Back the Blue Pay Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 3
HOUSE BILL 42
Committee Substitute Favorable 2/25/25
Senate Appropriations/Base Budget Committee Substitute Adopted 9/22/25

Short Title: Back the Blue Pay Act. (Public)
Sponsors:
Referred to:
February 5, 2025
*H42-v-3*
A BILL TO BE ENTITLED 1
AN ACT (1) AWARDING LEGISLATIVELY MANDAT ED ANNUAL SALARY 2
INCREASES TO STATE L AW ENFORCEMENT AND C ORRECTIONAL OFFICERS 3
AND STATE BUREAU OF INVESTIGATION ADMINISTRATIVE EMPLOYEES AND 4
GRANTING BONUSES TO STATE AND LOCAL LAW ENFORCEMENT OFFICERS; 5
(2) AUTHORIZING RECR UITMENT AND RETENTIO N BONUSES FOR MEMBER S 6
OF THE NORTH CAROLIN A NATIONAL GUARD; (3 ) ENHANCING BENEFITS 7
UNDER THE NORTH CARO LINA FIREFIGHTERS' A ND RESCUE SQUAD 8
WORKERS' PENSION FUN D; (4) INCREASING BE NEFITS PAYABLE UNDER THE 9
NORTH CAROLINA NATIONA L GUARD PENSION FUND ; AND (5) INCREASING 10
THE AMOUNT AWARDED F OR LINE OF DUTY DEAT HS UNDER THE PUBLIC 11
SAFETY EMPLOYEES' DEATH BENEFITS ACT. 12
The General Assembly of North Carolina enacts: 13
14
PART I. APPROPRIATIONS 15
16
GENERAL FUND 17
SECTION 1.1.(a) Effective July 1, 2025, there is appropriated from the General 18
Fund to a Reserve for State Law Enforcement Compensation Increases the sum of sixty -two 19
million seven hundred eighteen thousand one hundred twenty -two dollars ($62,718,122) in 20
recurring funds for the 2025 -2026 fiscal year and the sum of sixty -four million two hundred 21
eighteen thousand one hundred twenty -two dollars ( $64,218,122) in recurring funds for the 22
2026-2027 fiscal year to award and administer the legislative salary increases provided in Part II 23
of this act. These funds are allocated as follows: 24
(1) To the Department of Public Safety, the sum of six million seven thousand 25
one hundred three dollars ($6,007,103) for the 2025 -2026 fiscal year and the 26
sum of seven million five hundred seven thousand one hundred three dollars 27
($7,507,103) in the 2026-2027 fiscal year. 28
(2) To the State Highway Patrol, the sum of eight million four hundred thirty-two 29
thousand seven hundred nineteen dollars ($8,432,719) in each year of the 30
2025-2027 fiscal biennium. 31
(3) To the State Bureau of Investigation, the sum of two million six hundred 32
ninety-six thousand nine hundred ninety-two dollars ($2,696,992) in each year 33
of the 2025-2027 fiscal biennium. 34
General Assembly Of North Carolina Session 2025
Page 2 House Bill 42-Third Edition
(4) To the Department of Adult Correction, the sum of fo rty-two million seven 1
hundred seventy -four thousand five hundred sixty -seven dollars 2
($42,774,567) in each year of the 2025-2027 fiscal biennium. 3
(5) To the Wildlife Resources Commission, the sum of eight hundred eighty-four 4
thousand one hundred fifty dollars ($884,150) in each year of the 2025 -2027 5
fiscal biennium. 6
(6) To the Department of Agriculture and Consumer Services, the sum of one 7
hundred five thousand five hundred ninety -three dollars ($105,593) in each 8
year of the 2025-2027 fiscal biennium. 9
(7) To the Department of Environmental Quality, the sum of two hundred 10
ninety-six thousand five hundred thirty-seven dollars ($296,537) in each year 11
of the 2025-2027 fiscal biennium. 12
(8) To the Department of Natural and Cultural Resources, the sum of one million 13
five hundred twenty thousand four hundred sixty-one dollars ($1,520,461) in 14
each year of the 2025-2027 fiscal biennium. 15
SECTION 1.1.(b) Effective July 1, 2025, there is appropriated from the General 16
Fund to a Reserve for State Law Enforcement Compensati on Increases the sum of forty -one 17
million thirty-nine thousand two hundred thirty-one dollars ($41,039,231) in nonrecurring funds 18
for the 2025-2026 fiscal year and the sum of forty-one million thirty-nine thousand two hundred 19
thirty-one dollars ($41,039,23 1) in nonrecurring funds for the 2026 -2027 fiscal year to award 20
legislatively mandated bonuses as provided by this act. These funds are allocated as follows: 21
(1) To the Office of State Budget and Management, the sum of five million one 22
hundred eighty-nine thousand two hundred thirty-one dollars ($5,189,231) in 23
each year of the 2025-2027 fiscal biennium. 24
(2) To the Department of Public Safety, the sum of one million five hundred 25
thousand dollars ($1,500,000) in each year of the 2025-2027 fiscal biennium. 26
(3) To the State Bureau of Investigation, the sum of thirty -four million three 27
hundred fifty thousand dollars ($34,350,000) in each year of the 2025 -2027 28
fiscal biennium. 29
30
STATE AGENCY RECEIPTS 31
SECTION 1.2. Any receipts that are required to be used to pay th e legislatively 32
mandated salary increases and employee benefits increases provided in this act are appropriated 33
up to the actual amount received for the 2025-2027 fiscal biennium. 34
35
PART II. SALARY INCREASES 36
37
STATE HIGHWAY PATROL /STATE BUREAU OF INVESTIGATION/ALCOHOL 38
LAW ENFORCEMENT – SALARY SCHEDULE 39
SECTION 2.1.(a) Effective July 1, 2025, l aw enforcement officers of the State 40
Highway Patrol, State Bureau of Investigation, and Alcohol Law Enforcement shall be 41
compensated pursuant to an experience -based salary schedule and shall be compensated based 42
on the officer's respective work experience pursuant to the salary schedule in subsection (b) of 43
this section. 44
SECTION 2.1.(b) The following annual salary schedule applies for the 2025 -2027 45
fiscal biennium under subsection (a) of this section: 46
Years of Experience FY 2025-27 47
0 $58,575 48
1 62,382 49
2 66,437 50
3 70,755 51
General Assembly Of North Carolina Session 2025
House Bill 42-Third Edition Page 3
4 75,354 1
5 80,252 2
6+ 85,468 3
4
PROBATION AND PAROLE OFFICERS/JUVENILE C OURT COUNSELORS – 5
SALARY SCHEDULE 6
SECTION 2.2.(a) Probation and parole offi cers shall be compensated pursuant to 7
the experience -based salary schedule based on the officer's respective work experience, as 8
established in subsection (b) of this section. 9
SECTION 2.2.(a1) State employees serving in the Department of Public Safety, 10
Division of Juvenile Justice and Delinquency Prevention, as Juvenile Court Counselors shall be 11
compensated under the probation and parole officer salary schedule. 12
SECTION 2.2.(b) Effective July 1, 2025, the following annual salary schedule 13
applies for the 2025-2027 fiscal biennium under subsections (a) and (a1) of this section: 14
Years of Experience FY 2025-27 15
0 46,898 16
1 49,946 17
2 53,194 18
3 56,651 19
4 60,334 20
5 64,256 21
6+ 68,432 22
23
CORRECTIONAL OFFICER S/YOUTH COUNSELORS/Y OUTH COUNSELOR 24
TECHNICIANS/YOUTH SE RVICES BEHAVIORAL SPECIALIS TS – SALARY 25
SCHEDULE 26
SECTION 2.3.(a) State employees serving as correctional officers in the Department 27
of Adult Correction shall be compensated at a specific pay rate on the basis of a salary schedule 28
determined according to the duration of the employee's correctional officer work experience. 29
SECTION 2.3.(a1) State employees serving in the Department of Public Safety, 30
Division of Juvenile Justice and Delinquency Prevention, shall be compensated at a specific pay 31
rate set on the basis of a salary schedule determined according to the duration of the employee's 32
work experience, as follows: 33
(1) Youth Counselor Technicians shall be paid under the Correctional Officer I 34
salary schedule. 35
(2) Youth Services Behavioral Specialists shall be paid under the Correctional 36
Officer II salary schedule. 37
(3) Youth Counselors shall be paid under the Correctional Officer III salary 38
schedule. 39
SECTION 2.3.(b) Effective July 1, 2025, the following annual salary schedule will 40
apply for the 2025-2027 fiscal biennium under subsections (a) and (a1) of this section: 41
42
Experience COI COII COIII 43
0 40,066 41,385 44,259 44
1 42,869 44,281 47,358 45
2 45,444 46,985 50,201 46
3 47,715 49,285 52,711 47
4 49,623 51,256 54,819 48
5 51,113 52,793 56,463 49
6+ 52,135 53,850 57,593 50
General Assembly Of North Carolina Session 2025
Page 4 House Bill 42-Third Edition
SECTION 2.3.(c) Regarding the Department of Adult Correction and Division of 1
Juvenile Justice, these salary funds are granted with the administrative flexibility necessary to 2
address salary compression and related issues connected with these increases, including adjusting 3
the salaries of supervisors and other employees who have, when considering classification, 4
significantly more experience and length of service compared to other employees receiving this 5
pay increase. 6
7
FORESTRY, MARINE FISHER IES, PARKS, AND WILD LIFE RESOURCES LAW 8
ENFORCEMENT OFFICER – SALARY INCREASES 9
SECTION 2.4.(a) Effective July 1, 2025, a legislatively mandated annual salary 10
increase in the amount of six and one-half percent (6.5%) shall be awarded to employees serving 11
as sworn law enforcement officers in one of the following State agencies: 12
(1) Department of Agriculture, Forestry. 13
(2) Department of Environmental Quality, Marine Fisheries. 14
(3) Department of Natural and Cultural Resources, Parks. 15
(4) Wildlife Resources Commission. 16
(5) State Capitol Police. 17
SECTION 2.4.(b) No employee eligible to receive the annual salary increase 18
awarded by this section shall be denied the full salary increase provided in this section because 19
the employee's salary after applying the legislative increase is above the maximum of the salary 20
range. 21
22
STATE BUREAU OF INVESTIGATION ADMINISTRATIVE INCREASES 23
SECTION 2.5. Effective July 1, 2025, the non -sworn administrative employees of 24
the State Bureau of Investigation employed o n June 30, 2025, are awarded a legislative annual 25
salary increase in the amount of five and seventy-five hundredths percent (5.75%). No employee 26
eligible to receive the annual salary increase awarded by this section shall be denied the full 27
salary increase provided in this section because the employee's salary after applying the 28
legislative increase is above the maximum of the salary range. 29
30
PART III. STATE LAW ENFORCEMENT BONUS AW ARDED IN EACH YEAR O F 31
THE 2025-2027 BIENNIUM 32
33
BONUS AWARDED IN EACH YEAR OF 2025-2027 BIENNIUM 34
SECTION 3.1.(a) For the 2025-2026 fiscal year, a State employee (i) who is a sworn 35
law enforcement officer eligible for compensation under Part II of this act or who is a sworn law 36
enforcement officer employed by another State agency or The University of North Carolina 37
System and (ii) who is employed on June 30, 2025, shall be awarded a bonus in the amount of 38
one thousand five hundred dollars ($1,500), payable during the month of November 2025. 39
SECTION 3.1.(b) For the 2026 -2027 fiscal year, a State employee (i) who is a 40
sworn law enforcement officer eligible for compensation under Part II of this act or who is sworn 41
law enforcement officer employed by another State agency or The University of North Carolina 42
System and (ii) who is employed on June 30, 2026, shall be awarded a bonus in the amount of 43
one thousand five hundred dollars ($1,500), payable during the month of November 2026. 44
SECTION 3.1.(c) The funds appropriated for bonuses in excess of the amounts 45
required to implement these bonuses shall revert to the General Fund. The compensation bonuses 46
awarded by this section are not compensation for the purposes of any retirement system 47
administered by the State. The compensation bonuses awarded by this section are not part of 48
annual salary and shall be paid out separately. The compensation bonus shall be awarded to 49
eligible State-funded permanent employees without regard to an employee's placement within 50
General Assembly Of North Carolina Session 2025
House Bill 42-Third Edition Page 5
the salary range, including employees at the top of the salary range. The compensation bonus 1
shall be adjusted pro rata for permanent part-time employees. 2
SECTION 3.1.(d) The Office of State Budget and Management (OSBM) shall award 3
these law enforcement compensation bonuses as provided by this section. The OSBM shall report 4
on the administration of the awards to the Fiscal Research Division by March 15, 20 26, and 5
March 15, 2027. 6
7
PART IV. BONUSES FOR LOCAL LAW ENFORCEMENT AND NORTH CAROLINA 8
NATIONAL GUARD 9
10
LOCAL LAW ENFORCEMENT BONUS 11
SECTION 4.1.(a) For the 2025 -2026 fiscal year, a sworn local law enforcement 12
officer employed on June 30, 2025, is eligible to receive a compensation bonus in the amount of 13
one thousand five hundred dollars ($1,500), payable during the month of November 2025. 14
SECTION 4.1.(b) For the 2026 -2027 fiscal year, a sworn local law enforcement 15
officer employed on June 30, 2026, is eligible to receive a compensation bonus in the amount of 16
one thousand five hundred dollars ($1,500), payable during the month of November 2026. 17
SECTION 4.1.(c) The funds appropriated for bonuses in excess of the amounts 18
required to implement these bonuses shall revert to the General Fund. The compensation bonuses 19
awarded by this section are not compensation for the purposes of any retirement system 20
administered by the State. The compensation bonuses awarded by this section are not part of 21
annual salary and sh all be paid out separately. The compensation bonus shall be awarded to 22
eligible officers without regard to an officer's placement within the salary range, including 23
employees at the top of the salary range. The compensation bonus shall be adjusted pro rata for 24
permanent part-time employees. 25
SECTION 4.1.(d) The State Bureau of Investigation (SBI) shall award these local 26
law enforcement compensation bonuses as provided by this section. The SBI shall report on the 27
administration of the awards to the Fiscal Re search Division annually by March 15, 2026, and 28
March 15, 2027. 29
30
NORTH CAROLINA NATIONAL GUARD RECRUITMENT AND RETENTION 31
SECTION 4.2.(a) Effective July 1, 2025, recruitment and retention bonuses shall be 32
issued to the members of the North Carolina National Guard (NCNG) who refer enlistments or 33
extend their service during the 2025-2027 fiscal biennium. 34
SECTION 4.2.(b) The compensation bon uses awarded by this section are not 35
compensation for the purposes of any retirement system administered by the State. The 36
compensation bonuses awarded by this section are not part of annual salary and shall be paid out 37
separately. 38
SECTION 4.2.(c) The North Carolina National Guard (NCNG) shall award these 39
compensation bonuses as provided by this section. The NCNG shall report on the administration 40
of the awards to the Fiscal Research Division annually by March 15, 2026, and March 15, 2027. 41
42
PART V. BENEFIT ENHANCEMENTS 43
44
ENHANCE BENEFITS UNDER NORTH CAROLINA FIREFIGHTERS' AND RESCUE 45
SQUAD WORKERS' PENSI ON FUND AND MAKE TEC HNICAL CHANGES TO 46
THE RELATED STATUTES 47
SECTION 5.1.(a) G.S. 58-86-55 reads as rewritten: 48
"§ 58-86-55. Monthly pensions upon attaining the age of 55 years. 49
(a) The monthly pension benefit under this section is one hundred eighty dollars 50
($180.00) and is payable per month from the Pension Fund unless otherwise provided. 51
General Assembly Of North Carolina Session 2025
Page 6 House Bill 42-Third Edition
(a1) Any member who has served 20 years as an "eligible firefighter" or "eligible eligible 1
firefighter or eligible rescue squad worker" worker in the State of North Carolina, as provided in 2
G.S. 58-86-25 and G.S. 58-86-30, this Article, and who has attained the age of 55 years is entitled 3
to be paid a monthly pension from this fund. The monthly pension shall be in the amount of one 4
hundred seventy-five dollars ($175.00) per month. Any retired firefighter receiving a pension 5
shall, effective January 1, 2025, receive a pension of one hundred seventy-five dollars ($175.00) 6
per month.benefit under this section. 7
(b) Members shall pay fifteen dollars ($15.00) per month as required by G.S. 58-86-35 8
and G.S. 58-86-40 for a period of no longer than 20 years. No "eligible rescue squad member" 9
shall receive a pension prior to July 1, 1983. 10
(c) A member who is totally and permanently disabled while in the discharge of the 11
member's official duties as a result of bodily injuries sustained or as a result of extreme exercise 12
or extreme activity experienced in the course and scope of those offici al duties and who leaves 13
the fire or rescue squad service because of this disability shall be entitled to be paid from the fund 14
a monthly benefit in an amount of one hundred seventy -five dollars ($175.00) per month a 15
monthly pension benefit under this section beginning the first month after the member's fifty-fifth 16
birthday. All applications for disability are subject to the approval of the board who Board, and 17
the Board may appoint physicians to examine and evaluate the disabled member prior to approval 18
of the application, and annually thereafter. Any G.S. 58-86-41 shall not apply to a disabled 19
member shall not be required to make the monthly payment of fifteen dollars ($15.00) as required 20
by G.S. 58-86-35 and G.S. 58-86-40.member. 21
(d) A member who is totally and permanently disabled for any cause, cause other than 22
line of duty, those under subsection (c) of this section and who leaves the fire or rescue squad 23
service because of this disability and who has at least 10 years of service with the pension fund, 24
Pension Fund may be permitted to continue making a monthly contribution of fifteen dollars 25
($15.00) in the amount required under G.S. 58-86-41 to the fund until the member has made 26
contributions for a total of 240 months. The Upon attaining the age of 55, that member shall upon 27
attaining the age of 55 years be entitled to receive a monthly pension as provided by benefit under 28
this section. All applications for disability are subject to the approval of the board who Board, 29
and the Board may appoint physicians to examine and evaluate the disabled member prior to 30
approval of the application application, and annually thereafter. 31
(d1) Benefits payable from the Pension Fund shall be paid in the following manner when 32
a member is killed in the line of duty and the requirements of Article 12A of Chapter 143 of the 33
General Statutes are met: 34
(1) If the member had been receiving a monthly pension fund benefit under this 35
section prior to being killed in the line of duty, then there shall be paid to the 36
member's principal beneficiary, if only one principal beneficiary is eligible 37
and has not accepted a return of contributions, an amount of one hundred 38
seventy-five dollars ($175.00) per month the monthly pension benefit amount 39
beginning the mont h following the member's month of death, payable until 40
the beneficiary's death. If the member became a member prior to July 1, 2018, 41
and had not designated a principal beneficiary prior to being killed in the line 42
of duty, there shall be paid to the member 's living spouse upon the spouse's 43
application to the Board, an amount of one hundred seventy -five dollars 44
($175.00) per month the monthly pension benefit amount beginning the month 45
following the member's month of death, payable until the spouse's death. 46
(2) If the member had been receiving a monthly pension fund benefit under this 47
section prior to being killed in the line of duty and the beneficiary is not 48
payable as described in subdivision (1) of this subsection, then a lump sum 49
payment equal to the diff erence between the amount paid into the member's 50
separate account by or on behalf of the member and the amount received by 51
General Assembly Of North Carolina Session 2025
House Bill 42-Third Edition Page 7
the member as a pensioner will shall be paid to the eligible beneficiaries, or if 1
there are no eligible beneficiaries, shall be paid to the member's estate. 2
(3) If the member had not yet begun receiving a monthly pension benefit under 3
this section prior to being killed in the line of duty, then there shall be paid to 4
the member's principal beneficiary, if only one principal beneficiary is eligible 5
and has not accepted a return of contributions, an amount of one hundred 6
seventy-five dollars ($175.00) per month the monthly pension benefit amount 7
beginning the month following the month the member would have attained 8
age 55, or if the member had already attained age 55, beginning the month 9
following the member's month of death, payable until the beneficiary's death. 10
If the member became a member prior to July 1, 2018, and had not designated 11
a principal beneficiary prior to being killed in the line of duty, then there shall 12
be paid to the member's living spouse upon the spouse's application to the 13
Board, an amount of one hundred seventy -five dollars ( $175.00) per month 14
the monthly pension benefit amount beginning the month following the month 15
the member would have attained age 55, or if the member had attained age 55, 16
beginning the month following the member's month of death, payable until 17
the spouse's death. 18
(4) If the member had not yet begun receiving a monthly pension benefit under 19
this section prior to being killed in the line of duty and the beneficiary is not 20
payable as described in subdivision (3) of this subsection, then a lump sum 21
payment equa l to the member's contributions will be paid to the eligible 22
beneficiaries, or if there are no eligible beneficiaries, a return of the 23
contributions shall be paid to the member's estate. 24
A beneficiary under this subsection shall not be required to make the monthly payment of 25
fifteen dollars ($15.00) as required by G.S. 58-86-35 and G.S. 58-86-40 G.S. 58-86-41 shall not 26
apply after the a member has been killed in the line of duty. 27
(e) A member who, because the If a member has at least 10 years of service with the 28
Pension Fund and that member's (i) residence is annexed by a city under Part 2 or Part 3 of Article 29
4A of Chapter 160A of the General Statutes, or whose (ii) department is closed because of an 30
annexation by a city under Part 2 or Part 3 of Article 4A of Chapter 160A of the General Statutes, 31
or whose (iii) volunteer department is taken over by a city or county, and because of such the 32
annexation or takeover the member is unable to perform as a firefighter or rescue squad worker 33
of any status, and if the member has at least 10 years of service with the pension fund, may then 34
the member shall be permitted to continue making a monthly contribution of fifteen dollars 35
($15.00) in the amount required under G.S. 58-86-41 to the fund until the member has made 36
contributions for a total of 240 months. The Upon completion of the total 240 months of 37
contributions, and upon a member upon attaining the age of 55 years and completion of such 38
contributions age 55, the member shall be entitled to receive a monthly pension as provided by 39
benefit under this section. Any application to make monthly contributions under this section shall 40
be subject to a finding of eligibility by the Board of Trustees upon application of the member. 41
(f) The pensions benefits provided under this Article shall be in addition to all other 42
pensions or benefits under any other statutes of the State of North Carolina or the United States, 43
notwithstanding any exclusionary provisions of other pensions or retirement systems provided 44
by law." 45
SECTION 5.1.(b) Article 86 of Chapter 58 of the General Statutes is amended by 46
adding a new section to read: 47
"§ 58 -86-41. Amount due for membership ; payments credited to separate member 48
accounts. 49
General Assembly Of North Carolina Session 2025
Page 8 House Bill 42-Third Edition
(a) Unless otherwise provided under this Article, each member of the Pension Fund shall 1
pay the sum of fifteen dollars ($15.00) per month to the Pension Fund for membership in the 2
fund for a period not to exceed 20 years. 3
(b) Unless otherwise provided under this Arti cle, all payments due in any calendar year 4
shall be made no later than March 31 subsequent to the end of the calendar year in which the 5
payment was due. 6
(c) The Pension Fund shall not award fully credited service based on payments received 7
later than March 31 subsequent to the end of the calendar year in which the month occurred 8
unless the payment is applied as provided in G.S. 58-86-45(a1). 9
(d) Payments made in accordance with this section shall be credited to the separate 10
account of the member and shall be kept by the custodia n in a manner that allows the payments 11
to be made available upon a member's withdrawal from membership or retirement." 12
SECTION 5.1.(c) G.S. 58-86-35 reads as rewritten: 13
"§ 58 -86-35. Firefighters' application for membership in fund; monthly payments by 14
members; payments credited to separate accounts of members; Pension Fund; 15
termination of membership. 16
(a) Those firefighters Firefighters who are eligible for membership in the Pension Fund 17
pursuant to G.S. 58-86-25 may apply to the board Board for membership. Each firefighter upon 18
becoming a member of the fund shall pay the director of the fund the sum of fifteen dollars 19
($15.00) per month; each payment shall be made no later than March 31 subsequent to the end 20
of the calendar year in which the month occurred. The Pension Fund shall not award fully 21
credited service based on payments received later than March 31 subsequent to the end of the 22
calendar year in which the month occurred unless the payment is applied as provided in 23
G.S. 58-86-45(a1). The monthly payments shall be credited to the separate account of the 24
member and shall be kept by the custodian so it is available for payment on withd rawal from 25
membership or retirement. 26
(b) A member may elect to terminate membership in the fund Pension Fund at any time 27
and request the refund of payments previously made to the fund. However, a A member's 28
delinquency in making the monthly payments requir ed by this section Article does not result in 29
the termination of membership without such an election to terminate membership in the Pension 30
Fund made by the member." 31
SECTION 5.1.(d) G.S. 58-86-40 reads as rewritten: 32
"§ 58 -86-40. Rescue squad worker's application for membership in funds; monthly 33
payments by members; payments credited to separate accounts of members; 34
Pension Fund; termination of membership. 35
(a) Those rescue Rescue squad workers eligible for membership in the Pe nsion Fund 36
pursuant to G.S. 58-86-30 may apply to the board Board for membership. Those rescue squad 37
workers eligible pursuant to G.S. 58-86-30 may apply to the board for membership. Each eligible 38
rescue squad worker upon becoming a member shall pay the director of the fund the sum of 39
fifteen dollars ($15.00) per month; each payment shall be made no later than March 31 40
subsequent to the end of the calendar year in which the month occurred. The Pension Fund shall 41
not award fully credited service based on p ayments received later than March 31 subsequent to 42
the end of the calendar year in which the month occurred unless the payment is applied as 43
provided in G.S. 58-86-45(a1). The monthly payments shall be credited to the separate account 44
of the member and sha ll be kept by the custodian so it is available for payment on withdrawal 45
from membership or retirement. 46
(b) A member may elect to terminate membership in the fund Pension Fund at any time 47
and request the refund of payments previously made to the fund. However, a A member's 48
delinquency in making the monthly payments required by this section Article does not result in 49
the termination of membership without such an election to terminate membership in the Pension 50
Fund made by the member." 51
General Assembly Of North Carolina Session 2025
House Bill 42-Third Edition Page 9
SECTION 5.1.(e) G.S. 58-86-45 reads as rewritten: 1
"§ 58-86-45. Additional retroactive membership. 2
(a1) Any firefighter or rescue squad worker who is 35 years of age or older and who is a 3
current or former member of a fire department or rescue squad chartered by the State of No rth 4
Carolina may purchase credit for any periods of service to any chartered fire department or rescue 5
squad not otherwise creditable by making a lump sum payment to the Annuity Savings Fund 6
equal to the full liability of the service credits calculated on the basis of the assumptions used for 7
purposes of the actuarial valuation of the system's liabilities, which payment shall take into 8
account the retirement allowance arising on account of the additional service credit commencing 9
at the earliest age at which the member could retire on a retirement allowance, as determined by 10
the board of trustees upon the advice of the consulting actuary, plus an administrative fee to be 11
set by the board of trustees. This provision for the payment of a lump sum for service " not 12
otherwise creditable" shall apply, inter alia, to all purchases of service credits for months as to 13
which timely payments were not previously made pursuant to G.S. 58-86-35 or G.S. 58-86-40, 14
whichever is applicable.in accordance with G.S. 58-86-41. 15
(b) An eligible firefighter or rescue squad worker who is not yet 35 years old may apply 16
to the Board for membership in the fund Pension Fund at any time. Upon becoming a member, 17
the worker may make a lump sum payment of fifteen dollars ($15.00) per month in the amount 18
required under G.S. 58-86-41 at the time of the payment for each month retroactively to the time 19
the worker first became eligible to become a member, plus interest at an annual rate to be set by 20
the board Board upon advice from actuary for each year of retroactive payments. Upon making 21
this lump sum payment, the worker shall be given credit for all prior service in the same manner 22
as if the worker had applied for membership upon first becoming eligible. 23
(c) A member of the Pension Fund who is not yet 35 years old may receive credit for the 24
prior service upon making a lump sum payment of fifteen dollars ($15.00) in the amount required 25
under G.S. 58-86-41 at the time of the payment for each month since the worker first became 26
eligible, plus interest at an annual rate to be set by the Board for each year of retroactive 27
payments. Upon making this lump sum payment, the date of membership shall be the same as if 28
the worker had applied for membership upon first becoming eligible. This provision for the 29
payment of a lump sum for service "not otherwise creditable" shall apply, inter alia, to all 30
purchases of service credits for months as to which timely payments were not previously made 31
pursuant to G.S. 58-86-35 or G.S. 58-86-40, whichever is applicable, for any firefighter or rescue 32
squad worker who is not yet 35 years of age or older and who is a current or former member of 33
a fire department or rescue squad chartered by the State of North Carolina." 34
SECTION 5.1.(f) The Revisor of Statutes shall replace the phrase "G.S. 58-86-35 or 35
G.S. 58-86-40" with the phrase "G.S. 58-86-41" in each instance it appears in G.S. 58-86-2. 36
SECTION 5.1.(g) This section applies to pension benefit amounts payable from the 37
Pension Fund due to a member or beneficiary on or after January 1, 2026. If a member or 38
beneficiary becomes eligible to receive a pension benefit from the Pension Fund on or before 39
December 31, 2025, but the pension benefit amount is paid from the Pension Fund on or after 40
January 1, 2026, then the pension benef it amount due to the member or beneficiary shall be the 41
amount applicable to the pension benefit amount that was effective for each respective month to 42
which the benefit applies. 43
SECTION 5.1.(h) This section is effective January 1, 2026. 44
45
INCREASE BENEFITS PAYABLE UNDER NORTH CAROLINA NATIONAL GUARD 46
PENSION FUND 47
SECTION 5.2.(a) G.S. 127A-40 reads as rewritten: 48
"§ 127A-40. Pensions for the members of the North Carolina National Guard. 49
(a) Every member and former member of the North Carolina National Guard who meets 50
the requirements of this section shall receive, commencing at age 60, a pension of one hundred 51
General Assembly Of North Carolina Session 2025
Page 10 House Bill 42-Third Edition
five eight dollars ($105.00) ($108.00) per month for 20 years' creditable military service with an 1
additional ten dollars and fifty cents ($10.50) eighty cents ($10.80) per month for each additional 2
year of such creditable military service; provided, however, that the total pension shall not exceed 3
two hundred ten sixteen dollars ($210.00) ($216.00) per month. The requirements for 4
(a1) To receive a pension are that under this section, each member shall:shall meet all of 5
the following requirements: 6
(1) Have The individual served and qualified for at least 20 years' creditable 7
military service, including National Guard, reserve and active duty, under the 8
same requirement specified for entitlement to retired pay for nonregular 9
service under Chapter 67, Title 10, United States Code. 10
(2) Have at At least 15 years of the aforementioned service required under 11
subdivision (1) of this subsection was as a member of the North Carolina 12
National Guard. 13
(3) Have The individual received an honorable discharge from the North Carolina 14
National Guard. 15
…." 16
SECTION 5.2.(b) This section applies to pension benefit amounts payable from the 17
Pension Fund due to a member on or after January 1, 2026. If a member becomes eligible to 18
receive a pension benefit from the Pension Fund on or before December 31, 2025, but the pension 19
benefit amount is paid from the Pension Fund on or after January 1, 2026, then the pension benefit 20
amount due to the member shall be the amount applicable to the pension benefit amount that was 21
effective for each respective month to which the benefit applies. 22
SECTION 5.2.(c) This section is effective January 1, 2026. 23
24
INCREASE THE AMOUNT AWARDED FOR LINE OF DUTY DEATHS UNDER THE 25
PUBLIC SAFETY EMPLOYEES' DEATH BENEFITS ACT 26
SECTION 5.3.(a) G.S. 143-166.3 reads as rewritten: 27
"§ 143-166.3. Payments; determination. 28
(a) When any covered person is killed in the line of duty, the Industrial Commission shall 29
award a death benefit in the amount of one hundred thousand dollars ($100,000) one hundred 30
fifty thousand dollars ($150,000) to be paid to one of the following: 31
(1) The spouse of the covered person if there is a surviving spouse. 32
(2) If there is no surviving spouse, then payments shall be made to any surviving 33
dependent child of the covered person. If there is more than one surviving 34
dependent child, then the payment shall be made to and equally divided among 35
all surviving dependent children. 36
(3) If there is no surviving spouse and no surviving dependent child or children, 37
then payments shall be made to any surviving dependent parent of the covered 38
person. If there is more than one surviving dependent parent, then the 39
payments shall be made to and equ ally divided between the surviving 40
dependent parents of the covered person. 41
(4) If there is no surviving spouse, surviving dependent child, or surviving 42
dependent parent, then the payment shall be made to the estate of the deceased 43
covered person. 44
… 45
(e) On and after July 1, 2016, when When any covered person is murdered in the line of 46
duty, in addition to the award under subsection (a) of this section, the Industrial Commission 47
shall award a death benefit in the amount of one hundred thousand dollars ($100, 000) one 48
hundred fifty thousand dollars ($150,000) to be paid to one of the following: 49
(1) The spouse of the covered person if there is a surviving spouse. 50
General Assembly Of North Carolina Session 2025
House Bill 42-Third Edition Page 11
(2) If there is no surviving spouse, then payments shall be made to any surviving 1
dependent child of the covered person. If there is more than one surviving 2
dependent child, then the payment shall be made to and equally divided among 3
all surviving dependent children. 4
(3) If there is no surviving spouse and no surviving dependent child or children, 5
then payments shall be made to any surviving dependent parent of the covered 6
person. If there is more than one surviving dependent parent, then the 7
payments shall be made to and equally divided between the surviving 8
dependent parents of the covered person. 9
(4) If there is no surviving spouse, surviving dependent child, or surviving 10
dependent parent, then the payment shall be made to the estate of the deceased 11
covered person. 12
…." 13
SECTION 5.3.(b) There is appropriated from the General Fund to the Department 14
of State Treasurer the sum of one million two hundred sixty thousand seven hundred fifty dollars 15
($1,260,750) in recurring funds for each year of the 2025 -2027 fiscal biennium to be used for 16
benefits awarded for line of duty deaths under the Public Safety Employees' Death Benefits Act, 17
pursuant to this section. 18
SECTION 5.3.(c) This section is retroactively effective July 1, 2025, and subsection 19
(a) of this section applies to deaths occurring on or after that date. 20
21
PART VI. MISCELLANEOUS PROVISIONS 22
23
USE OF FUNDS APPROPRIATED 24
SECTION 6.1.(a) The Office of State Budget and Management shall ensure that the 25
appropriations made by this act are used only for those purposes. 26
SECTION 6.1.(b) If the Director of the Budget determines that funds appropriated 27
to a State agency exceed the amount required by that agency for those purposes, the Director may 28
reallocate those funds to other State agencies that received insufficient funds for the employee 29
salaries or benefits as authorized by this act. 30
SECTION 6.1.(c) Funds appr opriated by this act may not be used to adjust the 31
budgeted salaries of vacant positions, to provide salary increases in excess of those required by 32
the General Assembly, or to increase the budgeted salary of filled positions to the minimum of 33
the position's respective salary range. 34
SECTION 6.1.(d) Any funds appropriated for employee benefits in excess of the 35
amounts required to provide for employee benefits shall be credited to the Pay Plan Reserve. 36
SECTION 6.1.(e) No later than May 1, 2026, the Office o f State Budget and 37
Management shall report to the Fiscal Research Division on the expenditure of funds for 38
employee benefits under this Part. This report shall include at least the following information for 39
each State agency: 40
(1) The total amount of funds that the agency received under this Part for 41
employee benefits. 42
(2) The total amount of funds transferred from the agency to other State agencies 43
pursuant to subsection (b) of this section. This section of the report shall 44
identify the amounts transferred to each recipient State agency. 45
(3) The total amount of funds used by the agency for employee benefits. 46
(4) The amount of funds credited to the Pay Plan Reserve. 47
48
STATE BUDGET ACT APPLICABILITY 49
SECTION 6.2. If any provision of this act and S.L. 2025-89 or G.S. 143C-5-4 are in 50
conflict, the provisions of this act shall prevail. The appropriations and the authorizations to 51
General Assembly Of North Carolina Session 2025
Page 12 House Bill 42-Third Edition
allocate and spend funds which are set out in this act shall remain in effect until the Current 1
Operations Appropriations Act for the applicable fiscal year becomes law, at which time that act 2
shall become effective and shall govern appropriations and expenditures. When the Current 3
Operations Appropriations Act for that fiscal year becomes law, the Director of the Budget shall 4
adjust allotments to give effect to that act from July 1 of the fiscal year. 5
6
SEVERABILITY CLAUSE 7
SECTION 6.3. If any provision of this act or its application is held invalid, the 8
invalidity does not affect other provisions or applications of this act that can be give n effect 9
without the invalid provisions or application and, to this end, the provisions of this act are 10
severable. 11
12
PART VII. EFFECTIVE DATE 13
SECTION 7.1. Except as otherwise provided, this act is effective July 1, 2025. 14