Continuing Budget Operations Part III.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 4
HOUSE BILL 389
Committee Substitute Favorable 4/1/25
Senate Appropriations/Base Budget Committee Substitute Adopted 9/22/25
Fourth Edition Engrossed 9/22/25

Short Title: Continuing Budget Operations Part III. (Public)
Sponsors:
Referred to:
March 13, 2025
*H389-v-4*
A BILL TO BE ENTITLED 1
AN ACT TO IMPLEMENT ADDITIONAL BUDGETARY ADJUSTMENTS AND TO MAKE 2
OTHER CHANGES IN THE BUDGET OPERATIONS OF THE STATE. 3
The General Assembly of North Carolina enacts: 4
5
PART I. EDUCATION 6
7
FUNDS FOR UNCC DATA SCIENCE AND BATTERY ENGINEERING AND 8
RECYCLING 9
SECTION 1.1. There is appropriated from the General Fund to the Board of 10
Governors of The University of North Carolina the sum of two million one hundred thousand 11
dollars ($2,100,000) in recurring funds for each year of the 2025 -2027 fiscal biennium to be 12
allocated to the University of North Carolina at Charlotte to expand its data science programs 13
and battery engineering and recycling initiatives. 14
15
PART II. DEPARTMENT OF HEALTH AND HUMAN SERVICES 16
17
TRANSITIONS TO COMMUNITY LIVING INITIATIVE FUNDING 18
SECTION 2.1. There is appropriated from the General Fund to the Department of 19
Health and Human Services, Division of Central Management and Support, the sum of twelve 20
million one hundred ninety -two thousand one hundred twenty -four dolla rs ($12,192,124) in 21
recurring funds for each year of the 2025-2027 fiscal biennium to provide increased funding for 22
implementation of the Transitions to Community Living Initiative Plan designed to achieve 23
compliance with the 2012 U.S. Department of Justic e Settlement. Funds appropriated by this 24
section shall be allocated and used as follows: 25
(1) The sum of eighty -four thousand one hundred twenty -four dollars ($84,124) 26
in recurring funds shall be used to support one full -time Olmstead Associate 27
Director position within the Division of Central Management and Support. 28
(2) The sum of twelve million one hundred eight thousand dollars ($12,108,000) 29
in recurring funds shall be used to provide community -based supported 30
housing, tenancy support, supported employment , and wrap -around 31
community-based mental health services to eligible adults with serious mental 32
illnesses as they transition from institutional to community care settings, and 33
General Assembly Of North Carolina Session 2025
Page 2 House Bill 389-Fourth Edition
to provide project management support for the Transitions to Community 1
Living Initiative. 2
3
ELECTRONIC HEALTH RECORDS FUNDING 4
SECTION 2.2.(a) The State Controller shall transfer from funds available in the 5
Information Technology Reserve established in Section 2.2(h) of S.L. 2021 -180 to the 6
Department of Health and Human Services, Divi sion of Central Management and Support 7
Special Fund (Budget Code 24410, Budget Fund 230034), the sum of fifteen million one hundred 8
eighteen thousand one hundred seventy -seven dollars ($15,118,177) in nonrecurring funds for 9
the 2025-2026 fiscal year. The funds transferred pursuant to this section are appropriated for the 10
fiscal year in which they are transferred to be allocated and used to fund continued 11
implementation of electronic health records (EHR) at State-operated healthcare facilities. 12
SECTION 2.2.(b) In addition, the State Controller shall transfer from funds available 13
in the Department of Health and Human Services, Division of Central Management and Support 14
Special Fund (Budget Code 24410, Budget Fund 230008), the sum of three million four hundred 15
ninety thousand one hundred forty -eight dollars ($3,490,148) in nonrecurring funds for the 16
2025-2026 fiscal year to the Department of Health and Human Services Special Fund referenced 17
in subsection (a) of this section (Budget Code 24410, Budget Fund 23003 4). The funds 18
transferred pursuant to this section are appropriated for the fiscal year in which they are 19
transferred to be allocated and used for the same purpose specified in subsection (a) of this 20
section. 21
SECTION 2.2.(c) There is appropriated from the General Fund to the Department 22
of Health and Human Services, Division of Mental Health, Developmental Disabilities, and 23
Substance Use Services, the sum of three million nineteen thousand two hundred thirty -three 24
dollars ($3,019,233) in recurring funds for each year of the 2025-2027 fiscal biennium to be used 25
to fund ongoing operations and maintenance of EHR at State-operated healthcare facilities. 26
27
FUNDING FOR MEDICAID HEALTHY OPPORTUNITIES PILOT 28
SECTION 2.3. There is appropriated from the General Fund to the Department of 29
Health and Human Services, Division of Health Benefits, the sum of thirty million dollars 30
($30,000,000) in nonrecurring funds and associated receipts for the 2025 -2026 fiscal year to be 31
used for the continued operations of the Healthy Op portunities Pilots program in current pilot 32
counties. 33
34
RURAL HEALTH TRANSFORMATION PROGRAM APPLICATION AND FUNDS 35
SECTION 2.4.(a) The lead State agency designated by the Governor to develop and 36
submit the application for funding under the Rural Health Transformation Program (RHTP) 37
established by the One Big Beautiful Bill Act (Section 71401 of P.L. 119 -21) shall collaborate 38
with all relevant state entities to ensure that the RHTP application submitted on behalf of North 39
Carolina includes demonstrated expertise on any combination of rural healthcare access, rural 40
healthcare quality, rural healthcare workforce, or rural healthcare out comes through system 41
transformation. The lead State agency described in this subsection shall provide to the Chairs of 42
the Joint Legislative Oversight Committee on Health and Human Services a copy of the RHTP 43
application it submits on behalf of North Carol ina to the federal Centers for Medicare and 44
Medicaid Services on the date of submission. In addition, by November 15, 2025, the lead State 45
agency described in this subsection shall submit a report to the Joint Legislative Oversight 46
Committee on Health and Human Services summarizing the rural health transformation vision, 47
plan, goals, strategies, proposed projects, and sustainability plans for North Carolina as described 48
in the State's Rural Health Transformation Program application. 49
SECTION 2.4.(b) Notwithstanding G.S. 143C-5-4(9) and consistent with Section 50
7(1) of Article V of the North Carolina Constitution, federal funds received by the State under 51
General Assembly Of North Carolina Session 2025
House Bill 389-Fourth Edition Page 3
the RHTP shall be available for expenditure only upon an act of appropriation by the General 1
Assembly. 2
SECTION 2.4.(c) This section is effective when it becomes law. 3
4
PART III. AGRICULTURE AND NATURAL AND ECONOMIC RESOURCES 5
6
DEPARTMENT OF NATURA L AND CULTURAL RESOU RCES – OPERATING 7
RESERVES 8
SECTION 3.1.(a) Recurring Funding. – There is appropriated from the G eneral 9
Fund to the Department of Natural and Cultural Resources (Department) the sum of ten million 10
seventy-eight thousand one hundred forty -nine dollars ($10,078,149) in recurring funds 11
beginning with the 2025-2026 fiscal year and ten million eight hundred sixty-four thousand nine 12
hundred fifty dollars ($10,864,950) in recurring funds for the 2026 -2027 fiscal year, to be 13
allocated as follows: 14
(1) Four hundred fifty thousand dollars ($450,000) in each year of the fiscal 15
biennium to Budget Fund 105111 for up to three full -time equivalent (FTE) 16
positions and operating costs for the expanded visitor center and grounds at 17
the Fort Fisher State Historic Site. 18
(2) Three hundred eighty-five thousand eight hundred fifteen dollars ($385,815) 19
in each year of the fiscal biennium to Budget Fund 105111 for up to three FTE 20
positions and operating costs for the newly renovated powerhouse and car 21
repair shed at the North Carolina Transportation Museum. 22
(3) Nine hundred fifty-three thousand six hundred thirty dollars ($953,63 0) and 23
up to 12 FTE positions in the 2025 -2026 fiscal year and one million seven 24
hundred forty thousand four hundred thirty -one dollars ($1,740,431) and up 25
to 24 FTE positions in the 2026 -2027 fiscal year to Budget Fund 105141 for 26
personnel and operating c osts associated with the renovation and expansion 27
of the Fort Fisher Aquarium. 28
(4) Five million six hundred forty -one thousand four hundred forty -six dollars 29
($5,641,446) in each year of the fiscal biennium to Budget Fund 105140 for 30
up to 54 FTE positions and operating costs associated with the new Asia 31
complex at the North Carolina Zoo. 32
(5) Two million six hundred forty-seven thousand two hundred fifty-eight dollars 33
($2,647,258) in each year of the fiscal biennium to Budget Fund 105137 for 34
up to 20 FTE positions. The Department may allocate the positions funded by 35
this subdivision among Bakers Lake, Bob's Creek, and Salmon Creek State 36
Natural Areas, Pettigrew and Lake Waccamaw State Parks, and Wilderness 37
Gateway State Trail. 38
SECTION 3.1.(b) Nonrecurring Funding. – There is appropriated from the General 39
Fund to the Department the sum of six million nine hundred thirty -six thousand nine hundred 40
dollars ($6,936,900) in nonrecurring funds for the 2025 -2026 fiscal year and four million five 41
hundred thousand dollars ($4,500,000) in nonrecurring funds for the 2026-2027 fiscal year, to be 42
allocated as follows: 43
(1) One hundred thousand dollars ($100,000) in the 2025 -2026 fiscal year to 44
Budget Fund 105111 for nonrecurring position, operating, and equipment 45
costs associated with the expansion at the Fort Fisher State Historic Site. 46
(2) Four million five hundred thousand dollars ($4,500,000) in each year of the 47
fiscal biennium to Budget Fund 105141 to replace receipts while the Fort 48
Fisher Aquarium is closed for renovations. 49
(3) One million fifty -six thousand six hundred dollars ($1,056,600) in the 50
2025-2026 fiscal year to Budget Fund 105140 for nonrecurring position, 51
General Assembly Of North Carolina Session 2025
Page 4 House Bill 389-Fourth Edition
operating, and equipment costs associated with the new Asia complex at the 1
North Carolina Zoo. 2
(4) One million two hundred eighty thousand three hundred dollars ($1,280,300) 3
in the 2025-2026 fiscal year to Budget Fund 105137 for nonrecurring position, 4
operating, and equipment costs associated with the expansion of State parks 5
through Connect NC bonds or other capital appropriations. 6
7
AUTHORIZE THE ENVIRO NMENTAL MANAGEMENT C OMMISSION TO 8
EMPLOY INDEPENDENT STAFF 9
SECTION 3.2.(a) G.S. 143B-283 reads as rewritten: 10
"§ 143B-283. Environmental Management Commission – members; selection; removal; 11
compensation; quorum; services. 12
… 13
(b4) Administrative Support. – All clerical and other services required by the Commission 14
shall be supplied by the Secretary of Environmental Quality. Commission Staff, Structure, and 15
Function. – 16
(1) The chair is authorized and empowered to employ professional, 17
administrative, technical, and clerical personnel as the chair may determine to 18
be necessary in the proper discharge of the Commission 's duty and 19
responsibility as provided by law. The chair shall organize and direct the work 20
of the Commission staff. Any additional clerical and other services required 21
by the Commission shall be supplied by the Secretary of the Department at 22
the direction of the chair. 23
(2) The salaries and compensation of all such personne l shall be fixed in the 24
manner provided by law for fixing and regulating salaries and compensation 25
by other State agencies. 26
(3) The chair, within allowed budgetary limits and as allowed by law, shall 27
authorize and approve travel, subsistence , and related e xpenses of such 28
personnel incurred while traveling on official business. 29
…." 30
SECTION 3.2.(b) There is appropriated from the General Fund to the Department 31
of Environmental Quality the sum of seven hundred thousand dollars ($700,000) in recurring 32
funds for each year of the 2025-2027 fiscal biennium for up to five full-time equivalent positions 33
as dedicated staff for the Environmental Management Commission. The positions may be 34
established from within the following classifications, at salary grades up to Level III: Deputy 35
Secretary, General Counsel (Attorney), Engineer, Environmental Program Consul tant, 36
Economist, and Administrative Officer. 37
38
WATER SEWER ECONOMIC DEVELOPMENT PROGRAM 39
SECTION 3.3.(a) Award Authorized. – Pursuant to Part 2H of Article 10 of Chapter 40
143B of the General Statutes, the Department of Commerce may commit in a Governor's Let ter 41
to reimburse, over a period of time not less than 10 years, a business, as defined in 42
G.S. 143B-437.51, for the costs incurred for an eligible project. For purposes of this section, an 43
eligible project is the construction of, or improvements to, new or existing water or sewer lines, 44
facilities, or equipment for new, proposed, or existing buildings by the business, and can include 45
water reuse and water reclamation projects, if the business commits, in a company performance 46
agreement, to the requirements of subsection (c) of this section. 47
SECTION 3.3.(b) Award Amount. – The total amount that may be committed for 48
reimbursement under this section is equal to the lesser of (i) fifty million dollars ($50,000,000) 49
or (ii) fifty percent (50%) of the cost of the eligible project. The maximum amount that can be 50
paid out in a single calendar year for all but the final year of the award term is the lesser of 51
General Assembly Of North Carolina Session 2025
House Bill 389-Fourth Edition Page 5
one-tenth of the amount committed or one-half of the costs incurred and verified by the business 1
for that calendar year. 2
SECTION 3.3.(c) Company Performance Agreement. – For a project to be eligible 3
under this section, a business operating a manufacturing site within the same county and river 4
basin as the eligible project must commit to the following requirement s in addition to those 5
contained in G.S. 143B-437.72(b): 6
(1) Invest at least two billion dollars ($2,000,000,000) of private funds in the 7
development or expansion of the manufacturing site served by or located 8
within the same county as the eligible project. 9
(2) For the greater of the term of the agreement or 10 years, create at least 500 10
new jobs having an overall average compensation that exceeds the average 11
wage for all insured private employers in the county in which the eligible 12
project is located and maintain both the new and existing jobs of the business 13
in that county. 14
(3) Annually verify costs incurred for the eligible project. 15
(4) Ensure that the eligible project will supply at least sixty percent (60%) of the 16
total aggregate water and wastewater needs required by the manufacturing site 17
as developed or expanded by the investment made under subdivision (1) of 18
this subsection. 19
(5) Not seek or accept any other grant from the State, including a grant pursuant 20
to Part 2G of Article 10 of Chapter 143B of the General Statutes, for any jobs 21
created as part of the company performance agreement. 22
SECTION 3.3.(d) One NC Commitment Exclusion. – The amount committed 23
pursuant to this section shall not be included in calculating the amount authorized to be 24
committed pursuant to G.S. 143B-437.71(b1). 25
SECTION 3.3.(e) Agreement Binding. – A Governor's Letter issued pursuant to this 26
section is a binding obligation of the State and is not subject to State funds being appropriated 27
by the General Assembly. 28
SECTION 3.3.(f) Match Requirement. – Notwithstanding G.S. 143B-437.72(c)(1), 29
a local government is not required to match the funds allocated by the State for an eligible project 30
under this section. 31
SECTION 3.3.(g) Effective Date. – This section is effective when this act becomes 32
law. 33
34
SUBSISTENCE ALLOWANCE FOR MEMBERS OF THE UTILITIES COMMISSION 35
SECTION 3.4.(a) G.S. 62-10(h1) reads as rewritten: 36
"(h1) In addition to compensation for their services, each member of the Commission who 37
lives at least 50 miles from the City of Raleigh shall be paid a the following allowances: 38
(1) A weekly travel allowance for each week the member travels to the City of 39
Raleigh from the member's home for business of the Commission. The 40
allowance shall be calculated for each member by multiplyi ng the actual 41
round-trip mileage from that member's home to the City of Raleigh by the 42
rate-per-mile which is the business standard mileage rate set by the Internal 43
Revenue Service in Rev. Proc. 93-51, December 27, 1993. 44
(2) A daily subsistence allowance for meals and lodging at a rate of one hundred 45
forty-three dollars and ten cents ($143.10) for each day of service when the 46
member travels to the City of Raleigh from the member 's home for business 47
of the Commission." 48
SECTION 3.4.(b) This section is effective when it becomes law. 49
50
EDPNC MARKETING FUNDING 51
General Assembly Of North Carolina Session 2025
Page 6 House Bill 389-Fourth Edition
SECTION 3.5. There is appropriated from the General Fund to the Department of 1
Commerce (Department) for the nonprofit corporation with which the Department contracts 2
pursuant to G.S . 143B-431.01(b) (Nonprofit) the nonrecurring sums of twenty million dollars 3
($20,000,000) for each year of the 2025 -2027 fiscal biennium. The Nonprofit shall equally 4
allocate the use of funds it receives under this section each fiscal year for (i) business marketing 5
expenses and (ii) travel and tourism marketing expenses. 6
7
PART IV. JUSTICE AND PUBLIC SAFETY 8
9
FUNDING FOR VIPER NETWORK OPERATING SHORTFALL 10
SECTION 4.1. There is appropriated from the General Fund to the State Highway 11
Patrol, Budget Fund 102690, the sum of two million one hundred thousand dollars ($2,100,000) 12
in recurring funds beginning in the 2025-2026 fiscal year to be used to maintain and operate the 13
VIPER network. 14
15
SCHOOL SAFETY GRANTS 16
SECTION 4.2.(a) Definitions. – For the purposes of th is section, the following 17
definitions shall apply: 18
(1) Community partner. – A public or private entity, including, but not limited to, 19
a nonprofit corporation or a local management entity/managed care 20
organization (LME/MCO), that partners with a public sch ool unit to provide 21
services or pay for the provision of services for the unit. 22
(2) School health support personnel. – School psychologists, school counselors, 23
school nurses, and school social workers. 24
SECTION 4.2.(b) Program; Purpose. – The Executive Dir ector of the Center for 25
Safer Schools shall establish the School Safety Grants Program (Program) for the 2025 -2026 26
fiscal year. The purpose of the Program shall be to improve safety in public school units by 27
providing grants in the 2025 -2026 fiscal year fo r (i) services for students in crisis, (ii) school 28
safety training, (iii) safety equipment in schools, and (iv) subsidizing the School Resource Officer 29
Grants Program. 30
SECTION 4.2.(c) Grant Applications. – A public school unit may submit an 31
application to the Executive Director of the Center for Safer Schools for one or more grants 32
pursuant to this section in the 2025-2026 fiscal year. The application shall include an assessment, 33
to be performed in conjunction with a local law enforcement agency, of the ne ed for improving 34
school safety within the public school unit that would receive the funding or services. The 35
application shall identify current and ongoing needs and estimated costs associated with those 36
needs. 37
SECTION 4.2.(d) Criteria and Guidelines. – The Executive Director of the Center 38
for Safer Schools shall develop criteria and guidelines for the administration and use of the grants 39
pursuant to this section, including any documentation required to be submitted by applicants. In 40
assessing grant applic ations, the Executive Director shall consider at least all of the following 41
factors: 42
(1) The level of resources available to the public school unit that would receive 43
the funding. 44
(2) Whether the public school unit has received other grants for school safety. 45
(3) The overall impact on student safety in the public school unit if the identified 46
needs are funded. 47
SECTION 4.2.(e) Grants for Students in Crisis. – Of the funds appropriated by this 48
section for the grants provided in this section, the Executive Di rector of the Center for Safer 49
Schools, in consultation with the Department of Health and Human Services, shall award grants 50
General Assembly Of North Carolina Session 2025
House Bill 389-Fourth Edition Page 7
to public school units to contract with community partners to provide or pay for the provision of 1
any of the following crisis services: 2
(1) Crisis respite services for parents or guardians of an individual student to 3
prevent more intensive or costly levels of care. 4
(2) Training and expanded services for therapeutic foster care families and 5
licensed child placement agencies that provid e services to students who (i) 6
need support to manage their health, welfare, and safety and (ii) have any of 7
the following: 8
a. Cognitive or behavioral problems. 9
b. Developmental delays. 10
c. Aggressive behavior. 11
(3) Evidence-based therapy services aligned with targeted training for students 12
and their parents or guardians, including any of the following: 13
a. Parent-child interaction therapy. 14
b. Trauma-focused cognitive behavioral therapy. 15
c. Dialectical behavior therapy. 16
d. Child-parent psychotherapy. 17
(4) Any other crisis service, including peer -to-peer mentoring, that is likely to 18
increase school safety. Of the funds appropriated by this act for the grants 19
provided in this section, the Executive Director shall use no more than three 20
hundred fifty thousand dollars ($350,000) in the 2025-2026 fiscal year for the 21
services identified in this subdivision. 22
SECTION 4.2.(f) Grants for Training to Increase School Safety. – Of the funds 23
appropriated by this section for the grants provided in this section, the Executive Director of the 24
Center for Safer Schools, in consultation with the Department of Health and Human Services, 25
shall award grants to public school units to contract with community partners to address school 26
safety by providing training to help students develop healthy responses to trauma and stress. The 27
training shall be targeted and evidence-based and shall include any of the following services: 28
(1) Counseling on Access to Lethal Means (CALM) training for school health 29
support personnel, local first responders, and teachers on the topics of suicide 30
prevention and reducing access by students to lethal means. 31
(2) Training for school health support personnel on comprehensive and 32
evidence-based clinical treatments for students and their parents or guardians, 33
including any of the following: 34
a. Parent-child interaction therapy. 35
b. Trauma-focused cognitive behavioral therapy. 36
c. Behavioral therapy. 37
d. Dialectical behavior therapy. 38
e. Child-parent psychotherapy. 39
(3) Training for students and school employees on commun ity resilience models 40
to improve understanding and responses to trauma and significant stress. 41
(4) Training for school health support personnel on Modular Approach to 42
Therapy for Children with Anxiety, Depression, Trauma, or Conduct 43
problems (MATCH-ADTC), including any of the following components: 44
a. Trauma-focused cognitive behavioral therapy. 45
b. Parent and student coping skills. 46
c. Problem solving. 47
d. Safety planning. 48
(5) Any other training, including the training on the facilitation of peer -to-peer 49
mentoring, that is likely to increase school safety. Of the funds appropriated 50
by this section for the grants provided in this section, the Executive Director 51
General Assembly Of North Carolina Session 2025
Page 8 House Bill 389-Fourth Edition
shall use no more than three hundred fifty thousand dollars ($350,000) in the 1
2025-2026 fiscal year for the services identified in this subdivision. 2
SECTION 4.2.(g) Grants for Safety Equipment. – Of the funds appropriated by this 3
section for the grants provided in this section, the Executive Director of the Center for Safer 4
Schools shall award grants to p ublic school units for (i) the purchase of safety equipment for 5
school buildings and (ii) training associated with the use of safety equipment purchased pursuant 6
to this subsection. Notwithstanding G.S. 115C-218.105(b), charter schools may receive grants 7
for school safety equipment pursuant to this subsection. 8
SECTION 4.2.(h) Subsidizing School Resource Officer Grants Program. – If the 9
Executive Director of the Center for Safer Schools receives applications for grants for school 10
resource officers under G.S. 143B-1208.20 in excess of the amount of funding appropriated for 11
school resource officer grants in the 2025 -2026 fiscal year, the Executive Director may use the 12
funds appropriated for the grants provided for in this section to cover the unmet need for school 13
resource officer grants. 14
SECTION 4.2.(i) Supplement Not Supplant. – Grants provided to public school units 15
pursuant to the Program shall be used to supplement and not to supplant State or non-State funds 16
already provided for these services. 17
SECTION 4.2.(j) Administrative Costs. – Of the funds appropriated to the Center 18
for Safer Schools by this section for the grants provided in this section, the Executive Director 19
of the Center for Safer Schools may retain a total of up to one hundred thousand dolla rs 20
($100,000) in the 2025-2026 fiscal year for administrative costs associated with the Program. 21
SECTION 4.2.(k) Disbursement. – The Executive Director of the Center for Safer 22
Schools may enter into a memorandum of understanding with the Department of Pub lic 23
Instruction to disburse grants awarded under this section. 24
SECTION 4.2.( l) Program Report. – No later than April 1, 2026, the Executive 25
Director of the Center for Safer Schools shall report on the Program to the Joint Legislative 26
Education Oversight Committee, the Joint Legislative Oversight Committee on Health and 27
Human Services, the Joint Legislative Oversight Committee on Justice and Public Safety, the 28
Joint Legislative Commission on Governmental Operations, the Senate Appropriations/Base 29
Budget Committee, the House Committee on Appropriations, and the Fiscal Research Divisio n. 30
The report shall include at least the following information: 31
(1) The identity of each public school unit and community partner that received 32
grant funds through the Program. 33
(2) The amount of funding received by each entity identified pursuant to 34
subdivision (1) of this subsection. 35
(3) The services, training, and equipment purchased with grant funds by each 36
entity that received a grant. 37
(4) Recommendations for the implementation of additional effective school 38
safety measures. 39
SECTION 4.2.(m) Appropriation. – There is appropriated from the General Fund to 40
the Center for Safer Schools the sum of thirty-five million dollars ($35,000,000) in nonrecurring 41
funds for the 2025-2026 fiscal year to be used for the Program established in this section. 42
43
CREATION OF THE MENTAL HEA LTH FOR DETAINEES GR ANT PROGRAM AT 44
THE DEPARTMENT OF HEALTH AND HUMAN SERVICES 45
SECTION 4.3.(a) There is appropriated from the General Fund to the Department 46
of Health and Human Services, Division of Mental Health, Developmental Disabil ities, and 47
Substance Use Services (DMH/DD/SUS), the sum of twenty -five million dollars ($25,000,000) 48
in nonrecurring funds for the 2025-2026 fiscal year to be used to distribute grants pursuant to the 49
Mental Health for Detainees Grant Program (MHD Grant Program) created by this section. 50
General Assembly Of North Carolina Session 2025
House Bill 389-Fourth Edition Page 9
SECTION 4.3.(b) The DMH/DD/SUS shall develop and implement the MHD Grant 1
Program pursuant to the minimum requirements set forth in this section. 2
SECTION 4.3.(c) The following criteria shall apply to the MHD Grant Program: 3
(1) Grant applicants shall be any State or local law enforcement agency or an 4
administrator or other person in charge of a local confinement facility. 5
(2) Grant funds shall be used by grant recipients for the provision of and, if 6
necessary, transportation to a commitment examiner for a mental health 7
evaluation. 8
(3) The DMH/DD/SUS shall set the maximum amount of each grant based upon 9
the availability of funds, provided that no grantee shall receive more than two 10
hundred fifty thousand dollars ($250,000) in grant funds. 11
(4) The DMH/DD/SUS shall prioritize awarding grants to grantees in 12
development tier one and tier two counties, as defined by G.S. 143B-437.08. 13
SECTION 4.3.(d) No later than October 1 of each year following a fiscal year in 14
which a grantee received funds pursuant to the MHD Grant Program created by this section, each 15
grantee shall submit a report to the DMH/DD/SUS delineating the uses of the funds. 16
SECTION 4.3.(e) No later than December 1 of a year in which the DMH/DD/SUS 17
receives a report requ ired by subsection (d) of this section, the DMH/DD/SUS shall submit a 18
report compiling all reports received under subsection (d) of this section to the Joint Legislative 19
Oversight Committee on Justice and Public Safety and the Joint Legislative Oversight Committee 20
on Health and Human Services. 21
SECTION 4.3.(f) The DMH/DD/SUS may use up to two hundred thousand dollars 22
($200,000) of the funds appropriated by this section for administrative purposes. 23
SECTION 4.3.(g) The funds appropriated by this section shall not revert on June 30, 24
2026, but shall remain available to the DMH/DD/SUS until June 30, 2027. 25
26
PART V. GENERAL GOVERNMENT 27
28
EMERGENCY TRAINING CENTER OPERATING COSTS 29
SECTION 5.1. There is appropriated from the General Fund to the Office of the 30
State Fire Marshal in the Department of Insurance the sum of two million three hundred thousand 31
dollars ($2,300,000) in recurring funds for each fiscal year of the 2025 -2027 fiscal biennium to 32
be used to support the operating costs of the Emergency Training Center located in Stanly 33
County. 34
35
STATE PROPERTY FIRE INSURANCE FUND 36
SECTION 5.2. There is appropriated from the General Fund to the Office of the 37
State Fire Marshal in the Department of Insurance the sum of thirty million dollars ($30,000,000) 38
in nonrecurring f unds for the 2025 -2026 fiscal year for the purpose of covering increased 39
expenditures related to the State's reinsurance policy. 40
41
BUDGET AND HUMAN RESOURCES POSITIONS 42
SECTION 5.3. There is appropriated from the General Fund to the Office of the 43
State Fire Marshal in the Department of Insurance the sum of three hundred thousand dollars 44
($300,000) in recurring funds for each fiscal year of the 2025 -2027 fiscal biennium to provide 45
funds for three administrative positions, including salaries and benefits, to support the Office of 46
the State Fire Marshal's budgetary and human resources needs. 47
48
DIRECT OSBM TO GIVE OSFM SEPARATE BUDGET CODE 49
General Assembly Of North Carolina Session 2025
Page 10 House Bill 389-Fourth Edition
SECTION 5.4. The Office of State Budget and Mana gement shall establish a new 1
budget code for the Office of the State Fire Marshal (OSFM) and create new budget funds for 2
each division of the OSFM. 3
4
RENOVATE FAYETTEVILLE STATE VETERANS HOME 5
SECTION 5.5.(a) Notwithstanding any other provision of law, there is appropriated 6
from the cash balance of the North Carolina Veterans Home Trust Fund, Budget Code 63050, to 7
the Department of Military and Veterans Affairs, the sum of twenty -seven million dollars 8
($27,000,000) in nonrecurring funds for the 2025 -2026 fiscal year to renovate and repair the 9
Fayetteville State Veterans Home. 10
SECTION 5.5.(b) Section 40.5(c) of S.L. 2021-180 is repealed. 11
12
PART VI. INFORMATION TECHNOLOGY 13
14
IBIS SYSTEM REPLACEMENT AND STABILIZATION 15
SECTION 6.1. There is appropriated from the IT Reserve to the Office of State 16
Budget and Management the sum of twenty million eight hundred fifty thousand dollars 17
($20,850,000) in nonrecurring funds for the 2025 -2026 fiscal year and eight hundred fifty 18
thousand dollars ($850,000) in nonrecurring funds for the 2026-2027 fiscal year to be used for 19
the replacement and stabilization of the IBIS system. 20
21
PART VII. TRANSPORTATION 22
23
MARINE VESSEL MAINTENANCE AND REPAIRS 24
SECTION 7.1.(a) There is appropriated from the Highway Fund to the Department 25
of Transport ation the sum of four million dollars ($4,000,000) in nonrecurring funds for the 26
2025-2026 fiscal year to provide funds for marine vessel maintenance and repairs at external 27
shipyards to meet U.S. Coast Guard dry dock requirements. 28
SECTION 7.1.(b) No later than January 1, 2026, and quarterly thereafter until the 29
funds are expended, the Ferry Division of the Department of Transportation shall submit a 30
progress report to the Joint Legislative Transportation Oversight Committee and the Fiscal 31
Research Division on the use of funds appropriated by this section for marine vessel dry docking. 32
The report shall include the following information: 33
(1) A list of all marine vessels scheduled or under contract for dry docking. 34
(2) The estimated cost of the work to be completed for each marine vessel sent to 35
a private shipyard for dry dock. 36
(3) The actual cost of the work and the total funds used as of the report date. 37
38
PART VIII. FINANCE 39
40
INSURANCE HOLDING COMPANY EXEMPTION 41
SECTION 8.1.(a) G.S. 105-122(b) reads as rewritten: 42
"(b) Determination of Net Worth. – A corporation taxed under this section shall determine 43
the total amount of its net worth on the basis of the books and records of the corporation as of 44
the close of its income year. The net worth of a corporati on is its total assets without regard to 45
the deduction for accumulated depreciation, depletion, or amortization less its total liabilities, 46
computed in accordance with generally accepted accounting principles as of the end of the 47
corporation's taxable year . If the corporation does not maintain its books and records in 48
accordance with generally accepted accounting principles, then its net worth is computed in 49
accordance with the accounting method used by the entity for federal tax purposes. A 50
corporation's net worth is subject to the following adjustments: 51
General Assembly Of North Carolina Session 2025
House Bill 389-Fourth Edition Page 11
… 1
(9) A deduction for any investment, whether direct or indirect, in an insurance 2
company subject to tax under Article 8B of this Chapter and any investment, 3
whether direct or indirect , in an insurance comp any that would be subject to 4
such tax if it engaged in business in this State. The deduction afforded under 5
this subdivision only applies if the corporation owns, directly or indirectly, 6
more than eighty percent (80%) of the outstanding voting stock, voting capital 7
interests, or ownership interests in the insurance company." 8
SECTION 8.1.(b) This section is effective retroactively for taxable years beginning 9
on or after January 1, 2019, and applicable to the calculation o f franchise tax reported on the 10
2018 and later corporate income tax returns. 11
12
PART IX. MISCELLANEOUS AND EFFECTIVE DATE 13
14
ADDITIONAL TRANSPARENCY IN STATE BUDGETING 15
SECTION 9.1.(a) Article 5 of Chapter 143C of the General Statutes is amended by 16
adding a new section to read: 17
"§ 143C-5-6. List requesting member of the General Assembly in the Current Operations 18
Appropriations Act. 19
Each provisi on of the Current Operations Appropriations Act enacted by the General 20
Assembly, and each provision of an appropriations bill making adjustments to that act, shall 21
specify which member or members of the General Assembly requested inclusion of the provision 22
in that act. This section shall be considered and treated as a rule of procedure in the Senate and 23
House of Representatives unless provided otherwise by a rule of either branch of the General 24
Assembly." 25
SECTION 9.1.(b) This section is effective when it becomes law and applies to 26
Current Operations Appropriations Acts enacted on or after that date. 27
28
EFFECT OF HEADINGS 29
SECTION 9.2. The headings to the Parts and sections of this act are a convenience 30
to the reader and are for reference only. The headings do not expand, limit, or define the text of 31
this act. 32
33
CONSTRUCTION 34
SECTION 9.3. Except where expressly re pealed or amended by this act, any 35
legislation enacted during the 2025 Regular Session expressly appropriating funds to an agency, 36
a department, or an institution covered under this act shall remain in effect. 37
38
STATE BUDGET ACT APPLICABILITY 39
SECTION 9.4. If any provision of this act and G.S. 143C-5-4 are in conflict, the 40
provisions of this act shall prevail. The appropriations and the authorizations to allocate and 41
spend funds which are set out in this act shall remain in effect until the Current Operation s 42
Appropriations Act for the applicable fiscal year becomes law, at which time that act shall 43
become effective and shall govern appropriations and expenditures. When the Current 44
Operations Appropriations Act for that fiscal year becomes law, the Director of the Budget shall 45
adjust allotments to give effect to that act from July 1 of the fiscal year. 46
47
SEVERABILITY CLAUSE 48
SECTION 9.5. If any provision of this act or its application is held invalid, the 49
invalidity does not affect other provisions or applications of this act that can be given effect 50
General Assembly Of North Carolina Session 2025
Page 12 House Bill 389-Fourth Edition
without the invalid provisions or application and, to this end, the provisions of this a ct are 1
severable. 2
3
EFFECTIVE DATE 4
SECTION 9.6. Except as otherwise provided, this act is effective retroactively to 5
July 1, 2025. 6