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GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
HOUSE BILL 171
RATIFIED BILL
*H171-v-6*
AN ACT ELIMINATING DIVERSITY, EQUITY, AND INCLUSION (DEI) INITIATIVES IN
STATE AND LOCAL GOVE RNMENT AND CLARIFYIN G THE PENALTY
PROVISIONS OF THE STATE BUDGET ACT AND LOCAL GOVERNMENT BUDGET
AND FISCAL CONTROL ACT.
The General Assembly of North Carolina enacts:
PART I. NO DEI IN STATE
SECTION 1.1.(a) Article 5 of Chapter 126 of the General Statutes is amended by
adding a new section to read:
"§ 126-14.7. Equality and merit in State government workplaces; no DEI.
(a) No State agency shall promote, support, fund, implement, or maintain workplace
diversity, equity, and inclusion (DEI), including using DEI in State government hirings and
employment; maintaining dedicated DEI staff positions or offices; or offering or requiring DEI
training.
(b) The following definitions apply in this section:
(1) Differential treatment. – Any distinction, exclusion, or difference in policy,
practice, or action that impairs equal access to opportunities or benefits, based
on a protected characteristic . This definition does not apply to
antidiscrimination measures, reasonable accommodations, legal requirements,
or bona fide occupational qualifications.
(2) Diversity, equity, and inclusion or DEI. – A program, policy, initiative, or
activity designed or implemented to:
a. Influence hiring or employment practices with respect to race , sex,
color, ethnicity, nationality, country of origin, or sexual orientation
other than through the use of merit -based hiring processes in
accordance with any applicable State and federal antidiscrimination
laws.
b. Promote differential treatment of or providing special benefits to
individuals on the basis of race, sex, color, ethnicity , nationality,
country of origin, or sexual orientation.
(3) Protected characteristic . – Any trait protected by State or federal
antidiscrimination laws.
(c) The State Auditor shall conduct periodic compliance audits to determine whether
there has been a violation of this section. If the State Auditor determines that a violation of this
section has occurred, the determination shall be reported to the General As sembly, the Joint
Legislative Commission on Governmental Operations, and the Attorney General.
(d) A State officer or employee who violates this section is subject to removal from office
or employment.
(e) A State officer or employee who knowingly and willfully violates this section shall
be subject to a civil penalty not to exceed five thousand dollars ($5,000) for each violation. The
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Attorney General may bring a civil action to collect the penalty in superior court which shall be
placed in the Civil Penalty and Forfeiture Fund established pursuant to G.S. 115C-457.1.
(f) An employee or a forme r employee of a State agency may bring a civil action for
damages to the employee, or the former employee, resulting from violation of this section. Any
person, who has been denied employment because of a violation of this section, may bring a civil
action seeking injunctive or declaratory relief and the recovery of reasonable attorneys' fees and
costs if the person prevails in the civil action. The action shall be brought in the county in which
all or a substantial part of the acts or omissions giving rise to the action occurred. Any civil action
brought pursuant to this subsection shall be subject to all of the following:
(1) Prior to the commencement of the civil action the person shall submit a written
grievance to the State agency detailing the alleged violation of this section and
the requested corrective action that the State agency is to take . The person
shall not commence the civil action until the State agency has had an
opportunity to respond to the grievance in accordance with subdivision (2) of
this subsection.
(2) The State agency shall respond to the grievance within 20 calendar days, in
either of the following ways:
a. Take the corrective action sought by the person. If the State agency
takes this corrective action, the State agency shall not be liable in any
civil action under this subsection.
b. Refuse to take the requested corrective action and provide a written
explanation why the State agency has not violated this section.
(3) If the State agency fails to respond to a written grievance in accordance with
subdivision (2) of this subsection, the State agency shall not be entitled to any
of the protections provided in that subdivision.
(g) Nothing in this section shall be construed to do any of the following:
(1) Conflict with, restrict, limit, or infringe upon speech protected by the First
Amendment of the U.S. Constitution.
(2) Conflict with or prohibit compliance with Title IX of the Education
Amendments of 1972, as amended; the Americans with Disabilities Act, as
amended; the Age Discrimination in Employment Act, as amended; Title VI
of the Civil Rights Act of 1964; or other applicable State or federal law.
(3) Alter the relationship between the State and an American Indian tribe which
shall continue to enjoy all rights, privileges, and immunities as an American
Indian tribe with a recognized tribal governing body carrying out and
exercising substantial governmental duties and powers similar to the State,
being recognized as eligible for the special programs and services provided
by the United States to Indians because of their status as Indians.
(4) Apply to the North Carolina State Commission of Indian Affairs and Indian
education services and positions.
(5) Prohibit the celebration of any holiday, observance, or remembrance.
(h) The provisions of this section are severable. If any provision of this section or its
application is held invalid, that invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application."
SECTION 1.1.(b) G.S. 126-5 is amended by adding a new subsection to read:
"(c22) Notwithstanding any provision of law to the contrary, G.S. 126-14.7 shall apply to all
nonexempt State employees in the executive branch, except nonexempt employees of The
University of North Carolina and nonexempt employees of the Communit y Colleges System
Office."
House Bill 171-Ratified Page 3
SECTION 1.1.(c) This section becomes effective July 1, 2026, and applies to acts
or omissions occurring on or after that date. All State agencies shall develop forms, rules, and
procedures to comply with the provisions of G.S. 126-14.7(f) as enacted by this act.
SECTION 1.2.(a) Article 10 of Chapter 143 of the General Statutes is amended by
adding a new section to read:
"§ 143-162.8. No public funds for DEI.
(a) No State agency or unit of local government may use any State funds or public monies
to promote, support, fund, implemen t, or maintain diversity, equity, and i nclusion (DEI)
initiatives or programs.
(b) No State agency or unit of local government shall apply for, accept, or utilize federal
funds, grants, or other financial assistance that require compliance with DEI policies, initiatives,
or mandates. Any existing programs funded through such means shall be discontinued unless
continued participation is expressly required by federal law.
(c) The following definitions apply in this section:
(1) Diversity, equity, and inclusion or DEI. – A program, policy, initiative, or
activity designed or implemented to:
a. Influence State government practices with respect to race, sex, color,
ethnicity, nationality, count ry of origin , or sexual orientation other
than for compliance with applicable State and federal
antidiscrimination laws.
b. Promote (i) differential treatment of or providing special benefits to
individuals on the basis of race, sex, color, ethnicity , nationality,
country of origin, or sexual orientation; or (ii) a difference in policy,
practice, or action that impairs equal access to opportunities or
benefits, based on a protected characteristic . This definition does not
apply to antidiscrimination mea sures, reasonable accommodations,
legal requirements, bona fide occupational qualifications, or any trait
protected by State or federal antidiscrimination laws.
(2) Public monies. – Funds from any source budgeted or expended by a local
political subdivisio n of the State, including revenue authorized by
G.S. 153A-149 or G.S. 160A-209.
(3) State agency. – A unit of the executive, legislative, or judicial branch of State
government, such as a department, institution, division, commission, board,
or council.
(4) State funds. – As defined in G.S. 143C-1-1.
(5) Unit of local government. – As defined in G.S. 143C-1-1.
(d) The prohibitions contained in subsection s (a) and (b) of this section include using
State funds or public monies to do any of the following:
(1) Utilize DEI in hirings, employment, or the awarding of contracts.
(2) Offer or require DEI training.
(3) Maintain DEI offices or dedicated staff positions , whether permanent,
time-limited, full-time, part-time, or temporary.
(e) Nothing in this section shall be construed to do any of the following:
(1) Conflict with, restrict, limit, or infringe upon speech protected by the First
Amendment of the U.S. Constitution.
(2) Conflict with or prohibit compliance with Title IX of the Education
Amendments of 197 2, as amended; the Americans with Disabilities Act, as
amended; the Age Discrimination in Employment Act, as amended; Title VI
of the Civil Rights Act of 1964; or other applicable State or federal law.
(3) Alter the relationship between the State and an American Indian tribe which
shall continue to enjoy all rights, privileges, and immunities as an American
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Indian tribe with a recognized tribal governing body carrying out and
exercising substantial governmen tal duties and powers similar to the State,
being recognized as eligible for the special programs and services provided
by the United States to Indians because of their status as Indians.
(f) This section shall not be construed to apply to any of the following:
(1) Guest speakers or performers on short-term engagements.
(2) Data collection.
(3) The North Carolina State Commission of Indian Affairs.
(4) Indian education services and positions.
(5) The celebration of any holiday, observance, or remembrance.
(g) A person who knowingly and willfully violates this section is subject to a civil penalty
not to exceed ten thousand dollars ($10,000) per violation. Each expenditure or action taken in
contravention of this section constitutes a separate violation. The Attorney General may bring a
civil action to collect the penalty in superior court which shall be placed in the Civil Penalty and
Forfeiture Fund established pursuant to G.S. 115C-457.1. In any such action, the court may also
award injunctions to prevent ongoing violations.
(h) A v iolation of this section is subject to the applicable civil penalty provisions of
G.S. 143C-10-3, 159-182(b), or 159-183.
(i) Beginning February 1, 2026, and annually thereafter, each State agency and unit of
local government shall prepare and publicly post on its website, as well as submit to the Office
of the State Auditor, a report detailing the actions taken to comply with this section. The report
must include each instance where a program or policy was revised or prohibited due to a conflict
with this section. The State Auditor shall compile this information and submit a consolidated
report to the Joint Legislative Commission on Governmental Operations and the General
Assembly by April 1, 2026, and then annually thereafter.
(j) The State Auditor shall conduct periodic compliance audits to determine whether
there has been a violation of this section. If the State Auditor determines that a violation of this
section has occurred, the determination shall be referred to the Attorney General for appropriate
civil enforcement action . The State Audi tor shall report all violations to the Joint Legislative
Commission on Governmental Operations and, if appropriate, shall report an individual violation
to the Local Government Commission.
(k) An employee or a former employee of a State agency or unit of local government may
bring a civil action for damages to the employee, or the former employee, resulting from violation
of this section. Any person, who has been denied employment because of a violation of this
section, may bring a civil action seeking injunctive or declaratory relief and the recovery of
reasonable attorneys' fees and costs if the person prevails in the civil action. The action shall be
brought in the county in which all or a substantial part of the acts or omissions giving rise to the
action occurred. Any civil action brought pursuant to this subsection shall be subject to all of the
following:
(1) Prior to the commencement of the civil action the person shall submit a written
grievance to the State agency or unit of local government detailing the alleged
violation of this section and the requested corrective action that the State
agency or unit of local government is to take. The person shall not commence
the civil action until the State agency or unit of local government has had an
opportunity to respond to the grievance in accordance with subdivision (2) of
this subsection.
(2) The State agency or unit of local government shall respond to the grievance
within 20 calendar days, in either of the following ways:
a. Take the corrective action sought by the person. If the State agency or
unit of local government takes this corrective action, the State agency
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or unit of local government shall not be liable in any civil action under
this subsection.
b. Refuse to take the requested corrective action and provide a written
explanation why the State agency or unit of local government has not
violated this section.
(3) If the State agency or unit of local government fails to respond to a written
grievance in accordance with subdivision (2) of this subsection, the State
agency or unit of local government shall not be entitled to any of the
protections provided in that subdivision.
(l) The liability and penalty provisions contained in this section for violating its
provisions are in addition to, and not in lieu of, liability under any other applicable provision of
law or cause of action in consequence of the violation.
(m) The provisions of this section are severable. If any provision of this section or its
application is held invalid, that invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application."
SECTION 1.2.(b) This section becomes effective July 1, 2026, and applies to acts
or omissions occurring on or after that date. All State agencies and units of local government
shall develop forms, rules, and procedures to comply with the provisions of G.S. 143-162.8(k)
as enacted by this act.
SECTION 1.3.(a) Article 10 of Chapter 143C of the General Statutes reads as
rewritten:
"Article 10.
"Penalties.
"§ 143C-10-1. Offenses for violation of Chapter.
…
(c) Forfeiture of Office or Employment. – An appointed officer or employee of the State
or an officer or employee of a political subdivision of the State, whether elected or appointed,
forfeits his or her office or employment upon conviction of an offense under this section. An
elected officer of the State is subject to impeachment for committing any of the offenses specified
in this section.
"§ 143C-10-2. Civil liability for violation of Chapter.
(a) A person convicted of an offense unde r who violates G.S. 143C-10-1 is liable in a
civil action for any damages suffered by the State in consequence of the offense. A State agency
shall have a duty to pursue the recoupment of misspent funds by all lawful means available,
including the filing of a civil action in the General Court of Justice.
(b) Any person may bring a civil action for a violation of this section seeking injunctive
or declaratory relief and the recovery of reasonable attorney s' fees and costs. The civil action
shall be brought in the county in which all or a substantial part of the acts or omissions giving
rise to the action occurred.
"§ 143C-10-3. Suspension from office or impeachment for refusal to comply with Chapter.
(a) State Officers or Employees of the Executive Branch. – The Governor may suspend
from the performance of his or her duties any State officer or employee of the executive branch
except an officer elected by the people, who persists, after notice and warning, in failing or
refusing to comply with the provisions of this Chapter or any lawful administrative directive
issued pursuant to this Chapter. Before acting to suspend, the Governor shall give the accused
notice and an opportunity to be heard in his or her own defense. The Governor shall report the
facts leading to suspension to the district attorney for the county in which all or a substantial part
of the violation occurred and to the Attorney General who may initiate appropriate criminal or
civil proceedings. The Governor may apply to the General Court of Justice for a restraining order
and injunction if a suspended officer or employee persists in performing official acts.
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(b) Elected Officers. – A State officer elected by the people who knowingly and willfully
fails or refuses to comply with any provision of this Chapter or any lawful administrative
directive issued under this Chapter is subject to impeachment."
SECTION 1.3.(b) G.S. 159-182 reads as rewritten:
"§ 159-182. Offending officers and employees removed from office.
(a) If an officer or employee of a local government or public authority persists, after
notice and warning from the Commission, in failing or refusing to comply with any provision of
this Chapter, he the officer or employee forfeits his the office or employment. The Commission
may enter an order suspending the offender from further performance of his or her office or
employment after first giving him or her notice and an opportunity to be heard in his or her own
defense, pending the outcome of quo warranto proceedings. Upon suspending a local officer or
employee under this section, the Commission shall report the circumstances to the Attorney
General who shall initiate quo warranto proceedings against the offi cer or employee in the
General Court of Justice. Justice and to the district attorney for the county in which all or a
substantial part of the noncompliance occurred. If an officer or employee persists in performing
any official act in violation of an orde r of the Commission suspending him or her from
performance of his or her duties, the Commission may apply to the General Court of Justice for
a restraining order and injunction.
(b) Any person may bring a civil action for a violation of this section seekin g injunctive
or declaratory relief and the recovery of reasonable attorney s' fees and costs. The civil action
shall be brought in the county in which all or a substantial part of the acts or omissions giving
rise to the action occurred."
SECTION 1.3.(c) Article 11 of Chapter 159 of the General Statutes is amended by
adding a new section to read:
"§ 159-183. Violation of G.S. 143-162.8.
(a) A person who knowingly and willfully violates G.S. 143-162.8 regarding the use of
public monies by a unit of local government shall be subject to a civil penalty not to exceed ten
thousand dollars ($10,000) per violation. An offending officer or employee is subject to removal
from office or employment as provided by G.S. 159-182. The Attorney General may initiate a
civil action to enforce the penalty under this section.
(b) A person who violates G.S. 143-162.8 is liable for any damages suffered by a unit of
local government in consequence of the offense. A unit of local government or entity receiving
public funds shall have a duty to pursue the re coupment of misspent funds by all lawful means
available, including the filing of a civil action in the General Court of Justice."
House Bill 171-Ratified Page 7
PART II. EFFECTIVE DATE
SECTION 2.1. Except as otherwise provided, this act becomes effective December
1, 2025, and applies to acts or omissions occurring on or after that date.
In the General Assembly read three times and ratified this the 30th day of June, 2025.
s/ Phil Berger
President Pro Tempore of the Senate
s/ Donna McDowell White
Presiding Officer of the House of Representatives
_____________________________________
Josh Stein
Governor
Approved __________.m. this ______________ day of ___________________, 2025