FOURTH MODIFICATION OF SETTLEMENT AGREEMENT

1. This document modifies the Settlement Agreement (“Agreement”) in the above-referenced matter between the United States and the State of North Carolina (collectively, the “Parties”).  Details of the Agreement and its modifications are set forth in the Second Modification of Settlement Agreement that the Parties filed, D.E. 36-1, and the Court entered, D.E. 37, on October 21, 2020, and in the Third Modification of Settlement Agreement that the Parties filed, D.E. 39, and the Court entered, D.E. 40, on March 1, 2021.  The Agreement and its prior modifications are incorporated here by reference.
2. The Parties now enter this Fourth Modification of Settlement Agreement.  The terms of this modification are as follows:
1. The Parties anticipate that the State will substantially comply with Section III(B)(3) of the Agreement, which requires the State, as of July 1, 2021, to provide to individuals identified in Section III(B)(2) of the Agreement access to 3,000 Housing Slots.  This obligation shall be discharged as of July 1, 2021, subject to the terms of subparagraph 2(d) below.
2. The Parties also anticipate that the State will substantially comply, as of July 1, 2021, with Sections III(B)(4), III(B)(6), III(E)(13)(a), III(E)(13)(b), III(E)(13)(d), III(F)(1), and III(F)(2) of the Agreement.  Thus, the State’s obligations to comply with these Sections shall be discharged on that date, provided that the State’s performance in these areas does not materially regress during the term of the extension.  Review of these Sections after July 1, 2021 shall be limited to that necessary to determine whether the State has materially regressed and to interpret other, continuing obligations in the Agreement.
3. The Parties believe that the State may substantially comply with Sections III(E)(9), III(E)(10), and III(E)(14) of the Settlement Agreement before the projected end date of the Agreement as modified below.  Therefore, the Parties will meet and confer within ninety days of issuance of the final version of the Report of the Independent Reviewer for Fiscal Year 2021, but no later than February 1, 2022, to determine whether discharge of the State’s obligations in these three Sections is appropriate at that time.
4. Section III(B)(5) of the Agreement is amended to read: “As of January 1, 2022, the State shall provide Housing Slots to 1,490 of the individuals described in Sections III(B)(2)(a), (b), and (c) of this Agreement.  The State shall provide Housing Slots to 1,660 such individuals by July 1, 2022; to 1,830 such individuals by January 1, 2023; and to 2,000 such individuals by July 1, 2023.  While achieving these totals, the State shall take all reasonable steps so that any individuals described in Section III(B)(2) of the Agreement who are eligible for the State’s Transitions to Community Living Initiative and who have Housing Slots as of March 1, 2021 continue to retain their Housing Slots as long as they do not oppose supported housing and supported housing remains appropriate for them.”
5. Section V(B) of the Agreement is amended to read: “The implementation of this Agreement shall begin immediately upon execution.  The Parties anticipate that the State will have substantially complied with all provisions of this Agreement by July 1, 2023, unless the Agreement is otherwise terminated, cancelled, or extended. Substantial compliance is achieved if any violations of the Agreement are minor and occasional and are not systemic.  Any Agreement deadline may be extended by mutual agreement of both Parties or pursuant to the process described in Section V(C) below in the event that the State has not achieved compliance with the Agreement on or before July 1, 2023.  This paragraph applies to all provisions of this Agreement to the extent that provisions have not expressly been discharged as described in subparagraphs 2(a)–(d) of the Fourth Modification of Settlement Agreement dated March 26, 2021.”
6. Section V(C) of the Agreement is amended to read: “The Court shall retain jurisdiction of this action for the purposes specified in Section V(A) until July 1, 2023 unless: (1) the Parties jointly ask the Court to terminate the Agreement before July 1, 2023; or (2) the United States disputes that the State is in substantial compliance with the Agreement as of July 1, 2023.  If the State has substantially complied with the Agreement before July 1, 2023, the United States shall not unreasonably decline to join the State in a motion to terminate the Agreement early.  If the United States disputes that the State is in substantial compliance with the Agreement as of July 1, 2023, then the United States shall inform the Court and the State by March 1, 2023, and the Court may schedule further proceedings as appropriate.  In any such proceedings, the burden shall be on the State to demonstrate substantial compliance.”
3. This modification incorporates by reference and amends the Agreement the Parties filed on August 23, 2012 and the prior modifications that the Parties filed on October 27, 2017, October 21, 2020, and March 1, 2021.  This modification supplements and does not supplant the Agreement or the prior modifications.  Unless otherwise noted, all definitions, obligations, and terms and conditions in the Agreement and the prior modifications remain in force for the term of the Agreement as extended.

Executed this 26th day of March, 2021.

FOR THE UNITED STATES OF AMERICA:

Executed on this 26th day of March, 2021.

FOR THE STATE OF NORTH CAROLINA: