H 1147

GENERAL ASSEMBLY OF NORTH CAROLINA
  SESSION 2025
 H  1
  HOUSE BILL 1147
 Short Title:   IDD Omnibus.  (Public)
 Sponsors:      Representatives Hawkins, Crawford, Quick, and Almond (Primary Sponsors).
  For a complete list of sponsors, refer to the North Carolina General Assembly web site.
 Referred to:   Appropriations, if favorable, Rules, Calendar, and Operations of the House
  May 4, 2026
1A BILL TO BE ENTITLED
2 AN ACT TO IMPLEMENT VARIOUS CHANGES RECOMMENDED BY THE
3    LEGISLATIVE JOINT CAUCUS FOR INTELLECTUAL AND DEVELOPMENTAL
4    DISABILITIES TO POSITIVELY IMPACT THE LIVES OF NORTH CAROLINA
5    CITIZENS WITH INTELLECTUAL OR OTHER DEVELOPMENTAL DISABILITIES.
6 The General Assembly of North Carolina enacts:
7
8 PART I. DIRECT CARE WORKER WAGE INCREASES
9SECTION 1.(a) It is the intent of the General Assembly to assist in increasing the
10 hourly wages of direct care workers in this State to a minimum of eighteen dollars ($18.00) per
11 hour. To that end, the Department of Health and Human Services, Division of Health Benefits
12 (DHB), shall provide a Medicaid rate increase to all of the following:
13(1)     Home- and community-based providers enrolled in the Medicaid program.
14(2)     Intermediate care facilities for individuals with intellectual disabilities
15(ICF/IIDs), including ICF/IID-level group homes.
16(3)     Providers who provide services to Medicaid beneficiaries receiving services
17through the North Carolina Innovations waiver program, the Community
18Alternatives Program for Children, or the Community Alternatives Program
19for Disabled Adults, and who are either (i) enrolled in the Medicaid program
20or (ii) approved financial managers or financial support agencies billing for
21personal care service or waiver service hours provided by direct care workers
22that are hired by employers of record or managing employers under
23consumer-directed or self-directed options in accordance with any of the
24following Medicaid Clinical Coverage Policies:
25a.       8-P: North Carolina Innovations.
26b.       3K-1: Community Alternatives Program for Children (CAP/C).
27c.       3K-2: Community Alternatives Program for Disabled Adults
28(CAP/DA).
29d.       8H-1: 1915(i) Supported Employment.
30e.       8H-4: 1915(i) Respite.
31f.       8H-5: Community Living and Supports.
32g.       8H-6: 1915(i) Community Transition.
33SECTION 1.(b) DHB, working with a workgroup of providers, shall determine the
34 definition of direct care worker to be applied and the amount of the rate increases to be
35 implemented under this section. DHB shall further determine the manner in which a provider or
  *H1147-v-1*
 General Assembly Of North Carolina  Session 2025
1 facility shall utilize the increased rate and demonstrate compliance with those utilization
2 requirements, including the documentation required to be kept by the provider or facility. This
3 documentation shall be made available upon request by DHB or by the relevant local
4 management entity/managed care organization (LME/MCO).
5SECTION 1.(c) Any rate increase provided under this section shall be effective on
6 the date approved by the Centers for Medicare and Medicaid Services. Upon implementation of
7 an applicable rate increase required by this section, DHB shall adjust the per member per month
8 (PMPM) capitation amount paid to LME/MCOs and the entity operating the children and families
9 specialty plan accordingly. All LME/MCOs and the entity operating the children and families
10 specialty plan shall be required to implement the increase.
11SECTION 1.(d) In addition to other allowable reasons for recoupment of funds, if
12 DHB or an LME/MCO determines any funds related to a rate increase required under this section
13 were not used to the benefit of direct care workers, then DHB or the LME/MCOs shall recoup
14 part or all of those funds.
15SECTION 1.(e) There is appropriated from the General Fund to the Department of
16 Health and Human Services, Division of Health Benefits, the sum of one hundred eighty-three
17 million dollars ($183,000,000) in recurring funds and associated receipts beginning with the
18 2026-2027 fiscal year to implement this section.
19SECTION 1.(f) This section is effective July 1, 2026.
20
21 PART II. FUND ADDITIONAL INNOVATIONS WAIVER SLOTS AND DEVELOP A
22 10-YEAR PLAN TO ADDRESS THE REGISTRY OF UNMET NEEDS
23SECTION 2.(a) The Department of Health and Human Services, Division of Health
24 Benefits, shall amend the North Carolina Innovations waiver to increase the number of slots
25 available under the waiver by a minimum of 1,000 slots. These additional slots shall be made
26 available upon approval by the Centers for Medicare and Medicaid Services.
27SECTION 2.(b) There is appropriated from the General Fund to the Department of
28 Health and Human Services, Division of Health Benefits, the sum of thirty-six million two
29 hundred thousand dollars ($36,200,000) in recurring funds and associated receipts beginning
30 with the 2026-2027 fiscal year to increase the number of slots under the North Carolina
31 Innovations waiver, as directed by subsection (a) of this section.
32SECTION 2.(c) The Department of Health and Human Services, Division of Health
33 Benefits (DHB), shall convene a workgroup of relevant stakeholders to develop a plan to satisfy
34 the registry of unmet needs for the North Carolina Innovations waiver within the next 10 years.
35 In developing the plan, the workgroup shall also consider the needs of individuals receiving
36 services approved under the 1915(i) option and may propose an alternative means of distributing
37 slots under the North Carolina Innovations waiver. The 10-year plan shall include a detailed cost
38 analysis of all recommendations and methods proposed to address the registry of unmet needs.
39 No later than February 1, 2026, DHB shall submit a report containing the 10-year plan to the
40 Joint Legislative Oversight Committee on Medicaid.
41SECTION 2.(d) Subsections (a) and (b) of this section are effective July 1, 2026.
42
43 PART III. UPDATE TO NC MEDICAID BUY-IN PROGRAM
44SECTION 3.(a) No later than 90 days after this act becomes law, the Department of
45 Health and Human Services, Division of Health Benefits, shall submit the necessary
46 documentation to the Centers for Medicare and Medicaid Services (CMS) for approval to remove
47 the unearned income limit and the resource limit from the eligibility requirements for the Health
48 Coverage for Workers with Disabilities Medicaid eligibility category. Upon approval by CMS
49 of the removal of the unearned income and resource limits, the Secretary of the Department of
50 Health and Human Services shall notify the Revisor of Statutes of the effective date approved by
51 CMS for the removal.
 Page 2  House Bill 1147-First Edition
 General Assembly Of North Carolina  Session 2025
1SECTION 3.(b) G.S. 108A-66.1 reads as rewritten:
2 "§ 108A-66.1. Medicaid buy-in for workers with disabilities.
3      (a)     Title. – This section may be cited as the Health Coverage for Workers With
4 Disabilities Act. The Department shall implement a Medicaid buy-in eligibility category as
5 permitted under P.L. 106-170, Ticket to Work and Work Incentives Improvement Act of 1999.
6 The Department shall establish rules, policies, and procedures to implement this act in
7 accordance with this section.
8      …
9      (c)     Eligibility. – An Except as provided in subsection (c1) of this section, an individual
10 is eligible for HCWD if:if all of the following apply:
11(1)     The individual is at least 16 years of age and is less than 65 years of age;age.
12(2)     The individual either meets Social Security Disability criteria, criteria or the
13individual has been enrolled in HCWD and then becomes medically improved
14improved, as defined in Ticket to Work and as further specified by the
15Department. An individual shall be determined to be eligible under this
16section without regard to the individual's ability to engage in, or actual
17engagement in, substantial gainful activity as defined in section 223 of the
18Social Security Act (42 U.S.C. § 423(d)(4)). In conducting annual
19redetermination of eligibility, the Department may not determine that an
20individual participating in HCWD is no longer disabled based solely on the
21individual's participation in employment or earned income;income.
22(3)     The individual's unearned income does not exceed one hundred fifty percent
23(150%) of FPG, and countable resources for the individual do not exceed the
24resource limit for the minimum community spouse resource standard under
2542 U.S.C. § 1396r, and as further determined by the Department. In
26determining an individual's countable income and resources, the Department
27may not consider income or resources that are disregarded under the State
28Medical Assistance Plan's financial methodology, including the
29sixty-five-dollar ($65.00) disregard, impairment-related work expenses,
30student earned-income exclusions, and other SSI program work incentive
31income disregards; and
32(4)     The individual is engaged in a substantial and reasonable work effort
33(employed) effort, as provided in this subdivision and subdivision, as further
34defined by the Department Department, and as allowable under federal law.
35For purposes of this subsection, "engaged in substantial and reasonable work
36effort" means all of the following:
37a.      Working in a competitive, inclusive work setting, or self-employed.
38b.      Earning at least the applicable minimum wage.
39c.      Having monthly earnings above the SSI basic sixty-five-dollar
40($65.00) earned-income disregard.
41d.      Being able to provide evidence of paying applicable Medicare, Social
42Security, and State and federal income taxes.
43      (c1) Additional Earnings Requirements. – The Department may impose additional
44 earnings requirements in defining "engaged in substantial and reasonable work effort" for
45 individuals who are eligible for HCWD based on medical improvement.
46      (c2) Involuntary Unemployment. – Individuals who participate in HCWD but thereafter
47 become unemployed for involuntary reasons, including health reasons, shall have continued
48 eligibility in HCWD for up to 12 months from the time of involuntary unemployment, so long as
49 the individual (i) maintains a connection with the workforce, as determined by the Department,
50 (ii) meets all other eligibility criteria for HCWD during the period, and (iii) pays applicable fees,
51 premiums, and co-payments.
 House Bill 1147-First Edition  Page 3
 General Assembly Of North Carolina  Session 2025
1     (d)    Fees, Premiums, and Co-Payments. – Individuals who participate in HCWD and have
2 countable income greater than one hundred fifty percent (150%) of FPG shall pay an annual
3 enrollment fee of fifty dollars ($50.00) to their county department of social services. Individuals
4 who participate in HCWD and have countable income greater than or equal to two hundred
5 percent (200%) of FPG shall pay a monthly premium in addition to the annual fee. The
6 Department shall set a sliding scale for premiums, which is consistent with applicable federal
7 law. An individual with countable income equal to or greater than four hundred fifty percent
8 (450%) of FPG shall pay not less than one hundred percent (100%) of the cost of the premium,
9 as determined by the Department. The premium shall be based on the experience of all
10 individuals participating in the Medical Assistance Program. Individuals who participate in
11 HCWD are subject to co-payments equal to those required under the Medical Assistance
12 Program.
13     (e)    Countable Income. – In determining an individual's countable income, the
14 Department may not consider income that is disregarded under the State Medical Assistance
15 Plan's financial methodology, including the sixty-five dollar ($65.00) disregard,
16 impairment-related work expenses, student earned-income exclusions, and other SSI program
17 work incentive income disregards."
18SECTION 3.(c) This section is effective on the date approved by the Centers for
19 Medicare and Medicaid Services for the removal of the unearned income and resource limits for
20 Health Coverage for Workers with Disabilities program eligibility, as required by Section 1 of
21 this act.
22SECTION 3.(d) Effective July 1, 2026, there is appropriated from the General Fund
23 to the Department of Health and Human Services, Division of Health Benefits, the sum of one
24 hundred sixty-five thousand dollars ($165,000) in recurring funds and associated receipts
25 beginning with the 2026-2027 fiscal year.
26
27 PART IV. MEDICAID COMMUNITY ACTIVITIES AND EMPLOYMENT
28 TRANSITIONS SERVICES
29SECTION 4.(a) The Department of Health and Human Services, Division of Health
30 Benefits (DHB), shall study the feasibility of adding coverage of a new Medicaid service, entitled
31 "Community Activities and Employment Transitions" (CAET), that provides individualized
32 services and supports for individuals age 16 or older with intellectual or other developmental
33 disabilities and that meets the criteria established in this subsection. DHB shall consider the
34 feasibility of adding the coverage in any of the following ways: (i) by adding an "in-lieu-of"
35 service offered through the 1115 waiver for Medicaid transformation, (ii) by adding or amending
36 a 1915(i) home- and community-based State Plan amendment to include the service, or (iii) by
37 adding the service to any existing Medicaid waiver in this State. The new CAET service shall
38 meet all of the following criteria:
39(1)     The new service shall be modeled after (i) the nonresidential components of
40the service, entitled "Long-Term Community Supports," currently provided
41by Vaya Health and (ii) similar services provided by Alliance Behavioral
42Healthcare that support a meaningful week when used either separately or
43with other available services.
44(2)     The CAET service shall not include any residential component.
45(3)     Services must originate from facilities that meet the home- and
46community-based services standards established by DHB and under federal
47law.
48SECTION 4.(b) In studying the feasibility of a new CAET service in accordance
49 with subsection (a) of this section, DHB shall collaborate with the Marketing Association for
50 Rehabilitation Centers (MARC), the North Carolina Association for Rehabilitation Facilities
51 (NCARF), the North Carolina Association of Professional Supported Employment (NCAPSE),
 Page 4  House Bill 1147-First Edition
 General Assembly Of North Carolina  Session 2025
1 all LME/MCOs, and other appropriate stakeholders. Concurrent with the study of the feasibility
2 of a new CAET service, the Commission for Mental Health, Developmental Disabilities, and
3 Substance Abuse Services (Commission) established under Part 4 of Article 3 of Chapter 143B
4 of the General Statutes also shall collaborate with those stakeholders to review any relevant rules,
5 including 10A NCAC 27G .2301 through .2306. The Commission may amend any relevant rules
6 and, if necessary, may adopt additional rules to account for the numerous community-based
7 activities and employment services that may be provided to Medicaid beneficiaries as part of a
8 new CAET service.
9SECTION 4.(c) Consistent with the authority granted under G.S. 108A-54(e), DHB
10 may submit any State Plan amendments or waivers, or request other approval from the Centers
11 for Medicare and Medicaid Services, necessary for the implementation of any new CAET service
12 determined to be feasible under subsection (a) of this section. Coverage of the new service may
13 not begin earlier than January 1, 2027.
14SECTION 4.(d) No later than April 1, 2027, DHB shall submit a report to the Joint
15 Legislative Oversight Committee on Medicaid detailing the following information related to any
16 new CAET service determined to be feasible under this section:
17(1)     The definition for the CAET service and any new Medicaid clinical coverage
18policy or changes to an existing Medicaid clinical coverage policy.
19(2)     The anticipated annual cost to the State of adding the CAET service.
20(3)     Any legislative changes necessary in order to implement the CAET service.
21(4)     Any recommendations regarding the future establishment of a new facility
22license for facilities providing the CAET service.
23(5)     Whether DHB is able to add coverage for the CAET service pursuant to its
24authority under G.S. 108A-54(e) or whether appropriations are required prior
25to implementation. If DHB intends to add coverage of the CAET service
26pursuant to its authority under G.S. 108A-54(e), the expected implementation
27date.
28SECTION 4.(e) There is appropriated from the General Fund to the Department of
29 Health and Human Services, Division of Health Benefits, the sum of two million dollars
30 ($2,000,000) in nonrecurring funds for the 2026-2027 fiscal year to be used to support the
31 feasibility study required by subsection (a) of this section and for drafting the requests for the
32 authorities or supports needed to implement any proposed new CAET service determined to be
33 feasible under that subsection.
34SECTION 4.(f) Subsection (e) of this section is effective July 1, 2026.
35
36 PART V. STATE RENTAL ASSISTANCE PROGRAM (SRAP) FOR I/DD HOUSING
37SECTION 5.(a) The Department of Health and Human Services, Division of Mental
38 Health, Development Disabilities, and Substance Use Services, shall develop a State Rental
39 Assistance Program to provide vouchers to assist individuals with intellectual and developmental
40 disabilities to transition to integrated housing as required by the 2024 consent order entered in
41 Samantha R., et al. v. State of North Carolina, et al., 17 CVS 6357-910 (Wake County Superior
42 Court). The program shall be modeled after the Transitions to Community Living program.
43SECTION 5.(b) Effective July 1, 2026, there is appropriated to the Department of
44 Health and Human Services, Division of Mental Health, Developmental Disabilities, and
45 Substance Use Services, the sum of one hundred thousand dollars ($100,000) in recurring funds
46 beginning with the 2026-2027 fiscal year to be used to support the program created pursuant to
47 subsection (a) of this section.
48SECTION 5.(c) The Department of Health and Human Services, Division of Mental
49 Health, Developmental Disabilities, and Substance Use Services, shall convene a workgroup of
50 relevant stakeholders to develop a five-year plan for monthly housing rental subsidies to be
51 provided to individuals with intellectual or other developmental disabilities for use in integrated
 House Bill 1147-First Edition  Page 5
 General Assembly Of North Carolina  Session 2025
1 settings. This plan shall create 200 new monthly housing rental subsidies to be provided to
2 individuals with intellectual or other developmental disabilities each year over the course of five
3 years, resulting in the creation of a total of 1,000 monthly housing rental subsidies by the end of
4 the five-year period. In developing the plan, the workgroup shall consider similar subsidy
5 programs in Virginia, Maryland, Connecticut, and Pennsylvania. The five-year plan shall include
6 a detailed cost analysis of the plan. Any plan developed under this subsection shall be in
7 furtherance of the State's compliance with the United States Supreme Court decision in Olmstead
8 v. L.C., 527 U.S. 581 (1999). No later than October 1, 2026, the Division of Mental Health,
9 Developmental Disabilities, and Substance Use Services shall submit a report containing the
10 five-year plan to the Joint Legislative Oversight Committee on Medicaid and to the members of
11 the Legislative Joint Caucus for Intellectual and Developmental Disabilities.
12
13 PART VI. STATE MATCH FOR REHABILITATION SERVICES ADMINISTRATION
14 (RSA) FEDERAL GRANT
15SECTION 6.(a) There is appropriated from the General Fund to the Department of
16 Health and Human Services, Division of Employment and Independence for People with
17 Disabilities (DEIPD), the sum of four million seven hundred fifty-five thousand seventy-one
18 dollars ($4,755,071) in recurring funds beginning with the 2026-2027 fiscal year to be used to
19 increase pay to address the vacancy rate in DEIPD, raise rates for Community Rehabilitation
20 Programs, and sustain the vocational rehabilitation workforce to ensure individuals with
21 disabilities can access paid employment services. These funds shall provide a State match for
22 seventeen million five hundred sixty-nine thousand two hundred four dollars ($17,569,204) in
23 recurring federal funds, and those federal funds are appropriated to DEIPD for the same purpose.
24SECTION 6.(b) There is appropriated from the General Fund to the Department of
25 Health and Human Services, Division of Services for the Blind (DSB), the sum of nine hundred
26 ninety-five thousand one hundred sixty-three dollars ($995,163) in recurring funds beginning
27 with the 2026-2027 fiscal year to be used to increase pay to address the vacancy rate in DSB,
28 raise rates for Community Rehabilitation Programs, and sustain the vocational rehabilitation
29 workforce to ensure individuals with disabilities can access paid employment services. These
30 funds shall provide a State match for three million six hundred seventy-six thousand nine hundred
31 fifty-nine dollars ($3,676,959) in recurring federal funds, and those federal funds are
32 appropriated to DSB for the same purpose.
33SECTION 6.(c) This section is effective July 1, 2026.
34
35 PART VII. BAN USE OF PRONE RESTRAINT AND REQUIRE INCREASED
36 PARENTAL NOTIFICATION AND TEACHER TRAINING ON THE USE OF
37 SECLUSION AND RESTRAINT
38SECTION 7.(a) G.S. 115C-391.1 reads as rewritten:
39 "§ 115C-391.1. Permissible use of seclusion and restraint.
40     …
41     (c)   Physical Restraint:
42…
43(5)    Physically restraining a student in a prone position is prohibited.
44     …
45     (j)   Notice, Consent, Reporting, and Documentation. –
46(1)    Notice of procedures. – Each governing body of a public school unit shall
47provide copies of this section and all governing body policies developed to
48implement this section to school personnel and parents or guardians at the
49beginning of each school year. The public school unit shall request
50confirmation that parents have received the policy.
51(2)    Notice of specified incidents:
 Page 6  House Bill 1147-First Edition
 General Assembly Of North Carolina  Session 2025
1a.     School personnel shall promptly notify the principal or principal's
2designee of:
31.      Any use of aversive procedures.
42.      Any prohibited use of mechanical restraint.
53.      Any use of physical restraint resulting in observable physical
6injury to a student.restraint.
74.      Any prohibited use of seclusion or seclusion that exceeds 10
8minutes or the amount of time specified on a student's behavior
9intervention plan.seclusion.
105.      If the seclusion or restraint was used in a prohibited manner,
11caused observable physical injury to a student, or exceeded 10
12minutes or the amount of time specified on a student's behavior
13intervention plan.
14b.     When a principal or principal's designee has personal knowledge or
15actual notice of any of the events described in this subdivision, the
16principal or principal's designee shall promptly notify the student's
17parent or guardian and will provide the name of a school employee the
18parent or guardian can contact regarding the incident.
19(3)    As used in subdivision (2) of this subsection, "promptly notify" means by the
20end of the workday school day during which the incident occurred when
21reasonably possible, but in no event later than the end of following
22workday.occurred.
23…."
24SECTION 7.(b) G.S. 115C-270.30(b)(1) reads as rewritten:
25"(1) For all teachers, at least eight continuing education credits with at least three
26credits required in a teacher's academic subject area.and at least one credit on
27the use of seclusion and restraint, including State policies, safe techniques,
28and trauma-informed practices."
29SECTION 7.(c) This section is effective when it becomes law and applies beginning
30 with the 2026-2027 school year.
31
32 PART VIII. DASHBOARD FOR SUSPENSION RATES FOR STUDENTS WITH IEPS
33SECTION 8.(a) G.S. 115C-12(27) reads as rewritten:
34"(27) Reporting Dropout Rates, Corporal Punishment, Suspensions, Expulsions,
35and Alternative Placements. – The State Board shall report by March 15 of
36each year to the Joint Legislative Education Oversight Committee on the
37numbers of students who have dropped out of school, been subjected to
38corporal punishment, been suspended, been expelled, been reassigned for
39disciplinary purposes, or been provided alternative education services. The
40data shall be reported in a disaggregated manner, reflecting the local school
41administrative unit, race, gender, grade level, ethnicity, and disability status
42of each affected student. Such data shall be readily available to the public.
43public via an electronic dashboard established and maintained by the State
44Board. The State Board shall not include students that have been expelled
45from school when calculating the dropout rate. The Board shall maintain a
46separate record of the number of students who are expelled from school and
47the reasons for the expulsion."
48SECTION 8.(b) This section is effective when it becomes law and applies beginning
49 with the 2026-2027 school year.
50
 House Bill 1147-First Edition  Page 7
 General Assembly Of North Carolina  Session 2025
1 PART IX. ADDITIONAL FUNDS FOR NORTH CAROLINA PERSONAL EDUCATION
2 STUDENT ACCOUNTS FOR CHILDREN WITH DISABILITIES PROGRAM
3SECTION 9.(a) There is appropriated from the General Fund to the Board of
4 Governors of The University of North Carolina the sum of twenty-five million dollars
5 ($25,000,000) in recurring funds beginning in the 2026-2027 fiscal year to be allocated to the
6 State Education Assistance Authority for the North Carolina Personal Education Student
7 Accounts for Children with Disabilities Program in accordance with Article 41 of Chapter 115C
8 of the General Statutes.
9SECTION 9.(b) G.S. 115C-600(a) reads as rewritten:
10     "(a) The General Assembly finds that due to the continued growth and ongoing need in
11 this State to provide opportunity for school choice for children with disabilities, it is imperative
12 that the State provide an increase in funds of at least one million dollars ($1,000,000) each fiscal
13 year for 10 years for the Personal Education Student Accounts for Children with Disabilities
14 Program. To that end, there is appropriated from the General Fund to the Board of Governors of
15 The University of North Carolina the following amounts each fiscal year to be allocated to the
16 Authority for the Program in accordance with this Article:
17Fiscal Year  Appropriation
18…
192027-2028  $77,643,166$102,643,166
202028-2029  $78,643,166$103,643,166
212029-2030  $79,643,166$104,643,166
222030-2031  $80,643,166$105,643,166
232031-2032  $81,643,166$106,643,166
242032-2033 and each subsequent fiscal year thereafter       $82,643,166$107,643,166
25     When developing the base budget, as defined by G.S. 143C-1-1, for each fiscal year specified
26 in this section, the Director of the Budget shall include the appropriated amount specified in this
27 section for that fiscal year."
28SECTION 9.(c) This section becomes effective July 1, 2026.
29
30 PART X. SUPPORT FOR STUDENTS WITH DISABILITIES
31SECTION 10.(a) Program Established. – Beginning with the 2026-2027 fiscal year,
32 the Department of Public Instruction shall establish a grant program for local school
33 administrative units to apply for funds from the Special State Reserve Fund (SSRF) for children
34 with disabilities for the purpose of covering the extraordinary costs of certain students with
35 disabilities, including costs associated with the placement of students in private schools with
36 approved nonpublic education programs providing special education in accordance with a
37 student's individualized education program (IEP). The grant program shall provide funds for
38 students with disabilities on an ongoing basis according to the students' IEPs. The grant program
39 established by this act shall be administered separately from the grant program funded from the
40 SSRF available to local school administrative units for high costs related to emergency situations
41 for children with disabilities in a school year. Funds administered pursuant to this act shall be to
42 supplement and not supplant existing federal, State, and local funding for children with
43 disabilities.
44SECTION 10.(b) Applications. – A local school administrative unit may apply for
45 grant funds for a student with disabilities served by the unit for extraordinary costs associated
46 with services provided to the student, including for a placement in a private school that has an
47 approved nonpublic education program providing special education in accordance with a
48 student's IEP. To be eligible for a grant, the local school administrative unit must demonstrate
49 that the total cost of the services equals or exceeds four times the State average per pupil
50 expenditure for children with disabilities in the prior fiscal year. The local school administrative
51 unit shall provide documentation to the Department of Public Instruction to support the funding
 Page 8  House Bill 1147-First Edition
 General Assembly Of North Carolina  Session 2025
1 request. The student's IEP must support the determination of the services, including if the
2 placement of the student is at a private school. Grant funds shall be student-specific and follow
3 the student for special education and related services provided within the State. The Department
4 shall require documentation for renewal of the grant for each school year with a request for funds
5 for the student. The Department shall reimburse seventy-five percent (75%) of the extraordinary
6 costs and disburse funds in quarterly amounts to providers on an approved list from the
7 Department.
8For the purposes of this act, extraordinary costs shall only include costs directly
9 attributable to providing the special education services on the student's IEP, such as salary of
10 educational personnel; salary of related services personnel; costs for specialized books, materials,
11 or equipment; tuition costs; and consultant costs, if directly attributable to the student's
12 instructional program. Extraordinary costs shall not include administrative or overhead costs, the
13 costs of adapting classrooms or materials that are used by more than one student, nor the costs
14 associated with evaluation, development of the IEP, or service coordination for the student with
15 disabilities.
16SECTION 10.(c) Oversight. – The Department of Public Instruction shall ensure
17 that, if a student who is covered by grant funds is placed in a private school that has an approved
18 nonpublic education program providing special education in accordance with a student's
19 individualized education program (IEP), the school is approved by the Department as adhering
20 to State and federal laws governing education services for students with disabilities and State and
21 federal laws governing seclusion and restraint of students. The student's local school
22 administrative unit shall remain legally responsible for ensuring the student is receiving a free
23 appropriate public education (FAPE) in the least restrictive environment (LRE) while the student
24 is placed in the private school, as required by State and federal laws governing education services
25 for students with disabilities, and the unit shall conduct an annual review of the student's IEP and
26 any interim reviews requested by the student's parent or legal guardian for purposes of
27 educational decision making in accordance with federal and State laws. Prior to approving a
28 renewal of the grant for a particular student, the Department shall ensure that the annual review
29 of the student's IEP has been completed and the student's parent or legal guardian, for purposes
30 of educational decision making, has received the notice of procedural safeguards required by
31 State and federal laws governing education services for students with disabilities.
32SECTION 10.(d) Appropriation. – There is appropriated from the General Fund to
33 the Special State Reserve Fund the sum of one million dollars ($1,000,000) in recurring funds
34 beginning with the 2026-2027 fiscal year for the Department of Public Instruction to implement
35 the grant program established pursuant to this section.
36SECTION 10.(e) Report. – By March 15, 2027, the Department of Public Instruction
37 shall report to the Joint Legislative Education Oversight Committee, the House Appropriations
38 Education Committee, the Senate Appropriations on Education/Higher Education Committee,
39 and the Fiscal Research Division on the amount of grant applications for the 2026-2027 school
40 year, the amount of grant funds awarded, the types of out-of-school system placements and
41 service providers, and the type of extraordinary costs reimbursed.
42SECTION 10.(f) G.S. 115C-107.5 reads as rewritten:
43 "§ 115C-107.5. Annual reports.
44      The State Board shall report no later than October 15 of each year to the Joint Legislative
45 Education Oversight Committee on the implementation of this Article and the educational
46 performance of children with disabilities. The report may be filed electronically. Each annual
47 report shall include the following information:
48…
49(4)    A summary analysis of the following data to be monitored and collected by
50the Department of Public Instruction on students with disabilities in each local
51school administrative unit on a monthly basis:
 House Bill 1147-First Edition  Page 9
 General Assembly Of North Carolina  Session 2025
1a.      The number of new and continued homebound placements.
2b.      The number of new and continued modified day placements.
3c.      The number of new and continued Home/Hospital, Separate Schools,
4and Residential placements.
5d.      The number of new and continued PRTF placements.
6The data collected by the Department under this subdivision shall be
7disaggregated by gender, race, ethnicity, disability, grade level, and school
8within a local school administrative unit. The report may reflect de-identified
9data for individual students, when available, regarding disciplinary outcomes,
10length of homebound, modified day, or institutionalized placements,
11including total number of homebound, modified day, and institutionalized
12placements over the course of a student's public school enrollment, and over
13the current and two prior school years, and the regular education, special
14education, and related services being received (i) prior to and (ii) during the
15homebound, modified day, or an institutionalized setting placement. The
16report shall also include any findings by the Office of Special Education
17Programs that relate to the implementation of a free and public education in
18the State, including any findings of noncompliance or deficiencies."
19SECTION 10.(g) The State Board of Education shall submit the information
20 required pursuant to G.S. 115C-107.5(4), as enacted by this section, beginning with the report
21 submitted to the Joint Legislative Education Oversight Committee by October 15, 2027.
22SECTION 10.(h) This section becomes effective July 1, 2026.
23
24 PART XI. DEVELOP AN OFFICE FOR ACCESSIBLE TRANSPORTATION
25SECTION 11.(a) The Secretary of the Department of Transportation shall create and
26 administer an office within the Department of Transportation to be known as the Office of
27 Accessible Transportation and Mobility.
28SECTION 11.(b) The purpose of the Office is to provide resources and expertise for
29 expanding and improving accessible transportation and mobility across the State at the direction
30 of the Secretary.
31SECTION 11.(c) All appropriate State and local agencies shall coordinate with the
32 Department of Transportation toward the goal of expanding and improving accessible
33 transportation and mobility across the State.
34SECTION 11.(d) The Office shall consult with stakeholders, selected by the
35 Department, who are consumers of accessible transportation as well as professionals with
36 experience in transportation, disability, and aging.
37SECTION 11.(e) No later than March 31, 2027, the Department shall submit a report
38 containing the following information to the House Appropriations Committee on Transportation,
39 the Senate Appropriations Committee on Department of Transportation, and the Fiscal Research
40 Division:
41(1)    A detailed statement on the Office's mission and scope of responsibilities.
42(2)    A five-year strategic plan to guide the Office's work.
43
44 PART XII. EFFECTIVE DATE
45SECTION 12. Except as otherwise provided, this act is effective when it becomes
46 law.
 Page 10  House Bill 1147-First Edition