## Attachment 2

North Carolina General Statutes

Referenced in the North Ca rolina Certification for

Clean Air Act Section 110(a)(1) and (2)

2008 Lead Requirements(This page intentionally left blank)Attachment 2 July 20, 2012 Page 1

This document contains the North Carolina Ge neral Statutes (NCGS) that supports North

Carolina’s certification for Clean Air Act Sec tion 110(a)(1) and (2) requirements for the 2008
lead national ambient air quality st andards. Below is a table of c ontents of the NCGS that were

referenced in Attachment 1.

NCGS Chapter 138A State G overnment Ethics Act........................................................................2

NCGS §138A-39 Disqualification to serve ...................................................................................36

NCGS §143-215.107 Air quality sta ndards and classifications .....................................................39

NCGS §143-215.197D Emissions of oxides of nitrog en (NOx) and sulfur dioxide (SO2) from
certain coal fired generating units ......................................................................................40

NCGS §143 215.108 Control of sources of air pollution; permits required ..................................41

NCGS §143- 215.3 General power s of Commission and Depart ment; auxiliary powers .............47

§143- 215.3(a)(1) ............................................................................................................ ...47

§143- 215.3(a)(12) ........................................................................................................... ..52

NCGS §143B-283 Environmental Management Co mmission – members; selection; removal;
compensation; quorum; services ........................................................................................55

NCGS §150B-21.1 Procedure for ad opting a temporary rule ........................................................56

NCGS §150B-21.2 Procedure for adopting a permanent rule .......................................................59Attachment 2 July 20, 2012 Page 2

Chapter 138A.

State Government Ethics Act.

Article 1.

General Provisions.

§ 138A-1. Title.

This Chapter shall be known and may be cite d as the "State Government Ethics Act". (2006-201, s. 1.)

§ 138A-2. Purpose.

The purpose of this Chapter is to ensure that elected and appointed State agency officials exercise their authority honestly and fairly, free from improprie ty, threats, favoritism, and undue influence. To this end, it is the intent of the General Assembly in this Chapter to ensure that

standards of ethical conduct and standards regarding conflicts of interest are clearly established for elected and appointed State agen cy officials, that the State con tinually educates these officials

on matters of ethical conduct and conflicts of interest, that pot ential and actual conflicts of

interests are identified and reso lved, and that violations of standards of ethical conduct and conflicts of interest are investigated and properly addre ssed. (2006-201, s. 1.)

§ 138A-3. Definitions.

The following definitions apply in this Chapter: (1) Blind trust. – A trust es tablished by or for the benef it of a covered person or a member of the covered person's immediate family for divestiture of all control and knowledge of assets. A trust quali fies as a blind trust under this subdivision if the covered person or a member of the covered person's immediate family has no knowledge of th e holdings and sources of income of the trust, the trustee of the trust is i ndependent of and not associated with or employed by the covered person or a member of the covered person's immediate family and is not a member of the covered person's extended family, and the trustee has sole discreti on as to the management of the trust

assets. (1c) Board. – Any State board, commission, c ouncil, committee, task force, authority, or similar public body, however denomina ted, created by statute or executive order, as determined and designated by the Commission, except for those public bodies that have on ly advisory authority. (2) Business. – Any of the fo llowing organized for profit:

a. Association.

b. Business trust. c. Corporation. d. Enterprise.

e. Joint venture. f. Organization. g. Partnership. h. Proprietorship.

i. Vested trust.Attachment 2 July 20, 2012 Page 3

j. Every other business interest, in cluding ownership or use of land for

income. (3) Business with which associated. – A business in which the covered person or filing person or any member of that covered person's or filing person's immediate family does any of the following: a. Is an employee. b. Holds a position as a director, officer, partner, proprietor, or member or manager of a limited liability compa ny, irrespective of the amount of compensation received or the amount of the interest owned. c. Owns a legal, equitable, or benefi cial interest of ten thousand dollars ($10,000) or more in the business or five percent (5%) of the business, whichever is less, other than as a trustee on a deed of trust. d. Is a lobbyist registered under Chapter 120C of the General Statutes. For purposes of this subdivision, the term "business" shall not include a widely held investme nt fund, including a mutual fund, regulated investment company, or pension or deferred compensation plan, if all of the following apply: 1. The covered person, filing person, or a member of the covered person's or filing person's imme diate family neither exercises nor has the ability to exerci se control over the financial interests held by the fund. 2. The fund is publicly traded, or the fund's assets are widely

diversified. (4) Commission. – The St ate Ethics Commission. (5) Committee. – The Legislative Ethics Committee as created in Part 3 of Article 14 of Chapter 120 of the General Statutes. (6) Compensation. – Any money, thing of valu e, or economic benefit conferred on or received by any covered person or filing pe rson in return for services rendered or to be rendered by that covered person or filing person or another. This term does not include campaign contributions properly received and, reported as required by Article 22A of Chapter 163 of the General Statutes. (7) Confidential informati on. – Information defined as confidential by the law. (8) Constitutional officers of the State. – Officers whose offices are established by

Article III of the North Carolina Constitution. (9) Contract. – Any agreement, including sa les and conveyances of real and personal property, and agreements for the performance of services. (10) Covered person. – A legisl ator, public servant, or judici al officer, as identified by

the Commission under G.S. 138A-11. (11) Repealed by Session Laws 2008- 213, s. 84(c), effective August 15, 2008. (12) Employing entity. – For public servants , any of the following bodies of State government of which the public servant is an employee or a member, or over which the public servant exercises superv ision: agencies, au thorities, boards, commissions, committees, councils, depart ments, offices, institutions and their subdivisions, and constitutional offices of the State. For legislators, it is the house of which the legislator is a member . For legislative employees, it is theAttachment 2 July 20, 2012 Page 4

authority that hired the individual. Fo r judicial employees, it is the Chief

Justice. (13) Extended family. – Spouse, lineal de scendant, lineal ascendant, sibling, spouse's lineal descendant, spouse's lineal ascendant, spouse's sibling, and the spouse of any of these individuals. (14) Filing person. – An indivi dual required to file a stat ement of economic interest

under G.S. 138A-22. (14a), (14b) Reserved for future codification purposes. (14c) Financial benefit. – A di rect pecuniary gain or loss to the legislator, the public servant, or a person with which the legi slator or public servant is associated, or a direct pecuniary loss to a business competitor of the legislator, the public servant, or a person with which the legi slator or public servant is associated. (15) Gift. – Anything of monetary valu e given or received without valuable consideration by or from a lobbyist, lobbyi st principal, liaison personnel, or a person described under G.S. 138A-32(d)(1), (2), or (3). The following shall not be considered gifts under this subdivision: a. Anything for which fair market value, or face value if sh own, is paid by the covered person or legislative employee. b. Commercially available loans made on terms not more favorable than generally available to the general public in the normal course of business if not made for lobbying. c. Contractual arrangements or commer cial relationships or arrangements made in the normal course of business if not made for lobbying.

d. Academic or athletic sc holarships based on the same criteria as applied to the public. e. Anything of value properly report ed as required underArticle 22A of Chapter 163 of the General Statutes. f. Expressions of condolence related to a death of an individual, sent within a reasonable time of the death, if the expression is one of the following: 1. A sympathy card, letter, or note.

2. Flowers. 3. Food or beverages for immediate consumption. 4. Donations to a religious organizati on, charity, the State or a political subdivision of the State, not to exceed a total of two hundred dollars ($200.00) per death per donor. (15a) through (15c) Reserved for future codification purposes. (15d) Governmental unit. – A political subdivi sion of the State, and any other entity or organization created by a poli tical subdivision of the State. (16) Honorarium. – Payment for services for which fees are not legally or traditionally required. (17) Immediate family. – An unemancipated child of the covered person residing in the household and the covered person's spouse, if not legally separated. A member of a covered person's extended family shall also be considered a member of the immediate family if act ually residing in the covered person's

household.Attachment 2 July 20, 2012 Page 5

(18) Judicial employee. – The director a nd assistant director of the Administrative

Office of the Courts and a ny other individual, designa ted by the Chief Justice, employed in the Judicial Department whose annual compensation from the State is sixty thousand do llars ($60,000) or more. (19) Judicial officer. – Justice or judge of the General Court of Justice, district attorney, clerk of court, or any individua l elected or appointed to any of these positions prior to taking office. (20) Legislative action. – As the term is defined in G.S. 120C-100. (21) Legislative employee. – As the term is defined in G.S. 120C-100. (22) Legislator. – A member or presiding officer of th e General Assembly, or an individual elected or appointed a member or presiding officer of the General Assembly before taking office. (23) Lobbying. – As the term is defined in G.S. 120C-100. (24) Nonprofit corporation or organizati on with which associated. – Any not for profit corporation, organization, or associa tion, incorporated or otherwise, that is organized or operating in the Stat e primarily for religious, charitable, scientific, literary, public health and sa fety, or educational purposes and of which the covered person, filing person, or any member of the covered person's or filing person's immediate fa mily is a director, officer, governing board member, employee, lobbyist re gistered under Chapter 120C of the General Statutes, or independent c ontractor. Nonprofit corporation or organization with which associated sh all not include any board, entity, or other organization created by this State or by any political subdivision of this

State. (25) Official action. – Any decision, incl uding administration, a pproval, disapproval, preparation, recommendation, the rende ring of advice, and investigation, made or contemplated in any procee ding, application, submission, request for a ruling or other determination, contract , claim, controvers y, investigation, charge, or rule making. (26) Participate. – To take pa rt in, influence, or attempt to influence, including acting through an agent or proxy. (26c) Permanent designee. – An individua l designated by a public servant to serve and vote in the absence of the public servant on a regular basis on a board on which the public servant serves. (27) Person. – Any individual, firm, partne rship, committee, asso ciation, corporation, business, or any other organization orgroup of persons acting together. The term "person" does not include the State, a political subdivision of the State, a board, or any other entity or organiza tion created by the St ate or a political

subdivision of the State. (27a), (27b) Reserved for future codification purposes. (27c) Person with which the legislator is associated. – Any of the following: a. A member of the legislator's extended family. b. A client of the legislator. c. A business with which the legislator or a member of the legislator's immediate family is associated.Attachment 2 July 20, 2012 Page 6

d. A nonprofit corporation or associati on with which the legislator or a member of the legislator's immediate family is associated. e. The State, a political subdivision of th e State, a board, or any other entity or organization created by the State or a political subdivision of the State that employs the legislator or a me mber of the legislator's immediate family. (27d) Person with which the public servan t is associated. – A ny of the following: a. A member of the public servant's extended family. b. A client of the public servant. c. A business with which the public se rvant or a member of the public servant's immediate family is associated. d. A nonprofit corporation or association with which the public servant or a member of the public servant's immediate family is associated. e. The State, a political subdivision of th e State, a board, or any other entity or organization created by the State or a political subdivision of the State that employs the public servant or a member of the public servant's immediate family. (28) Political party. – Either of the two larg est political parties in the State based on statewide voter registration at the applicable time. (29) Repealed by Session Laws 2008-213, s. 49, effective August 15, 2008. (30) Public servants. – All of the following:

a. Constitutional officers of the State a nd individuals elected or appointed as

constitutional officers of the State prior to taking office. b. Employees of the Office of the Governor. c. Heads of all principal State departme nts, as set forth in G.S. 143B-6, who are appointed by the Governor. d. The chief deputy and chief administrative assistant of each individual designated under sub-subdivision a. or c. of this subdivision.

e. Confidential assistants and secretarie s as defined in G.S. 126-5(c)(2), to individuals designated under sub-subdi vision a., c., or d. of this

subdivision. f. Employees in exempt positions designated in accordance with G.S. 126-5(d)(1), (2), or (2a) and c onfidential secretaries to these

individuals. g. Any other employees or appointees in the principal State departments as may be designated by the Governor to the extent that the designation

does not conflict with the State Personnel Act. h. Judicial employees. i. All voting members of boards, incl uding ex officio members, permanent designees of any voting member, and members serving by executive, legislative, or judicial branch appointment. j. For The University of North Carolina, the voting members of the Board of Governors of The University of No rth Carolina, the president, the vice-presidents, and the chancellors, the vice-chancellors, and voting

members of the boards of trustees of the constituent institutions.Attachment 2 July 20, 2012 Page 7

k. For the Community College System, the voting members of the State Board of Community Colleges, the President and the chief fina ncial officer of the Community College System, the president, chief financial officer, and chief administrative officer of each community college, and voting members of the boards of trustees of each community college. l. Members of the Commission, the ex ecutive director, and the assistant

executive director of the Commission.

m. Individuals under contract with the State working in or against a position

included under this subdivision.

n. The director of the Of fice of State Personnel.

o. The State Controller. p. The chief information officer, deputy chief information officers, chief financial officers, and general coun sel of the Office of Information Technology Services. q. The director of the State Museum of Art. r. The executive director of the Agency for Public Telecommunications.

s. The Commissioner of Motor Vehicles.

t. The Commissioner of Banks and th e chief deputy commissioners of the Banking Commission.

u. The executive director of the No rth Carolina Housing Finance Agency. v. The executive director, chief financial officer, and chief operating officer of the North Carolina Turnpike Authority. (30a) through (30j) Reserved fo r future codification purposes. (30k) State agency. – An agency in the ex ecutive branch of the government of this State, including the Governor's Office, a board, a department, a division, and any other unit of government in the executive branch. (31) Vested trust. – A trust, annuity, or other funds held by a trustee or other third party for the benefit of the covered person or a member of the covered person's immediate family, except a bli nd trust. A vested trust shall not include a widely held investment f und, including a mutual fund, regulated investment company, or pension ordeferred compensation plan, if: a. The covered person or a member of the covered person' s immediate family neither exercises nor has the ability to exercise control over the financial interests held by the fund; and b. The fund is publicly traded, or the fund's assets are widely diversified. (2006-201, s. 1; 2007-347, ss. 7, 8; 2007-348, ss. 19-26; 2008-187, s. 44; 2008-213, ss. 40-54, 84(c); 2010- 169, ss. 10, 17(n), (o); 2010-170, s. 14.)

§ 138A-4. Application to Lieutenant Governor.

For purposes of this Chapter, the Lieutenant G overnor shall be considered a legislator when carrying out the Lieutenant Govern or's duties under Sec. 13 of Ar ticle II of the Constitution, and a public servant for all othe r purposes. (2006-201, s. 1.)

§ 138A-5. Reserved for futu re codification purposes.Attachment 2 July 20, 2012 Page 8

Article 2.

State Ethics Commission.

§ 138A-6. State Ethics Commission established.

There is established the State Et hics Commission. (2006-201, s. 1.)

§ 138A-7. Membership.

(a) The Commission shall consist of eight member s. Four members shall be appointed by the Governor, of whom no more than two shall be of the same politic al party. Four members shall be appointed by the General Assembly, two upon the recommendation of the Speaker of the House of Representatives, neither of whom shall be of the same political party, and two upon the recommendation of the President Pro Tempore of the Senate, neither of whom shall be of the same political party. Members shall serve for f our-year terms, beginning January 1, 2007, except

for the initial terms that shall be as follows: (1) Two members appointed by the Governor sh all serve an initial term of one year. (2) Two members appointed by the Genera l Assembly, one upon the recommendation of the Speaker of the House of Representatives and one upon the

recommendation of the President Pro Tempore of the Senate, shall serve initial terms of two years. (3) Two members appointed by the Governor sh all serve initial term s of three years. (4) Two members appointed by the Genera l Assembly, one upon the recommendation of the Speaker of the H ouse of Representatives and one member upon the

recommendation of the President Pro Tempore of the Senate, shall serve initial terms of four years. (b) Members shall be removed from the Comm ission only for misfeasance, malfeasance, or nonfeasance. Members appointed by the Governor may be removed by the Governor. Members appointed by the General Assembly upon the re commendation of the Speaker of the House of Representatives shall be removed by the G overnor upon the recommendation of the Speaker. Members appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate shall be removed by the Governor upon the recommendation of the President Pro Tempore. (c) Vacancies in appointments made by the Gove rnor shall be filled by the Governor for the remainder of any unfulfilled term. Vacancies in appointments made by the General Assembly

shall be filled in accordance with G.S. 120-122 for the remainder of any unfulfilled term. (d) No member while serving on the Co mmission or employee while employed by the

Commission shall: (1) Hold or be a candidate for any other office or place of trust or profit under the United States, the State, or a pol itical subdivision of the State. (2) Hold office in any political party above the precinct level. (3) Participate in or contribute to the polit ical campaign of any covered person or any candidate for a public office as a covered person over which the Commission would have jurisdiction or authority. (4) Otherwise be an employee of the Stat e, a community college, or a local school system, or serve as a member of any other State board.Attachment 2 July 20, 2012 Page 9

(e) The Governor shall annually appoint a member of the Commission to se rve as chair of the

Commission. The Commission shall elect a vice- chair annually from its membership. The

vice-chair shall act as the chair inthe chair's absence or if there is a vacancy in that position. (f) Members of the Commission shall receive no compensation for service on the

Commission but shall be reimbursed for subsisten ce, travel, and conventi on registration fees as provided under G.S. 138-5 or 138-7, as applicable. (2006-201, s. 1.)

§ 138A-8. Meetings and quorum.

The Commission shall meet at least quarterly a nd at other times as called by its chair or by

four of its members. In the ca se of a vacancy in the chair, meetings may be called by the vice-chair. Five members of the Commission constitute a quorum. (2006-201, s. 1.)

§ 138A-9. Staff and offices.

The Commission may employ professi onal and clerical staff, incl uding an executive director.

The Commission shall be located within the Department of Ad ministration for administrative purposes only, but shall exercise all of its power s, including the power to employ, direct, and supervise all personnel, independently of the Secr etary of Administration, and is subject to the direction and supervision of the Secretary of Administration only with respect to the management functions of coordina ting and reporting. (2006-201, s. 1.)

§ 138A-10. Powers and duties.

(a) In addition to other powers and duties speci fied in this Chapter, the Commission shall: (1) Provide reasonable assistan ce to covered persons in comp lying with this Chapter. (2) Develop readily understandable forms, po licies, and procedures to accomplish the purposes of the Chapter. (3) Identify and publish the following: a. A list of nonadvisory boards. b. The names of individuals subject to this Chapter as covered persons and legislative employees under G.S. 138A-11. (4) Receive and review all statements of economic interests filed with the Commission by prospective and actual c overed persons and evaluate whether (i) the statements conform to the law and the rules of the Commission, and (ii)

the financial interests and other info rmation reported reveals actual or potential conflicts of interest. Pursuant to G.S. 138A-24(e), this subdivision does not apply to statements of economic interest of legisl ators and judicial

officers. (5) Conduct inquiries of alleged violations ag ainst judicial officer s, legislators, and legislative employees in accordance with G.S. 138A-12. (6) Conduct inquiries in to alleged violations against public servants in accordance

with G.S. 138A-12. (7) Render advisory opinions in accord ance with G.S. 138A-13 and G.S. 120C-102. (8) Initiate and maintain oversight of ethics educational programs for public servants and their staffs, and legislators and legi slative employees, consistent with G.S.

138A-14.Attachment 2 July 20, 2012 Page 10

(9) Conduct a continuing study of governmental ethics in the State and propose changes to the General Assembly in the government process and the law as are conducive to promoting and c ontinuing high ethical behavior by governmental officers and employees. (10) Adopt procedures and guideli nes to implement this Chapter. (11) Report annually to the General Assembly and the G overnor on the Commission's activities and generally on the subject of public disclosure, ethics, and conflicts of interest, including re commendations for administrative and legislative action, as the Co mmission deems appropriate. (12) Publish annually statis tics on complaints filed w ith or considered by the Commission, including the number of complaints filed, the number of complaints referred under G.S. 138A -12(b), the number of complaints dismissed under G.S. 138A-12(c)(4), the number of complaints dismissed under G.S. 138A-12(f), the number of complaints referred for criminal prosecution under G.S. 138A-12, the numb er of complaints dismissed under G.S. 138A-12(h), the number of compla ints referred for appropriate action under G.S. 138A-12(h) or G. S. 138A-12(k)(3), and the number and age of complaints pending action by the Commission. (13) Perform other duties as may be nece ssary to accomplish the purposes of this Chapter. (b) The Commission may authorize the Executive Director and other st aff of the Commission

to evaluate statements of economic interest on behalf of the Commission as authorized under subdivision (a)(4) of this section. (c) Except as otherwise provided in this Chapter, the Commission shall be the sole State agency with authority to determine compliance with or violations of this Chapter and to issue interpretations and advisory opinions under this Chapter. Decisions and advisory opinions by the Commission under this Chapter shall be binding on all other State agen cies. (2006-201, s. 1; 2008-213, s. 55; 2008-215, s. 7; 2009-549, s. 8.)

§ 138A-11. Identify and publish names of cov ered persons and legislative employees.

The Commission shall identify and publish at l east quarterly a listing of the names and positions of all individuals subject to this Chapter as covered persons or legislative employees. The Commission shall also identify and publish at least annually a listing of all boards to which this Chapter applies. This listing may be published electronically on a public Internet Web site maintained by the Commission. (2006-201, s. 1; 2008-213, s. 56.)

§ 138A-12. Inquiries by the Commission.

(a) Jurisdiction. – The Commi ssion may receive complaints alleging unethical conduct by covered persons and legislative employees and sh all conduct inquiries of complaints alleging unethical conduct by covered person s and legislative employees, as set forth in this section. (a1) Notice of Allegation. – Upon receipt by the Commission of a written allegation of unethical conduct by a covered person or legi slative employee, or the initiation by the Commission of an inquiry into unethical conduct under subsection (b) of this section, the Commission shall immediately notify the covered person or legislative em ployee subject to the allegation or inquiry in writing.Attachment 2 July 20, 2012 Page 11

(b) Institution of Proceedings. – On its ow n motion, in response to a signed and sworn complaint of any individual filed with the Com mission, or upon the writte n request of any public servant or those responsible for the hiring, appo inting, or supervising of a public servant, the Commission shall conduct an inqu iry into any of the following: (1) The application or alleged violation of this Chapter. (2) For legislators, the applic ation or alleged violations of Part 1 of Article 14 of Chapter 120 of the General Statutes. (3) An alleged violation of the criminal law by a covered person in the performance

of that individual's official duties. (4) An alleged violation of G.S. 126-14. Upon receipt of a referral under G.S. 147-64.6B or a report under G.S. 147-64.6(c)(19), the Commission may conduct an inquiry under this section on its own mo tion. Allegations of

violations of the Code of Judicial Conduct shall be referred to the Judicial Standards Commission without investigation. (b1) Complaints on Its Own Motion. – An inve stigation initiated by the Commission on its own motion or upon written request of any public servant or those responsible for the hiring, appointing, or supervising of a publ ic servant instituted under subsec tion (b) of this section shall be treated as a complaint for purposes of this section and need not be sworn or verified. (c) Complaint. – (1) A sworn complaint filed under this Chap ter shall state the name, address, and telephone number of the individual filing the complaint, the name and job title or appointive position of the covered pe rson or legislative employee against whom the complaint is filed, and a conc ise statement of the nature of the complaint and specific facts indicating th at a violation of this Chapter or Chapter 120 of the General Statutes or G.S. 126-14 or the criminal law in the performance of that individual's offici al duties has occurred, the date the alleged violation occurred, a nd either (i) that the contents of the complaint are within the knowledge of the individual ve rifying the complaint, or (ii) the basis upon which the individual veri fying the complaint believes the allegations to be true. (2) Except as provided in subsection (d) of this section, a complaint filed under this Chapter must be filed within two years of the date the complainant knew or should have known of the conduct upon which the complaint is based. (3) The Commission may decline to accept, refer, or conduct an inquiry into any complaint that does not meet all of th e requirements set forth in subdivision (1) of this subsection, or the Commissi on may, in its sole discretion, request additional information to be provided by the complainant within a specified period of time of no less than five business days. (4) In addition to subdivision (3) of this subsection, the Commission may decline to accept, refer, or conduct an inquiry into a complaint if it determines that any of the following apply: a. The complaint is frivolous or brought in bad faith. b. The covered person or legislative employee and conduct complained of have already been the subject of a prior complaint.Attachment 2 July 20, 2012 Page 12

c. The conduct complained of is prim arily a matter more appropriately and adequately addressed and handled by other federal, State, or local agencies or authorities, including la w enforcement authorities. If other agencies or authorities are conducti ng an investigation of the same actions or conduct involved in a comp laint filed under this section, the Commission may stay its complaint inquiry pending final resolution of the other investigation. (5) The Commission shall send a copy of th e complaint to the covered person or legislative employee who is the subject of the complaint and the employing entity, within 10 business days of the filing. (d) Conduct of Inquiry of Complaints by the Commission. – The Commission shall conduct an inquiry into all complaints properly be fore the Commission in a timely manner. The Commission shall initiate an inquiry into a compla int within 10 business days of the filing of the complaint. The Commission is auth orized to initiate inquiries upon request of any member of the

Commission if there is reason to believe that a covered person or legislative employee has or may have violated this Chapte r. Commission-initiated complaint inquiries under this section

shall be initiated within two years of the date the Commissi on knew of the conduct upon which the complaint is based, except when the conduct is material to the co ntinuing conduct of the duties in office. In determining whether there is reason to believe that a violation has or may have occurred, a member of the Commission may take general notice of available information even if not formally provided to the Commissi on in the form of a complaint. The Commission may utilize the services of a hired in vestigator when conducting inquiries. (e) Covered Person and Legislative Employees Cooperation With Inquiry. – Covered persons and legislative employees shall promptly and fully cooperate with the Commission in any Commission-related inquir y. Failure to cooperate fully with the Commission in any inquiry shall be grounds for sanctions as set forth in G.S. 138A-45. (f) Dismissal of Complaint After Preliminary Inquiry. – The Commission shall conclude the preliminary inquiry within 20 business days. The Co mmission shall dismiss the complaint, if at the end of its preliminary inquiry the Commission determines that any of the following apply: (1) The individual who is the subject of the complaint is not a covered person or legislative employee subject to the Commission's jurisdiction and authority under this Chapter. (2) The complaint does not allege facts sufficient to constitute a violation within the jurisdiction of the Commission under subsection (b) of this section. (3) The complaint is determined to be frivolous or br ought in bad faith. (g) Commission Inquiries. – If at the end of its prelim inary inquiry, the Commission determines to proceed with further inquiry into the conduct of a covere d person or legislative employee, the Commission shall provide written notice to the individual who filed the complaint and the covered person or legisl ative employee as to the fact of the inquiry and the charges against the covered person or le gislative employee. The covered person or legislative employee shall be given an opportunity to file a written response w ith the Commission. (h) Action on Inquiries. – The Commission shall c onduct inquiries into complaints to the extent necessary to either dismiss the complain t for lack of probable cause of a violation under this section, or:Attachment 2 July 20, 2012 Page 13

(1) For public servants, decide to proceed w ith a hearing under subsection (i) of this

section. (2) For legislators, except the Lieutenant Governor, refer the complaint to the

Committee. (3) For judicial officers, refer the complain t to the Judicial Standards Commission for complaints against justices and judges, to the senior reside nt superior court judge of the district or county for compla ints against district attorneys, or to the chief district court judge for the di strict or county for complaints against

clerks of court. (4) For legislative employees, refer the complaint to the employing entity. (i) Hearing. – (1) The Commission shall give full and fair consideration to all complaints received against a public servant. If the Commission determines that the complaint cannot be resolved without a hearing, or if the public servant requests a hearing, a hearing shall be held. (2) The Commission shall send a notice of the hearing to the complainant, and the public servant. The notice shall contain the time and place for a hearing on the matter, which shall begin no less than 30 days and no more than 90 days after

the date of the notice. (3) The Commission shall make available to th e public servant or that public servant's private legal counsel all documents or other evidence which are intended to be presented at the hearing to the Co mmission or which a reasonable person would believe might exculpate the accu sed public servant at least 30 days prior to the date of the hearing held in connection with the investigation of a complaint. Any documents or other ev idence discovered within less than 30 days of the hearing shall be furnished as soon as possible after discovery but prior to the hearing. (4) At any hearing held by the Commission:

a. Oral evidence shall be take n only on oath or affirmation. b. The hearing shall be open to the public, except for matters involving minors, personnel records, or ma tters that could otherwise be

considered in closed session unde r G.S. 143-318.11. In any event, the deliberations by the Commission on a complaint may be held in closed

session. c. The public servant being investigat ed shall have the right to present evidence, call and examine witnesses, cross-examine witnesses, introduce exhibits, and be represented by counsel. (j) Settlement of Inquiries. – The public servan t who is the subject of the complaint and the

staff of the Commission ma y meet by mutual consent before the hearing to discuss the possibility of settlement of the inquiry or the stipulation of any issues, facts, or matters of law. Any proposed settlement of the inquiry is s ubject to the approval of the Commission. (k) Disposition of Inquiries. – After hearing, the Co mmission shall dispos e of the matter in one or more of the following ways:Attachment 2 July 20, 2012 Page 14

(1) If the Commission finds substantial evidence of an alleged violation of a criminal statute, the Commission sh all refer the matter to the Attorney General for investigation and referral to the dist rict attorney for possible prosecution. (2) If the Commission finds that the allege d violation is not es tablished by clear and convincing evidence, the Commissi on shall dismiss the complaint. (3) If the Commission finds that the alleged vi olation of this Chapter is established by clear and convincing evidence, the Comm ission shall do one or more of the following: a. Issue a private admonishment to the public servant and notify the employing entity, if app licable. Such notification shall be treated as part of the personnel record of the public servant. b. Refer the matter for appropriate actio n to the Governor and the employing entity that appointed or employed the public servant or of which the public servant is a member. c. Refer the matter for appropriate acti on to the Chief Justice for judicial employees. d. Refer the matter to the Principal Clerks of the House of Representatives and Senate of the General Assembly for c onstitutional officers of the State. e. Refer the matter for appropriate action to the principal clerk of the house of the General Assembly that elected the public servant for members of

the Board of Governors and the St ate Board of Community Colleges. (l) Notice of Dismissal. – Upon the dismissal of a compla int under this section, the Commission shall provide written notice of the dismissal to the individual who filed the complaint and the covered person or legislative employee against whom the complaint was filed. The Commission shall forward copies of complain ts and notices of dismissal of complaints against legislators to the Committee, against legislative employees to the employing entity for legislative employees, and agains t judicial officers to the J udicial Standards Commission for complaints against justices and judges, and the seni or resident superior cour t judge of the district or county for complaints against district attorneys, or the chief district cour t judge of the district or county for complaints against clerks of cour t. The Commission shall also forward a copy of the notice of dismissal to the employing entity of the covered person against whom a complaint was filed if the employing entity received a copy of the complaint under subdivision (5) of subsection (c) of this section. Ex cept as provided in subsection (n) of this section, the complaint

and notice of dismissal are confid ential and not public records. (m) Reports and Records. – The Commission sha ll render the results of its inquiry in writing. When a matter is referred under subdivision (h)(2) and (3), or subsection (k) of this section, the Commission's report shall consist of the complaint, response, and detailed re sults of its inquiry in support of the Commission's finding of a violation under this Chapter. (n) Confidentiality. – Complaints and responses filed with the Commission and reports and other investigative documents and records of th e Commission connected to an inquiry under this section, including information provided pursuan t to G.S. 147-64.6B or G.S. 147-64.6(c)(19),

shall be confidential and not ma tters of public record, except as otherwise provided in this section or when the covered person or legislat ive employee under inquiry requests in writing that the complaint, response, and findings be ma de public. Once a hearing under this section commences, the complaint, response, and all other documents offere d at the hearing inAttachment 2 July 20, 2012 Page 15

conjunction with the complaint, not otherwise pr ivileged or confidenti al under law, shall be public records. If no hearing is held at such time as the Commission reports to the employing entity a recommendation of sa nctions, the complaint and response shall be made public. (o) Recommendations of Sanctions. – After re ferring a matter under su bsection (k) of this section, if requested by the entity to which the matter was referred, the Commission may recommend sanctions or issue rulings as it deem s necessary or appropriate to protect the public interest and ensure compliance with this Chap ter. In recommending appropriate sanctions, the Commission may consider the following factors: (1) The public servant's prior experience in an agency or on a board and prior opportunities to learn the ethi cal standards for a public servant as set forth in Article 4 of this Chapter, including th ose dealing with conflicts of interest. (2) The number of ethics violations. (3) The severity of th e ethics violations. (4) Whether the ethics violations involve the public servant's financial interest. (5) Whether the ethics violations were inadvertent or intentional. (6) Whether the public servant knew or should have known that the improper conduct was a violation of this Chapter. (7) Whether the public servant has previo usly been advised or warned by the

Commission. (8) Whether the conduct or situation giving rise to the ethics viol ation was pointed out to the public servant in the Commissi on's Statement of Economic Interest evaluation letter issued under G.S. 138A-24(e). (9) The public servant's motivation or r eason for the improper conduct or action, including whether the action was for pers onal financial gain versus protection of the public interest. In making recommendations under this subsec tion, if the Commission determines, after proper review and investigation, that sanctions are appropriat e, the Commission may recommend any action it deems necessary to properly address and rectify any violation of this Chapter by a public servant, including removal of the public se rvant from the public servant's State position. Nothing in this subsection is intended, and shal l not be construed, to give the Commission any independent civil, criminal, oradministrative investigative or enforcement authority over covered persons, or other Stat e employees or appointees. (p) Authority of Employing Entity. – Any act ion or failure to act by the Commission under this Chapter, except G.S. 138A -13, shall not limit any authority of any of the applicable employing entities to discipline the c overed person or legislative employee. (q) Continuing Jurisdiction. – The Commissi on shall have continuing jurisdiction to investigate possible criminal viol ations of this Chapter for a pe riod of one year following the date an individual, who was formerly a public se rvant or legislative employee, ceases to be a public servant or legislative employee for any inve stigation that commenced prior to the date the public servant or legislative employee ceases to be a public servant or legislative employee. (r) Subpoena Authority. – The Commission may petition the Superior Court of Wake County for the approval to issue subpoenas and subpoenas duces tecum as necessary to conduct investigations of alleged viola tions of this Chapter. The cour t shall authorize subpoenas under

this subsection when the court determines the subpoenas are neces sary for the enforcement of this Chapter. Subpoenas issued under this subs ection shall be enforcea ble by the court throughAttachment 2 July 20, 2012 Page 16

contempt powers. Venue shall be with the Supe rior Court of Wake County for any person or governmental unit covered by this Chapter, and pe rsonal jurisdiction may be asserted under G.S.

1-75.4. (s) Reports. – The number of co mplaints referred under this section shall be reported under G.S. 138A-10(a)(12). (t) Concurrent Jurisdiction. – Nothing in this section shall limit th e jurisdiction of the

Committee or the Judicial Standards Commission with regards to legislative or judicial misconduct, and jurisdiction under th is section shall be concurrentwith the juri sdiction of the

Committee and the Judicial St andards Commission. (2006-201, s. 1; 2007-348, ss. 27-30; 2008-187, s. 21; 2008-213, ss. 1(b), 57; 2008-21 5, ss. 4, 5; 2009-549, ss. 9, 10, 11; 2010-169, s. 23(a)-(e), (h).)

§ 138A-13. Request for advice.

(a) At the request of any public servant or legislative employee, an y individual who is responsible for the supervision or appointment of a public servant or legislative employee, legal counsel for any public servant or legislative empl oyee, any ethics liaison under G.S. 138A-14, or any member of the Commission, the Commission shall render advice on specific questions involving the meaning and applicat ion of this Chapter and the pub lic servant's or legislative employee's compliance therewith. Requests for advice and advice rendered in response to those requests shall relate prosp ectively to real or reasonably antici pated fact settings or circumstances. (a1) On its own motion, the Commission may rende r advisory opinions on specific questions involving the meaning and app lication of this Chapter. (a2) A request for a formal advi sory opinion under subsection (a) of this section shall be in writing, electronic or otherwise. The Commission shall issue formal advisory opinions having prospective application only. A pub lic servant or legislative empl oyee who relies upon the advice provided to that public servan t or legislative employee on a specific matter addressed by the requested formal advisory opinion shall be immune from all of the following: (1) Investigation by th e Commission, except for an inqui ry under G.S. 138A-12(b)(3). (2) Any adverse action by the employing entity. (3) Investigation by the Secretary of State. (b) At the request of a legisl ator, the Commission shall render advice on specific questions involving the meaning and applicati on of this Chapter and Part 1 of Article 14 of Chapter 120 of the General Statutes, and the legislator's co mpliance therewith. Requests for advice and advice rendered in response to those requests shall relate prospectively to real or reasonably anticipated fact settings or circumstances. (b1) A request by a legislator for a recommended formal advisory opinion shall be in writing,

electronic or otherwise. The Commission shall issue recomme nded formal advisory opinions having prospective application only. Until acti on is taken by the Committee under G.S. 120-104, a legislator who relies upon the advice provided to that legislat or on a specific matter addressed by the requested recommended formal advisory opinion shall be immune from all of the following: (1) Investigation by the Committee or Comm ission, except for an inquiry under G.S. 138A-12(b)(3). (2) Any adverse action by the house of which the legislator is a member. (3) Investigation by the Secretary of State.Attachment 2 July 20, 2012 Page 17

Any recommended formal advisory opinion issued to a legislator under this subsection shall immediately be delivered to the chairs of the Committee, together with a copy of the request. Except for the Lieutenant Governor, the immunity granted under this subs ection shall not apply

after the time the Committee modifies or overtur ns the advisory opinion of the Commission in

accordance with G.S. 120-104. (b2) At the request of the Auditor, the Comm ission shall render advisory opinions on specific questions involving the meaning and application of this Chapter, Article 14 of Chapter 120 of the General Statutes, and Chapter 120C of the General Statutes and an affected person's compliance therewith. The request shall be in writing, electronic or otherwise, and relate to real fact settings and circumstances. Except when the question involves a question governed by subsection (b) or (b1) of this section, the Commi ssion shall issue an advisory opini on under this subsection within 60 days of the receipt of all information deem ed necessary by the Commission to render an opinion. If the question involves a question governed by subsection (b) or (b1) of this section, the Commission shall comply with the provisions of that section prior to responding to the Auditor by delivering the recommended advisory opinion to the Committee within 60 days of the receipt of all information deemed necessary by the Co mmission to render an opinion. The Committee shall act on the opinion within 30 days of receipt and the Commission shall deliver the opinion to

the Auditor. If the Committee fails to act on a recommended advisory opinion under this subsection with 30 days of receipt, the Commi ssion shall deliver its recommended advisory opinion to the Auditor. Notwithstanding G.S. 138A-13(e), the Auditor may only release those portions of the advisory opinion necessary to comply with the requirements of G.S. 147-64.6(c)(1). (c) Staff to the Commission may issue advi ce, but not formal or recommended formal advisory opinions, under proce dures adopted by the Commission. (d) The Commission shall publish its formal adviso ry opinions within 30 days of issuance. These formal advisory opinions shall be editedfor publication purposes as necessary to protect the identities of the individuals requesting fo rmal advisory opinions. When the Commission

issues a recommended formal a dvisory opinion to a legislatorunder subsection (b1) of this section, the Commission shall publi sh only the edited formal advi sory opinion of the Committee within 30 days of receipt of the edited opinion from the Committee. (e) Except as provided under subsections (b2), (d) and (e1) of this section, a request for advice, any advice provided by Co mmission staff, any formal or recommended formal advisory opinions, any supporting documents submitted or caused to be submitted to the Commission or Commission staff, and any docum ents prepared or collected by the Commission or Commission staff in connection with a request for advice ar e confidential. The identity of the individual making the request for advice, the existence of the request, and any information related to the request may not be revealed without the consen t of the requestor. An individual who requests advice or receives advice, includi ng a formal or recommended formal advisory opinion, may authorize the release to any othe r person, the State, or any govern mental unit of the request, the advice, or any supporting documents. For purposes of this section, "document" is as defined in G.S. 120-129. Requests for advice, any advice, and any documents related to requests for advice are not "public records" as defined

in G.S. 132-1. (e1) Staff to the Commission may share all info rmation and documents related to requests for advice, made by legislators under this section w ith staff to the Committee. The information andAttachment 2 July 20, 2012 Page 18

documents in the possession of staff to the Committee are confidential and are not public

records. (f) This section shall apply to judicial officer s only for advice related to Article 3 of this Chapter. (g) Requests for advice may be withdrawn by the requestor at any time pr ior to the issuance of the advice. (2006-201, s. 1; 2007-348, s. 31; 2008-213, ss. 2(b), 91.5; 2008-215, s. 6; 2009-570, s. 17; 2010-169, s. 17(p).)

§ 138A-14. Ethics education program.

(a) The Commission shall develop and implem ent an ethics education and awareness program designed to instill in all covered pers ons and their immediate staffs, and legislative employees, a keen and continuing awareness of their ethical obligations and a sensitivity to situations that might result in real or potential conflicts of interest. (b) The Commission shall offer basic ethics e ducation and awareness presentations to all public servants and their immediate staffs, upon their election, appointment, or employment, and shall offer periodic refresher presentations as the Commission deems appropriate. Every public servant shall participate in an ethics presenta tion approved by the Commission within six months of the public servant's electi on, reelection, appointment, or employment, and shall attend refresher ethics education presen tations at least every two year s thereafter in a manner as the Commission deems appropriate. (b1) A public servant appointed to a board determined and designa ted as nonadvisory under G.S. 138A-10(a)(3) shall attend an ethics presentation approve d by the Commission within six

months of notification of the designation by the Commissi on and at least every two years thereafter in a manner as the Commission deems appropriate. (c) The Commission, jointly with the Committee, shall make basic ethics education and awareness presentations to al l legislators and legislativ e employees upon their election, reelection, appointment, or employment and shall offer periodic refresher presentations as the Commission and the Committee deem appropriate. Ever y legislator shall participate in an ethics presentation approved by the Commission and Co mmittee within two months of either the convening of the General Assembly to which the legi slator is elected or w ithin two months of the legislator's appointment, whicheve r is later. Every legislative em ployee shall part icipate in an ethics presentation approved by the Commissi on and Committee within three months of employment, and shall attend refr esher ethics education presentations at least every two years thereafter, in a manner as the Commission and Committee deem appropriate. (d) Upon request, the Commission shall assist e ach agency in developing in-house education programs and procedures necessary or desirable to meet the agency's particular needs for ethics education, conflict identificat ion, and conflict avoidance. (e) Each agency head shall designate an ethics liaison who shall maintain active communication with the Commission on all agency et hical issues. The ethics liaison shall attend ethics education and awareness programs as pr ovided under this section and lobbying education and awareness programs as provided under G.S. 120C-103 and continuously assess and advise the Commission of any issues or conduct which mi ght reasonably be expected to result in a conflict of interest and seek advice and rulings from the Commission as to their appropriate

resolution.Attachment 2 July 20, 2012 Page 19

(f) The Commission shall publish a newsletter containing summ aries of the Commission's opinions, policies, procedures, and interpretive bulletins as issued from time to time. The

newsletter shall be distributed to all covered persons and le gislative employees. Publication under this subsection may be done electronically. (g) The Commission shall assemble and maintain a collection of relevant State laws, rules, and regulations that set forth ethical standards applicable to covered persons. This collection shall be made available electronically as resource material to public servants, and ethics liaisons,

upon request. (h) Repealed by Session Laws 2009-549, s. 12, effective August 28, 2009. (i) This section shall not apply to judici al officers. (2006-201, s. 1; 2007-347, s. 9(a); 2008-213, ss. 59, 60; 2009-10, s. 4; 2009- 549, s. 12; 2010-169, s. 22(a).)

§ 138A-15. Duties of heads of State agencies.

(a) The head of each State agency, including the chair of each board subj ect to this Chapter,

shall take an active role in furt hering ethics in pub lic service and ensuring compliance with this Chapter. The head of each State agency and the chair of each board shall make a conscientious, good-faith effort to assist public servants within the agency or on the board in monitoring their personal, financial, and professiona l affairs to avoid taking any action that results in a conflict of

interest. (b) The head of each State agency, including the chair of each board subject to this Chapter, shall maintain familiarity with and stay knowledg eable of the reports, opinions, newsletters, and other communications from the Commission regardi ng ethics in general and the interpretation and enforcement of this Chapter. The head of each State agency and the chair of each board shall also maintain familiarity with and stay knowledgeable of the Commission's reports, evaluations, opinions, or findings regarding indi vidual public servants in that individual's agency or on that individual's board, or under that individual's supervision or c ontrol, including all reports, evaluations, opinions, or findings pertaining to actual or pote ntial conflicts of interest. (c) When an actual or potential conflict of interest is cited by the Commission under G.S. 138A-24(e) with regard to a public servant sitting on a board, the c onflict shall be recorded in the minutes of the applicable board and duly brought to the atten tion of the membership by the board's chair as often as necessary to remind a ll members of the conflict and to help ensure compliance with this Chapter. (d) The head of each State agency, including the chair of each board subject to this Chapter, shall periodically remind public serv ants under that individual's au thority of the public servant's duties to the public under the ethi cal standards and rule s of conduct in this Chapter, including the duty of each public servant to continually monito r, evaluate, and manage the public servant's personal, financial, and professi onal affairs to ensure the abse nce of conflicts of interest. (e) At the beginning of any meeting of a board , the chair shall remind all members of their duty to avoid conflicts of interest under this Chap ter. The chair also shall inquire as to whether there is any known conflict of interest with respec t to any matters coming before the board at that

time. (f) The head of each State agency, including the chair of each board subject to this Chapter, shall ensure that legal counsel employed by or assi gned to their agency or board are familiar with the provisions of this Chapter, including the Et hical Standards for Covered Persons set forth in Article 4 of this Chapter, and are available to ad vise public servants on th e ethical considerationsAttachment 2 July 20, 2012 Page 20

involved in carrying out th eir public duties in the best interest of the public. Legal counsel so engaged may consult with the Commission, seek the Commission's assi stance or advice, and refer public servants and others to the Commission as appropriate. (g) Taking into consideration the individual autonomy, needs, and circumstances of each agency and board, the head of each State agency, in cluding the chair of each board subject to this Chapter, shall consider the need for the develo pment and implementation of in-house educational programs, procedures, or policies tailored to meet the agency's or board's particular needs for ethics education, conflict iden tification, and conflict avoidan ce. This includes the periodic presentation to all agency head s, their chief deputies or assist ants, other public servants under their supervision or control, and members of board s, of the basic ethics education and awareness presentation outlined in G.S. 138A-14 and any other workshop orseminar program the agency head or board chair deems necessary in implem enting this Chapter. Agency heads and board chairs may request reasonable assistance fr om the Commission in complying with the requirements of this subsection. (h) As soon as reasonably pract icable after the designation, hiri ng, or promotion of their chief deputies, assistants, or other public servants under their supervision or control, or learning of the appointment or election of other public servan ts to a board covered under this Chapter, all agency heads and board chairs shall (i) notif y the Commission of such designation, hiring, promotion, appointment, or election and (ii) provide these public se rvants with co pies of this Chapter and all applicable financial disclosure fo rms, if these materials and forms have not been previously provided to these public servants in connection with their designation, hiring, promotion, appointment, or election. In order to avoid duplication of effort, agency heads and

board chairs shall coordinate this effort with the Commission's staff. (2006-201, s. 1; 2007-347, s. 9(b); 2008-213, ss. 61, 62.)

§ 138A-16. Reserved for future codification purposes.

§ 138A-17. Reserved for future codification purposes.

§ 138A-18. Reserved for future codification purposes.

§ 138A-19. Reserved for future codification purposes.

§ 138A-20. Reserved for future codification purposes.

Article 3.

Public Disclosure of Economic Interests.

§ 138A-21. Purpose.

The purpose of disclosure of the financial and personal interests by c overed persons is to assist covered persons and those who appoint, elect, hire, supervise, or advise them identify and

avoid conflicts of interest and potential conflicts of interest be tween the covered person's private interests and the covered person's public duties. It is critical to this process that current and prospective covered persons examine, evaluate , and disclose those personal and financial

interests that could be or cause a conflict of inte rest or potential conflict of interest between the covered person's private interests and the covere d person's public duties. Covered persons must take an active, thorough, and cons cientious role in the disclosure and review process, including having a complete knowledge of how the covered person's public position or duties might impactAttachment 2 July 20, 2012 Page 21

the covered person's private interests. Covered pe rsons have an affirmative duty to provide any and all information that a reasonable person would conclude is necessary to carry out the purposes of this Chapter and to fully disclose a ny conflict of interest or potential conflict of interest between the covered person's public and pr ivate interests, but the disclosure, review, and evaluation process is not intended to result in th e disclosure of unnecessary or irrelevant personal information. (2006-201, s. 1; 2008-213, s. 63.)

§ 138A-22. Statement of economic interest; filing required.

(a) Every covered person subject to this Ch apter who is elected, appointed, or employed, including one appointed to fill a vacancy in electi ve office, except for public servants (i) included under G.S. 138A-3(30)b., e., f., or g. whose annual co mpensation from the State is less than sixty thousand dollars ($60,000), or (ii) who are ex officio student members under Chapters 115D and 116 of the General Statutes, shal l file a statement of economic interest with the Commission prior to the covered person's in itial appointment, election, or empl oyment and no later than April 15 of every year thereafter, except as otherwise filed under subsections (c1) and (d) of this section. A prospective covered pers on required to file a statement under this Chapter shall not be appointed, employed, or receive a certificate of election, prior to submission by the Commission

of the Commission's evaluation of the statement in accordance with this Article. The requirement for an annual filing under this subsection also shall apply to covered persons whose terms have expired but who continue to serve until the cove red person's replacement is appointed. Once a statement of economic interest is properly comple ted and filed under this Article, the statement of economic interest does not need to be supplemen ted or refiled prior to the next due date set

forth in this subsection. (b) Notwithstanding subsection (a ) of this section, individuals hired by, and appointees of, constitutional officers of the State may file a st atement of economic interest within 30 days after their appointments or employment when the appointment or employment is made during the first 60 days of the constitutional officer's initial term in that constitutional office. (c) Notwithstanding subsection (a) of this sec tion, public servants, under G.S. 138A-3(30)j. and k., who have submitted a statement of economic interest under subsection (a) of this section, may be hired, appointed, or elec ted provisionally prior to subm ission by the Commission of the

Commission's evaluation of the statement in accordan ce with this Article, subject to dismissal or

removal based on the Commission's evaluation. (c1) A public servant reappointed to a board between January 1 and April 15 shall file a

current statement of economic intere st prior to the reappointment. (c2) A public servant appointed to a board determined and designated as nonadvisory under G.S. 138A-10(a)(3) shall file the initial statem ent of economic interest within 60 days of notification of the designation by the Commission and as provided in this section thereafter. (d) A candidate for an office subject to this Article shall file the statement of economic interest at the same place and in the same manner as the notice of candidacy for that office is required to be filed under G.S. 163-106 or G.S. 163-323 within 10 days of the filing deadline for

the office the candidate seeks. An individua l who is nominated unde r G.S. 163-114 after the primary and before the general election, and an individual who qualifies under G.S. 163-122 as an unaffiliated candidate in a general election, shall file a statement of economic interest with the county board of elections of each county in the senato rial or representative district. An individual

nominated under G.S. 163-114 shall file the st atement within three days following theAttachment 2 July 20, 2012 Page 22

individual's nomination, or not later than th e day preceding the general election, whichever

occurs first. An individual se eking to qualify as an unaffiliat ed candidate under G.S. 163-122

shall file the statement of ec onomic interest with the petiti on filed under that section. An individual seeking to have write -in votes counted for that indivi dual in a general election shall

file a statement of economic intere st at the same time the candidate files a declaration of intent under G.S. 163-123. A candidate of a new party chos en by convention shall file a statement of economic interest at the same time that the pres ident of the convention certifies the names of its

candidates to the State Board of Elections under G.S. 163-98. (d1) In addition to subsections (a) and (d) of this section, a covered person holding elected office or a former covered person who held elected office subject to this Article shall file a

statement of economic interest in all of the following instances, as specified: (1) Filed on or before Apr il 15 of the year following th e year a covered person or former covered person does not file a notice of candidacy or petition for election, or does not receive a certifi cate of election, to the position making that individual a covered person, w ith all information provided in the

statement of economic interest current as of the last day of December of the preceding year. (2) Filed on or before April 15 of the year following the year the covered person or former covered person resigns from the position making that individual a covered person, with all information provided in the statement of economic interest current as of the last day in the position. (e) The State Board of Elections shall provide for notification of the statement of economic interest requirements of this Article to be give n to any candidate filing for nomination or election to those offices subject to this Article at the time of the filing of candidacy. (f) Within 10 days of the fili ng deadline for office of a covered person, the executive director

of the State Board of Elections shall send to th e State Ethics Commission a list of the names and

addresses of each candidate who have filed as a candidate fo r office as a covered person. A county board of election shall forward any statemen ts of economic interest filed with the board

under this section to the State Bo ard of Elections. The executive director of the State Board of Elections shall forward a certified copy of the st atements of economic interest to the Commission for evaluation upon its filing with the Stat e Board of Elections under this section. (g) The Commission shall issue forms to be used for the statement of economic interest and

shall revise the forms from time to time as necessary to carry out the purposes of this Chapter. Except as otherwise set forth in this section and in G.S. 1 38A-15(h), upon notification by the employing entity, the Commission shall furnish to all other covered persons the appropriate forms needed to comply with this Article. (2006-201, s. 1; 2007-29, s. 2; 2007-348, ss. 32, 33; 2008-213, s. 64; 2009-549, s. 13; 2010-169, ss. 12, 22(b).)

§ 138A-23. Statements of economi c interest as public records.

(a) The statements of economic interest file d by prospective public servants under this Article for appointed or employed positions an d written evaluations by the Commission of these statements are not public records until the pros pective public servant is appointed or employed by the State. All other statements of economic in terest and all other written evaluations by the

Commission of those statem ents are public records.Attachment 2 July 20, 2012 Page 23

(b) The statements of economic interest filed by prospective public servants, and the written evaluations by the Commission of those statements, for individua ls elected by the General Assembly shall be provided to the chair of the standing committee handling the legislation regarding the election and made available to all members of the General Assembly. The statements of economic interest filed by public servants elected to positions by the General Assembly, and written evaluations by the Commissi on of those statements, are not public records until the prospective public serv ant is sworn into office. (c) The statements of economic interest filed by prospective public servants, and the written evaluations by the Commission of those statements , for individuals confirmed for appointment as a public servant by the General Assembly shall be provided to the chair of the standing committee handling the legislation regarding th e appointment. The statements of economic interest filed by prospective publ ic servants for confirmation for appointment by the General Assembly, and written evaluations by the Commissi on of those statements, are public records at the time of the announcement of the appointment . (2006-201, s. 1; 2007-3 47, s. 10; 2008-213, ss. 65, 66.)

§ 138A-24. Contents of statement.

(a) Any statement of economic inte rest filed under this Article shall be on a form prescribed by the Commission. Answers must be provided to all questions. The form shall include the following information about the filing person and the filing person's immediate family: (1) Except as otherwise provided in this subdivision, the name, current mailing address, occupation, employer, and business of the filing person. Any individual holding or s eeking elected office for which residence is a qualification for office shall include a ho me address. A judi cial officer may use a current mailing address instead of the home address on the form required in this subsection. The filing pe rson may also use the initials instead of the name of any unemancipated child of the filing person who also resides in the household of the filing person. If the filing person provides the initials of an unemancipated child, the filing person shall concurrently provide the name of the unemancipated child to the Commission. The name of an unemancipated child provided by the filing person to the Commission shall not be a public r ecord under Chapter 132 of the General Statutes and is privileged and confidential. (2) A list of each asset and li ability included in this s ubdivision of whatever nature (including legal, equitable, or beneficial interest) with a value of at least ten thousand dollars ($10,000) owned by the filing person and the filing person's immediate family, except assets or liabil ities held in a blind trust. This list shall include the following: a. All real estate located in the State owned wholly or in part by the filing person or the filing person's immedi ate family, including descriptions adequate to determine the location by city and county of each parcel. b. Real estate that is currently leased or rented to or from the State. c. Personal property sold to or bought from the State within the preceding two

years. d. Personal property currently leased or rented to or from the State.Attachment 2 July 20, 2012 Page 24

e. The name of each publicly owned company. For purposes of this sub-subdivision, the term "publicly owned company" shall not include a widely held investment fund, including a mutual fund, regulated investment company, or pension or deferred compensation plan, if all of the following apply: 1. The filing person or a member of the filing person's immediate family neither exercises nor has the ability to exercise control

over the financial inte rests held by the fund. 2. The fund is publicly traded, or the fund's assets are widely

diversified. f. The name of each nonpublicly owned company or business entity, including interests in sole proprietorships, partnerships, limited partnerships, joint ventures, limited liability companies, limited liability partnerships, and closel y held corporations. g. For each company or business entity listed under sub-subdivision f. of this subdivision, if known, a list of any other companies or business entities in which the company or bus iness entity owns securities or equity interests exceed ing a value of ten t housand dollars ($10,000). h. Repealed by Session Laws 2010-169, s. 13(a), effective January 1, 2011, and applicable to statements of economic interest filed on or after that

date. i. Recodified as subdivision (a)(16) by Session Laws 2010-169, s. 13(c), effective January 1, 2011, and applicable to statements of economic

interest filed on or after that date. j. For a vested trust created, establishe d, or controlled by the filing person of which the filing person or the members of the filing person's immediate family are the beneficiar ies, excluding a blind trust, the name and address of the trustee, a description of the trust, and the filing person's relationship to the trust. k. A list of all liabilities, excluding in debtedness on the filing person's primary personal residence, by type of creditor and debtor. l. Repealed by Session Laws 2007-348, s. 34. See Editor's note for effective

date. m. A list of all stock options in a comp any or business not otherwise disclosed

on this statement. (3) The name of each source (not specific amounts) of income of more than five thousand dollars ($5,000) received duri ng the previous ye ar by business or industry type, if that source is not listed under subdivision (2) of this

subsection. Income shall in clude salary, wages, pr ofessional fees, honoraria, interest, dividends, rental income, and business income from any source other than capital gains, federal government retirement, military retirement, or social security income. (4) If the filing person is a practicing atto rney, an indication of whether the filing person, or the law firm with which the f iling person is affiliated, earned legalAttachment 2 July 20, 2012 Page 25

fees during the past year in excess of ten thousand dollars ($10,000) from any of the following categories of legal representation:

a. Administrative law. b. Admiralty law. c. Corporate law.

d. Criminal law.

e. Decedents' estates law.

f. Environmental law. g. Insurance law.

h. Labor law. i. Local government law. j. Negligence or other tort litigation law. k. Real property law.

l. Securities law.

m. Taxation law. n. Utilities regulation law. (5) Except for a filing person in compliance under subdivision (4) of this subsection, if the filing person is a licensed profe ssional or provides consulting services, either individually or as a member of a professional association, a list of categories of business and the nature of services rendered, for which payment for services were charged or paid dur ing the past year in excess of ten thousand dollars ($10,000). (6) An indication of whether the filing person, the filing person's employer, a member of the filing person's imme diate family, or the imme diate family member's employer is licensed or re gulated by, or has a busi ness relationship with, the board or employing entity with which the filing person is or will be

associated. This subdivision doe s not apply to a legislator , a judicial officer, or that legislator's or judicial officer's immediate family. (7) A list of societies, orga nizations, or advocacy groups, pertaining to subject matter areas over which the public servant's agency or board may have jurisdiction, in which the public servant or a member of the public servant's immediate family is a director, officer, or gov erning board member. This subdivision does not apply to a legislator, a judicial o fficer, or that legisl ator's or judicial officer's immediate family. (8) A list of all things w ith a total value of over two hundred dollars ($200.00) per calendar quarter given and received without valuable consideration and under circumstances that a reasonable person would conclude that the thing was given for lobbying, if such things were given by a person not required to report under Chapter 120C of the General Statutes, excluding things given by a member of the filing person's extende d family. The list shall include only those things received during the 12 months preceding the reporting period under subsection (d) of this section, a nd shall include the source of those things. The list required by this subdivision shall not apply to things of monetary value received by the filing person prior to the time the filing personAttachment 2 July 20, 2012 Page 26

filed or was nominated as a candidate for office, as described in G.S. 138A-22, or was appointed or employed as a covered person. (9) A list of any felony convictions of the filing person, excluding any felony convictions for which a pardon of i nnocence or order of expungement has been granted. (10) Any other information that the filing person believes may assist the Commission in advising the filing person with regard s to compliance with this Chapter. (11) A list of any nonprofit corporation or organization with which associated during the preceding calendar year, including a list of which of those nonprofit corporations or organizations with whic h associated do business with the State or receive State funds and a brief descrip tion of the nature of the business, if known or with which due dilige nce could reasonably be known. (12) A statement of whether the filing pers on or the filing person' s immediate family is or has been a lobbyist or lobbyist principal regist ered under Chapter 120C

of the General Statutes with in the preceding 12 months. (13) A list of all contributions as define d in G.S. 163-278.6(6) with a cumulative total of more than one thousand dollars ($1,000) made by the filing person only, during the preceding calendar year, to the candidate or candidate campaign committee of the covered person as defined in G.S. 138A-3(30)a. appointing the filing person to the covered board. (14) A statement indicating "Yes" or "No" as to whether the filing person engaged in each of the following activities duri ng the preceding calendar year, with respect to or on the behalf of the candidate or candidate campaign committee of the covered person as defined in G.S. 138A-3(30)a. appointing the filing person: (i) collected contributions fr om multiple contributors, took possession of such multiple contributions, and tr ansferred or delivered those collected multiple contributions, (ii) hosted a fund -raiser in the filing person's residence or place of business, or (iii) volunt eered for campaign-related activity. This subdivision only applies to filing pe rsons in the following categories: a. A public servant, or a prospectiv e appointee to, as defined in G.S. 138A-3(30)c. b. A judicial officer that serves on, or a prospective appointee to, the Supreme Court, the Court of Appeals, the supe rior court, or th e district court. c. A covered person serving on, or a prospective appointee to, one of the following panels or boards: 1. Alcoholic Beverage Control Commission.

2. Coastal Resources Commission.

3. State Board of Education.

4. State Board of Elections. 5. Division of Employment Security. 6. Environmental Management Commission.

7. Industrial Commission.

8. State Personnel Commission.

9. Rules Review Commission. 10. Board of Transportation.Attachment 2 July 20, 2012 Page 27

11. Board of Governors of the Un iversity of North Carolina.

12. Utilities Commission.

13. Wildlife Resources Commission. (15) The name of each business with which associated that the filing person or a member of the filing person's immediat e family is an employee, director, officer, partner, proprietor, or member or manager. (16) For any company or business entity listed under subdivisi on (15) of this subsection and sub-subdivisions f. and g. of subdivision (2) of this subsection, if known, a statement whether that co mpany or business entity has any material business dealings or business contracts with the State, or is regulated by the State, including a brief desc ription of the business activity. (b) The Supreme Court, the Committee, constitutiona l officers of the State, heads of principal departments, the Board of Gover nors of The University of Nort h Carolina, the State Board of Community Colleges, other boards, and the appoin ting authority or employing entity may require a filing person to file supplemental information in conjunction with the filing of that filing person's statement of economic interest. These supplemental filings requirements shall be filed

with the Commission and included on the forms to be filed with the Commission. The Commission shall evaluate the supplemental forms as part of the statement of economic interest. The failure to file supplemental forms shall be subject to the provi sions of G.S. 138A-25. (c) Each statement of economic interest shall contain a certification by the filing person that the filing person has read the stat ement and that, to the best of the filing person's knowledge and belief, the statement is true, correct, and comp lete. The filing person's certification also shall provide that the filing person has not transferred, and will not transfer, any asset, interest, or other property with the intent to conceal it from disclosure while retaining an equitable interest

therein. (c1) Reserved for futu re codification purposes. (c2) Recodified as G.S. 138A-22(c2) by Sessi on Laws 2010-169, s. 22(b), effective August 2, 2010. (d) All information provided in the statement of economic interest shall be current as of the last day of December of the year preceding the date the statemen t of economic interest was due. (e) The Commission shall prepare a written eval uation of each statement of economic interest relative to conflicts of interest and potential conf licts of interest. This subsection does not apply to statements of economic interest of legislat ors and judicial officer s. The Commission shall submit the evaluation to all of the following: (1) The filing person who submitted the statement. (2) The head of the agency in which the filing person serves. (3) The Governor for gubernatorial appoint ees and employees in agencies under the Governor's authority. (4) Repealed by Session Laws 2008-213, s. 74, effective August 15, 2008. (5) The appointing or hiring authority for those public servants not under the Governor's authority. (6) The State Board of Elections for those filing persons who are elected. (7) Repealed by Session Laws 2008-213, s. 74, effective August 15, 2008. (f) The Commission shall prepare a written eval uation of each statement of economic interest

for nominees of the Board of Governors of The Un iversity of North Carolina elected pursuant toAttachment 2 July 20, 2012 Page 28

G.S. 116-6, and nominees of the State Board of Community Colleges elected pursuant to G.S. 115D-2.1 within seven days of th e submission of the completed st atement of economic interest to the Commission. (2006-201, s. 1; 2007-29, s. 1; 2007-348, s. 34; 2008-187, s. 32; 2008-213, ss. 67-72(a), 73, 74, 74.5, 91; 2009-549, s. 14; 2009-570, s. 45; 2010-169, ss. 13(a)-(d), 17(q), 22(b); 2011-401, s. 3.18.)

§ 138A-25. Failure to file.

(a) Within 30 days after th e date due under G.S. 138A-22, th e Commission shall notify filing persons who have failed to file or filing persons whose statement has been deemed incomplete. For a filing person currently serving as a covere d person, the Commission sh all notify the filing person and the ethics liaison that if the statement of economic interest is not filed or completed within 30 days of receipt of the notice of failure to file or complete, the filing person shall be subject to a fine as provi ded for in this section. (b) Any filing person who fails to file or comple te a statement of economic interest within 30 days of the receipt of the notice, required under subsection (a) of this sect ion, shall be subject to a fine of two hundred fifty dollars ($2 50.00), to be imposed by the Commission. (c) Failure by any filing person to file or comple te a statement of economic interest within 60 days of the receipt of the notice, required under s ubsection (a) of this sect ion, shall be deemed to be a violation of this Chapte r and shall be grounds for disc iplinary action under G.S. 138A-45. (2006-201, s. 1; 2008-213, s. 75; 2009-549, s. 15.)

§ 138A-26. Concealing or failing to disclose material information.

A filing person who knowingly conceals or knowingl y fails to disclose information that is required to be disclosed on a statement of economic interest under this Articl e shall be guilty of a Class 1 misdemeanor and shall be subject to disciplinary action unde r G.S. 138A-45. (2006-201, s. 1.)

§ 138A-27. Penalty for false information.

A filing person who provides false information on a statement of economic interest as required under this Article knowing that the inform ation is false is guilty of a Class H felony and shall be subject to disciplinary action under G.S. 138A-45. (2006-201, s. 1.)

§ 138A-28: Reserved for future codification purposes.

§ 138A-29: Reserved for future codification purposes.

§ 138A-30: Reserved for future codification purposes.

Article 4.

Ethical Standards for Covered Persons.

§ 138A-31. Use of public posi tion for private gain.

(a) Except as permitted under G.S. 138A-38, a c overed person or legislative employee shall not knowingly use the covered person's or legislat ive employee's public position in an official action or legislative action that will result in financial benefit to the covered person or legislative employee, a member of the covered person's or legislative employee's extended family, or business with which the covered person or legisl ative employee is associated. This subsection shall not apply to financial or other benefits derived by a covered person or legislative employeeAttachment 2 July 20, 2012 Page 29

that the covered person or legislative employee would enjoy to an extent no greater than that

which other citizens of the St ate would or could enjoy, or that are so remote, tenuous, insignificant, or speculative that a reasonable person would conclude u nder the circumstances that the covered person's or legislative empl oyee's ability to protect the public interest and perform the covered person's or legislative employee's official duties would not be compromised. (b) A covered person shall not mention or authorize another person to mention the covered person's public position in nongovernmental advertisi ng that advances the pr ivate interest of the covered person or others. The prohibition in th is subsection shall not apply to any of the following: (1) Political advertising. (2) News stories and articles. (3) The inclusion of a covered person's public position in a directory or a biographical listing. (4) The inclusion of a covered person's public position in an agenda or other document related to a meeting, conference, or similar event when the disclosure could reasonably be considered material by an individual attending the meeting, conference, or similar event. (5) The inclusion of a covered person's public position in a charitable solicitation for a nonprofit business entity qualifying under 26 U. S.C. § 501(c)(3). (6) The disclosure of a covered person' s position to an exis ting or prospective customer, supplier, or client when the disclosure could reasonably be considered material by the cu stomer, supplier, or client. (c) Notwithstanding G.S. 163-278.16A, no covered pe rson shall use or permit the use of State funds for any advertisement or public service a nnouncement in a newspaper, on radio, television, magazines, or billboards, that contains that covered person's name, picture, or voice, except in case of State or national emergency and only if the announcement is reasonably necessary to the covered person's official functi on. This subsection shall not appl y to fund-raising on behalf of and aired on public radio or public television. (2006-201, s. 1; 2009-549, s. 16; 2011-393, s. 1.)

§ 138A-32. Gifts.

(a) A covered person or a legislative employee shall not knowingly, directly or indirectly, ask, accept, demand, exact, solicit, seek, assign, receive, or agree to receive anything of value for the covered person or legislative employee, or for another person, in return for being influenced in the discharge of the covered person's or legi slative employee's official responsibilities, other than that which is received by the covered person or the legisl ative employee from the State for acting in the covered person's or legi slative employee's official capacity. (b) A covered person may not solicit for a char itable purpose any thing of monetary value from any subordinate State employee. This s ubsection shall not apply to generic written

solicitations to all members of a class of subordinates. Nothing in this subsection shall prohibit a covered person from serving as the honorary head of the State Employees Combined Campaign. (c) No public servant, legislat or, or legislative employee sha ll knowingly accept a gift from a lobbyist or lobbyist principal registered under Chapter 120C of the General Statutes. No legislator or legislative employee shall knowi ngly accept a gift from liaison personnel designated under Chapter 120C of the General Statutes. No public servant, legislator, or legislative employee shall accept a gift knowing all of the following:Attachment 2 July 20, 2012 Page 30

(1) The gift was obtained indirectly from a lobbyist, lobbyist pr incipal, or liaison personnel registered under Chapter 120C of the General Statutes. (2) The lobbyist, lobbyist principal, or liaison personnel registered under Chapter 120C of the General Statutes intended for an ultimate recipient of the gift to be a public servant, legislator, or le gislative employee as provided in G.S.

120C-303. (d) No public servant shall knowingly accept a gift from a person whom the public servant

knows or has reason to know any of the following: (1) Is doing or is seeking to do business of any kind with the public servant's employing entity. (2) Is engaged in activities that are regul ated or controlled by the public servant's employing entity. (3) Has financial interests that may be substantially and materially affected, in a manner distinguishable from the public generally, by the performance or nonperformance of the public se rvant's official duties. (d1) No public servant shall accept a gift knowing all of the following: (1) The gift was obtained indirectly from a person described under subdivision (d)(1), (2), or (3) of this section. (2) The person described under subdivision (d)(1), (2), or (3) of th is section intended for an ultimate recipient of the gift to be a public servant. (e) Subsections (c), (d), and (d1) of this se ction shall not apply to any of the following: (1) Food and beverages for immediate cons umption in connection with any of the following: a. An open meeting of a public body, provided that the open meeting is properly noticed under Article 33C of Chapter 143 of the General

Statutes. b. A gathering of a person or governmen tal unit with at least 10 or more individuals in attendance open to th e general public, provided that a sign or other communication containi ng a message that is reasonably designed to convey to the general public that th e gathering is open to the general public is disp layed at the gathering. c. A gathering of a person or governmental unit to which the entire board of which a public servant is a member, at least 10 public servants, all the members of the House of Represen tatives, all the members of the Senate, all the members of a c ounty or municipal legislative delegation, all the members of a r ecognized legislative caucus with regular meetings other than meetings with one or more lobbyists, all the members of a committee, a standing subcommittee, a joint committee or joint commission of th e House of Representatives, the Senate, or the General Assembly, or all legislative employees are invited, and one of the following applies: 1. At least 10 individuals associated with the person or governmental unit actually attend, other than the covered person or legislative employee, or the immediate family of the covered person or legislative employee.Attachment 2 July 20, 2012 Page 31

2. All shareholders, empl oyees, board members, officers, members, or subscribers of the person or gove rnmental unit located in North

Carolina are notified and invited to attend. For purposes of this sub-subdivisi on only, the term "invited" shall mean written notice from at least one host or sponsor of the gathering containing the date, time, and locati on of the gathering given at least 24 hours in advance of the gatherin g to the specific qualifying group

listed in this sub-subdivision. If it is known at the time of the written notice that at least one sponsor is a lobbyist or lobbyist principal, the

written notice shall also state whethe r or not the gathering is permitted

under this section. (2) Informational materials relevant to the duties of the covered person or legislative employee. (3) Reasonable actual expenditu res of the legislator, public servant, or legislative employee for food, beverages, registrati on, travel, lodging, other incidental items of nominal value, and entert ainment, in connection with (i) a legislator's, public servant's, or legislative employee's attendance at an educational meeting for purposes primar ily related to the public duties and responsibilities of the legisl ator, public servant, or le gislative employee; (ii) a legislator's, public servant's, or legi slative employee's participation as a speaker or member of a panel at a meeti ng; (iii) a legislator's or legislative employee's attendance and pa rticipation in meetings of a nonpartisan state, regional, national, or international legislative organization of which the General Assembly is a member or that the legislator or legislative employee is a member or participant of by virtue of that legislator's or legislative employee's public position, or as a memb er of a board, agency, or committee of such organization; or (iv) a public servant's attendance and participation in meetings as a member of a board, agen cy, or committee of a nonpartisan state, regional, national, or international or ganization of which the public servant's agency is a member or the public servan t is a member by virtue of that public servant's public position, provide d the following conditions are met: a. The reasonable actual expenditures shall be made by a lobbyist principal, and not a lobbyist. b. Any meeting must be attended by at least 10 or more participants, have a formal agenda, and notice of the m eeting has been given at least 10 days in advance. c. Any food, beverages, tr ansportation, or entertainmen t must be provided to all attendees or defined groups of 10 or more attendees as part of the meeting or in conjunction with the meeting. d. Any entertainment must be incident al to the principal agenda of the meeting. e. If the legislator, public servant, or legislative employee is participating as a speaker or member of a panel, then that legislator, public servant, or legislative employee must be a bonafide speaker or participant.Attachment 2 July 20, 2012 Page 32

(4) A plaque or similar nonmonetary mement o recognizing individu al services in a field or specialty or to a charitable cause. (5) Gifts accepted on behalf of the State for use by the State or for the benefit of the

State. (6) Anything generally made av ailable or distributed to th e general public or all other State employees by lobbyists or lobbyist principals, or persons described in subdivisions (d)(1), (2), or (3) of this section. (7) Gifts from the covered person's or legislative employee's extended family, or a

member of the same household of the c overed person or legislative employee. (8) Gifts given to a public servant not ot herwise subject to an exception under this subsection, where the gift is food and beverages, transportation, lodging, entertainment or related expenses a ssociated with the public business of industry recruitment, promotion of inte rnational trade, or the promotion of travel and tourism, and the public servant is responsible for conducting the business on behalf of the State, provi ded all the following conditions apply: a. The public servant did not solicit th e gift, and the public servant did not accept the gift in exchange for the performance of the public servant's

official duties. b. The public servant reports electronically to the Commission within 30 days of receipt of the gift or of the date set for disclosure of public records under G.S. 132-6(d), if applicab le. The report shall include a description and value of the giftand a description how the gift contributed to the public business of industry recruitment, promotion of international trade, or the prom otion of travel and tourism. This report shall be posted to the Commission's public Web site. c. A tangible gift, other than food or be verages, not otherwise subject to an exception under this subs ection shall be turned over as State property to the Department of Commerce with in 30 days of receipt, except as permitted under subsection (f) of this section. (9) Gifts of personal property valued at less than one hundred dollars ($100.00) given to a public servant in the commission of the public servant's official duties if the gift is given to the public servant as a personal gift in another country as part of an overseas trade mission, a nd the giving and receiving of such personal gifts is considered a custom ary protocol in the other country. (10) Gifts given or received as part of a business, civic, religious, fraternal, personal,

or commercial relationshi p provided all of the foll owing conditions are met: a. The relationship is not related to the public servant's, legislator's, or legislative employee's pub lic service or position. b. The gift is made under circumstan ces that a reasonable person would conclude that the gift was not given to lobby. (11) Food and beverages for immediate consumption and related transportation provided all of the following conditions are met: a. The food, beverage, or transportati on is given by a lobbyist principal and not a lobbyist.Attachment 2 July 20, 2012 Page 33

b. The food, beverage, or transporta tion is provided during a conference, meeting, or similar event and is avai lable to all attendees of the same class as the recipient. c. The recipient of the food, beverage, or transportation is a director, officer, governing board member, employee, or independent contractor of one of the following: 1. The lobbyist principal giving the food, beverage, or transportation. 2. A third party that received the funds to purchase the food, beverages, or transportation. (12) Food and beverages for immediate cons umption at an organi zed gathering of a person, the State, or a governmental unit to which a public servant is invited to attend for purposes primarily related to the public servant' s public service or position, and to which at least 10 individua ls, other than the public servant, or the public servant's immedi ate family, actually atte nd, or to which all shareholders, employees, board members, officers, members, or subscribers of the person or governmental unit who are located in a specific North Carolina office or county are notified and invited to attend. (f) A prohibited gift that would constitute an expense appropriate for reimbursement by the public servant's employing entity if it had been incurred by the public servan t personally shall be considered a gift accepted by or donated to the State, provided the public servant has been approved by the public servant's employing entity to accept or r eceive such things of value on behalf of the State. The fact that the employing entity's reimbursement rate for the type of expense is less than the value of a particular gift shall not render the gift prohibited. (g) A prohibited gift shall be, and a permissibl e gift may be, promptly declined, returned, paid for at fair market value, or donated to charity or the State. (h) A covered person or legislative employee shall not accept an honorarium from a source other than the employing entity for conducting a ny activity where any of the following apply: (1) The employing entity reim burses the covered person or legislative employee for travel, subsistence, a nd registration expenses. (2) The employing entity's work time or resources are used. (3) The activity would be considered offici al duty or would b ear a reasonably close relationship to the covered person's or legislative employee's official duties. An outside source may reimburse the employing ent ity for actual expenses incurred by a covered person or legislative employee in conducting an activity within the duties of the covered person or legislative employee, or may pay a fee to the employing entity, in lieu of an honorarium, for the services of the covered person or legisla tive employee. An honorarium permissible under this

subsection shall not be consider ed a gift for purposes of subs ection (c) of this section. (i) Acceptance or solicitation of a gift in comp liance with this section without corrupt intent

shall not constitute a violation of the statut es related to bribery under G.S. 14-217, 14-218, or 120-86. (2006-201, s. 1; 2007-347, s. 11; 2007-348, ss. 15(b), 35 -41(a); 2008-213, ss. 77(a), 78(a), 79-82, 90; 2009-549, s. 17; 2010-169, ss. 15(b), (c), 17(r).)

§ 138A-33. Other compensation.

A public servant or legislative employee shall no t solicit or receive pers onal financial gain, other than that received by the publ ic servant or legislative employ ee from the State, or with theAttachment 2 July 20, 2012 Page 34

approval of the employing entity, for acting in the public servant's or legislative employee's official capacity, or for advice or assistance given in the course of carrying out the public servant's or legislative empl oyee's duties. (2006-201, s. 1.)

§ 138A-34. Use of information for private gain.

A public servant or legislative employee sha ll not use or disclose nonpublic information gained in the course of, or by reason of, the pub lic servant's or legislative employee's official responsibilities in a way that w ould affect a personal financial in terest of the public servant or legislative employee, a member of the public servant's or legisl ative employee's extended family, or a person or governmental unit with whom or business with which the public servant or legislative employee is associat ed. A public servant or legislative employee shall not improperly use or improperly disclose any confidentia l information. (2006-201, s. 1; 2008-213, s. 83.)

§ 138A-35. Other rules of conduct.

(a) A public servant shall make a due and dili gent effort before ta king any action, including voting or participating in discussions with ot her public servants on a board on which the public servant also serves, to determine whether the public servant has a conflict of interest. If the public servant is unable to determine whether or not a conflict of interest may exist, the public servant has a duty to inquire of the Commission as to that conflict. (b) A public servant shall con tinually monitor, evaluate, and manage the public servant's personal, financial, and professi onal affairs to ensure the abse nce of conflicts of interest. (c) A public servant shall obey a ll other civil laws, administrativ e requirements, and criminal statutes governing conduct of State government applicable to appointees and employees. (2006-201, s. 1.)

§ 138A-36. Public servant particip ation in official actions.

(a) Except as permitted by subsection (d) of this section and under G.S. 138A-38, no public servant acting in that capacity, au thorized to perform an official action requiring the exercise of discretion, shall participate in an official action by the employing entity if the public servant knows the public servant or a person with which the public servant is associated may incur a reasonably foreseeable financial benefit from the matter under consideration, which financial benefit would impair the public servant's inde pendence of judgment or from which it could reasonably be inferred that the financial benefit would influence the public servant's participation

in the official action. (b) A public servant described in subsection (a) of this secti on shall abstain from taking any

verbal or written action in furtherance of the o fficial action. The public servant shall submit in writing to the employing entity the reasons for the abstention. When the employing entity is a board, the abstention shall be record ed in the employing entity's minutes. (c) A public servant shall take appropriate st eps, under the particular circumstances and considering the type of proceeding involved, to remove himself or herself to the extent necessary, to protect the public interest and comp ly with this Chapter, from any proceeding in which the public servant's impartiality might re asonably be questioned due to the public servant's familial, personal, or financial relationship witha participant in the proceeding. A participant includes (i) an owner, shareholde r, partner, member or manager of a limited liability company, employee, agent, officer, or director of a business, organization, or group involved in theAttachment 2 July 20, 2012 Page 35

proceeding, or (ii) an organization or group that has petitioned for rule making or has some specific, unique, and substantial interest in th e proceeding. Proceedings include quasi-judicial proceedings and quasi-legislative proceedings. A personal relationship includes one in a leadership or policy-making position in a business, organization, or group. (d) If a public servant is uncertain about whether the rela tionship described in subsection (c) of this section justifies removing the public se rvant from the proceeding under subsection (c) of this section, the public servant sh all disclose the relationship to the individual presiding over the proceeding and seek appropriate guidance. The presiding officer, in consultation with legal counsel if necessary, shall then determine the ex tent to which the public servant will be permitted to participate. If the affected publ ic servant is the individual pres iding, then the vice-chair or any other substitute presiding officer shall make the determination. A good-faith determination under

this subsection of the allowable degree of participation by a public servant is presumptively valid and only subject to review under G.S. 138A-12 upon a clear and convincing showing of mistake, fraud, abuse of discretion, or willf ul disregard of this Chapter. (e) This section shall not allow participation in an offi cial action prohib ited by G.S. 14-234. (2006-201, s. 1; 2007-347, s. 12; 2007-348, s. 42; 2008-213, s. 84(a).)

§ 138A-37. Legislator participat ion in legislative actions.

(a) Except as permitted under G.S. 138A-38, no legi slator shall particip ate in a legislative action if the legislator knows the legislator or a person with whic h the legislator is associated may incur a reasonably foreseeable financial bene fit from the action, and if after considering whether the legislator's judgment would be substantially influen ced by the financial benefit and considering the need for the legislator's partic ular contribution, including special knowledge of the subject matter to the effective functioning of the legislature, the legislator concludes that an actual financial benefit does exist which would imp air the legislator's in dependence of judgment. (a1) The legislator shall submit in writing to the principal clerk of the house of which the legislator is a member the reasons for the absten tion from participation in the legislative matter. (b) If the legislator has a material doubt as to whether the legislator should act, the legislator may submit the question for an advisory opinion to the State Ethics Commission in accordance with G.S. 138A-13 or the Legislative Ethi cs Committee in accord ance with G.S. 120-104. (2006-201, s. 1; 2007-347, s. 13; 2008- 213, s. 84(b); 2010-169, s. 22(c).)

§ 138A-38. Permitted participation exception.

(a) Notwithstanding G.S. 138A-36 and G.S. 138A- 37, a covered person may participate in an official action or legislative action under a ny of the following circumstances except as specifically limited: (1) The only interest or reasonably foreseeable benefit or detriment that accrues to the covered person, the covered person's extended family, business with which the covered person is associated, or n onprofit corporation or organization with which the covered person is associat ed as a member of a profession, occupation, or general class is no greate r than that which could reasonably be

foreseen to accrue to all members of that profession, occupation, or general

class. (2) When an official or legislative action affects or would affect the covered person's compensation and allowances as a covered person.Attachment 2 July 20, 2012 Page 36

(3) Before the covered person participated in the official or legislative action, the covered person requested and received from the Commission or Committee a written advisory opinion that authorized the participation. In authorizing the participation under this subdivisio n, the Commission orCommittee shall consider the need for the legislator's pa rticular contribution, such as special knowledge of the subject matter, to the effective functioning of the General Assembly. (4) Before participating in an official action, a public servan t made full written disclosure to the public servant's empl oying entity which then made a written determination that the interest or benefit would neither impair the public servant's independence of judgment nor influence the public servant's participation in the official action. The employing entity shall file a copy of

that written determina tion with the Commission. (5) When action is ministerial only and doe s not require the exer cise of discretion. (6) When a public or legisla tive body records in its minutes that it cannot obtain a quorum in order to take the official or legislative action because the covered person is disqualified from acting under G.S. 138A-36, G.S. 138A-37, or this section, the covered person may be c ounted for purposes of a quorum, but shall otherwise abstain from taking any further action. (7) When a public servant notifies the Commis sion in writing that the public servant, or someone whom the public servant appo ints to act in th e public servant's stead, or both, are the onl y individuals having lega l authority to take an official action, and the public servant di scloses in writing the circumstances

and nature of the conflict of interest. (b) This section shall not allo w participation in an official action prohibited by G.S. 14-234. (c) Notwithstanding G.S. 138A-37, if a legislator is employed or retained by, or is an independent contractor of, a governmental unit, and the legislator is the only member of the

house elected from the district wh ere that governmental unit is located, then the legislator may take legislative action on behalf of that governmental unit provide d the legislator discloses in writing to the principal clerk the nature of the re lationship with the governmental unit prior to, or at the time of, taking th e legislative action. (d) Notwithstanding G.S. 138A-36, service by th e president, chief financial officer, chief administrative officer, or voting member of the board of trustees of a community college as an officer, employee, or member of the board of directors of a nonprofit corporation established under G.S. 115D-20(9) to support the community college shall not constitute a conflict of interest under G.S. 138A-36, provi ded that the majority of the nonprofit corpora tion's board of directors is not comprised of the president, chief financial officer, and chief administrative officer, or voting members of the board of truste es of the community college which the nonprofit corporation was created to support. (2006- 201, s. 1; 2007-347, s. 14; 2008-213, s. 85; 2010-169, s. 22(d).)

§ 138A-39. Disqualification to serve.

(a) Within 30 days of notice of the Commissi on's determination that a public servant has a disqualifying conflict of interest, the public servan t shall eliminate the inte rest that constitutes the disqualifying conflict of interest or resign from the public position.Attachment 2 July 20, 2012 Page 37

(b) Failure by a public servant to comply with s ubsection (a) of this sect ion is a violation of this Chapter for purposes of G.S. 138A-45. (c) A decision under this section shall be cons idered a final decision for contested case purposes under Article 3 of Chapte r 150B of the General Statutes. (d) As used in this section, a disqualifying conflict of interest is a conflic t of interest of such significance that the conflict of interest wo uld prevent a public servant from fulfilling a substantial function or portion of the pub lic servant's public duties. (2006-201, s. 1.)

§ 138A-40. Employment and supervision of memb ers of covered person's or legislative employee's extended family.

A covered person or legislative employee sh all not cause the employment, appointment, promotion, transfer, or advancement of an exte nded family member of the covered person or legislative employee to a State office, or a pos ition to which the covered person or legislative employee supervises or manages, except for positions at the General Assembly as permitted under G.S. 120-32(2). A public servant or legislat ive employee shall not supervise, manage, or participate in an action relating to the discipline of a member of the public servant's or legislative employee's extended family, except as specifica lly authorized by the public servant's or legislative employee's employing entit y. (2006-201, s. 1; 2007-347, s. 15.)

§ 138A-41. Other ethics standards.

(a) Nothing in this Chapter shall prevent the Supreme Court, the Committee, the Legislative Services Commission, constitutional officers of the State, heads of principal departments, the Board of Governors of The University of No rth Carolina, the State Board of Community Colleges, or other boards from a dopting additional or supplemental et hics standards applicable to that public agency's operations. (b) The Governor, as a constitutional officer of the State, shall have the authority to adopt additional and supplemental ethics standards appli cable to any appointee of the Governor to any State board, commission, council, committee, task force, authority, or similar public body, however denominated, created by stat ute or executive order, whethe r advisory or nonadvisory in authority. If the Governor adopts such ethics standard s, the standards sha ll be published in the North Carolina Register and made available to each appointee subj ect to the ethics standards. (c) The Governor, as a constituti onal officer of the State, sha ll have the authority to adopt minimum ethics standards applicab le to any employee of a State ag ency. If the Governor adopts such standards, the ethics standards shall be published in the North Carolina Register and made available to each employee subject to the ethi cs standards. (2006-201, s. 1; 2010-169, s. 14.)

§ 138A-42. Reserved for future codification purposes.

§ 138A-43. Reserved for future codification purposes.

§ 138A-44. Reserved for future codification purposes.Attachment 2 July 20, 2012 Page 38

Article 5. Violation Consequences.

§ 138A-45. Violation consequences.

(a) Violation of this Chapter by any covered person or legislative employee is grounds for disciplinary action. Except as spec ifically provided in this Chap ter and for perjury under G.S. 138A-12 and G.S. 138A-24, no criminal penalty shall attach for any violation of this Chapter. (b) The willful failure of any public servant serv ing on a board to comply with this Chapter is misfeasance, malfeasance, or nonfeasance. In the event of misfeasance, malfeasance, or nonfeasance, the offending public servant serving on a board is subject to removal from the board of which the public servan t is a member. For appointees of the Governor and members of the Council of State, the appointing authority may remove the offending public servant. For appointees of the Speaker of th e House of Representatives, the Speaker of the House of Representatives may remove the offending public servant. For appointees of the General Assembly made upon the recommendation of the Sp eaker of the House of Representatives, the

Governor at the recommendation of the Speaker of the House of Representatives may remove the offending public servant. For appointees of th e President Pro Tempore of the Senate, the President Pro Tempore of the Sena te may remove the offending public servant. For appointees of the General Assembly made upon the recommenda tion of the President Pro Tempore of the Senate, the Governor at the recommendation of the President Pro Tempore of the Senate may remove the offending public servan t. For public servants elected to a board by either the Senate or House of Representatives, the electing house of the General Assembly shall exercise the discretion of whether to remove the offending public servant. For all other appointees, the

Commission shall exercise the di scretion of whether to remove the offending public servant. (c) The willful failure of any public servant serv ing as a State employee to comply with this Chapter is a violation of a written work order, thereby permitting disciplinary action as allowed by the law, including termination from employment. For employees of State departments headed by a member of the Council of State, the appropri ate member of the Council of State shall make

all final decisions on the manner in which the o ffending public servant shall be disciplined. For public servants who are judicial employees, the Ch ief Justice shall make all final decisions on the matter in which the offending judicial employee sh all be disciplined. For legislative employees, the Legislative Services Commissi on shall make or refer to the hi ring authority all final decisions on the matter in which the offending legislativ e employee shall be disciplined. For public servants appointed or elected for The University of North Carolina or the Community Colleges System, the appointing or electing authority shall make all final decisions on the matter in which the offending public servant shall be disciplined. For any other public servant serving as a State employee, the Governor shall make all final decisions on the manner in which the offending public servant shall be disciplined. (d) The willful failure of any constitutional officer of the State to comply with this Chapter is malfeasance in office for purposes of G.S. 123-5. (e) The willful failure of a legislator, other than the Lieutenant Governor , to comply with this Chapter is grounds for sanctions under G.S. 120-103.1. (f) Nothing in this Chapter affects the power of the State to prosecute any person for any

violation of the criminal law. (g) The Commission may seek to enjoin vi olations of G.S. 138A-34. (2006-201, s. 1.)Attachment 2 July 20, 2012 Page 39

§ 143-215.107. Air quality standards and classifications.

(a) Duty to Adopt Plans, Standards, et c. – The Commission is hereby directed and empowered, as rapidly as possible within the limits of funds and facilities available to it, and subject to the procedural requireme nts of this Article and Article 21: (1) To prepare and develop, after proper st udy, a comprehensive plan or plans for the prevention, abatement and control of ai r pollution in the State or in any designated area of the State. (2) To determine by means of field sa mpling and other studi es, including the examination of available data collected by any local, State or federal agency or any person, the degree of air contam ination and air pollution in the State

and the several areas of the State.

* * * * * * * * * * * * * * * * * * * * * * * *

(4) To collect information or to require re porting from classes of sources which, in the judgment of the Environmental Ma nagement Commission, may cause or contribute to air pollution. Any pers on operating or responsible for the operation of air contaminant sources of any class for which the Commission requires reporting shall make reports c ontaining such information as may be required by the Commission concerni ng location, size, and height of contaminant outlets, processes employed, fuels used, and the nature and time periods or duration of emissions, and such other information as is relevant to air pollution and available or reasonably capable of being assembled. (5) To develop and adopt emission control standards as in the judgment of the Commission may be necessary to prohibit, abate, or control air pollution commensurate with established air quali ty standards. This subdivision does not apply to that portio n of the National Emission Standards for Hazardous Air Pollutants for asbestos that govern s demolition and renovation as set out in 40 C.F.R. § 61.141, 61.145, 61.150, and 61.154 (1 July 1993 edition).

* * * * * * * * * * * * * * * * * * * * * * * *

(7) To develop and adopt standards and pl ans necessary to implement programs for the prevention of significant deterioration and for the attainment of air quality

standards in nonattainment areas.

* * * * * * * * * * * * * * * * * * * * * * * *

(10) To develop and adopt standards and plans necessary to implement requirements of the federal Clean Air Act and implementing regulations adopted by the United States Environmental Protection Agency.Attachment 2 July 20, 2012 Page 40

§ 143-215.107D. Emissions of oxides of nitrogen (NOx) and sulfur dioxide (SO2) from certain coal-fired generating units.

(a) As used in this section: (1) "Coal-fired generating unit" means a co al-fired generating unit, as defined by 40 Code of Federal Regulations § 96.2 (1 July 2001 Edition), that is located in this State and has the capacity to genera te 25 or more megawatts of electricity. (2) "Investor-owned public utility" means an investor-owned public utility, as defined

in G.S. 62-3. (b) An investor-owned public u tility that owns or operates co al-fired generating units that collectively emitted more than 75,000 tons of oxi des of nitrogen (NOx) in calendar year 2000: (1) Shall not collectively emit from the coal-fired generating units that it owns or operates more than 35,000 tons of oxides of nitrogen (NOx) in any calendar year beginning 1 January 2007. (2) Shall not collectively emit from the coal-fired generating units that it owns or operates more than 31,000 tons of oxides of nitrogen (NOx) in any calendar year beginning 1 January 2009. (c) An investor-owned public utility that owns or operates coal-fired generating units that collectively emitted 75,000 tons or less of oxides of nitrogen (NOx) in calendar year 2000 shall not collectively emit from the coal-fired genera ting units that it owns or operates more than 25,000 tons of oxides of nitrogen (NOx) in any calendar year beginning 1 January 2007. (d) An investor-owned public u tility that owns or operates co al-fired generating units that collectively emitted more than 225,000 tons of sulfur dioxide (SO2) in calendar year 2000: (1) Shall not collectively emit from the coal-fired generating units that it owns or operates more than 150,000 tons of sulfur dioxide (SO2) in any calendar year beginning 1 January 2009. (2) Shall not collectively emit from the coal-fired generating units that it owns or operates more than 80,000 tons of sulfur dioxide (SO2) in any calendar year beginning 1 January 2013. (e) An investor-owned public utility that owns or operates coal-fired generating units that collectively emitted 225,000 tons or less of sulf ur dioxide (SO2) in calendar year 2000: (1) Shall not collectively emit from the coal-fired generating units that it owns or operates more than 100,000 tons of sulfur dioxide (SO2) in any calendar year beginning 1 January 2009. (2) Shall not collectively emit from the coal-fired generating units that it owns or operates more than 50,000 tons of sulfur dioxide (SO2) in any calendar year beginning 1 January 2013. (f) Each investor-owned public utility to which this section applies may determine how it will

achieve the collective emissions limitations imposed by this section. Compliance with the

emissions limitations set out in this section does not alter the obligation of any person to comply with any other federal or State la w, regulation, or rule related to air qualit y or visibility. This

subsection shall not be construed to limit the authority of the Commission to impose specific

limitations on the emission of oxi des of nitrogen (NOx) and su lfur dioxide (SO2) from an individual coal-fired generating unit owned or operated by an investor-owned public utility.Attachment 2 July 20, 2012 Page 41

(g) A coal-fired generating unit that is subjec t to the collective emissions limitations set out

in this section on 1 July 2002 shall remain subject to the collective emissions limitations whether

or not it thereafter continues to be owned or operated by an investor-owned public utility. (h) The Commission shall require th at any permit or modified permit issued for a coal-fired generating unit that is subject to this sectio n include conditions that provide for testing, monitoring, record keeping, and reporting adequate to assure compliance with the requirements

of this section. (i) The Governor may enter into an agreemen t with an investor-owned public utility under which the investor-owned public u tility voluntarily agrees to transfer to th e State any emissions allowances acquired or that ma y be acquired by the investor-own ed public utility pursuant to 42 U.S.C. §§ 7651-7651o, as implemented by 40 Code of Federal Regulations §§ 73.1 through 73.90 (1 July 2001 Edition) ; 42 U.S.C. 7410(a)(2)(D)(i)(I), as implemented by 40 Code of Federal Regulations § 51.121 (1 July 2001 Edition) , related federal regulations, and the associated State Implementation Plan; 42 U.S.C. § 7426, as implemented by 40 Code of Federal Regulations § 52.34 (1 July 2001 Edition) and related federal regulations; or any similar program

established under federal law that result from co mpliance with the emissions limitations set out in this section. An agreement en tered into pursuant to this subs ection shall be binding and shall be enforceable by specific performa nce. If the Governor enters into an agreement that provides

for the transfer of emissions allowances to the State, the Governor shall file verified copies of the agreement with the Attorney General, the Secretar y of State, the State Treasurer, the Secretary of Environment and Natural Resources, and the Utilities Commission. The State Treasurer shall

hold all emissions allowances that are transferred to the State as provided in this subsection in trust for the people of this Stat e and shall sell, trade, transfer , or otherwise dispose of the emissions allowances only as the Ge neral Assembly shall provide by law. (j) An investor-owned public util ity that is subject to the emi ssions limitations set out in this

section shall submit to the Utilities Commission a nd to the Department on or before 1 April of each year a verified statement pursuant to subsection (i) of G.S. 62-133.6. (2002-4, s. 1.)

§ 143-215.108. Control of sources of ai r pollution; permits required.

(a) Except as provided in subsections (a1) and (a 2) of this section, no person shall do any of the following things or carry out any of the follow ing activities that contravene or will be likely

to contravene standards es tablished pursuant to G.S. 143-215.107 or set out in G.S. 143-215.107D unless that person has obtained a perm it for the activity from the Commission and has complied with any conditions of the permit: (1) Establish or operate any air contaminan t source, except as provided in G.S.

143-215.108A. (2) Build, erect, use, or opera te any equipment that may result in the emission of an air contaminant or that is likely to cause air pollution, except as provided in

G.S. 143-215.108A. (3) Alter or change the construction or method of operation of any equipment or process from which air contaminants are or may be emitted. (4) Repealed by Session Laws 2003- 428, s. 1, effective August 19, 2003. (a1) The Commission may by rule establish procedur es that meet the requirements of section 502(b)(10) of Title V (42 U.S.C. § 7661a(b)(10 )) and 40 Code of Federal Regulations §Attachment 2 July 20, 2012 Page 42

70.4(b)(12) (1 July 1993 Edition) to allow a permittee to make changes within a permitted facility without requiring a revision of the permit. (a2) The Commission may adopt rule s that provide for a minor modification of a permit. At a minimum, rules that provide for a minor modifica tion of a permit shall meet the requirements of 40 Code of Federal Regulations § 70.7(e)(2) (1 July 1993 Edition). If the Commission adopts rules that provide for a minor m odification of a permit, a permitt ee shall not make a change in the permitted facility while the application for the minor modifi cation is under review unless the change is authorized under th e rules adopted by the Commission. (b) The Commission shall act upon all applications for permits so as to effectuate the purposes of this Article by reducing existing ai r pollution and preventing, so far as reasonably possible, any increased pollution of the air from any additional or enlarged sources. (c) The Commission shall have the power: (1) To grant and renew a permit with any conditions attached that the Commission believes necessary to achieve the purposes of this Article or the requirements of the Clean Air Act and implementi ng regulations adopted by the United States Environmental Protection Agency; (2) To grant and renew any temporary permit for such period of time as the Commission shall specify even though th e action allowed by such permit may result in pollution or increase pollu tion where conditions make such temporary permit essential; (3) To terminate, modify, or revoke a nd reissue any permit upon not less than 60 days' written notice to any person affected; (3a) To suspend any permit pursuant to the provisions of G.S. 150B-3(c); (4) To require all applications for permits and renewals to be in writing and to prescribe the form of such applications; (5) To request such information from an applicant and to conduct such inquiry or investigation as it may deem necessary and to require the submission of plans and specifications prior to acting on any application for a permit; (5a) To require that an applicant satisfy the Department that the applicant, or any parent, subsidiary, or other affiliate of the applicant or parent: a. Is financially qualified to carry out the activity for which a permit is required under subsection (a); and b. Has substantially complied with th e air quality and emission control standards applicable to any activity in which the applicant has previously engaged, and has been in substantial compliance with federal and state laws, regulations, and rules for the protection of the

environment. As used in this subdivision, the words "affiliate," "parent," and "subsidiary" have the same meaning as in 17 C ode of Federal Regulations 240.12b-2 (1 April 1990 Edition); (6) To adopt rules, as it deems necessary, establishing the form of applications and permits and procedures for the granting or denial of permits and renewals pursuant to this section; and all perm its, renewals and denials shall be in writing;Attachment 2 July 20, 2012 Page 43

(7) To prohibit any stationary source within the State from emitting any air pollutant in amounts that will prevent attainment or maintenance by any other state of any national ambient air quality standard or that will interfere with measures required to be included in the applicable implementation plan for any other state to prevent deterioration of ai r quality or protect visibility; and (8) To designate certain classes of activ ities for which a general permit may be issued, after considering the environmental impact of an activity, the frequency of the activity, the need fo r individual permit oversight, and the need for public review and co mment on individual permits. (d) (1) The Commission may conduct any inquir y or investigation itconsiders necessary before acting on an application and may require an applican t to submit plans, specifications, and other information the Commission considers necessary to evaluate the application. A permit application may not be deemed complete unless it is accompanied by a copy of the request for determination as provided in subsection (f) of this section that bears a date of receipt entered by the clerk of the local government and un til the 15-day period for issuance of a determination has elapsed. (2) The Commission shall adopt rules specifying the times within which it must act upon applications for permits required by Title V and other permits required by this section. The times specified shall be extended for the period during which the Commission is prohibited from issuing a permit under subdivisions (3) and (4) of this subsection. The Co mmission shall inform a permit applicant as to whether or not the application is complete within the time specified in the rules for action on the application. If the Commission fails to act on an application for a permit required by Title V or this section within the time period specified, the failure to act on th e application constitutes a final agency decision to deny the permit. A permit applicant, permittee, or other person aggrieved, as defined in G.S. 150B-2, may seek judicial review of a failure to act on the application as provided in G.S. 143-215.5 and Article 4 of Chapter

150B of the General Statutes. Notw ithstanding the provisions of G.S. 150B-51, upon review of a failure to act on an application for a permit required by Title V or this section, a cour t may either: (i) affirm the denial of the permit or (ii) remand the applica tion to the Commission for action upon the application within a specified time. (3) If the Administrator of the United States Environmental Protection Agency validly objects to the issuance of a permit required by Title V within 45 days after the Administrator receives the pr oposed permit and the required portions of the permit application, the Commi ssion shall not issue the permit until the Commission revises the proposed permit to meet all objections noted by the

Administrator or otherwise satisfies all objections cons istent with Title V and implementing regulations adopted by the United States Environmental Protection Agency. (4) If the Administrator of the United States Environmental Protection Agency validly objects to the issuance of a permit required by Title V after the expiration of the 45-day review period specified in subdivision (3) of thisAttachment 2 July 20, 2012 Page 44

subsection as a result of a petition filed pursuant to section 505(b)(2) of Title V (42 U.S.C. § 7661d(b)(2)) and prior to the issuance of the permit by the Commission, the Commission shall not i ssue the permit until the Commission revises the proposed permit to meet all objections noted by the Administrator

or otherwise satisfies all objections consistent with Title V and implementing regulations adopted by the United Stat es Environmental Protection Agency. (d1) No Title V permit issued pursuant to this section shall be issued or renewed for a term exceeding five years. All other permits issued pursua nt to this section shall be issued for a term not to exceed eight years. (e) A permit applicant or permittee who is diss atisfied with a decision of the Commission may commence a contested case by filing a petiti on under G.S. 150B-23 within 30 days after the Commission notifies the applicant or permittee of its decision. If the permit applicant or permittee does not file a petition within the required time, the Commission's decision on the application is final and is not subject to review. (f) An applicant for a permit unde r this section for a new facil ity or for the expansion of a facility permitted under this section shall reque st each local government having jurisdiction over any part of the land on which th e facility and its appurtenances are to be located to issue a determination as to whether the local government has in effect a zoning or subdivision ordinance applicable to the facility and whet her the proposed facility or expa nsion would be consistent with the ordinance. The request to the local governme nt shall be accompanied by a copy of the draft permit application and shall be delivered to the clerk of the local government personally or by

certified mail. The determination shall be verified or supported by affidavit signed by the official designated by the local government to make the determination and, if the local gove rnment states that the facility is inconsistent with a zoning or subdivision ordi nance, shall incl ude a copy of the ordinance and the specific reas ons for the determination of in consistency. A copy of any such determination shall be provided to the applicant when it is submitted to the Commission. The Commission shall not act upon an application for a permit under this section until it has received a determination from each local government request ed to make a determination by the applicant. If a local government determines that the new faci lity or the expansion of an existing facility is inconsistent with a zoning or subdivision ordi nance, and unless the local government makes a subsequent determination of cons istency with all ordinances cited in the determination or the proposed facility is determined by a court of co mpetent jurisdiction to be consistent with the cited ordinances, the Commission sha ll attach as a condition of the permit a requirement that the applicant, prior to construction or operation of the facility unde r the permit, comply with all lawfully adopted local or dinances, including those cited in the determina tion, that apply to the facility at the time of construc tion or operation of the facility. If a local government fails to submit a determination to the Commission as provi ded by this subsection within 15 days after receipt of the request, the Commission may proceed to consider the perm it application without regard to local zoning and subdi vision ordinances. This subsecti on shall not be construed to affect the validity of any lawf ully adopted franchise, local zoning, subdivision, or land-use planning ordinance or to affect the responsibility of any person to comply with any lawfully adopted franchise, local zoning, subdivision, or land-use planni ng ordinance. This subsection shall not be construed to limit any opportunity a local government may have to comment on a permit application under any other law or rule. Th is subsection shall not apply to any facilityAttachment 2 July 20, 2012 Page 45

with respect to which local ordi nances are subject to review unde r either G.S. 104E-6.2 or G.S.

130A-293. (g) Any person who is required to hold a perm it under this section shall submit to the Department a written description of his current and projected plan s to reduce the emission of air contaminants under such permit by source reducti on or recycling. The written description shall accompany the payment of the annual permit fee. The written description shall also accompany any application for a new permit, or for modifi cation of an existing permit, under this section. The written description required by this subsecti on shall not be consider ed part of a permit application and shall not serve as the basis for the denial of a permit or permit modification. (h) Expedited Review of Applications Ce rtified by a Professional Engineer. – The Commission shall adopt rules governing the subm ittal of permit applications certified by a professional engineer, in cluding draft permits, that can be se nt to public notice and hearing upon receipt and subjected to techni cal review by personnel within th e Department. These rules shall specify, at a minimum, any forms to be used; a checklist for applicants that lists all items of information required to prepare a complete permit application; the form of the certification required on the application by a professional engin eer; and the information that must be included in the draft permit. The Departme nt shall process an application that is certified by a professional engineer as provided in subdivisions (1) through (7 ) of this subsection. (1) Initiation of Review. – Upon receipt of an application certified by a professional engineer in accordance with this subsect ion and the rules adopted pursuant to this subsection, the Department shall determine whether the application is complete as provided in subdivision (2) of this subsection. Within 30 days after the date on which an application is determined to be complete, the Department shall: a. Publish any required notices, usi ng the draft permit included with the application; b. Schedule any required public meetings or hearings on the application and permit; and c. Initiate any and all tec hnical review of the applica tion in a manner to ensure substantial completion of the technical review by the time of any public hearing on the application, or if there is no hearing, by the close of the notice period. (2) Completeness Review. – Within 10 wo rking days of receipt of the permit application certified by a professiona l engineer under this subsection, the Department shall determine whether the application is comp lete for purposes of this subsection. The Department shall determine whether the permit application certified by a professional engineer is complete by comparing the information provided in the applicati on with the checklist contained in the rules adopted by the Commission pursuant to this subsection. a. If the application is not complete, the Department shall promptly notify the applicant in writing of all deficien cies of the application, specifying the items that need to be included, modified, or supplemented in order to make the application complete, and the 10-day time period is suspended after this request for fu rther information. If the applicant submits the requested information within the time specified, theAttachment 2 July 20, 2012 Page 46

10-day time period shall begin ag ain on the day the additional

information was submitted. If th e additional information is not submitted within the time periods specified, the Department shall return the application to the appli cant, and the applicant may treat the return of the application as a denial of the application or may resubmit the application at a later time. b. If the Department fails to notify the applicant that an application is not complete within the time period set forth in this subsection, the application shall be deemed to be complete. (3) Time for Permit Decision. – For any application found to be complete under subdivision (2) of this subsection, the De partment shall issue a permit decision within 30 days of the last day of any public hearing on the application, or if there is no hearing, within 30 days of the close of the notice period. (4) Rights if Permit Decision Not Made in Ti mely Fashion. – If the Department fails to issue a permit decision within the time periods specified in subdivision (3) of this subsection, the applicant may: a. Take no action, thereby consenting to the continued review of the application; or b. Treat the failure to issue a permit deci sion as a denial of the application and appeal the denial as provided in subdivision (2) of subsection (d) of

this section. (5) Power to Halt Review. – At any time af ter the permit application certified by a professional engineer has been determin ed to be complete under subdivision (2) of this subsection, the Department may immediately terminate review of that application, includi ng technical review and a ny hearings or meetings scheduled on the application, upon a dete rmination of one of the following: a. The permit application is not in substantial compliance with the applicable rules; or b. The applicant failed to pay all permit application fees. (6) Rights if Review Halted. – If the Depart ment terminates review of an application under subdivision (5) of this subsection, the applicant may take any of the following actions: a. Revise and resubmit the application; or

b. Treat the action as a deni al of the application a nd appeal the denial under Article 3 of Chapter 150B of the General Statutes. (7) Option; No Additional Fee. – The subm ittal of a permit application certified by a professional engineer to be considered under this subsection shall be an option and shall not be required of any appli cant. The Department shall not impose any additional fees for the receipt or processing of a permit application certified by a profe ssional engineer. (i) Rules for Review of Applications Other Th an Those Certified by a Professional Engineer. – The Commission shall adopt rules governing the times of review for all permit applications submitted pursuant to this section other than those certified by a professional engineer pursuant to subsection (h) of this section. Those rule s shall specify maximum times for, among other things, the following actions in reviewing the pe rmit applications covered by this subsection:Attachment 2 July 20, 2012 Page 47

(1) Determining that the permit application is complete; (2) Requesting additional information to determine completeness; (3) Determining that additional information is needed to conduct a technical review of the application; (4) Completing all technical revi ew of the permit application; (5) Holding and completing all public meetings and hearings required for the application; (6) Completing the record from review ing and acting on the application; and (7) Taking final action on the permit, including granting or denying the application. (1973, c. 821, s. 6; c. 1262, s. 23; 1979, c. 545, ss. 2, 3; 1987, c. 461, s. 2; c. 827, ss. 154, 206; 1989, c. 168, s. 30; c. 492; 1989 (Reg. Sess., 1990), c. 1037, s. 2; 1991, c. 552, s. 5; c. 629, s. 1; c. 761, s. 27(a) -(c); 1993, c. 400, s. 8; 1995, c. 484, s. 2; 1995 (Reg. Sess., 1996), c. 728, s. 1; 2002-4, s. 2; 2003-340, s. 1.8(b); 2003-428, ss. 1, 2; 2011-398, s. 60(a).)

§ 143-215.3. General powers of Commission and Department; auxiliary powers.

(a) Additional Powers. – In addition to the specific powers prescribed elsewhere in this Article, and for the purpose of carrying out its duties, the Commission shall have the power: (1) To make rules implementing Article s 21, 21A, 21B, or 38 of this Chapter. (1a) To adopt fee schedules and collect fees for the following: a. Processing of applications for perm its or registrations issued under Article 21, other than Parts 1 and 1A, Ar ticles 21A, 21B, and 38 of this Chapter; b. Administering permits or registrati ons issued under Article 21, other than Parts 1 and 1A, Articles 21A, 21B, a nd 38 of this Chapter including monitoring compliance with the terms of those permits; and c. Reviewing, processing, and publicizi ng applications for construction grant

awards under the Federal Wa ter Pollution Control Act. No fee may be charged under this provision, however, to a farmer who submits an application that pertains to his farming operations. (1b) The fee to be charged pursuant to G.S. 143-215.3(a)(1a) for processing an application for a permit under G.S. 143-215.108 and G.S. 143-215.109 of Article 21B of this Chapter may not exceed five hundred dollars ($500.00). The fee to be charged pursuant to G.S. 143-215.3( a)(1a) for processing a registration under Part 2A of this Article or Article 38 of this Chapter may not exceed fifty dollars ($50.00) for any si ngle registration. An additional fee of twenty percent (20%) of the registrati on processing fee may be assessed for a late registration under Article 38 of this Chapter. The fee for administering and compliance monitoring under Article 21, other than Parts 1 and 1A, and

G.S. 143-215.108 and G.S. 143-215.109 of Artic le 21B shall be charged on an annual basis for each year of the permit term and may not exceed one thousand five hundred dollars ($1,500) per year. Fees for processing all permits under Article 21A and all other sections of Article 21B shall not exceed one hundred dollars ($100.00) fo r any single permit. The totalAttachment 2 July 20, 2012 Page 48

payment for fees that are set by the Commission under this subsection for all permits for any single facility shall not exceed seven thousand five hundred dollars ($7,500) per year, which amount shall include all application fees and fees for administration and compliance m onitoring. A single facility is defined to be any contiguous area under one ownership and in which permitted

activities occur. For all permits issued under these Articles where a fee schedule is not specified in the statutes, the Commi ssion, or other commission specified by statute shall adopt a fee schedule in a rule following the procedures established by the Administ rative Procedure Act. Fee schedules

shall be established to reflect the si ze of the emission or discharge, the potential impact on the environment, the staff costs involved, relative costs of the issuance of new permits and the re issuance of existing permits, and shall include adequate safeguards to prev ent unusual fee assessments which would

result in serious economic burden on an individual applicant. A system shall

be considered to allow consolidated annual payments for persons with multiple permits. In its rulemaking to establish fee schedules, the Commission

is also directed to cons ider a method of rewarding facilities which achieve full compliance with administrative and se lf-monitoring reporting requirements, and to consider, in those cases where th e cost of renewal or amendment of a permit is less than for the original permit, a lower fee for the renewal or

amendment. (1c) Moneys collected pursuant to G.S. 143-215.3(a)(1a) shall be used to: a. Eliminate, insofar as possible, b acklogs of permit applications awaiting agency action; b. Improve the quality of permits issued; c. Improve the rate of compliance of permitted activities with environmental standards; and d. Decrease the length of the processing period for permit applications. (1d) The Commission may adopt and implem ent a graduated fee schedule sufficient

to cover all direct and indirect cost s required for the State to develop and administer a permit program which meets the requirements of Title V. The provisions of subdivision (1b) of this subsection do not apply to the adoption

of a fee schedule under this subdivisi on. In adopting and implementing a fee schedule, the Commission shall require that the owner or operator of all air contaminant sources subject to the re quirement to obtain a permit under Title V to pay an annual fee, or the equivale nt over some other period, sufficient to cover costs as provided in section 502( b)(3)(A) of Title V. The fee schedule shall be adopted according to the procedures set out in Chapter 150B of the

General Statutes.

a. The total amount of fees collecte d under the fee schedule adopted pursuant to this subdivision shall conform to the requirements of section 502(b)(3)(B) of Title V. No fee sha ll be collected for more than 4,000 tons per year of any individual re gulated pollutant, as defined in section 502(b)(3)(B)(ii) of Title V, emitted by any source. FeesAttachment 2 July 20, 2012 Page 49

collected pursuant to this subdivision shall be credited to the Title V

Account. b. The Commission may reduce any permit fe e required under this section to

take into account the financial reso urces of small business stationary sources as defined under Title V and regulations promulgated by the United States Environmental Protection Agency.

c. When funds in the Title V Account exceed the total amount necessary to cover the cost of the Title V program for the next fiscal year, the Secretary shall reduce the amount billed for the next fiscal year so that the excess funds are used to supplement the cost of administering the Title V permit program in that fiscal year. (1e) The Commission shall collect the a pplication, annual, and project fees for processing and administering permits, cer tificates of coverage under general permits, and certifications issued under Parts 1 and 1A of this Article and for compliance monitoring under Parts 1 and 1A of this Article as provided in

G.S. 143-215.3D and G.S. 143-215.10G. (2) To direct that such investigation be conducted as it may reasonably deem necessary to carry out its duties as prescr ibed by this Article or Article 21A or Article 21B of this Chapter, and for th is purpose to enter at reasonable times upon any property, public or private, for the purpose of investigating the condition of any waters and the discha rge therein of any sewage, industrial waste, or other waste or for the purpos e of investigating the condition of the air, air pollution, air contaminant sour ces, emissions, or the installation and operation of any air-cleaning devices, and to require written statements or the filing of reports under oat h, with respect to pertinent questions relating to the operation of any air-cleaning device, sewer system, disposal system, or

treatment works. In the case of effluent or emission data, any records, reports,

or information obtained under this Article or Article 21A or Article 21B of this Chapter shall be related to any a pplicable effluent or emission limitations or toxic, pretreatment, or new source performance standards. No person shall refuse entry or access to any authorized representative of the Commission or Department who requests entry for purpos es of inspection, and who presents appropriate credentials, nor shall any person obstruct, ha mper or interfere with any such representative while in the pr ocess of carrying out his official duties. (3) To conduct public hearings and to delegate the pow er to conduct public hearings in accordance with the procedures prescr ibed by this Article or by Article 21B of this Chapter. (4) To delegate such of the powers of the Commission as the Commission deems necessary to one or more of its memb ers, to the Secretary or any other qualified employee of the Department. The Commission shall not delegate to persons other than its own members and the designated employees of the Department the power to conduct hearings with respect to the classification of waters, the assignment of classifications, air quality standards, air contaminant source classifications, emi ssion control standards, orthe issuance of any special order except in th e case of an emergency under subdivision (12) of thisAttachment 2 July 20, 2012 Page 50

subsection for the abatement of existi ng water or air pollution. Any employee of the Department to whom a delega tion of power is made to conduct a hearing shall report the hearing with its evidence and record to the

Commission. (5) To institute such actions in the superior cour t of any county in which a violation of this Article, Article 21B of this Chapter, or the rules of the Commission has occurred, or, in the discretion of the Co mmission, in the superior court of the county in which any defendant resides, or has his or its principal place of business, as the Commission may deem necessary for the enforcement of any of the provisions of this Article, Article 21B of this Chapter, or of any official action of the Commission, including proceedings to enforce subpoenas or for the punishment of contempt of the Commission. (6) To agree upon or enter into any settlements or compromises of any actions and to prosecute any appeals or other proceedings. (7) To direct the investigati on of any killing of fish and wildlife which, in the opinion of the Commission, is of sufficient magn itude to justify investigation and is

known or believed to have resulted from the pollution of the waters or air as defined in this Article, and whenever a ny person, whether or not he shall have been issued a certificate of approval , permit or other document of approval authorized by this or any other State la w, has negligently, or carelessly or unlawfully, or willfully and unlawfully, ca used pollution of the waters or air as defined in this Article, in such qu antity, concentration or manner that fish

or wildlife are k illed as the result thereof, the Commission, may recover, in the name of the State, damages from such person. The measure of damages shall be the amount determined by the Department and the North Carolina Wildlife Resources Commission, whichever has jurisdiction over the fish and wildlife destroyed to be the replacemen t cost thereof plus the cost of all reasonable and necessary investigations made or caused to be made by the State in connection therewith. Upon r eceipt of the estimate of damages caused, the Department shall notify the pe rsons responsible for the destruction of the fish or wildlife in question a nd may effect such settlement as the Commission may deem proper and reasonabl e, and if no settlement is reached within a reasonable time, the Commission shall bring a civil action to recover such damages in the superior court in the county in which the discharge took place. Upon such action being brought the superior court shall have jurisdiction to hear and determine all issu es or questions of law or fact, arising on the pleadings, including issues of liability and the amount of damages. On such hearing, the estimate of the repl acement costs of the fish or wildlife destroyed shall be prima facie eviden ce of the actual replacement costs of such fish or wildlife. In arriving at such estimate, any reasonably accurate method may be used and it shall not be necessary for any ag ent of the Wildlife Resources Commission or the Depart ment to collect, handle or weigh numerous specimens of dead fish or wildlife.

The State of North Carolina shall be deemed the owner of the fish or wildlife killed and all actions for recovery shall be brought by the Commission on behalf ofAttachment 2 July 20, 2012 Page 51

the State as the owner of the fish or wildlife. The fact that the person or persons alleged to be responsible for the pollution which killed the fish or

wildlife holds or has held a certificate of approval, permit or other document of approval authorized by this Article or any other law of the State shall not bar any such action. The proceeds of any recovery, less the cost of investigation, shall be used to replace, insofar as and as promptly as possible, the fish and wildlife killed, or in cas es where replacement is not practicable, the proceeds shall be used in whatevermanner the responsible agency deems proper for improving the fish and wildlife habitat in question. Any such funds received are hereby appropriated for these designated purposes. Nothing in this paragraph shall be construed in any way to limit or prevent any other action which is now authorized by this Article. (8) After issuance of an appr opriate order, to withhold th e granting of any permit or permits pursuant to G.S. 143-215.1 or G.S. 143-215.108 for the construction or operation of any new or additional disposal system or systems or air-cleaning device or de vices in any area of the State. Such order may be issued only upon determination by the Comm ission, after public hearing, that the permitting of any new or additional source or sources of water or air pollution will result in a ge neralized condition of wate r or air pollution within the area contrary to the public interest, detrimental to the public health, safety, and welfare, and contrary to the policy and intent declared in this Article or Article 21B of this Chapter. Th e Commission may make reasonable distinctions among the various sources of water and ai r pollution and may

direct that its order shall apply only to those sources which it determines will result in a generalized cond ition of water or air pollution.

The determination of the Commission shall be supported by detailed findings of fact

and conclusions set forth in the orde r and based upon competent evidence of record. The order shall describe the ge ographical area of the State affected thereby with particularity and shall prohibit the issuan ce of permits pending a determination by the Commission that the generalized condition of water or air pollution has ceased. Notice of hearing shall be given in acco rdance with the provisions of G.S. 150B-21.2. A person aggrieved by an order of the Co mmission under this subdivision may seek judicial review of the or der under Article 4 of Chap ter 150B of the General Statutes without first commencing a co ntested case. An order may not be stayed while it is being reviewed. (9) If an investigation conducted pursuant to this Article or Article 21B of this Chapter reveals a violation of any rules, standards, or limitations adopted by the Commission pursuant to this Article or Article 21B of this Chapter, or a violation of any terms or conditions of any permit issued pursuant to G.S. 143-215.1 or 143-215.108, or special order or other document issued pursuant to G.S. 143-215.2 or G.S. 143-215.110, the Commission may assess the reasonable costs of any investigation, inspection or monitoring survey which revealed the violation against the person responsible therefor . If the violation resulted in an unauthorized discharge to the waters or atmosphere of the State,Attachment 2 July 20, 2012 Page 52

the Commission may also assess the pe rson responsible for the violation for any actual and necessary costs incurred by the State in removing, correcting or abating any adverse effects upon the water or air resulting from the unauthorized discharge. If the person re sponsible for the violation refuses or fails within a reasonable time to pay any sums assessed, the Commission may institute a civil action in the superior c ourt of the county in which the violation occurred or, in the Commission's discre tion, in the superior court of the county in which such person resides orhas his or its pr incipal place of business, to recover such sums. (10) To require a laboratory facility that performs any tests, analyses, measurements, or monitoring required under this Article or Article 21B of this Chapter to be certified annually by the Department, to establish standards that a laboratory facility and its employees must meet a nd maintain in order for the laboratory facility to be certified, and to charge a laboratory facility a fee for

certification. Fees collected under this subdivision shall be credited to the

Water and Air Account and used to ad minister this subdivision. These fees shall be applied to the cost of certifyi ng commercial, industrial, and municipal laboratory facilities. (11) Repealed by Session Laws 1983, c. 296, s. 6. (12) To declare an emergency when it finds that a generalized condition of water or air pollution which is causing imminent da nger to the health or safety of the public. Regardless of any othe r provisions of law, if the Department finds that such a condition of water or air pollution exists and that it creates an emergency requiring immediate action to protect the public health and safety or to protect fish and wildlife, the Secretary of the Department with the concurrence of the Governor, shall or der persons causing or contributing to the water or air pollution in question to reduce or disconti nue immediately the

emission of air contaminants or the disc harge of wastes. Immediately after the issuance of such order, the chairman of the Commission shall fix a place and time for a hearing before the Commissi on to be held within 24 hours after issuance of such order, and within 24 hours after the commencement of such hearing, and without adjournment thereof, the Commission shall either affirm, modify or set aside the order. In the absence of a generalized condition of ai r or water pollution of the type referred to above, if the Secretary finds that the emissions from one or more air

contaminant sources or the discharge of wastes from one or more sources of water pollution is causing im minent danger to human he alth and safety or to fish and wildlife, he may with the concurrence of the Governor order the person or persons responsible for the operation or operations in question to immediately reduce or discontinue the em issions of air contaminants or the discharge of wastes or to take such ot her measures as are, in his judgment, necessary, without regard to any other provisions of this Article or Article 21B of this Chapter. In such event, the requirements for hearing and affirmance, modification or setting asid e of such orders set forth in the preceding paragraph of this subdivision shall apply.Attachment 2 July 20, 2012 Page 53

(13) Repealed by Session Laws 1983, c. 296, s. 6. (14) To certify and approve, by appropriate de legations and condi tions in permits required by G.S. 143-215.1, requests by publicly owned treatment works to implement, administer and enforce a pr etreatment program for the control of pollutants which pass through or interfer e with treatment processes in such treatment works; and to require su ch programs to be developed where necessary to comply with the Federal Water Pollution Control Act and the Resource Conservation and Recovery Act, including the addition of conditions and compliance schedules in permits requiredby G.S. 143-215.1. Pretreatment programs submitted by publicly owned treatment works shall include, at a minimum, the adoption of pretreatment standards, a permit or equally effective system for the control of pollutants c ontributed to the treatment works, and the ability to e ffectively enforce compliance with the

program. (15) To adopt rules for the prevention of pollution from underground tanks containing petroleum, petroleum products, or hazardous substances. Rules adopted under this section may incorporate standards and restrictions which exceed and are more comprehensive than comparable federal regulations. (16) To adopt rules limiting the manufacture, storage, sale, distribution or use of cleaning agents containing phosphorus pursuant to G.S. 143-214.4(e), and to adopt rules limiting the manufacture, storage, sale, distribution or use of cleaning agents containing nitrilotriacetic acid. (17) To adopt rules to implement Part2A of Article 21A of Chapter 143. (b) Research Functions. – The Department sh all have the power to conduct scientific experiments, research, and i nvestigations to discover econo mical and practical corrective methods for air pollution and waste disposal pr oblems. To this end, the Department may cooperate with any public or priv ate agency or agencies in th e conduct of such experiments, research, and investigations, and may, when funds permit, establish research studies in any North Carolina educational institution, with the consent of such institution. In addition, the Department shall have the power to cooperate and enter into contracts with techni cal divisions of State agencies, institutions and with municipalities, industries, and other persons in the execution of such surveys, studies, a nd research as it may deem necessary in fulfilling its f unctions under this Article or Article 21B of this Chapter. All State departments shall advise with and cooperate with the Department on matters of mutual interest. (c) Relation with the Federal Government. – The Commission as official water and air pollution control agency for the State is delegate d to act in local administration of all matters covered by any existing federal statutes and futu re legislation by Congress relating to water and air quality control. In order for the State of North Carolina to e ffectively participate in programs administered by federal agencies for the regulat ion and abatement of water and air pollution, the Department is authorized to accept and administ er funds provided by federal agencies for water and air pollution programs and to enter into contracts with federal agencies regarding the use of

such funds. (d) Relations with Other States. – The Commi ssion or the Department may, with the approval of the Governor, consult with qualified representatives of adjoining states relative to theAttachment 2 July 20, 2012 Page 54

establishment of regulations for the protection of waters and air of mutual interest, but the approval of the General Assembly shall be required to make any regulations binding. (e) Variances. – Any person subject to th e provisions of G.S. 143-215.1 or 143-215.108 may apply to the Commission for a vari ance from rules, standards, or limitations established pursuant to G.S. 143-214.1, 143-215, or 143-2 15.107. The Commission may grant such variance, for fixed or indefinite periods after public hearing on due no tice, or where it is found that circumstances so require, for a period not to exceed 90 days without prior hearing and notice. Prior to granting a variance hereunder, the Co mmission shall find that: (1) The discharge of waste or the emission of air contaminants occurring or proposed to occur do not endanger human health or safety; and (2) Compliance with the rules, standards, or limitations from which variance is sought cannot be achieved by application of best available technology found to be economically reasonable at the time of application for such variances, and would produce serious hardship without equa l or greater benefits to the public, provided that such variances shall be consistent with the provisions of the

Federal Water Pollution Control Act as amended or the Clean Air Act as amended; and provided further, thatany person who would otherwise be

entitled to a variance or modificati on under the Federal Water Pollution

Control Act as amended or the Clean Air Act as amended shall also be entitled

to the same variance from or modificati on in rules, standards, or limitations established pursuant to G.S. 143-214.1, 143-215, and 143-215.107, respectively. (f) Notification of Completed Remedial Ac tion. – The definitions set out in G.S. 130A-310.31(b) apply to this s ubsection. Any person may subm it a written request to the Department for a determination that groundwater ha s been remediated to meet the standards and

classifications established under this Part. A re quest for a determinatio n that groundwater has

been remediated to meet the standards and classi fications established unde r this Part shall be accompanied by the fee required by G.S. 130A-310.39(a )(2). If the Department determines that groundwater has been remediated to established standards and classifica tions, the Department

shall issue a written notification that no further remediation of th e groundwater will be required.

The notification shall state that no further remediation of the groundw ater will be required unless the Department later determines, based on new information or information not previously provided to the Department, that the groundwater has not been remediated to established standards and classifications or that the Depa rtment was provided with false or incomplete information. Under any of those circumstances, the Department may wit hdraw the notification and require responsible parties to remediate the groundwater to established standards and classifications. (1951, c. 606; 1957, c. 1267, s. 3; 1959, c. 779, s. 8; 1963, c. 1086; 1967, c. 892, s. 1; 1969, c. 538; 1971, c. 1167, ss. 7, 8; 1973, c. 698, ss. 1-7, 9, 17; c. 712, s. 1; c. 1262, ss. 23, 86; c. 1331, s. 3; 1975, c. 583, ss. 5, 6; c. 655, s. 3; 1977, c. 771, s. 4; 1979, c. 633, ss. 6-8; 1979, 2nd Sess., c. 1158, ss. 1, 3, 4; 1983, c. 296, ss. 5-8; 1985, c. 551, s. 2; 1987, c. 111, s. 2; c. 767, s. 1; c. 827, ss. 1, 154, 161, 266; 1987 (Reg. Sess., 1988), c. 1035, s. 2; 1989, c. 500, s. 122; c. 652, s. 1; 1991, c. 552, ss. 2, 11; c. 712, s. 2; 1991 (Reg. Sess., 1992), c. 890, s. 16; c. 1039, ss. 14, 20.1; 1993, c. 344, s. 2; c. 400, ss. 1(c), 2, 3, 15; c. 496, s. 4; 1993 (Re g. Sess., 1994), c. 694, s. 1; 1995, c. 484, s. 5; 1997-357, s. 6; 1997-496, s. 4; 1998-212, s. 29A.11(b).)Attachment 2 July 20, 2012 Page 55

§ 143B-283. Environmental Management Commi ssion – members; selection; removal; compensation; quorum; services.

(a) The Environmental Management Commission shall consist of 13 members appointed by

the Governor. The Governor shall select the memb ers so that the membership of the Commission

shall consist of: (1) One who shall be a licensed physician withspecialized training and experience in the health effects of environmental pollution; (2) One who shall, at the time of appoi ntment, be actively connected with the

Commission for Public Health or local board of health or have experience in health sciences; (3) One who shall, at the time of appointmen t, be actively connected with or have had experience in agriculture; (4) One who shall, at the time of appoint ment, be a registered engineer with specialized training and experience in wa ter supply or water or air pollution control; (5) One who shall, at the time of appointmen t, be actively connected with or have had experience in the fish and wildlife conservation activities of the State; (6) One who shall, at the time of appointme nt, have special training and scientific expertise in hydrogeolog y or groundwater hydrology; (7) Three members interested in water and air pollution control, appointed from the public at large; (8) One who shall, at the time of appointme nt, be actively employed by, or recently retired from, an industrial manufacturi ng facility and knowledgeable in the field of industrial air and water pollution control; (9) One who shall, at the time of appointmen t, be actively connected with or have had experience in pollution control problems of municipal or county government; (10) One who shall, at the time of appoint ment, have special training and scientific expertise in air pollution control and the effect s of air pollution; and (11) One who shall, at the time of appoint ment, have special training and scientific expertise in freshwater, estuarine, mari ne biological, or ecological sciences. (b) Members appointed by the Governor shall serve terms of office of six years. Any appointment to fill a vacancy on the Commission created by the resignation, dismissal, death or disability of a member shall be for the balance of the une xpired term. The Governor may reappoint a member of the Commission to an add itional term if, at the time of the reappointment, the member qualifies for membership on the Co mmission under subsection (a) of this section. (b1) The Governor shall have the power to remove any member of the Commission from office for misfeasance, malfeasance, or nonfeasance in accordance with the provisions of G.S.

143B-13 of the Executive Organization Act of 1973. (b2) The members of the Commission shall r eceive per diem and necessary travel and subsistence expenses in accordance w ith the provisions of G.S. 138-5. (b3) A majority of the Commission shall consti tute a quorum for the tr ansaction of business. (b4) All clerical and other services require d by the Commission shall be supplied by the Secretary of Environment and Natural Resources.Attachment 2 July 20, 2012 Page 56

(c) Nine of the members appointed by the Gove rnor under this section shall be persons who do not derive any significant portion of their income from persons subject to permits or enforcement orders under this Chapter. The G overnor shall require ad equate disclosure of potential conflicts of interest by members. Th e Governor, by executive order, shall promulgate criteria regarding conflicts of interest and disclosure thereof for determining the eligibility of persons under this section, giving due regard to the requirements of federal legislation, and for this purpose may promulgate ru les, regulations or guidelines in conformance with those established by any federal agency interpre ting and applying provisions of federal law. (d) In addition to the members designated by subsection (a) of this section, the General Assembly shall appoint six members, three upon the recommendation of the Speaker of the House of Representatives, and three upon the r ecommendation of the President Pro Tempore of the Senate. Appointments by the General Assembly shall be made in ac cordance with G.S. 120-121, and vacancies in those appointments sh all be filled in accordance with G.S. 120-122. Members appointed by the General Assembly sha ll serve terms of two y ears. (1973, c. 1262, s. 20; 1977, c. 771, s. 4; 1979, 2nd Sess., c. 1158, ss. 5, 6; 1981 (Reg. Sess., 1982), c. 1191, s. 19; 1989, c. 315; c. 727, s. 218(129); 1995, c. 490, s. 18; 1997-381, s. 1; 1997-443, s. 11A.119(a); 1998-217, s. 17; 2000-172, ss. 4.1, 4.2; 2001-486, s. 2.16; 2007-182, s. 2.)

§ 150B-21.1. Procedure for adopting a temporary rule.

(a) Adoption. – An agency may adopt a temporary rule when it finds th at adherence to the notice and hearing requirements of G.S. 150B-21.2 would be contrary to the public interest and that the immediate adoption of the rule is required by one or more of the following: (1) A serious and unforeseen threat to the public health, safety, or welfare. (2) The effective date of a recent act of the General Assembly or the United States Congress. (3) A recent change in federa l or State budgetary policy. (4) A recent federal regulation. (5) A recent court order. (6) The need for a rule establishing review criteria as authorized by G.S. 131E-183(b) to complement or be made consistent with the State Medi cal Facilities Plan approved by the Governor, if the rule addresses a matter included in the State Medical Facilities Plan, and the proposed rule and a no tice of public hearing is submitted to the Codifier of Rules prior to the effective date of the Plan. (7) The need for the Wildlife Resources Commission to esta blish any of the following:

a. No wake zones. b. Hunting or fishing seasons. c. Hunting or fishing bag limits. d. Management of public game lands as defined in G.S. 113-129(8a). (8) The need for the Secretary of State to implement the certification technology provisions of Article 11A of Chapter 66 of the General Statutes, to adopt uniform Statements of Policy that have been officially adopted by the North

American Securities Administrators A ssociation, Inc., for the purpose ofAttachment 2 July 20, 2012 Page 57

promoting uniformity of state securi ties regulation, and to adopt rules governing the conduct of hearings pursuant to this Chapter. (9) The need for the Commissioner of Insura nce to implement the provisions of G.S.

58-2-205. (10) The need for the Chief Information Officer to implement the information technology procurement provisions of Article 3D of Chapter 147 of the

General Statutes. (11) The need for the State Board of Electi ons to adopt a temporary rule after prior notice or hearing or upon any abbreviate d notice or hearing the agency finds practical for one or more of the following: a. In accordance with the provisions of G.S. 163-22.2. b. To implement any provisions of stat e or federal law for which the State

Board of Elections has been authorized to adopt rules.

c. The need for the rule to become eff ective immediately in order to preserve the integrity of upcoming electi ons and the elect ions process. (12) The need for an agency to adopt a te mporary rule to implement the provisions of any of the following acts unt il all rules necessary to implement the provisions

of the act have become effective as either temporary or permanent rules: a. Repealed by Session Laws 2000- 148, s. 5, effective July 1, 2002. b. Repealed by Session Laws 2000- 69, s. 5, effective July 1, 2003. (13), (14) Reserved. (15) Expired pursuant to Session Laws 2002-164, s. 5, effective October 1, 2004. (16) Expired pursuant to Session Laws 2003-184, s. 3, effective July 1, 2005. (a1) Recodified as subdivision (a)(16) of this section by Session Laws 2004-156, s. 1. (a2) A recent act, change, regulation, or order as used in subdivisions (2) through (5) of subsection (a) of this section means an act, change, regulation, or or der occurring or made effective no more than 210 days prior to the submission of a temporary rule to the Rules Review Commission. Upon written request of the ag ency, the Commission may waive the 210-day requirement upon consideration of the degree of public benefit, whether the agency had control over the circumstances that required the requested waiver, notice to and opposition by the public, the need for the waiver, and previous re quests for waivers submitted by the agency. (a3) Unless otherwise provided by law, the agency shall: (1) At least 30 business days prior to adopting a temporary rule, submit the rule and a notice of public hearing to the Codifier of Rules, and the Codifier of Rules shall publish the proposed temporary rule and the notice of public hearing on the Internet to be posted within five business days. (2) At least 30 business days prior to adopting a temporar y rule, notify persons on the mailing list maintained pursuant to G.S. 150B-21.2(d) and any other interested parties of its intent to adopt a temporary rule and of the public hearing. (3) Accept written comments on the proposed temporary rule for at least 15 business days prior to adoption of the temporary rule. (4) Hold at least one public hearing on the proposed temporary rule no less than five days after the rule and notice have been published. (a4) An agency must also prepare a written st atement of its findings of need for a temporary rule stating why adherence to the notice and he aring requirements in G.S. 150B-21.2 would beAttachment 2 July 20, 2012 Page 58

contrary to the public interest and why the immediate adoption of the rule is required. If the temporary rule establishes a new fee or increases an existing fee, the agency shall include in the written statement that it has complied with the requirements of G.S. 12- 3.1. The statement must be signed by the head of the ag ency adopting the temporary rule. (b) Review. – When an agency adopts a tem porary rule it must submit the rule and the agency's written statement of its findings of the need for the rule to the Rules Review Commission. Within 15 business days after receiving the proposed temporary rule, the Commission shall review the agency's written statem ent of findings of need for the rule and the

rule to determine whether the statement meets the cr iteria listed in subsection (a) of this section

and the rule meets the standards in G.S. 150B- 21.9. The Commission shall direct a member of its staff who is an attorney licensed to practice la w in North Carolina to review the statement of findings of need and the rule. The staff me mber shall make a recommendation to the Commission, which must be appr oved by the Commission or its designee. The Commission's designee shall be a panel of at least three members of the Commission. In reviewing the statement, the Commission or its designee may consider any information submitted by the agency or another person. If the Commission or its designee finds that the statement meets the criteria listed in subsection (a) of this section and the rule meets the st andards in G.S. 150B-21.9, the Commission or its designee must approve the temporary rule and deliver the rule to the

Codifier of Rules within two bus iness days of approval. The Codi fier of Rules must enter the

rule into the North Carolina Administrative C ode on the sixth business day following receipt from the Commission or its designee. (b1) If the Commission or its designee finds th at the statement does not meet the criteria listed in subsection (a) of this section or that the rule does not meet the standards in G.S. 150B-21.9, the Commission or its designee must imme diately notify the head of the agency. The agency may supplement its statement of need with additional findings or submit a new statement. If the agency provides additiona l findings or submits a new stat ement, the Commission or its designee must review the additiona l findings or new statement within five business days after the agency submits the additional findings or new stat ement. If the Commission or its designee again

finds that the statement does not meet the criteria listed in subsection (a) of this section or that

the rule does not meet the standards in G.S. 150B-21.9, the Commission or its designee must immediately notify the head of the agency and return the ru le to the agency. (b2) If an agency decides not to provide a dditional findings or submit a new statement when notified by the Commission or its designee that the agency's findi ngs of need for a rule do not meet the required criteri a or that the rule does not meet the required standards, the agency must notify the Commission or its designee of its deci sion. The Commission or its designee shall then return the rule to the agency. When the Commissi on returns a rule to an agency in accordance with this subsection, the agency may file an ac tion for declaratory judg ment in Wake County Superior Court pursuant to Article 26 of Chapter 1 of the General Statutes. (b3) Notwithstanding any other provision of th is subsection, if the agency has not complied with the provisions of G.S. 12-3.1, the Codifier of Rules shall not enter the rule into the Code. (c) Standing. – A person aggrieved by a tempor ary rule adopted by an agency may file an action for declaratory judgment in Wake Coun ty Superior Court pursuant to Article 26 of Chapter 1 of the General Statutes. In the action, the court shall determine whether the agency's written statement of findings of n eed for the rule meets the criteria listed in subsection (a) of thisAttachment 2 July 20, 2012 Page 59

section and whether the rule meets the standard s in G.S. 150B-21.9. The court shall not grant an ex parte temporary restraining order. (c1) Filing a petition for rule making or a request for a declaratory ruling with the agency that adopted the rule is not a prerequisite to filing an action under this subsection. A person who files an action for declaratory judgment under this s ubsection must serve a copy of the complaint on the agency that adopted the rule being contested, the Codifier of Rules, and the Commission. (d) Effective Date and Expiration. – A temp orary rule becomes effective on the date specified in G.S. 150B-21.3. A te mporary rule expires on the ear liest of the following dates: (1) The date specified in the rule. (2) The effective date of the permanent rule adopted to replace the temporary rule, if the Commission approves the permanent rule. (3) The date the Commission returns to an agency a permanent rule the agency adopted to replace the temporary rule. (4) The effective date of an act of the Ge neral Assembly that sp ecifically disapproves a permanent rule adopted to replace the temporary rule. (5) 270 days from the date the temporary rule was published in the North Carolina Register, unless the permanent rule adopted to replace the temporary rule has

been submitted to the Commission. (e) Publication. – When the Codifi er of Rules enters a temporary rule in the North Carolina Administrative Code, the Codifier must publish the rule in the North Carolina Register. (1973, c. 1331, s. 1; 1981, c. 688, s. 12; 1981 (Reg. Sess., 1982) , c. 1232, s. 1; 1983, c. 857; c. 927, ss. 4, 8; 1985, c. 746, s. 1; 1985 (Reg. Sess., 1986), c. 1022, s. 1(1), 1(8); 1987, c. 285, ss. 10-12; 1991, c. 418, s. 1; 1991 (Reg. Sess., 1992), c. 900, s. 149; 1993, c. 553, s. 54; 1995, c. 507, s. 27.8(c); 1996, 2nd Ex. Sess., c. 18, ss. 7.10(c), (d); 1997-403, ss. 1-3; 1998-127, s. 2; 1998-212, s. 26B(h); 1999-434, s. 16; 1999-453, s. 5(a); 2000-69, ss. 3, 5; 2000-148, ss. 4, 5; 2001-126, s. 12; 2001-421, ss. 2.3, 5.3; 2001-424, ss. 27.17(b), (c), 27.22( a), (b); 2001-487, s. 21(g); 2002-97, ss. 2, 3; 2002-164, s. 4.6; 2003-184, s. 3; 2003-229, s. 2; 2003-413, ss. 27, 29; 2004-156, s. 1; 2011-398, s. 4.)

§ 150B-21.2. Procedure for adopting a permanent rule.

(a) Steps. – Before an agency adopts a perm anent rule, the agency must comply with the requirements of G.S. 150B-19.1, and it must take the following actions: (1) Publish a notice of text in the North Caro lina Register. (2) When required by G.S. 150B-21.4, prepare or obtain a fiscal no te for the proposed

rule. (3) Repealed by Session Laws 2003-229, s. 4, effective July 1, 2003. (4) When required by subsection (e) of this section, hold a public hearing on the proposed rule after publication of the proposed text of the rule. (5) Accept oral or written comments on the proposed rule as required by subsection (f) of this section. (b) Repealed by Session Laws 2003-229, s. 4, effective July 1, 2003. (c) Notice of Text. – A notice of the proposed text of a rule must includ e all of the following: (1) The text of the proposed rule.Attachment 2 July 20, 2012 Page 60

(2) A short explanation of the reason for th e proposed rule and a link to the agency's Web site containing the informa tion required by G.S. 150B-19.1(c). (3) A citation to the law that gives the agency the authority to adopt the rule. (4) The proposed effective date of the rule. (5) The date, time, and place of any public hearing scheduled on the rule. (6) Instructions on how a person may dema nd a public hearing on a proposed rule if

the notice does not schedul e a public hear ing on the proposed rule and subsection (e) of this section requires the agency to hold a public hearing on the proposed rule when requested to do so. (7) The period of time during which and the person to whom written comments may be submitted on the proposed rule. (8) If a fiscal note has been prepared for th e rule, a statement that a copy of the fiscal note can be obtained from the agency. (9) The procedure by which a person can object to a proposed rule and the requirements for subjecting a proposed rule to the legislativ e review process. (d) Mailing List. – An agency must maintain a mailing list of persons who have requested notice of rule making. When an agency publishes in the North Carolina Register a notice of text of a proposed rule, it must mail a copy of the not ice or text to each person on the mailing list who has requested notice on the subject matter described in the notice or the rule affected. An agency may charge an annual fee to each person on th e agency's mailing list to cover copying and mailing costs. (e) Hearing. – An agency must hold a public h earing on a rule it proposes to adopt if the agency publishes the text of th e proposed rule in the North Ca rolina Register and the agency receives a written request for a public hearing on the proposed rule w ithin 15 days after the notice of text is published. The agency must accept comments at the public hearing on both the proposed rule and any fiscal note that has been prepared in connection with the proposed rule. An agency may hold a public hearing on a proposed rule and fiscal note in other circumstances. When an agency is required to hold a public hearing on a proposed rule or decides to hold a public hearing on a proposed rule when it is not required to do so, the agency must publish in the North Carolina Register a notice of the date , time, and place of the public hearing. The hearing date of a public hearing held after the agency publishes notice of the hearing in the North Carolina Register must be at least 15 days after the date the notice is published. If notice of a public hearing has been published in the North Carolina Register and that public hearing has been can celled, the agency shall publish notice in the North Carolina Register at least 15 days prior to th e date of any rescheduled hearing. (f) Comments. – An agency must accept comment s on the text of a pr oposed rule that is published in the North Carolina Register and any fi scal note that has been prepared in connection with the proposed rule for at least 60 days afte r the text is published or until the date of any public hearing held on the proposed rule, whichever is longer. An agency mu st consider fully all

written and oral comments received. (g) Adoption. – An agency shall not adopt a rule until the time for commenting on the proposed text of the rule has elapsed and shall not adopt a rule if more than 12 months have elapsed since the end of the time for commenti ng on the proposed text of the rule. Prior to adoption, an agency shall review any fiscal note th at has been prepared for the proposed rule and consider any public comments receiv ed in connection with the propos ed rule or the fiscal note.Attachment 2 July 20, 2012 Page 61

An agency shall not adopt a rule that differs substantially from the te xt of a proposed rule published in the North Carolina Re gister unless the agency publishes the text of the proposed different rule in the North Carolina Register and accepts comments on the proposed different rule for the time set in subsection (f) of this section. An adopted rule differs substantially from a proposed rule if it does one or more of the following: (1) Affects the interests of persons who, based on the pr oposed text of the rule published in the North Carolina Regi ster, could not reasonably have

determined that the rule w ould affect their interests. (2) Addresses a subject matter or an issue that is not addressed in the proposed text of

the rule. (3) Produces an effect that could not r easonably have been expected based on the proposed text of the rule. When an agency adopts a rule, it shall not take subsequent action on the rule without following the procedures in this Part. An agency must submit an adopted rule to the Rules Review Commission within 30 days of the agency's adoption of the rule. (h) Explanation. – An agency must issue a concise written statem ent explaining why the agency adopted a rule if, within 15 days afte r the agency adopts the rule, a person asks the agency to do so. The explanation must state th e principal reasons for and against adopting the rule and must discuss why the agency rejected any arguments made or considerations urged against the adoption of the rule. The agency must issue the explanation within 15 days after receipt of the request for an explanation. (i) Record. – An agency must keep a record of a rule-making proceeding. The record must

include all written comments receive d, a transcript or recording of any public hearing held on the rule, any fiscal note that has been prepared for the rule, and any written explanation made by the agency for adopting the rule. (1973, c. 1331, s. 1; 1975, 2nd Sess., c. 983, s. 63; 1977, c. 915, s. 2; 1983, c. 927, ss. 3, 7; 1985, c. 746, s. 1; 1985 (Reg. Sess., 1986), c. 1022, s. 1(1), (7); 1987, c. 285, ss. 7-9; 1989, c. 5, s. 1; 1991, c. 418, s. 1; 1995, c. 507, s. 27.8(d); 1996, 2nd Ex. Sess., c. 18, s. 7.10(e); 2003-229, s. 4; 2011-398, s. 5.)