2025 Governor's Budget.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 440

Short Title: 2025 Governor's Budget. (Public)
Sponsors: Senators Jackson, Hise, and Lee (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 25, 2025
*S440-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO MAKE BASE BUDGET APPROPRIATIONS FOR CURRENT OPERAT IONS 2
OF STATE DEPARTMENTS , INSTITUTIONS, AND AGENCIES, AND FOR OT HER 3
PURPOSES. 4
The General Assembly of North Carolina enacts: 5
6
PART I. TITLE AND INTRODUCTION 7
8
TITLE OF ACT 9
SECTION 1.1. This act shall be known as the "Current Operations Appropriations 10
Act of 2025." 11
12
INTRODUCTION 13
SECTION 1.2. The appropriations made in this act are for maximum amounts 14
necessary to provide the services and accomplish the purposes described in the budget in 15
accordance with the State Budget Act. Savings shall be effected where the total amounts 16
appropriated are not required to perform these services and accomplish these purposes, and the 17
savings shall revert to the appropriate fund at the end of each fiscal year, except as otherwise 18
provided by law. 19
20
PART II. CURRENT OPERATIONS AND EXPANSION/GENERAL FUND 21
22
GENERAL FUND APPROPRIATIONS 23
SECTION 2.1.(a) Appropriations from the General Fund for the budgets of the State 24
departments, institutions, and agencies, and for other purposes as enumerated, are made for each 25
year of the 2025-2027 fiscal biennium, according to the following schedule: 26
27
Current Operations – General Fund FY 2025-2026 FY 2026-2027 28
29
EDUCATION 30
Community College System 1,835,773,238 1,817,233,999 31
32
Public Instruction 12,940,561,945 13,312,131,679 33
34
Appalachian State University 209,862,595 209,862,595 35
East Carolina University 36
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 440-First Edition
Academic Affairs 274,127,761 274,127,761 1
Health Affairs 107,144,915 107,144,915 2
Elizabeth City State University 48,513,547 48,513,547 3
Fayetteville State 87,586,990 87,586,990 4
NC A&T State University 162,728,474 162,743,010 5
NC Central University 98,572,636 98,572,636 6
NC State University 7
Academic Affairs 564,312,136 564,676,069 8
Agricultural Extension 46,543,237 46,543,237 9
Agricultural Research 63,465,016 63,465,016 10
UNC-Asheville 51,101,094 51,101,094 11
UNC-Chapel Hill 12
Academic Affairs 385,597,924 385,597,924 13
Health Affairs 249,399,553 249,399,553 14
AHEC 57,855,450 57,855,450 15
UNC-Charlotte 331,584,743 331,584,743 16
UNC-Greensboro 204,987,083 204,987,083 17
UNC-Pembroke 95,473,853 95,473,853 18
UNC-School of the Arts 42,015,189 42,015,189 19
UNC-Wilmington 217,239,729 217,239,729 20
Western Carolina University 164,563,738 164,589,450 21
Winston-Salem State University 68,743,773 68,743,773 22
General Administration 50,098,094 50,098,094 23
University Institutional Programs 445,200,342 418,908,192 24
Related Educational Programs 155,756,139 494,956,139 25
NC School of Science and Math 47,142,167 46,042,167 26
Aid to Private Institutions 11,209,300 1,209,300 27
Total University of North Carolina 4,240,825,478 4,543,037,509 28
29
HEALTH AND HUMAN SERVICES 30
Department of Health and Human Services 31
Aging and Adult Services 52,921,202 52,835,960 32
Central Management and Support 264,668,458 280,846,739 33
Child Development and Early Education 382,372,308 402,337,850 34
Child and Family Well Being 67,730,469 66,899,077 35
Health Benefits 6,713,749,640 6,915,372,354 36
Health Services Regulation 28,910,644 27,684,055 37
Mental Hlth/Dev. Disabl./Subs. Abuse Serv. 872,910,215 861,901,094 38
Public Health 145,202,462 141,115,801 39
Services for the Blind, Deaf and Hard of Hearing 10,914,745 10,582,156 40
Social Services 237,776,745 237,389,031 41
Vocational Rehabilitation 49,986,020 48,988,234 42
Total Health and Human Services 8,827,142,908 9,045,952,351 43
44
AGRICULTURE, NATURAL, AND ECONOMIC RESOURCES 45
Agriculture and Consumer Services 212,663,368 187,645,965 46
47
Department of Commerce 48
Commerce 32,609,149 32,416,005 49
General State Aid 19,655,810 19,655,810 50
Economic Development 166,248,245 161,248,245 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 3
1
Environmental Quality 140,680,891 128,482,814 2
3
Labor 28,121,857 27,647,075 4
5
Department of Natural and Cultural Resources 307,296,564 300,576,669 6
7
Wildlife Resources Commission 18,351,461 17,633,011 8
9
JUSTICE AND PUBLIC SAFETY 10
Judicial Department 827,773,076 820,165,360 11
12
Judicial Department – Indigent Defense Services 185,962,469 175,026,742 13
14
Department of Justice 90,804,406 89,863,913 15
16
Department of Public Safety 702,776,742 686,556,053 17
18
Department of Adult Correction 2,177,127,587 2,157,937,189 19
20
State Bureau of Investigation 75,468,655 64,814,302 21
22
GENERAL GOVERNMENT 23
Department of Administration 74,678,938 74,260,897 24
25
Office of Administrative Hearings 8,898,948 8,839,511 26
27
State Board of Elections 11,759,995 11,682,822 28
29
Office of State Auditor 20,631,544 20,427,667 30
31
Office of State Controller 37,735,638 37,484,996 32
33
General Assembly 106,202,329 103,830,055 34
35
Office of the Governor 12,123,401 12,059,283 36
37
Office of State Budget and Management 38
Office of State Budget and Management 13,505,238 13,404,735 39
OSBM – Reserve for Special Appropriations 35,300,000 15,300,000 40
41
Housing Finance Agency 70,660,000 60,660,000 42
43
Office of State Human Resource 13,247,160 15,358,37744
45
Department of Insurance 46
Insurance 109,006,753 84,282,862 47
Insurance – Industrial Commission 16,099,148 14,739,941 48
49
Office of Lieutenant Governor 1,417,641 1,405,203 50
51
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 440-First Edition
Department of Military and Veterans Affairs 10,522,771 10,436,405 1
2
Department of Revenue 135,835,446 135,281,182 3
4
Department of Secretary of State 21,063,124 20,875,289 5
6
Department of State Treasurer 7
Treasurer 622,074 209,074 8
Treasurer – Retirement System 24,044,657 24,044,657 9
10
Information Technology 95,908,367 97,150,36711
12
RESERVES, DEBT, AND OTHER BUDGETS 13
Statewide Reserves 0 0 14
15
Total Net Appropriation 33,649,107,021 34,349,758,014 16
17
SECTION 2.1.(b) For purposes of this act, the requirements set forth in this section 18
represent the total amount of funds, including agency receipts, appropriated to an agency, 19
department, or institution. 20
21
GENERAL FUND AVAILABILITY 22
SECTION 2.2.(a) The General Fund availability derived from State tax revenue, 23
nontax revenue, and other adjustments used in developing the budget for each year of the 24
2025-2027 fiscal biennium is as follows: 25
26
FY 2025-2026 FY 2026-2027 27
28
Unappropriated Balance from Prior Fiscal Year 48,073,341 364,074,833 29
Projected Over Collections FY 2024-25 543,900,000 - 30
Anticipated Reversions FY 2024-25 300,000,000 - 31
Total, Current Beginning Unreserved Balance 891,973,341 364,074,833 32
33
Statutorily Required Reservations of Revenue 34
State Capital and Infrastructure Fund (1,120,000,000) (1,159,200,000) 35
Unfunded Liability Solvency Reserve (38,514,750) (117,406,800) 36
Subtotal (1,158,514,750) (1,276,606,800) 37
38
Investments to Reserves 39
State Emergency Response and Disaster Relief Fund 500,000,000 0 40
Subtotal, Investments to Reserves (500,000,000) 0 41
42
Tax Revenues 43
Individual Income 16,980,000,000 16,114,000,000 44
Sales and Use 11,582,500,000 11,895,200,000 45
Corporate Income 1,483,600,000 1,340,100,000 46
Franchise 785,800,000 809,700,000 47
Insurance 1,503,300,000 1,415,600,000 48
Alcoholic Beverage 560,000,000 572,700,000 49
Tobacco Products 245,400,000 240,900,000 50
Other Tax Revenue 248,200,000 268,900,000 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 5
Subtotal, Tax Revenues 33,388,800,000 32,657,100,000 1
2
Non-tax Revenues 3
Judicial Fees 207,400,000 204,600,000 4
Investment Income 681,900,000 594,100,000 5
Disproportionate Share 107,700,000 109,000,000 6
Master Settlement Agreement 105,100,000 102,000,000 7
Insurance 124,000,000 126,900,000 8
Other Non-tax Revenues 274,800,000 273,400,000 9
Subtotal, Non-tax Revenue 1,500,900,000 1,410,000,000 10
11
Total, Net Revenues 34,889,700,000 34,067,100,000 12
13
Adjustments to Revenues: 14
Maintain Individual Income Tax at 4.25% 386,300,000 1,801,800,000 15
Maintain Lowest Corporate Tax Rate at 2.25% 68,400,000 166,200,000 16
Working Families Tax Credit – 20% of federal 17
Earned Income Tax Credit (426,800,000) (425,800,000) 18
Child and Dependent Care Tax Credit (59,000,000) (60,300,000) 19
Child Deduction to Refundable Child Tax Credit (23,000,000) (23,000,000) 20
Sales Tax Back-to-School Holiday (29,000,000) (30,000,000) 21
PHP Gross Tax Revenue Offset (78,035,000) (75,623,000) 22
Subtotal, Adjustments to Tax Revenue (161,135,000) 1,353,277,000 23
24
Adjustments to Availability 25
Insurance Non-Tax Transfer 51,158,263 25,646,165 26
27
Revised Total Net General Fund Availability 34,013,181,854 34,533,491,198 28
29
Less General Fund Net Appropriations (33,649,107,021) (34,349,758,014) 30
31
Unappropriated Balance Remaining 364,074,833 183,733,184 32
33
SECTION 2.2.(b) IT Reserve – The State Controller shall transfer the sum of one 34
hundred sevent een million eight hundred ninety -five thousand five hundred ninety dollars 35
($117,895,590) from the unreserved fund balance in the Information Technology Project Reserve 36
to the Office of State Budget and Management. Funds appropriated from the Information 37
Technology Project Reserve shall be allocated by the Director of the State Budget in consultation 38
with the State Chief Information Officer and the head of the department with primary ownership 39
over the information technology project based on documented proj ect needs. Funds transferred 40
under this section are appropriated in the year in which they are transferred and shall be used for 41
the following information technology projects: 42
(1) The Office of State Budget and Management's replacement for the integrated 43
budget information system (IBIS). 44
(2) The Department of Information Technology's cybersecurity tools continuation 45
of protection offerings, and constituent portal and citizen identity software. 46
(3) The Department of Adult Correction's rounds tracking software. 47
(4) The Office of the State Auditor's modernization of audit IT infrastructure. 48
(5) The Department of Public Instruction's PSU school business system 49
modernization. 50
General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 440-First Edition
(6) The Office of State Human Resources' human capital management (HCM) 1
vendor integration and HARP data analytics improvements (GDAC). 2
(7) The Department of Revenue's DataPower end of life replacement, datacenter 3
hardware replacement, and replacement of OFP and RCA desktop clients. 4
(8) The State Board of Elections' election modernization. 5
(9) The State Bureau of Investigation's headquarters data center and investigative 6
case management system. 7
(10) The Office of Administrative Hearings' database development system. 8
(11) The Department of Commerce's new career information system. 9
(12) The Depa rtment of Environmental Quality's completion of the permit 10
transformation project. 11
(13) The Department of Health and Human Services, Division of State Operated 12
Health Facilities' electronic health records. 13
(14) The Department of Health and Human Services, Division of Health Benefits' 14
Medicaid enterprise system and other technology. 15
(15) The Department of Justice's legal case management system. 16
17
SECTION 2.2.(c ) SERDRF – The State Controller shall reserve to the State 18
Emergency Response and Disaster Relief Reserve established in G.S. 166A-19.42 from funds 19
available in the General Fund the sum of five hundred million dollars ($500,000,000) in 20
nonrecurring funds f or the 2025 -2026 fiscal year. The State Controller shall transfer funds 21
available in the State Emergency Response and Disaster Relief Reserve the sum of one hundred 22
fourteen million dollars ($114,000,000) to the Department of Public Safety, Emergency 23
Management Division, to be used as state matching funds to draw down remaining federal 24
funding for storms that occurred prior to 2024. The funds are appropriated for the five-year period 25
ending June 30, 2030. 26
SECTION 2.2.(d) Federal Infrastructure Match Reserve. – The State Controller shall 27
transfer funds available in the Federal Infrastructure Match Reserve to agencies and departments 28
as needed to draw down federal funds in accordance with the following schedule, and the funds 29
transferred are appropriated for the 2025-2027 fiscal biennium: 30
(1) Five million dollars ($5,000,000) to the Department of Agriculture and 31
Consumer Services for Farmland Preservation Agricultural Military Buffer 32
Conservation Easements; 33
(2) Ten million five hundred thousand dollars ($10,50 0,000) to the Department 34
of Commerce, Office of Science, Technology, and Innovation, for the NC 35
Coalition Strategic Support Fund to leverage federal funding and grow the 36
semiconductor and chip industries in the state; and 37
(3) Twenty-two million six hundred fourteen thousand one hundred dollars 38
($22,614,100) to the Department for Environmental Quality for Drinking 39
Water and Clean Water State Revolving Funds match funds. 40
SECTION 2.2.(e) Except as otherwise specifically provided, nothing in this section 41
shall be construed as appropriating funds reserved pursuant to this section. Funds reserved 42
pursuant to this section do not constitute an "appropriation made by law," as that phrase is us ed 43
in Section 7(1) of Article V of the North Carolina Constitution. 44
SECTION 2.2.(f) The State Controller shall ensure that the transfers required under 45
this section are completed as soon as practicable but no later than the end of the fiscal year in 46
which they are directed. In making the transfers required under this section, the State Controller 47
shall prioritize transfers to Reserves that support expenditures. 48
49
PART III. HIGHWAY FUND AND HIGHWAY TRUST FUND 50
51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 7
CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND 1
SECTION 3.1. Appropriations from the State Highway Fund for the maintenance 2
and operation of the Department of Transportation and for other purposes as enumerated are 3
made for the fiscal biennium ending June 30, 2027, according to the following schedule: 4
5
Current Operations – Highway Fund FY 2025-2026 FY 2026-2027 6
7
Department of Transportation 8
Administration $143,308,209 $143,308,209 9
Division of Highways 10
Administration 38,487,904 38,412,904 11
Construction 77,543,078 77,543,078 12
Maintenance 2,231,198,332 2,248,723,293 13
Governor's Highway Safety Program 601,695 601,695 14
OSHA Program 358,030 358,030 15
State Aid to Municipalities 185,875,000 185,875,000 16
Intermodal Divisions 17
Ferry 92,551,173 84,147,728 18
Public Transportation, Bicycle, and Pedestrian 70,570,554 70,570,554 19
Aviation 158,376,982 159,889,238 20
Rail 49,367,607 50,367,607 21
Division of Motor Vehicles 173,788,575 166,853,269 22
Compensation, Benefits, 23
Reserves, Transfers, and Other 76,660,123 69,756,123 24
Capital Improvements 6,712,738 47,793,272 25
Total Highway Fund Appropriations 3,305,400,000 3,344,200,000 26
27
HIGHWAY FUND AVAILABILITY 28
SECTION 3.2. The Highway Fund availability used in developing the 2025 -2027 29
fiscal biennial budget is shown below: 30
31
Highway Fund Availability FY 2025-2026 FY 2026-2027 32
Motor Fuels Tax $1,853,000,000 $1,878,100,000 33
Highway Short Term Lease 113,100,000 114,900,000 34
Licenses and Fees 1,104,500,000 1,123,300,000 35
Investment Income 50,200,000 37,600,000 36
Aviation Fuel Tax 13,100,000 13,400,000 37
Sales Tax 171,500,000 176,900,000 38
Total Highway Fund Availability $3,305,400,000 $3,344,200,000 39
40
HIGHWAY TRUST FUND APPROPRIATIONS 41
SECTION 3.3. Appropriations from the State Highway Trust Fund for the 42
maintenance and operation of the Department of Transportation and for other purposes as 43
enumerated are made for the fiscal biennium ending June 30, 2027, according to the following 44
schedule: 45
46
Current Operations – Highway Trust Fund FY 2025-2026 FY 2026-2027 47
48
Program Administration $44,621,733 $44,621,733 49
Bonds 121,440,275 121,436,275 50
Turnpike Authority 49,000,000 49,000,000 51
General Assembly Of North Carolina Session 2025
Page 8 Senate Bill 440-First Edition
State Ports Authority 45,000,000 45,000,000 1
FHWA State Match 6,048,440 6,048,440 2
Strategic Prioritization Funding Plan for 3
Transportation Investments 2,222,253,974 2,280,386,974 4
Transfer to Visitor Center 640,000 640,000 5
Transfer to Department of Revenue 0 371,000 6
Uncommitted Trust Fund 495,578 495,578 7
Total Highway Trust Fund Appropriations $2,489,500,000 $2,548,000,000 8
9
HIGHWAY TRUST FUND AVAILABILITY 10
SECTION 3.4. The Highway Trust Fund availability used in developing the 11
2025-2027 fiscal biennial budget is shown below: 12
13
Highway Trust Fund Availability FY 2025-2026 FY 2026-2027 14
15
Highway Use Tax $1,150,500,000 $1,179,800,000 16
Motor Fuels Tax 619,500,000 627,900,000 17
Fees 172,100,000 172,500,000 18
Sales Tax 514,400,000 530,600,000 19
Investment Income 33,000,000 37,200,000 20
Total Highway Trust Fund Availability $2,489,500,000 $2,548,000,000 21
22
PART IV. OTHER AVAILABILITY AND APPROPRIATIONS 23
24
CASH BALANCES AND OTHER APPROPRIATIONS 25
SECTION 4.1.(a) Cash balances, federal funds, departmental receipts, grants, and 26
gifts from the General Fund, revenue funds, enterprise funds, and internal service funds are 27
appropriated for the 2025-2027 fiscal biennium as follows: 28
(1) For all budget codes listed in th e Governor's Recommended Budget for the 29
2025-2027 fiscal biennium, dated March 2025, and in the Budget Support 30
Document, fund balances and receipts are appropriated up to the amounts 31
specified, as adjusted by the General Assembly, for the 2025-2026 fiscal year 32
and the 2026-2027 fiscal year. Funds may be expended only for the programs, 33
purposes, objects, and line items or as otherwise authorized by the General 34
Assembly. Expansion budget funds listed in those documents are appropriated 35
only as otherwise provided in this act. 36
(2) Notwithstanding the provisions of subdivision (1) of this subsection: 37
a. Any receipts that are required to be used to pay debt service 38
requirements for various outstanding bond issues and certificates of 39
participation are appropriated up to the actual amounts received for the 40
2025-2026 fiscal year and the 2026-2027 fiscal year and shall be used 41
only to pay debt service requirements. 42
b. Other funds, cash balances, and receipts of funds that meet the 43
definition issued by the Governmental Accounting Standards Board of 44
a trust or agency fund are appropriated for and in the amounts required 45
to meet the legal requirements of the trust agreement for the 2025-2026 46
fiscal year and the 2026-2027 fiscal year. 47
SECTION 4.1.(b) Receipts collected in a fiscal year in excess of the amounts 48
appropriated by this section shall remain unexpended and unencumbered until appropriated by 49
the General Assembly, unless the expenditure of over-realized receipts in the fiscal year in which 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 9
the receipts were collecte d is authorized by the State Budget Act. Over -realized receipts are 1
appropriated in the amounts necessary to implement this subsection. 2
SECTION 4.1.(c) Notwithstanding subsections (a) and (b) of this section, there is 3
appropriated from the Reserve for Rei mbursements to Local Governments and Shared Tax 4
Revenues for each fiscal year an amount equal to the amount of the distributions required by law 5
to be made from that reserve for that fiscal year. 6
7
EDUCATION LOTTERY AN D OTHER WAGERING FUN DS/CHANGES TO 8
REVENUE ALLOCATIONS 9
SECTION 4.2. The appropriations for the 2025-2027 fiscal biennium made from the 10
Education Lottery Fund equal one billion, eight hundred and four million seven hundred 11
thousand dollars ($1,804,700,000); and from E -Instant Games equal four hu ndred fifty -two 12
million three hundred thousand dollars ($452,300,000) and are as follows: 13
14
FY 2025-2026 FY 2026-2027 15
16
Noninstructional Support Personnel $385,914,455 $385,914,455 17
Prekindergarten Program 105,002,110 111,402,110 18
NC Pre-K Wrap-Around Summer Child Care 10,000,000 10,000,000 19
Universal School Breakfast 85,300,000 85,300,000 20
1-1 Device Refresh 68,250,000 68,250,000 21
Public School Building Capital Fund 100,000,000 100,000,000 22
Needs-Based Public School Capital Fund 258,252,612 258,252,612 23
Public School Repairs and Renovations 50,000,000 50,000,000 24
Scholarship Reserve Fund for Public Colleges and Universities 41,194,733 41,194,733 25
LEA Transportation 21,386,090 21,386,090 26
TOTAL APPROPRIATION $1,125,300,000 $1,131,700,000 27
28
INDIAN GAMING EDUCATION REVENUE FUND APPROPRIATION 29
SECTION 4.3. Notwithstanding G.S. 143C-9-7, the appropriations from the Indian 30
Gaming Education Revenue Fund to the Department of Public Instruction, Textbooks, and 31
Digital Resources Allotment, are as follows. These receipts are appropriated in the year in which 32
they are received. 33
34
FY 2025-2026 FY 2026-2027 35
36
Textbooks and Digital Resources Allotment $22,700,000 $13,700,000 37
Classroom Materials 1,000,000 1,000,000 38
TOTAL APPROPRIATION $23,700,000 $14,700,000 39
40
CIVIL PENALTY AND FORFEITURE FUND 41
SECTION 4.4. Allocations are made from the Civil Penalty and Forfeiture Fund for 42
the fiscal biennium ending June 30, 2027, as follows: 43
44
FY 2025-2026 FY 2026-2027 45
46
School Technology Fund $18,000,000 $18,000,000 47
Drivers Education 31,493,768 31,493,768 48
State Public School Fund 166,041,640 166,041,640 49
1-1 Device Refresh 11,300,000 11,300,000 50
TOTAL APPROPRIATION $226,835,408 $226,835,408 51
General Assembly Of North Carolina Session 2025
Page 10 Senate Bill 440-First Edition
1
PART V. GENERAL PROVISIONS 2
3
ESTABLISHING OR INCREASING FEES 4
SECTION 5.1.(a) Notwithstanding G.S. 123.1, an agency is not required to consult 5
with the Joint Legislative Commission on Governmental Operations prior to establishing or 6
increasing a fee to the level authorized or anticipated in this act. 7
SECTION 5.1.(b) Notwithstanding G.S. 150B-21.1A(a), an agency may adopt an 8
emergency rule in accordance with G.S. 150B-21.1A to establish or increase a fee as authorized 9
by this act if the adoption of a rule would otherwise be required under Article 2A of Chapter 10
150B of the General Statutes. 11
12
CAP STATE FUNDED PORTION OF NONPROFIT SALARIES 13
SECTION 5.2. No more than one hundred forty thousand dollars ($140,000) in State 14
funds, including any interest earnings accruing from those funds, may be used for the annual 15
salary of any individual employee of a nonprofit organization. 16
17
PART VI. COMMUNITY COLLEGE SYSTEM 18
19
PROPEL NC FUNDING MODEL ADJUSTMENT 20
SECTION 6.1.(a) The funds appropriated in this act for Propel NC shall be used to 21
shift North Carolina Community College System's enrollment formula from the current 22
tier-based allocation model to a labor-market driven model. This new model shall link courses to 23
workforce sectors that are ranked and valued by statewide salary job demand data. 24
SECTION 6.1.(b) The State Board of Community Colleges in consultation with the 25
Department of Commerce shall identify the workforce sectors aligned with the State's 26
high-demand, high-salary jobs and allocate the funds appropriated in this act to those workforce 27
sectors. Appropriated funds may also be used for customized training and Small Business Centers 28
at the individual colleges. 29
30
PROPEL NC ENROLLMENT GROWTH RESERVE 31
SECTION 6.2. G.S. 115D-31 reads as rewritten: 32
"§ 115D-31. State financial support of institutions. 33
… 34
(e) If receipts for community college tuition and fees exceed the amount certified in 35
General Fund Codes at the end of a fiscal year, the State Board of Community Colleges shall 36
transfer retain the amount of receipts and fees above those budgeted to the Enrollment Growth 37
Reserve. . Funds in the Enrollment Growth Reserve shall not revert to the General Fund and shall 38
remain available to the State Board until expended. The State Board may allocate these funds in 39
this reserve to colleges experiencing an enrollment increase greater than five percent (5%) of 40
budgeted enrollment levels. proportionally to colleges based on actual receipt collections from 41
the prior fiscal year. 42
(f) The Enrollment Growth Reserve shall be established as a recurring, nonreverting 43
reserve under the direction of the State Board of Community Colleges. Funds appropriated by 44
the North Carolina General Assembly shall be allocated based on actual fall semester FTE. The 45
method of alloc ation shall be as follows: at one -half the average FTE value pe r FTE for the 46
greater of FTE increases in excess of 5% for each category of instruction, or for increases in total 47
FTE greater than 325. If enrollment growth exceeds the funds appropriated in a given year, the 48
value per FTE would be reduced proportionally." 49
50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 11
AUTHORIZE USE OF MOT ORCYCLE SAFETY EDUCA TION PROGRAM FUNDS 1
FOR A CAPITAL PROJECT 2
SECTION 6.3.(a) Notwithstanding G.S. 115D-72, of the funds received for the 3
North Carolina Motorcycle Safety Education Program (NCMSEP), the State Board of 4
Community Colle ges may award up to five -hundred thousand dollars ($500,000) to Lenoir 5
Community College for use in constructing or renovating a facility used for this program. 6
SECTION 6.3.(b) This authorization is for the fiscal year ending on June 29, 2026, 7
and funds transferred under Section (a) above, shall not revert and shall remain available until 8
expended. 9
10
INCREASE CUSTOMIZED TRAINING SUPPORT FOR REGIONAL COMMUNITY 11
COLLEGE PERSONNEL 12
SECTION 6.4. G.S. 115D-5.1(f3) reads as rewritten: 13
"§ 115D-5.1. Workforce Development Programs. 14
… 15
(f3) Of the funds appropriated in a fiscal year for the Customized Training Programs, the 16
State Board of Community Colleges may approve the use of up to eight percent (8%) fifteen 17
percent (15%) for the training and support of regional com munity college personnel to deliver 18
Customized Training Program services to business and industry. 19
…." 20
21
ADD SUCCESS RATE OF SCIENCE COURSES TO PERFORMANCE MEASURES 22
SECTION 6.5. G.S. 115D-31.3(e) reads as rewritten: 23
"§ 115D-31.3. Institutional performance accountability. 24
… 25
(e) Mandatory Performance Measures. – The State Board of Community Colleges shall 26
evaluate each college on the following performance measures: 27
(1) Progress of basic skills students. 28
(2) Repealed by Session Laws 2016‑94, s. 10.1, effective July 1, 2016. 29
(3) Performance of students who transfer to a four‑year institution. 30
(3a) Success rate of students in credit‑bearing English courses. 31
(3b) Success rate of students in credit‑bearing Math courses.or Science courses. 32
(4), (5) Repealed by Session Laws 2016‑94, s. 10.1, effective July 1, 2016. 33
(5a) Progress of first‑year curriculum students. 34
(6) Repealed by Session Laws 2012‑142, s. 8.5, effective July 1, 2012. 35
(7) Curriculum student retention and graduation. 36
(8) Repealed by Session Laws 2012‑142, s. 8.5, effective July 1, 2012. 37
(9) Attainment of licensure and certifications by students. 38
The State Board may also evaluate each college on additional performance measures. 39
…." 40
41
PERMIT SYSTEM OFFICE TO RETAIN ADMINISTR ATIVE COSTS FROM NC 42
CAREER COACH PROGRAM 43
SECTION 6.6. G.S. 115D-21.5 reads as rewritten: 44
"§ 115D-21.5. NC Career Coach Program. 45
… 46
(e) Administrative Costs. – In alignment with the goals, objectives, and requirements of 47
the North Carolina Career Coach Program, the Community College System Office may allocate 48
up to 4% of the program 's annual appropriation for administrative costs. Such administrative 49
costs may include professional development, program management, and evaluation. These funds 50
General Assembly Of North Carolina Session 2025
Page 12 Senate Bill 440-First Edition
shall be utilized to enhance the effectivenes s and sustainability of the program, ensuring its 1
continued support for students within the community college system." 2
3
FREE COMMUNITY COLLEGE TUITION FOR HIGH DEMAND SKILLS TRAINING 4
SECTION 6.7. G.S. 115D-5.1A reads as rewritten: 5
"§ 115D-5.1A. Short-Term Workforce Development Grant Program. 6
(a) Program Established. – There is established the North Carolina Community College 7
Short‑Term Workforce Development Grant Program (Program) to be administered by the State 8
Board of Community Colleges. The State B oard shall adopt rules for the disbursement of the 9
grants pursuant to this section. 10
(b) Programs of Study. – The State Board of Community Colleges, in collaboration with 11
the Department of Commerce, shall determine the eligible programs of study for the Pro gram, 12
according to the occupations that are in the highest demand in the State. The eligible programs 13
of study shall include programs such as architecture and construction, health sciences, 14
information technology, electrical line worker, and manufacturing programs and may include 15
other programs to meet local workforce needs. 16
(c) Award Amounts. – To the extent funds are made available for the Program, the State 17
Board of Community Colleges shall award grants in an amount of up to seven hundred fifty 18
dollars ( $750.00) to students pursuing short‑term, noncredit State and industry workforce 19
credentials. The State Board of Community Colleges shall establish criteria for initial and 20
continuing eligibility for students. The criteria shall include a requirement that eligible students 21
be a resident of North Carolina pursuant to G.S. 116-143.1(a)(1). At a minimum, students shall 22
be required to qualify as a resident for tuition purposes under the criteria set forth in G.S. 23
116‑143.1 and in accordance with the coordinated and centralized residency determination 24
process administered by the State Education Assistance Authority. 25
(d) Report. – The State Board shall submit a report by April 1, 2024, and annually 26
thereafter,an initial report by April 1, 2024, and annually thereafter by December 1, on the 27
Program to the Joint Legislative Education Oversight Committee and the Fiscal Research 28
Division. The report shall contain, for each academic year and by programs of study, the amount 29
of grant funds disbursed and the number of eligible students receiving funds. (2023‑134, s. 6.5.)" 30
31
PART VII. PUBLIC INSTRUCTION 32
33
PILOT PROGRAM TO LIMIT STUDENT CELL PHONE USE IN SCHOOLS 34
SECTION 7.1.(a) Purpose. – The State Board of Education shall establish a grant 35
program to be administered by the Department of Public instruction to support public school 36
units' implementation of policies to limit student cell phone use during instructional time. 37
SECTION 7.1.(b) Application, Criteria and Guidelines. – By August 1, 2025, the 38
Department of Public Instruction shall develop and publish criteria and guidelines for the 39
application process. Public school units shall submit applications by September 1, 2025. T he 40
application shall require that submissions include the following information at a minimum: 41
1. Description of the school or schools included in the proposal, including the 42
number of students and classrooms by grade level who will be subject to the 43
policy; 44
2. Description of the proposed policy; 45
3. Justification of the proposed policy, including evidence-based research to the 46
extent possible; 47
4. Implementation plan; 48
5. Description of how grant funds will be used; 49
6. Plans for financial sustainability once grant money is no longer available; 50
7. A letter of endorsement from the governing board. 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 13
SECTION 7.1.(c) Grant Awards. – By October 1, 2025, the Department of Public 1
Instruction shall review the applications and select public school units for grant awards, ensuring 2
that the following are represented to the extent possible: 3
1. All eight regions of the state; 4
2. Urban and rural areas of the state; and 5
3. Schools from Tier I, II, and III counties. 6
SECTION 7.1.(d) Qualifying Expenses. – If a public school unit is awarded a grant, 7
it may request reimbursement for qualifying expenditures for the 2025-26 school year that were 8
made prior to the October 1 award notification date. 9
SECTION 7.1.(e) Evaluation and Reporting. – Of the funds appropriated by this act, 10
the State Board of Education may use up to one hundred thousand dollars ($100,000) to contract 11
with an independent research organization to evaluate the impact of this grant program. The 12
independent research organization shall report the results of this evalu ation to the Joint 13
Legislative Education Oversight Committee, the Fiscal Research Division of the General 14
Assembly, and the Office of State Budget and Management by September 1, 2027. The 15
Department of Public Instruction shall report annually to the same e ntities listed above on the 16
implementation of this grant program beginning on March 1, 2026. 17
SECTION 7.1.(f) Administration. – The Department of Public Instruction may retain 18
up to two percent (2%) of grant funds to cover administrative costs. 19
SECTION 7.1.(g) Carryforward. – Funds unspent in the 2025 -26 fiscal year shall 20
not revert and shall be carried forward to FY 2026-27 to implement this section. 21
22
ELIMINATE THE CAP FOR FUNDS FOR CHILDREN WITH DISABILITIES 23
SECTION 7.2. G.S. 115C-111.05 reads as rewritten: 24
"§ 115C-111.05. Funding for children with disabilities. 25
To the extent funds are made available for this purpose, the State Board shall allocate funds 26
for children with disabilities to each local school administrative unit on a per child basis. Each 27
local school administrative unit shall receive funds for the lesser of (i) all children who are 28
identified as children with disabilities or (ii) thirteen percent (13%) of its allocated average daily 29
membership in the local school administrative unit for the current school year. Each local school 30
administrative unit shall receive funds for the total number of children who are identified as 31
children with disabilities in the local school administrative unit." 32
33
SCHOOL SAFETY ALLOTMENT FOR MIDDLE AND ELEMENTARY SCHOOLS 34
SECTION 7.3.(a) G.S. 143B-1209.60 is repealed. 35
SECTION 7.3.(b) Purpose. – The State Board of Education shall allocate funds to 36
the School Safety Allotment to provide for the safety of students on school grounds. Elementary 37
and middle schools across the state can use allotted funds to hire and train School Resource 38
Officers (SROs). 39
SECTION 7.3.(c) Allotment. – Of the funds appropriated through this act to the 40
Department of Public Instruction, the State Board shall allocate funding to each local school 41
administrative unit for hiring school resource officers. Each local school administrative unit shall 42
receive allotted dollars for each non -virtual school serving students in elementary and middle 43
schools with an allotted average daily membership of greater than 300. 44
SECTION 7.3.(d) Consolidation. –Effective July 1, 202 5, G.S. 143B-1209.60 is 45
repealed and all funds for elementary and middle school SROs shall be administered through the 46
School Safety Allotment by the Department of Public Instruction. At the discretion of the State 47
Board of Education, the funds provided fo r high school SROs through the At Risk Student 48
Allotment may also be consolidated into this allotment. 49
SECTION 7.3.(e) Training. – The Center for Safer Schools and the Department of 50
Public Instruction shall work with the NC Criminal Justice Education and Training Standards 51
General Assembly Of North Carolina Session 2025
Page 14 Senate Bill 440-First Edition
Commission to establish initial training and continuing education standards for SROs. Those 1
standards shall include pre-service training and modules on the social and cognitive development 2
of elementary school and middle school children, behavioral health, and trauma -informed 3
practices in schools. All SROs must receive training through a community college, a local law 4
enforcement agency, or the North Carolina Justice Academy prior to placement in a school. 5
6
EXPAND LITERACY PROF ESSIONAL DE VELOPMENT AND SUPPOR T TO 7
GRADES 6-8 8
SECTION 7.4.(a) G.S. 115C-83.6A reads as rewritten: 9
"§ 115C-83.6A. Approval of literacy intervention plans. 10
(a) Each local school administrative unit shall submit to the Department of Public 11
Instruction a plan for the literacy interventions interventions for kindergarten through eighth 12
grade it will offer, including reading camps, in the following school year no later than October 13
1. The plan shall include information about the local school administrative unit's efforts to staff 14
reading camps with the most qualified teachers possible, including the unit's efforts to attract 15
teachers associated with high growth in reading based on EVAAS data and teachers who have 16
earned a reading bonus. The plan shall incorporate any feed back received from the Department 17
on the previous year's plan. As part of their plans, local school administrative units are 18
encouraged to partner with other local school administrative units and with community 19
organizations to enhance literacy interventions." 20
SECTION 7.4.(b) Allotment. – To the extent funds are made available for this 21
purpose, the Department of Public Instruction shall use funds appropriated in this act to contract 22
with Lexia Learning to provide Lexia Aspire® Professional Learning to all English-Language 23
Arts, Math, Science and Social Studies teachers in sixth, seventh, and eighth grades. 24
25
EXPAND USE OF DIAGNOSTIC READING ASSESSMENTS TO GRADES 4-5 26
SECTION 7.5.(a) G.S. 115C-83.3 reads as rewritten: 27
"§ 115C-83.3. Definitions. 28
The following definitions apply in this Part: 29
(1) "Accelerated reading class" means a class where focused literacy 30
interventions are provided to increase a student's reading level at least two 31
grades in one school year. 32
(2) "Alternative assessment" means a valid and re liable standardized assessment 33
of reading comprehension, approved by the State Board of Education, that is 34
not the same test as the State -approved standardized test of reading 35
comprehension administered to third grade students. The State Board of 36
Education shall provide the valid and reliable alternative assessment to local 37
school administrative units public school units upon request and establish 38
achievement level ranges for the approved alternative assessment. The State 39
Board of Education shall annually review the alternative assessment to ensure 40
ongoing relevance, validity, and reliability." 41
SECTION 7.5.(b) G.S. 115C-83.6 reads as rewritten: 42
"§ 115C-83.6. Facilitating early grade reading proficiency. 43
(a) Kindergarten, first, second, and third through fifth grade students shall be assessed 44
with valid, reliable, formative, and diagnostic reading assessments made available to local school 45
administrative units public school units by the State Board of Education pursuant to 46
G.S. 115C-174.11(a). Difficulty with reading development identified through administration of 47
formative and diagnostic assessments shall be addressed with literacy interventions outlined in 48
the student's Individual Reading Plan. Parents or guardians of first and second grade students 49
offered a reading camp as a literacy intervention shall be encouraged to enroll their student in the 50
reading camp provided by the local school administrative unit. Parents or guardians of a student 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 15
identified as demonstrating reading comprehension below grade level shall make the final 1
decision regarding a student's reading camp attendance. 2
… 3
(a2) The Department of Public Instruction shall provide for EVAAS analysis all formative 4
and diagnostic assessment data collected pursuant to this section for kindergarten through third 5
fifth grade. The Department shall use a uniform template for all data collected, and the template 6
shall be used each time data is provided. The template shall include clear designations for each 7
data component reported." 8
SECTION 7.5.(c) G.S. 115C-83.6B reads as rewritten: 9
"§ 115C-83.6B. Individual Reading Plans. 10
(a) An Individual Reading Plan (IRP) shall be developed for any student in kindergarten 11
through third eighth grade demonstrating difficulty with reading development based on the 12
results of either (i) the first diagnostic or formative assessment of the school year or (ii) the first 13
diagnostic or formative assessment of the second semester of the school year . The IRP shall be 14
continually adjusted based on multiple data sources as prescribed by the Department of Public 15
Instruction, indicating that the student is not progressing toward grade -level standards in one or 16
more major reading areas. Based on the most recentl y collected data, the IRP shall include the 17
following information, specific to the identified student: 18
(1) The specific reading skill deficiencies identified by assessment data. 19
(2) Goals and benchmarks for growth. 20
(3) The means by which progress will be monitored and evaluated. 21
(4) The specific additional literacy interventions the student will receive. 22
(5) The Science of Reading -based instructional programming the teacher will 23
implement. 24
(6) Any additional services the teacher deems appropriate to acceler ate the 25
student's reading skill and development." 26
27
SCHOOL PERFORMANCE GRADE REDESIGN 28
SECTION 7.6.(a) Program Established; Purpose. – There is established the School 29
Performance Grade Redesign Pilot Program (Program) for the 2025 -2027 biennium. The 30
Program shall be composed of a small group of school units and expanded to all K -12 schools 31
receiving public funds in the 2027-28 school year. The purpose of the Program is to improve the 32
school performance grade process to provide more transparent and comprehens ive information 33
about school performance to parents, students, and administrators. School performance grades 34
will continue to be issued pursuant to G.S. 115C-83.15 during the pilot program. 35
SECTION 7.6.(b) School Performance Grade Criteria. – The Department of Public 36
Instruction shall develop and publish criteria to be used for school performance grades in the 37
Program. 38
SECTION 7.6.(c) Application for Program. – Public school units interested in 39
participating in the Program shall notify the Department, and the Department shall establish a 40
process for selecting schools to participate. The Department shall select one charter school, one 41
local school administrative unit, and one private school that receives state funds to participate in 42
the Program from each State Board of Education region, balancing characteristics of the school 43
units to represent the diversity of the State. 44
SECTION 7.6.(d) Interim Reporting. – Each school unit participating in the Program 45
shall report to the Department on the criteria developed pursuant to subsection (b) of this section 46
by the deadline established by the Department. 47
SECTION 7.6.(e) Department Reporting. – The Department shall report to the Joint 48
Legislative Oversight Committee and the Office of State Budget and Management by November 49
1, 2026, on the status and progress of the Program. A copy of the report shall be distributed to all 50
General Assembly Of North Carolina Session 2025
Page 16 Senate Bill 440-First Edition
local superintendents and principals in public school units participating in the Program. The 1
report shall include at least the following: 2
(1) Any difficulties in collecting data or information required by the Program. 3
(2) Any recommended changes to the Program. 4
(1) Any other information the Department deems relevant to the performance of the 5
Program. 6
(2) Any other information requested by the committee. 7
SECTION 7.6.(f) Statewide Expansion of the Program. – Beginning with the 8
2027-28 school year, the Program shall be expanded to all K-12 schools in the State that receive 9
public funds. All participating schools shall provide the information required by the Program. 10
SECTION 7.6.(g) Final Reporting. – Each participating school unit, as part of the 11
Program, shall report to the Department on the criteria developed pursuant to subsection (a) of 12
Section 2 of this act by the deadline established by the Department. 13
SECTION 7.6.(h) Final Department Reporting. – The Department shall submit a 14
final report to the Joint Legislative Oversight Committee by June 30, 2027, on the outcomes of 15
the Program. A copy of the report shall be distributed to local superintendents and principals in 16
all participating schools. The report shall include at least the following: 17
(1) Any continued difficulties in collecting data or information required by the 18
Program. 19
(2) Any recommended changes to the criteria developed by the Program. 20
(3) Any other information the Department deems relevant to the performance of the 21
Program. 22
(4) The model and scale that the Department would use to assign school performance 23
grades from the criteria developed for the Program. 24
(5) Any recommended legislation for implementing the Program permanently to 25
replace the existing school performance grade system. 26
(6) Any other information requested by the committee. 27
SECTION 7.6.(i) Intention of General Assembly. – It is the intention of the General 28
Assembly that after any statutory changes made pursuant to subsection (h) of this section, school 29
performance measures be issued that are based on the results of the pilot, that more heavily 30
weight growth than the current score, and that comply with federal requirements, including those 31
in the Every Student Succeeds Act. 32
33
PART VIIA. COMPENSATION OF PUBLIC SCHOOL EMPLOYEES 34
35
TEACHER SALARY SCHEDULE 36
SECTION 7A.1.(a) The following monthly teacher salary schedule shall apply for 37
the 2025-26 fiscal year to licensed personnel of the public schools who are classified as teachers. 38
The salary schedule is based on years of teaching experience. 39
2025-2026 Teacher Monthly Salary Schedule 40
Years of Experience "A" Teachers 41
0 4,450 42
1 4,530 43
2 4,610 44
3 4,690 45
4 4,770 46
5 4,850 47
6 4,930 48
7 5,010 49
8 5,090 50
9 5,170 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 17
10 5,250 1
11 5,330 2
12 5,410 3
13 5,490 4
14 5,570 5
15-24 5,588 6
25+ 5,795 7
SECTION 7A.1.(b) The following monthly teacher salary schedule shall apply for 8
the 2026 -2027 fiscal year to licensed personnel of the public schools who are classified as 9
teachers. The salary schedule is based on years of teaching experience. 10
2026-2027 Teacher Monthly Salary Schedule 11
Years of Experience "A" Teachers 12
0 5,120 13
1 5,160 14
2 5,200 15
3 5,240 16
4 5,280 17
5 5,320 18
6 5,360 19
7 5,400 20
8 5,440 21
9 5,480 22
10 5,520 23
11 5,560 24
12 5,600 25
13 5,640 26
14 5,680 27
15-24 5,720 28
25+ 5,920 29
SECTION 7A.1.(c) Salary Supplements for Teachers Paid on This Salary Schedule. 30
(1) Licensed teachers who have NBPTS certification shall receive a salary 31
supplement each month of twelve percent (12%) of their monthly salary on 32
the "A" salary schedule. 33
(2) Licensed teachers who are classified as "M" teachers shall receive a salary 34
supplement each month of ten percent (10%) of their monthly salary on the 35
"A" salary schedule. 36
(3) Licensed teachers with licensure based on academic preparation at the 37
six-year degree level shall receive a salary supplement of one hundred 38
twenty-six dollars ($126.00) per month in addition to the supplement provided 39
to them as "M" teachers. 40
(4) Licensed teachers with licensure based on academic preparation at the 41
doctoral degree level shall receive a salary supplement of two hundred 42
fifty-three dollars ($253.00) per month in addition to the supplement provided 43
to them as "M" teachers. 44
(5) Certified school nurses shall receive a salary supplement each month of ten 45
percent (10%) of their monthly salary on the "A" salary schedule. 46
(6) School counselors who are licensed as counselors at the master's degree level 47
or higher shall receive a salary supplement each month of one hundred dollars 48
($100.00). 49
General Assembly Of North Carolina Session 2025
Page 18 Senate Bill 440-First Edition
SECTION 7A.1.(d) For school psychologists, school speech pathologists who are 1
licensed as speech pathologists at the master's degree level or higher, and school audiologists 2
who are licensed as audiologists at the master's degree level or higher, the following shall apply: 3
(1) The first step of the salary schedule shall be equivalent to the sixth step of the 4
"A" salary schedule. 5
(2) These employees shall receive the following salary supplements each month: 6
a. Ten percent (10%) of their monthly salary, excluding the supplement 7
provided pursuant to sub-subdivision b. of this subdivision. 8
b. Three hundred fifty dollars ($350.00). 9
(3) These employees are eligible to receive salary supplements equivalent to those 10
of teachers for academic preparation at the six -year degree level or the 11
doctoral degree level. 12
(4) The twenty -sixth step of the salary schedule shall be seven and one -half 13
percent (7.5%) higher than the salary received by these same employees on 14
the twenty-fifth step of the salary schedule. 15
SECTION 7A.1.(e) Beginning with the 2014-2015 fiscal year, in lieu of providing 16
annual longevity payments to teachers paid on the teacher salary schedule, the amounts of those 17
longevity payments are included in the monthly amounts under the teacher salary schedule. 18
SECTION 7A.1.(f) A teacher compensated in accordance with this salary schedule 19
for the 2025 -26 and 2026 -27 school year shall receive an amount equal to the greater of the 20
following: 21
(1) The applicable amount on the salary schedule for the applicable school year. 22
(2) For teachers who w ere eligible for longevity for the 2013 -2014 school year, 23
the sum of the following: 24
a. The salary the teacher received in the 2013-2014 school year pursuant 25
to Section 35.11 of S.L. 2013-360. 26
b. The longevity that the teacher would have received under the longevity 27
system in effect for the 2013 -2014 school year provided in Section 28
35.11 of S.L. 2013-360 based on the teacher's current years of service. 29
c. The annual bonus provided in Section 9.1(e) of S.L. 2014-100. 30
(3) For teachers who were not eligible for longevity for the 2013 -2014 school 31
year, the sum of the salary and annual bonus the teacher received in the 32
2014-2015 school year pursuant to Section 9.1 of S.L. 2014-100. 33
SECTION 7A.1.(g) As used in this section, the term "teacher" shall also include 34
instructional support personnel. 35
36
RESTORE MASTER'S PAY 37
SECTION 7A.2.(a) The following session laws are repealed: 38
(1) Section 8.22 of S.L. 2013-360. 39
(2) Section 8.3 of S.L. 2014-100. 40
SECTION 7A.2.(b) G.S. 115C-302.10 reads as rewritten: 41
"§ 115C-302.10. Qualifications for certain education-based salary supplements. 42
(a) Notwithstanding any other provision of law, only the following teachers and 43
instructional support personnel shall be paid on the "M" salary schedule or receive a salary 44
supplement for academic preparation at the six-year degree level or at the doctoral degree level: 45
(1) Certified school nurses and instructional support personnel in positions for 46
which a master's degree is required for licensure. 47
(2) Teachers and instructional support personnel who were paid on the "M" salary 48
schedule or received that salary supplement prior to the 2014-15 school year. 49
(3) Teachers and instructional support personnel who (i) complete a degree at the 50
master's, six-year, or doctoral degree level for which they completed at least 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 19
one course prior to August 1, 2013, and (ii) would have qualified for the salary 1
supplement pursuant to State Board of Education policy, TCPA006, as it was 2
in effect on June 30, 2013. 3
(4) Teachers who do not qualify under subdivisions (1), (2), and (3) of this section 4
but who spend at least seventy percent (70%) of their time as follows: 5
a. For teachers, in classroom instruction related to their graduate 6
academic preparation in their field or subject area within their area of 7
licensure. Most of the teachers' remaining time shall be spent in one or 8
more of the following: 9
1. Mentoring teachers. 10
2. Performing demonstration lessons for teachers. 11
3. Writing curricula. 12
4. Developing and leading staff development programs for 13
teachers 14
b. For instructional support personnel, performing work within the 15
employee's area of graduate academic preparation. 16
(b) Beginning with the 2025-2026 fiscal year and in subsequent fiscal years, for teachers 17
who are paid on the "M" salary schedule under subdivision (4) of subsection (a) of this act, 18
determination of whether teachers shall be paid on the "M" salary schedule or receive a salary 19
supplement for academic preparation shall take place on an annual basis. Teachers may be moved 20
off the "M" salary schedule or discontinue receiving salary supplements if they are not meeting 21
the requirements of subdivision (4) of subsection (a) of this act in that year. 22
(c) Unless an individual otherwise qualifies under subdivision (2) or (3) of subsection (a) 23
of this section, teachers and instructional support personnel who earn an advanced degree in 24
school administration shall not be paid on the "M" salary schedule or receive a salary supplement 25
for academic preparation." 26
27
CONSOLIDATED TEACHER BONUS PROGRAM 28
SECTION 7A.3.(a) Establish Consolidated Bonus Program. – The State Board of 29
Education shall establish a consolidated teacher bonus program for the 2025 -2027 fis cal 30
biennium to reward teacher performance and encourage student learning and improvement. To 31
attain this goal, the Department of Public Instruction shall administer bonus pay to qualifying 32
teachers whose salaries are supported from State funds in January of 2026 and 2027, based on 33
data from the 2024 -2025 and 2025 -2026 school years, respectively, in accordance with this 34
section. 35
SECTION 7A.3.(b) Definitions. – For purposes of this section, the following 36
definitions shall apply: 37
(1) Eligible advanced course teacher. – A teacher of Advanced Placement 38
courses, International Baccalaureate Diploma Programme courses, or the 39
Cambridge Advanced International Certificate of Education (AICE) program 40
who meets the following criteria: 41
a. Is employed by, or retired havi ng last held a position at, one or more 42
of the following: 43
1. A qualifying public school unit. 44
2. The North Carolina Virtual Public School program. 45
b. Taught one or more students who received a score listed in subsection 46
(c) of this section. 47
(2) Eligible career and technical education (CTE) teacher. – A teacher who meets 48
the following criteria: 49
a. Is employed by, or retired having last held a position at, a qualifying 50
public school unit. 51
General Assembly Of North Carolina Session 2025
Page 20 Senate Bill 440-First Edition
b. Taught one or more students who attained approved industry 1
certifications or credentials consistent with G.S. 115C-156.2. 2
(3) Eligible growth teacher. – A teacher who meets at least one of the following 3
criteria: 4
a. Is employed by, or retired having last held a position at, a qualifying 5
public school unit and meets one of the following criteria: 6
1. Is in the top twenty-five percent (25%) of teachers in the State 7
according to the EVAAS student growth index score for third 8
grade reading from the previous school year. 9
2. Is in the top twenty-five percent (25%) of teachers in the State 10
according to the EVAAS student growth index score for fourth 11
or fifth grade reading from the previous school year. 12
3. Is in the top twenty-five percent (25%) of teachers in the State 13
according to the EVAAS student growth index score for fourth, 14
fifth, sixth, seventh, or eighth grade mathematics from the 15
previous school year. 16
b. Is employed by, or retired having last held a position at, a local school 17
administrative unit and meets one of the following criteria: 18
1. Is in the top twenty -five percent (25%) of teachers in the 19
teacher's respective local school administrative unit according 20
to the EVAAS student growth index score for third grade 21
reading from the previous school year. 22
2. Is in the top twenty -five percent (25%) of teachers in the 23
teacher's respective local school administrative unit according 24
to the EVAAS student growth index score for fourth or fifth 25
grade reading from the previous school year. 26
3. Is in the top twenty -five percent (25%) of teachers in the 27
teacher's respective local school administrative unit according 28
to the EVAAS student growth index score for fourth, fifth, 29
sixth, seventh, or eighth grade mathematics from the previous 30
school year. 31
c. Was employed by a local school administrative unit that employed in 32
the previous school year three or fewer total teachers in that teacher's 33
grade level as long as the teacher has an EVAAS student growth index 34
score from the previous school year of exceeded expected growth in 35
one of the following subject areas: 36
1. Third grade reading. 37
2. Fourth or fifth grade reading. 38
3. Fourth, fifth, sixth, seventh, or eighth grade mathematics. 39
(4) EVAAS. – The Education Value-Added Assessment System. 40
(5) Qualifying public school unit. – Any of the following: 41
a. A local school administrative unit. 42
b. A charter school. 43
c. A regional school. 44
d. A school providing elementary or secondary instruction operated by 45
The University of North Carolina under Article 29A of Chapter 116 of 46
the General Statutes. 47
(6) Qualifying teacher. – An eligible teacher who meets one of the following 48
criteria: 49
a. Remains employed teaching in the same qualifying public school unit, 50
or, if an eligible advanced course teacher is only employed by the 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 21
North Carolina Virtual Public School program, remains employed 1
teaching in that program, at least from the school year the data is 2
collected until January 1 of the corresponding school year that the 3
bonus is paid. 4
b. Retired, between the last day of the school year in which the data is 5
collected and January 1 of the corresponding school year in which the 6
bonus is paid, after attaining one of the following: 7
1. The age of at least 65 with five years of creditable service. 8
2. The age of at least 60 with 25 years of creditable service. 9
3. Thirty years of creditable service. 10
SECTION 7A.3.(c) Advanced Course Bonuses. – A bonus in the amount of fifty 11
dollars ($50.00) shall be provided to qualifying advanced course teachers for each student taught 12
in each advanced course who receives the following score: 13
(1) For Advanced Placement courses, a s core of three or higher on the College 14
Board Advanced Placement Examination. 15
(2) For International Baccalaureate Diploma Programme courses, a score of four 16
or higher on the International Baccalaureate course examination. 17
(3) For the Cambridge AICE program, a score of "E" or higher on the Cambridge 18
AICE program examinations. 19
SECTION 7A.3.(d) CTE Bonuses. – For qualifying career and technical education 20
teachers, bonuses shall be provided in the following amounts: 21
(1) A bonus in the amount of twenty-five dollars ($25.00) for each student taught 22
by a teacher who provided instruction in a course that led to the attainment of 23
an industry certification or credential with a twenty-five dollar ($25.00) value 24
ranking as determined under subsection (e) of this section. 25
(2) A bonus in the amount of fifty dollars ($50.00) for each student taught by a 26
teacher who provided instruction in a course that led to the attainment of an 27
industry certification or credential with a fifty dollar ($50.00) value ranking 28
as determined under subsection (e) of this section. 29
SECTION 7A.3.(e) CTE Course Value Ranking. – The Department of Commerce, 30
in consultation with the State Board, shall assign a value ranking for each industry certification 31
and credential based on academic rigor and employment value in accordance with this subsection. 32
Fifty percent (50%) of the ranking shall be based on academic rigor and the remaining fifty 33
percent (50%) on employment value. Academic rigor and employment value shall be based on 34
the following elements: 35
(1) Academic rigor shall be based on the number of instructional hours, including 36
work experience or internship hours, required to earn the industry certification 37
or credential, with extra weight given for coursework that also provides 38
community college credit. 39
(2) Employment value shall be based on the entry wage, growth rate in 40
employment for each occupational category, and average annual openings for 41
the primary occupation linked with the industry certification or credential. 42
SECTION 7A.3.(f) Statewide Growth Bonuses. – Of the funds appropriated in this 43
act for the program, bonuses shall be provided to qualifying teachers who are eligible teachers 44
under sub-subdivision a. of subdivision (3) of subsection (b) of this section, as follows: 45
(1) The sum of five million dollars ($5,000,000) shall be allocated for bonuses to 46
eligible teachers under sub -sub-subdivision a.1. of subdivision (3) of 47
subsection (b) of this section. These funds shall be distributed equally among 48
qualifying teachers. 49
General Assembly Of North Carolina Session 2025
Page 22 Senate Bill 440-First Edition
(2) A bonus in the a mount of two thousand dollars ($2,000) shall be awarded to 1
each qualifying teacher who is an eligible teacher under sub -sub-subdivision 2
a.2. of subdivision (3) of subsection (b) of this section. 3
(3) A bonus in the amount of two thousand dollars ($2,000) sh all be awarded to 4
each qualifying teacher who is an eligible teacher under sub -sub-subdivision 5
a.3. of subdivision (3) of subsection (b) of this section. 6
SECTION 7A.3.(g) Local Growth Bonuses. – Of the funds appropriated in this act 7
for the program, bonuses shall be provided to eligible teachers under sub -subdivisions b. and c. 8
of subdivision (3) of subsection (b) of this section, as follows: 9
(1) The sum of five million dollars ($5,000,000) shall be allocated for bonuses to 10
eligible EVAAS teachers under su b-sub-subdivisions b.1. and c.1. of 11
subdivision (3) of subsection (b) of this section. These funds shall be divided 12
proportionally based on average daily membership in third grade for each 13
local school administrative unit and then distributed equally among qualifying 14
third grade reading teachers in each local school administrative unit. 15
(2) A bonus in the amount of two thousand dollars ($2,000) shall be awarded to 16
each qualifying teacher who is an eligible teacher under sub -sub-subdivision 17
b.2. or c.2. of subdivision (3) of subsection (b) of this section. 18
(3) A bonus in the amount of two thousand dollars ($2,000) shall be awarded to 19
each qualifying teacher who is an eligible teacher under sub -sub-subdivision 20
b.3. or c.3. of subdivision (3) of subsection (b) of this section. 21
SECTION 7A.3.(h) Limitations and Other Criteria. – The following additional 22
limitations and other criteria shall apply to the program: 23
(1) Bonus funds awarded to a teacher pursuant to subsection (c), subsection (d), 24
subdivision (1) of subsection (f), and subdivision (1) of subsection (g) of this 25
section shall not exceed three thousand five hundred dollars ($3,500) per 26
subsection or subdivision in any given school year. 27
(2) A qualifying teacher who is an eligible teacher under sub-sub-subdivision a.1., 28
b.1., or c.1. of subdivision (3) of subsection (b) of this section may receive a 29
bonus under both subdivision (1) of subsection (f) and subdivision (1) of 30
subsection (g) of this section but shall not receive more than seven thousand 31
dollars ($7,000) pursuant to subdivision (1) of subsection (f) and subdivision 32
(1) of subsection (g) of this section in any given school year. 33
(3) A qualifying teacher who is an eligible teacher under sub-sub-subdivision a.2., 34
b.2., or c.2. of subdivision (3) of sub section (b) of this section may receive a 35
bonus under both subdivision (2) of subsection (f) and subdivision (2) of 36
subsection (g) of this section but shall not receive more than two bonuses 37
pursuant to subdivision (2) of subsection (f) and subdivision (2) of subsection 38
(g) of this section in any given school year. 39
(4) A qualifying teacher who is an eligible teacher under sub-sub-subdivision a.3., 40
b.3., or c.3. of subdivision (3) of subsection (b) of this section may receive a 41
bonus under both subdivision (3) of subsection (f) and subdivision (3) of 42
subsection (g) of this section but shall not receive more than two bonuses 43
pursuant to subdivision (3) of subsection (f) and subdivision (3) of subsection 44
(g) of this section in any given school year. 45
SECTION 7A.3.(i) Bonuses Not Compensation. – Bonuses awarded to a teacher 46
pursuant to this section shall be in addition to any regular wage or other bonus the teacher receives 47
or is scheduled to receive. Notwithstanding G.S. 135-1(7a), the bonuses awarded under thi s 48
section are not compensation under Article 1 of Chapter 135 of the General Statutes, Retirement 49
System for Teachers and State Employees. 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 23
SECTION 7A.3.(j) Study and Report. – The State Board of Education shall study 1
the effect of the program on teacher performance and retention. The State Board shall report the 2
results of its findings and the amount of bonuses awarded to the President Pro Tempore of the 3
Senate, the Speaker of the House of Representatives, the Joint Legislative Education Oversight 4
Committee, the Office of State Budget and Management, and the Fiscal Research Division by 5
March 15 of each year of the 2025-2027 fiscal biennium. The report shall include, at a minimum, 6
the following information: 7
(1) Number of students enrolled and taking examinations in each of the following 8
categories of courses: 9
a. Advanced Placement. 10
b. International Baccalaureate Diploma Programme. 11
c. Cambridge AICE program. 12
d. Courses needed for the attainment of an industry certification or 13
credential. 14
(2) Number of students receiving outcomes on examinations resulting in the 15
award of a bonus for a teacher in each category of courses identified in 16
sub-subdivision a. of subdivision (1) of this subsection. 17
(3) Number of teachers receiving a bonus in each category of courses ide ntified 18
in sub-subdivision a. of subdivision (1) of this subsection. 19
(4) The amounts awarded to teachers for each category of courses identified in 20
sub-subdivision a. of subdivision (1) of this subsection. 21
(5) The type of industry certifications and credentials earned by the students, the 22
value ranking for each certification and credential, the number of bonuses 23
earned for each certification or credential, and the total bonus amount awarded 24
for each certification or credential. 25
(6) Average bonus amount awarded to each qualifying teacher who is an eligible 26
teacher under sub -sub-subdivision a.1., b.1., or c.1. of subdivision (3) of 27
subsection (b) of this section. 28
(7) The percentage of teachers who received a bonus pursuant to this section and 29
were eligible to receive a bonus for teaching in the same grade level or course 30
in January 2024 or January 2025, or both, where applicable, pursuant to one 31
of the following programs: 32
a. The Advanced Course and CTE Bonus Program provided in Section 33
7A.4 of S.L. 2021-180. 34
b. The Growth-Based Teacher Bonus Program provided in Section 7A.2 35
of S.L. of 2022-74. 36
(8) The percentage of teachers who received a bonus pursuant to this section and 37
received a bonus for teaching in the same grade level or course in either 38
January 2024 or January 2025 pursuant to one of the programs listed in 39
subdivision (7) of this subsection. 40
(9) The percentage of teachers who received a bonus pursuant to this section and 41
received a bonus for teaching in the same grade level or course in January 42
2024 or January 2025, or both, where applicable, pursuant to one of the 43
programs listed subdivision (7) of this subsection. 44
(10) The statistical relationship between a teacher receiving a bonus in January 45
2024 or 2025 pursuant to this section and receiving a bonus pursuant to a 46
predecessor bonus program. For purposes of this subdivision, the following 47
are predecessor programs: 48
a. Bonuses awarded pursuant to Section 7A.4(c) of S.L. 2021 -180 are 49
predecessors to bonuses awarded pursuant to subsection (c) of this 50
section. 51
General Assembly Of North Carolina Session 2025
Page 24 Senate Bill 440-First Edition
b. Bonuses awarded pursuant to Section 7A.4(d) of S.L. 2021 -180 are 1
predecessors to bonuses awarded pursuant to subsection (d) of this 2
section. 3
c. Bonuses awarded pursuant to subdivision (1) of subsection (c) and 4
subdivision (1) of subsection (d) of Se ction 7A.2 of S.L. 2022-74 are 5
predecessors to bonuses awarded pursuant to subdivision (1) of 6
subsection (f) and subdivision (1) of subsection (g) of this section. 7
d. Bonuses awarded pursuant to subdivision (2) of subsection (c) and 8
subdivision (2) of subsection (d) of Section 7A.2 of S.L. 2022 -74 are 9
predecessors to bonuses awarded pursuant to subdivision (2) of 10
subsection (f) and subdivision (2) of subsection (g) of this section. 11
e. Bonuses awarded pursuant to subdivision (c)(3) and subdivision (d)(3) 12
of Section 7A.2 of S.L. 2022-74 are predecessors to bonuses awarded 13
pursuant to subdivision (3) of subsection (f) and subdivision (3) of 14
subsection (g) of this section. 15
(11) The distribution of statewide and local growth bonuses awarded pursuant to 16
this section as among qualifying public school units and, where applicable, 17
schools within those units. 18
19
SUPPLEMENTAL FUNDS FOR TEACHER COMPENSATION 20
SECTION 7A.4.(a) Use of Funds. – For each year of the 2025-2027 fiscal biennium, 21
except as provided in subsection (f1) of this section, the State Board of Education shall allocate 22
funds pursuant to this section to eligible local school administrative units to provide salary 23
supplements to teachers and qualifying school administrators in those units. Allocation of salary 24
supplements among teachers and qualifying school administrators within each eligible local 25
school administrative unit, including whether a teacher or qualifying school administrator 26
receives a salary supplement and the amount of the supplement provided to that person, shall be 27
determined in the discretion of the local board of education of the eligible unit, except that no 28
individual salary supplement shall exceed the per teacher funding amount awarded to that unit 29
pursuant to subdivision (4) of subsection (c) of this section. 30
SECTION 7A.4.(b) Definitions. – As used in this section, the following definitions 31
shall apply: 32
(1) Adjusted market value of taxable real property. – A county's assessed taxable 33
real property value, using the latest available data published by the 34
Department of Revenue, divided by the county's sales assessment ratio 35
determined under G.S. 105-289(h). 36
(2) Composite value. – For each eligible county, the sum of the following: 37
a. The taxable real property factor multiplied by sixty -five percent 38
(65%). 39
b. The median household income factor multiplied by twenty -five 40
percent (25%). 41
c. The effective tax rate factor multiplied by ten percent (10%). 42
(3) County allocation factor. – For each eligible county, the supplement factor for 43
that county divided by the sum of all supplement factors for the State. 44
(4) Effective tax rate. – The actual county tax rate multiplied by the most recent 45
annual sales assessment ratio for that county. 46
(5) Effective tax rate factor. – For each eligible county, the ef fective tax rate for 47
that county divided by the median effective tax rate in the State. 48
(6) Eligible county. – A county that has an adjusted market value of taxable real 49
property of less than fifty billion nine hundred million dollars 50
($50,900,000,000). 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 25
(7) Eligible local school administrative unit. – A local school administrative unit 1
located in whole or in part in an eligible county. 2
(8) Eligible school. – A public school that is located in an eligible county and 3
governed by a local school administrative unit. 4
(9) Maintenance of effort amount. – For each local school administrative unit in 5
each fiscal year, the supplant factor multiplied by the total State and non-State 6
funds expended for salaries for teachers from the fiscal year for which the 7
most recent salary data are available. 8
(10) Median household income. – A county's median household income for the 9
most recent 12 months for which data are available, as that term is used in 10
G.S. 143B-437.08. 11
(11) Median household income factor. – For each eligible co unty, the median 12
household income in the State divided by the median household income for 13
that county. 14
(12) Non-State funds. – Any funds held by a local school administrative unit, other 15
than nonrecurring federal funds received as a result of legislation e nacted by 16
Congress in response to COVID19, that are not State funds. 17
(13) Qualifying school administrator. – Any of the following: 18
a. Assistant principals paid pursuant to G.S. 115C-285(a)(8). 19
b. Principals paid pursuant to G.S. 115C-285(a)(8a). 20
(14) Supplant factor. – For each local school administrative unit in each fiscal year 21
of the fiscal biennium, the total non -State funds expended for salary 22
supplements for teachers in the 2020 -2021 fiscal year divided by the total 23
State and non-State funds expended for salaries for teachers in the 2020-2021 24
fiscal year. 25
(15) Supplement factor. – For each eligible county, the composite value multiplied 26
by the number of State -funded teachers employed in a school in the county 27
that is governed by a local school administrative unit. 28
(16) Taxable real property factor. – For each eligible county, the median adjusted 29
market value of taxable real property in the State divided by the adjusted 30
market value of taxable real property for that county. 31
(17) Teacher. – Teachers and instructional support personnel. 32
SECTION 7A.4.(c) Allocation of Funds. – The State Board of Education shall 33
allocate funds for salary supplements to eligible local school administrative units according to 34
the following procedure: 35
(1) County allocation. – For each eligible county, the State Board shall determine 36
a county allocation by multiplying the county allocation factor for that county 37
by the funding amount appropriated pursuant to this section for the applicable 38
fiscal year. 39
(2) Per teacher funding amount. – For each eligible county, the State Board shall 40
determine a per teacher funding amount by dividing the county allocation 41
amounts determined pursuant to subdivision (1) of this subsection by the total 42
number of State -funded teachers employed in al l eligible schools in that 43
county. 44
(3) Unit funding amount. – For each eligible local school administrative unit, the 45
State Board shall determine the funding amount for that unit based on the per 46
teacher funding amount or amounts for the eligible county or counties where 47
the unit is located. For each county with an eligible school governed by the 48
unit, the State Board shall multiply the applicable per teacher funding amount 49
for that county determined pursuant to subdivision (2) of this subsection by 50
the number of State -funded teachers employed in the eligible school in that 51
General Assembly Of North Carolina Session 2025
Page 26 Senate Bill 440-First Edition
county. If the unit is located in multiple eligible counties, the State Board shall 1
aggregate those amounts. 2
(4) Allocation and funding cap. – The State Board shall allocate the amount 3
determined pursuant to subdivision (3) of this subsection to each eligible local 4
school administrative unit for each applicable fiscal year, up to a maximum of 5
five thousand dollars ($5,000) per State-funded teacher. 6
SECTION 7A.4.(d) Charter Schools. – Funds appropriated to the Department of 7
Public Instruction pursuant to this section shall be subject to the allocation of funds for charter 8
schools described in G.S. 115C-218.105. The General Assembly encourages charter schools 9
receiving funds pursuant to this section to provide salary supplements to teachers and qualifying 10
school administrators in the charter school in accordance with the requirements of this section. 11
SECTION 7A.4.(e) Formula for Distribution of Supplemental Funding Pursuant to 12
this Section Only. – The formula in this section is solely a basis for distribution of supplemental 13
funding to eligible local school administrative units and is not intended to reflect any measure of 14
the adequacy of the educational program or funding for public schools. The formula is also not 15
intended to reflect any commitment by the General Assembly to appropriate any additional 16
supplemental funds for eligible local school administrative units. 17
SECTION 7A.4.(f) Non-supplant Requirement. – A local school administrative unit 18
that receives funds under this section shall use those funds to supplement non -State funds 19
provided for salary supplements for teachers and qualifying school administrators and shall not 20
use any State funds, including funds received under this sectio n or Section 7A.12 of S.L. 21
2021-180, to supplant non -State funds provided for salary supplements for teachers and 22
qualifying school administrators. For purposes of this section, a local school administrative unit 23
has supplanted non -State funds if the State Board finds that the amount of non -State funds 24
expended by the unit for salary supplements was less than ninety -five percent (95%) of the 25
maintenance of effort amount for the local school administrative unit. 26
SECTION 7A.4.(f1) Non-supplant Enforcement. – If the State Board of Education 27
determines that a local school administrative unit has supplanted non-State funds in violation of 28
subsection (f) of this section, the State Board of Education shall not allocate any funds under this 29
section to the unit. 30
SECTION 7A.4.(f2) Additional Penalty for Consecutive Supplanting. – It is the 31
intent of the General Assembly that the State Board of Education will not allocate supplemental 32
funds for teacher compensation to a local school administrative unit in the 2025-2026 fiscal year 33
if the State Board of Education determines that the local school administrative unit supplanted 34
non-State funds provided for salary supplements for teachers and qualifying school 35
administrators with State funds in the 2021 -2022 fiscal year and the 2022-2023 fiscal year. For 36
the 2021-2022 fiscal year, the State Board shall not deem a local school administrative unit to 37
have supplanted non -State funds for purposes of this subsection if the State Board determines 38
that the unit supplanted non-State funds solely with any State funds for which the allowable uses 39
include salary supplements for teachers or qualifying school administrators. 40
SECTION 7A.4.(g) Reports. – No later than April 15 of each year of the 2025-2027 41
fiscal biennium, the State Board of Education shall report the following information for the 42
applicable fiscal year to the Joint Legislative Education Oversight Committee and the Fiscal 43
Research Division: 44
(1) A list of all eligible counties and eligible local school administrative units. 45
(2) Funds allocated to each eligible local school administrative unit. 46
(3) The percentage and amount of teachers and qualifying school administrators 47
in each eligible local school administrative unit receiving salary supplements. 48
(4) The average salary su pplement amount in each eligible local school 49
administrative unit. 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 27
(5) The range of salary supplement amounts in each eligible local school 1
administrative unit. 2
(6) The effect of the salary supplements on the retention of teachers and 3
qualifying school administrators in eligible local school administrative units. 4
(7) The identity of any local school administrative unit that the State Board 5
determines has supplanted funds. 6
7
PRINCIPAL SALARY SCHEDULE 8
SECTION 7A.5.(a) The following annual salary schedule for principals shall apply 9
for the 2025-2026 fiscal year, beginning July 1, 2025. 10
2025-2026 Principal Annual Salary Schedule 11
Avg. Daily Membership Base Met Growth Exceeded Growth 12
0-200 $80,126 $88,137 $96,151 13
201-400 $84,131 $92,544 $100,958 14
401-700 $88,137 $96,952 $105,766 15
701-1,000 $92,145 $101,358 $110,574 16
1,001-1,600 $96,151 $105,766 $115,381 17
1,601+ $100,156 $110,172 $120,188 18
SECTION 7A.5.(b) The following annual salary schedule for principals shall apply 19
for the 2026-2027 fiscal year, beginning July 1, 2026. 20
2026-2027 Principal Annual Salary Schedule 21
Avg. Daily Membership Base Met Growth Exceeded Growth 22
0-200 $84,934 $93,425 $101,920 23
201-400 $89,179 $98,097 $107,015 24
401-700 $93,425 $102,769 $112,112 25
701-1,000 $97,674 $107,439 $117,208 26
1,001-1,600 $101,920 $112,112 $122,304 27
1,601+ $106,165 $116,782 $127,399 28
29
SECTION 7A.5.(c) A principal's placement on the salary schedule shall be 30
determined according to the average daily membership of the school supervised by the principal, 31
as described in subsection (b) of this section, and the school growth scores, calculated pursuant 32
to G.S. 115C-83.15(c), for each school the principal supervised in at least one of the prior two 33
school years, as described in subsection (c) of thi s section, regardless of a break in service, and 34
provided the principal supervised each school as a principal for at least a majority of the school 35
year, as follows: 36
(1) A principal shall be paid according to the Exceeded Growth column of the 37
schedule if t he school growth scores show the school or schools exceeded 38
expected growth in at least one of the prior two school years. 39
(2) A principal shall be paid according to the Met Growth column of the schedule 40
if any of the following apply: 41
a. The higher school growth score in one of the two prior school years 42
shows that the school met expected growth. 43
b. The principal supervised a school in the two prior school years that 44
was not eligible to receive a school growth score. 45
(3) A principal shall be paid according to the Base column if either of the 46
following apply: 47
a. The school growth scores show the school or schools did not meet 48
expected growth in either of the two prior years. 49
b. The principal has not supervised any school as a principal for a 50
majority of the school year in at least the two prior school years. 51
General Assembly Of North Carolina Session 2025
Page 28 Senate Bill 440-First Edition
SECTION 7A.5.(d) For purposes of determining the average daily membership of a 1
principal's school, the following amounts shall be used during the following time periods: 2
(1) For the 2025-2026 school year, placement on the schedule related to average daily 3
membership shall be based on the average daily membership for the school from 4
the 2024 -2025 school year. If the school did not have an average daily 5
membership in the 2024 -2025 school year, the projected ave rage daily 6
membership for the school for the 2025 -2026 school year shall be used between 7
July 1, 2025, and December 31, 2025, and the average daily membership for the 8
school shall be used between January 1, 2026 and June 30, 2026. 9
(2) For the 2026-2027 school year, placement on the schedule related to average daily 10
membership shall be based on the average daily membership for the school from 11
the 2025 -2026 school year. If the school did not have an average daily 12
membership in the 2025 -2026 school year, the proje cted average daily 13
membership for the school for the 2026 -2027 school year shall be used between 14
July 1, 2026 and December 31, 2026, and the average daily membership for the 15
school shall be used between January 1, 2027 and June 30, 2027. 16
SECTION 7A.5.(e) For purposes of determining the school growth scores for each 17
school the principal supervised in one or more prior school years, the following school growth 18
scores shall be used during the following time periods: 19
(1) For purposes of determining the school grow th scores for each principal in the 20
2025-2026 school year, school growth scores from the two most recent available 21
school years, up to the 2024-2025 school year, shall be used. 22
(2) For purposes of determining the school growth scores for each principal in the 23
2026-2027 school year, school growth scores from the two most recent available 24
school years, up to the 2025-2026 school year, shall be used. 25
SECTION 7A.5.(f) Beginning with the 2017 -2018 fiscal year, in lieu of providing 26
annual longevity payments to princ ipals paid on the principal salary schedule, the amounts of 27
those longevity payments are included in the annual amounts under the principal salary schedule. 28
SECTION 7A.5.(g) A principal compensated in accordance with this section for the 29
2025-2026 and 2026-27 fiscal year shall receive an amount equal to the greater of the following: 30
(1) The applicable amount determined pursuant to subsections (a) through (d) of 31
this section. 32
(2) For principals who were eligible for longevity in the 2016 -2017 fiscal year, 33
the sum of the following: 34
a. The salary the principal received in the 2016-2017 fiscal year pursuant 35
to Section 9.1 or Section 9.2 of S.L. 2016-94. 36
b. The longevity that the principal would have received as provided for 37
State employees under the North Carol ina Human Resources Act for 38
the 2016 -2017 fiscal year based on the principal's current years of 39
service. 40
(3) For principals who were not eligible for longevity in the 2016 -17 fiscal year, 41
the salary the principal received in the 2016 -2017 fiscal year pursu ant to 42
Section 9.1 or Section 9.2 of S.L. 2016-94. 43
44
BONUSES FOR PRINCIPALS 45
SECTION 7A.6.(a) The Department of Public Instruction shall administer a bonus 46
in the 2025-2026 fiscal year to any principal who supervised a school as a principal for a majority 47
of the previous school year if that school was in the top fifty percent (50%) of school growth in 48
the State during the previous school year, calculated by the State Board pursuant to 49
G.S. 115C-83.15(c), as follows: 50
2025-2026 Principal Bonus Schedule 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 29
Statewide Growth Percentage Bonus 1
Top 5% $15,000 2
Top 10% $10,000 3
Top 15% $5,000 4
Top 20% $2,500 5
Top 50% $1,000 6
A principal shall receive no more than one bonus pursuant to this subsection. The 7
bonus shall be paid at the highest amount for which the principal qualifies. 8
SECTION 7A.6.(b) The bonus awarded pursuant to this section shall be in addition 9
to any regular wage or other bonus the principal receives or is scheduled to receive. 10
SECTION 7A.6.(c) Notwithstanding G.S. 135-1(7a), the bonuses awarded pursuant 11
to this section are not compensation under Article 1 of Chapter 135 of the General Statutes, 12
Retirement System for Teachers and State Employees. 13
SECTION 7A.6.(d) It is the intent of the General Assembly that funds provided 14
pursuant to this section will supplement principal compensation and not supplant local funds. 15
SECTION 7A.6.(e) The bonus provided pursuant to this section shall be paid no 16
later than October 31, 2025, to qualifying principals employed as of October 1, 2025. 17
18
ASSISTANT PRINCIPAL SALARIES 19
SECTION 7A.7.(a) For the 2025 -2026 and 2026 -2027 fiscal years, assistant 20
principals shall receive a monthly salary based on the relevant salary schedule for teachers shown 21
in Section 7A.1(a) who are classified as "A" teachers plus nineteen percent (19% ). An assistant 22
principal shall be placed on the step on the salary schedule that reflects the total number of years 23
of experience as a certified employee of the public schools. For purposes of this section, an 24
administrator with a one -year provisional ass istant principal's certificate shall be considered 25
equivalent to an assistant principal. 26
SECTION 7A.7.(b) Assistant principals with certification based on academic 27
preparation at the six -year degree level shall be paid a salary supplement of one hundred 28
twenty-six dollars ($126.00) per month and at the doctoral degree level shall be paid a salary 29
supplement of two hundred fifty-three dollars ($253.00) per month. 30
SECTION 7A.7.(c) Participants in an approved full -time master's in school 31
administration program shall receive up to a 10-month stipend during the internship period of the 32
master's program. The stipend shall be at the beginning salary of an assistant principal or, for a 33
teacher who becomes an intern, at least as much as that person would earn as a teacher on the 34
teacher salary schedule. The North Carolina Principal Fellows Program or the school of education 35
where the intern participates in a full-time master's in school administration program shall supply 36
the Department of Public Instruction with certification of eligible fulltime interns. 37
SECTION 7A.7.(d) Beginning with the 2017-2018 fiscal year, in lieu of providing 38
annual longevity payments to assistant principals on the assistant principal salary schedule, the 39
amounts of those longevity payments are included in the monthly amounts provided to assistant 40
principals pursuant to subsection (a) of this section. 41
SECTION 7A.7.(e) An assistant principal compensated in accordance with this 42
section for the 2025 -2027 fiscal biennium shall receive an amount equal to the greater of the 43
following: 44
(1) The applicable amount determined pursuant to subsections (a) through (d) of 45
this section. 46
(2) For assistant principals who were eligible for longevity in the 2016-2017 fiscal 47
year, the sum of the following: 48
a. The salary the assistant principal received in the 2016-2017 fiscal year 49
pursuant to Section 9.1 or Section 9.2 of S.L. 2016-94. 50
General Assembly Of North Carolina Session 2025
Page 30 Senate Bill 440-First Edition
b. The longevity that the assistant principal would have received as 1
provided for State employees under the North Carolina Human 2
Resources Act for the 2016 -2017 fiscal year based on the assistant 3
principal's current years of service. 4
(3) For assistant principals who were not eligible for longevity in the 2016 -2017 5
fiscal year, the salary the assistant principal received in the 2016 -2017 fiscal 6
year pursuant to Section 9.1 or Section 9.2 of S.L. 2016-94. 7
8
CENTRAL OFFICE SALARIES 9
SECTION 7A.8.(a) For the 2025 -2026 fiscal year, beginning July 1, 2025, the 10
annual salary for superintendents, assistant superintendents, associate superintendents, 11
directors/coordinators, supervisors, and finance officers, whose salaries are supported from State 12
funds, shall be increased by three percent (3%). 13
SECTION 7A.8.(b) It is the intent of the General Assembly to increase the annual 14
salary fo r superintendents, assistant superintendents, associate superintendents, 15
directors/coordinators, supervisors, and finance officers, whose salaries are supported from State 16
funds, in the 2026-27 fiscal year, beginning July 1, 2026, by three percent (3%). 17
SECTION 7A.8.(c) The monthly salary maximums that follow apply to assistant 18
superintendents, associate superintendents, directors/coordinators, supervisors, and finance 19
officers for the 2025-2026 fiscal year, beginning July 1, 2025: 20
2025-2026 Fiscal Year 21
Maximum 22
School Administrator I $7,800 23
School Administrator II $8,265 24
School Administrator III $8,757 25
School Administrator IV $9,099 26
School Administrator V $9,463 27
School Administrator VI $10,023 28
School Administrator VII $10,424 29
The local board of education shall determine the appropriate category and placement 30
for each assistant superintendent, associate superintendent, director/coordinator, supervisor, or 31
finance officer within the maximums and within funds appropriated by the General Assembly 32
for central o ffice administrators and superintendents. The category in which an employee is 33
placed shall be included in the contract of any employee. 34
SECTION 7A.8.(d) The monthly salary maximums that follow apply to public 35
school superintendents for the 2025-2026 fiscal year, beginning July 1, 2025: 36
2025-2026 Fiscal Year 37
Maximum 38
Superintendent I $11,049 39
Superintendent II $11,707 40
Superintendent III $12,410 41
Superintendent IV $13,156 42
Superintendent V $13,947 43
The local board of education shall determine the appropriate category and placement 44
for the superintendent based on the average daily membership of the local school administrative 45
unit and within funds appropriated by the General Assembly for central office administrators and 46
superintendents. 47
SECTION 7A.8.(e) Longevity pay for superintendents, assistant superintendents, 48
associate superintendents, directors/coordinators, supervisors, and finance officers shall be as 49
provided for State employees under the North Carolina Human Resources Act. 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 31
SECTION 7A.8.(f) Superintendents, assistant superintendents, associate 1
superintendents, directors/coordinators, supervisors, and finance officers with certification based 2
on academic preparation at the six -year degree level shall receive a salary supplement of one 3
hundred twenty -six dollars ($126.00) per month in addition to the compensation provided 4
pursuant to this section. Superintendents, assistant superintendents, associate superintendents, 5
directors/coordinators, supervisors, and finance officers with certification based on ac ademic 6
preparation at the doctoral degree level shall receive a salary supplement of two hundred 7
fifty-three dollars ($253.00) per month in addition to the compensation provided for under this 8
section. 9
SECTION 7A.8.(g) The State Board of Education shall n ot permit local school 10
administrative units to transfer State funds from other funding categories for salaries for public 11
school central office administrators. 12
13
NON-CERTIFIED PERSONNEL SALARIES 14
SECTION 7A.9.(a) For the 2025 -2026 fiscal year, beginning Jul y 1, 2025, the 15
annual salary for non-certified public school employees whose salaries are supported from State 16
funds shall be increased as follows: 17
(1) For permanent, full-time employees on a 12-month contract, by three percent 18
(3%). 19
(2) For the following employees, by a prorated and equitable amount based on the 20
amount specified in subdivision (1) of this subsection: 21
a. Permanent, full -time employees on a contract for fewer than 12 22
months. 23
b. Permanent, part-time employees. 24
c. Temporary and permanent hourly employees. 25
26
PART VIII. THE UNIVERSITY OF NORTH CAROLINA SYSTEM 27
28
UNC PERFORMANCE FUNDING 29
SECTION 8. 1.(a) Part 1 of Article 1 of Chapter 116 of the General Statutes is 30
amended by adding a new section to read: 31
"§ 116‐11.5. Institutional performance accountability. 32
(a) Implementation of Accountability Measures and Performance Standards. ‐ The UNC 33
Board of Governors shall adopt and implement a system of accountability measures and 34
performance standards for the constituent institutions. At least once every three years, the Board 35
shall review, and revise, as necessary, the accountability measures and performance standards to 36
ensure that they are appropriate for use in recognition of successful institutional performance. 37
(b) Recognition of Successful Institutional Performance. ‐ Subject to the availability of 38
funds, the Board of Governors may allocate funds among constituent institutions based on the 39
evaluation of each institution's performance, including at least the following components: 40
(1) Performance change evaluated by determining a college 's rate of student 41
success on each measure as compared to an institution‐specific baseline and 42
goal. 43
(2) Institutional impact based on the number of degree completers. 44
The Board may also allocate funds to specific institutions warranting targeted 45
support to increase institutional performance or adapt to significant 46
enrollment changes. Institutions shall use funds allocated to it pursuant to this 47
subsection to support strategies to improve institutional performance. 48
(c) Reporting Requirement. – The UNC Board of Governors shall report annually on the 49
implementation of this section consistent with G.S. 116‐11(9b)." 50
51
General Assembly Of North Carolina Session 2025
Page 32 Senate Bill 440-First Edition
SECTION 8.1.(b) G.S. 116‐11 reads as rewritten: 1
"§ 116‐11. Powers and duties generally. 2
(9b) The Board of Governors shall report by February March 1 of each year to the 3
Joint Legislative Education Oversight Committee, the Senate Appropriations 4
Committee on Education/Higher Education, the House of Representatives 5
Appropriations Subcommittee on Education, and the Fiscal Research Division 6
on the actions and adjustments necessary to its budgetary policies, regulations, 7
and standards resulting from the Current Operations Appropriations Act for 8
the administration and operation of The University of North Carolina and the 9
distribution of State and federal funds to constituent institutions. The report 10
shall include at least the following information for each constituent institution: 11
a. Guidelines related to State salaries of University of North Carolina 12
employees, including range, median, and mean of faculty salaries at the 13
institution. 14
b. Budget allocations and reductions, including for operating expenses and 15
specific programs. 16
c. Distribution of additional State allocations for enrollment funding. 17
d. Use of State funds and budget flexibility. 18
e. Availability of federal funds. 19
f. Tuition and fees. 20
g. Composition of the student population at the institution, including 21
headcount enrollment and full -time student enrollment for both 22
undergraduate and graduate students, and aggregate data on residency 23
status, median household income, gender, race, and ethnicity. 24
h. Student retention and graduation rates. 25
i. Postsecondary educational attainment rate at the institution, including 26
comparison to statewide data. 27
j. A comparison to prior fiscal year expenditures and appropriations. 28
k. The total amount of mandatory student fee revenue collected by institution 29
and fee type. 30
l. Any source of student auxiliary revenue that represents greater than ten 31
percent (10%) of the overall student auxiliary revenue by ins titution and 32
revenue type. 33
m. Any source of sales revenue that represents greater than ten percent (10%) 34
of the overall student auxiliary revenue by institution and revenue type. 35
n. Institutional performance on accountability measures adopted by the 36
Board of Governors pursuant to G.S. 116-11.5." 37
38
COMPLETION ASSISTANCE PROGRAMS 39
SECTION 8.2.(a) For purposes of this section, the term "eligible constituent 40
institutions" refers to the following constituent institutions of The University of North Carolina: 41
(1) Elizabeth City State University 42
(2) Fayetteville State University 43
(3) NC Central University 44
(4) University of North Carolina at Pembroke 45
(5) Winston-Salem State University 46
SECTION 8.2.(b) The Board of Governors of The University of North Carolina 47
shall establish a Completion Assistance Program (Program) at each eligible constituent 48
institution. At a minimum, each Program shall meet the following criteria: 49
(1) A student enrolled in a Program established by this section may receive up to 50
one thousand dollars ($1,000) per academic semester under the Program to 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 33
pay for the costs of continuing attendance and earning necessary credit hours 1
at the eligible constituent institution. 2
(2) A student shall be eligible to receive funds under a Program if the student 3
meets at least the following requirements: 4
a. Needs financial assistance to remain enrolled at the eligible constituent 5
institution and earn credits necessary to graduate on time. 6
b. Is a resident for tuition purposes, as provided in G.S. 116‐143.1. 7
c. Meets satisfactory academic progress, as determined by the Board. 8
d. Has completed or is on track to complete at least 60 academic credit hours 9
by the end of the semester in which the funds are provided. 10
e. Has completed the Free Application for Federal Student Aid (FAFSA) for 11
the academic year in which the funds are provided. 12
f. Has an unpaid balance with the eligible constituent institution. This may 13
include an unpaid balance for tuition, fees, room, board, or other expenses 14
of attendance. 15
SECTION 8.2.(c) The Board of Governors of The University of North Carolina shall 16
report on each Completion Assistance Program established pursuant to this section to the Joint 17
Legislative Education Oversight Committee no later than March 15, 2027. The report shall 18
include, at a minimum, an analysis of the impact of each Program on the following: 19
(1) On‐time graduation rates. 20
(2) Student debt at graduation. 21
SECTION 8.2.(d) Of the funds appropriated in this act to the Board of Governors 22
of The University of North Carolina for Completion Assistance Programs, the Board shall 23
allocate funds to each eligible constituent institution of The University of North Carolina 24
proportional to the number of undergraduate students enrolled at each eligible constituent 25
institution who are residents of North Carolina and recipients of a federal Pell Grant. 26
27
EXPAND CHEATHAM‐WHITE SCHOLARSHIP PROGRAM 28
SECTION 8.3.(a) G.S. 116‐290 reads as rewritten: 29
"§ 116‐290. Cheatham‑White Scholarships; establishment and purpose; benefits. 30
(a) Scholarships Established; Purpose. – The Cheatham‐White Scholarships are 31
established as a merit scholarship program at North Carolina Agricultural and Technical State 32
University, and at North Carolina Central University, and Winston‐Salem State University. The 33
purpose of the scholarships is to provide an outstanding educational experience for students who 34
are exceptional scholars, versatile and well‐ rounded individuals with a broad range of interests, 35
and who are accomplished and proficient in areas of both the arts and the sciences. They must 36
also demonstrate leadership potential and a strong commitment to service. 37
(b) Scholarship Benefits. – Each scholarship is a fully funded four‐year scholarship that 38
covers the cost of all of the following: full tuition, student fees, housing, meals, textbooks, a 39
laptop, supplies, travel, and personal expenses. Each scholarship also provides four summers of 40
fully funded enrichment and networking opportunities that may include international travel and 41
study. 42
(c) Number of Scholarships Awarded. – Up to 50 150 scholarships, 40 120 for resident 43
students and 10 30 for nonresident students, may be awarded each academic year to students 44
admitted to North Carolina Agricultural and Technical State University. Up to 50 100 45
scholarships, 40 80 for resident students and 10 20 for nonresident students, may be awarded each 46
academic year to students admitted to North Carolina Central University. Up to 50 scholarships, 47
40 for resident students and 10 for nonresident students, may be awarded each academic year to 48
students admitted to Winston‐Salem State University." 49
SECTION 8.3.(b) G.S. 116‐292(a) reads as rewritten: 50
"§ 116‑292. Cheatham‑White Scholarships; eligibility and selection criteria. 51
General Assembly Of North Carolina Session 2025
Page 34 Senate Bill 440-First Edition
(a) Eligibility. – To be eligible to be nominated as a potential candidate for a Cheatham‐1
White Scholarship, a person must satisfy all of the following criteria: 2
(1) Be a competitive applicant for admission as a freshman in the fall semester 3
into a baccalaureate program at either North Carolina Agricultural and 4
Technical Stat e University , or North Carolina Central University , or 5
Winston-Salem State University. 6
(2) Be a United States citizen or permanent resident. 7
(3) Be on course to graduate from high school in the spring semester prior to 8
college admission." 9
SECTION 8.3.(c) G.S. 116‐294 reads as rewritten: 10
"§ 116‑294. Cheatham‑White Scholarships; administration of scholarships. 11
The University of North Carolina System Office shall administer the Cheatham‐White 12
Scholarships, in consultation and collaboration with North Carolina Agricultural and Technical 13
State University, and North Carolina Central University, and Winston‐Salem State University, 14
pursuant to policies adopted by the Board of Trustees of both constituent institutions. As part of 15
its administrative responsibilities, The University of North Carolina System Office, in 16
consultation and collaboration with North Carolina Agricultural and Technical State University, 17
and North Carolina Central University, and Winston‐Salem State University, shall do all of the 18
following: 19
(1) Design and implement an application and school nomination process to be 20
used to identify potential scholarship candidates and a process for awarding 21
the scholarships. 22
… 23
(9) Any other function necessary for the successful implementation o f the 24
Cheatham‐White Scholarships program and administration of the Cheatham‐25
White Scholarships Fund. (2016‐94, s.11.4(e); 2018‐12, s. 12.)" 26
27
NORTH CAROLINA SCHOOL OF SCIENCE AND MATH RECEIPT FLEXIBILITY 28
SECTION 8.4. G.S. 116-30.3A reads as rewritten: 29
"§ 116-30.3A. Availability of excess receipts. 30
Notwithstanding the provisions of Chapter 143C of the General Statutes, receipts within The 31
University of North Carolina realized in excess of budgeted levels shall be available, up to a 32
maximum of ten percent ( 10%) above budgeted levels, for each Budget Code, in addition to 33
appropriations to support the operations generating the receipts as approved by the Director of 34
the Budget. This section shall not apply to the North Carolina School of Science and 35
Mathematics. The North Carolina School of Science and Mathematics shall be subject to 36
subsections b1 and b2 of G.S. 143C-6-4." 37
38
PART VIIIA. NORTH CAROLINA STATE EDUCATION ASSISTANCE AUTHORITY 39
40
GROWING THE HEALTHCARE WORKFORCE 41
SECTION 8A.1.(a) Establishment of the Fund. – Of the funds appropriated to the 42
Board of Governors of the University of North Carolina by this act for the 2025 -26 fiscal year, 43
the Board shall use ten million ($10,000,000) to establish the Fund for Growing the Health Care 44
Workforce (Fund). Any unexpended funds remaining in the Fund at the end of the fiscal year 45
shall not revert to the General Fund but shall remain available for the purposes set forth in this 46
section through June 30, 2026. The Fund shall be used to assist in dependent college and 47
universities who participate in the State Need Based Grant in starting or expanding programs that 48
will grow the health care workforce, including through providing greater facility capacity for 49
trainees; increasing the numbers of healt h faculty and staff; and providing student support, 50
equipment and lab space. 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 35
SECTION 8A.1.(b) Report. – The Board shall submit an initial report to the Joint 1
Legislative Education Oversight Committee by December 1, 2026, and an annual report 2
thereafter for each year the Board provides funds, on the programs receiving the funds, which 3
shall include at least the following information: 4
(1) The institutions that received funds, the amount of funds, and the types of 5
programs started. 6
(2) The use of funds by each instit ution receiving awards, including costs 7
associated with student instruction, faculty salaries, instructional supplies, 8
related instructional equipment, and accreditation costs. 9
(3) Evaluation of the success of the new program receiving funds. 10
11
LONGLEAF COMMITMENT COMMUNITY COLLEGE GRANT CONSOLIDATION 12
SECTION 8A.2.(a) The recurring funds appropriated in S.L. 2023-134 to the Board 13
of Governors of The University of North Carolina for each year of the 2023-2025 fiscal biennium 14
to be allocated to the State Educatio n Assistance Authority for the Longleaf Commitment 15
Community College Grant Program shall from the 2025-2026 fiscal year instead be allocated for 16
the North Carolina Need -Based Scholarship Program for Public Colleges and Universities for 17
eligible students enrolled in the North Carolina Community College System. 18
SECTION 8A.2.(b) G.S. 116-209.85(b) reads as rewritten: 19
"§ 116-209.85. Scholarship Reserve Fund for Public Colleges and Universities. 20
… 21
(b) The Authority shall create two reserves within the Reserve Fund as follows: The 22
University of North Carolina (UNC Reserve) and the North Carolina Community College System 23
(CC Reserve) from monies in the Reserve Fund. The funds in the reserves shall be used for 24
scholarships for the academic year that begins in the fiscal year following the fiscal year in which 25
the allocations are made to the reserves. Allocations shall be made from the reserves for the 26
amounts determined for the payment schedules for eligible postsecondary institutions pursuant 27
to G.S. 116‑209.83. 28
Beginning with the 2023‑2024 fiscal year and for each subsequent fiscal year, within the 29
funds available, the Authority shall allocate an amount equal to the amount from the prior fiscal 30
year for the UNC Reserve and the CC Reserve to each reserve, respectiv ely, unless otherwise 31
agreed to by the President of The University of North Carolina and the President of the North 32
Carolina Community College System. Additional funds may be directed to the reserves from a 33
Current Operations Appropriations Act in a fiscal year. The reserves established for the 34
2022‑2023 fiscal year shall consist of the following funds: 35
(1) For the UNC Reserve, the monies shall consist of the following: 36
a. An amount equal to the amount appropriated to the Board of 37
Governors of The University of North Carolina for The University of 38
North Carolina Need‑Based Financial Aid Program for the 2021‑2022 39
fiscal year. 40
b. An amount equal to the proportionate share of the appropriation for 41
the Education Lottery Scholarship Program based on awards of 42
financial assistance to students enrolled in The University of North 43
Carolina from the Education Lottery Scholarship Program for the 44
2017‑2018, 2018‑2019, and 2019‑2020 fiscal years. 45
(2) For the CC Reserve, the monies shall consist of the following: 46
a. An amo unt equal to the amount appropriated to the Community 47
Colleges System Office for the North Carolina Community College 48
Grant Program, except for funds set aside for the targeted assistance 49
program pursuant to G.S. 115D‑40.1, for the 2021‑2022 fiscal year. 50
General Assembly Of North Carolina Session 2025
Page 36 Senate Bill 440-First Edition
b. An amount equal to the proportionate share of the appropriation for 1
the Education Lottery Scholarship based on awards of financial 2
assistance to students enrolled in North Carolina community colleges 3
from the Education Lottery Scholarship Program for th e 2017‑2018, 4
2018‑2019, and 2019‑2020 fiscal years. 5
c. Beginning with t he 2025-2026 fiscal year and thereafter an amount 6
equal to the amount appropriated to the Board of Governors of The 7
University of North Carolina for the Longleaf Commitment 8
Community College Grant Program for each year of the 2023 -2025 9
fiscal biennium. 10
…." 11
12
OPPORTUNITY SCHOLARSHIPS ACCOUNTABILITY 13
SECTION 8A.3.(a) G.S. 115C-562.1 reads as rewritten: 14
"§ 115C-562.1. Definitions. 15
The following definitions apply in this Part: 16
… 17
(3a) Eligible student. – A student residing in North Carolina who has not yet received a 18
high school diploma and who meets all of the following requirements: 19
a. Is eligible to attend a North Carolina public school pursuant to Article 25 of this 20
Chapter. A child who is the age of 4 on or before April 16 is eligible to attend the 21
following school year if the principal, or equivalent, of the school in which the 22
child seeks to enroll finds that the student meets the requirements established by 23
the Authority pursuant to G.S. 115C562.2(d) and those findings are submitted to 24
the Authority. 25
b. Has not been enrolled in a postsecondary institution as a full -time student taking 26
at least 12 hours of academic credit. 27
c. Has not been placed in a nonpublic school or facility by a public agency at public 28
expense. 29
d. Received a scholarship grant during the previous school year." 30
SECTION 8A.3.(b) G.S. 115C-562.2 reads as rewritten: 31
"§ 115C-562.2. Scholarship grants. 32
(a) The Authority shall make available no later than February 1 annually applications to 33
eligible students for the award of scholarship grants to attend any nonpublic school on a full or 34
part-time basis. Information about scholarship grants and the application process shall be made 35
available on the Authority's Web site. Begi nning March 15, the Authority shall begin awarding 36
scholarship grants to students who have applied by March 1 in the following order: according to 37
the following criteria: 38
(1) Eligible students who received a scholarship grant for the school year prior to 39
the school year for which the students are applying. 40
(2) Eligible students qualifying for a scholarship grant in the amount provided 41
under subdivision (1) of subsection (b2) of this section. 42
(3) Eligible students qualifying for a scholarship grant in the am ount provided 43
under subdivision (2) of subsection (b2) of this section. 44
(4) Eligible students qualifying for a scholarship grant in the amount provided 45
under subdivision (3) of subsection (b2) of this section. 46
(5) All other students. 47
(b) Repealed by Session Laws 2023-134, s. 8A.6(c), effective July 1, 2023. 48
(b1) Repealed by Session Laws 2021-180, s. 8A.3(e), effective July 1, 2021. 49
(b2) Scholarship grants shall be awarded to eligible students as follows: 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 37
(1) For students residing in households with an income level not in excess of the 1
amount required for the student to qualify for the federal free or reduced-price 2
lunch program, per year per eligible student, an amount of up to one hundred 3
percent (100%) of the average State per pupil allocation for average daily 4
membership in the prior fiscal year. 5
(2) For students residing in households with an income level between the amount 6
required for the student to qualify for the federal free or reduced -price lunch 7
program and not in excess of two hundred percent (200%) of that amount, per 8
year per eligible student, an amount of up to ninety percent (90%) of the 9
average State per pupil allocation for average daily membership in the prior 10
fiscal year. 11
(3) For students residing in households with an income level of betwe en two 12
hundred percent (200%) of the amount required for the student to qualify for 13
the federal free or reducedprice lunch program and not in excess of four 14
hundred fifty percent (450%) of that amount, per year per eligible student, an 15
amount of up to sixty percent (60%) of the average State per pupil allocation 16
for average daily membership in the prior fiscal year. 17
(4) For all students, per year per eligible student, an amount of up to fortyfive 18
percent (45%) of the average State per pupil allocation for average daily 19
membership in the prior fiscal year, unless the student qualifies for a higher 20
amount under this subsection. 21
(b3) Tuition and fees for a nonpublic school may include tuition and fees for books, 22
transportation, equipment, or other items required by the nonpublic school. 23
(b4) No scholarship grant shall exceed, per year per eligible student, an amount equal to 24
one hundred percent (100%) of the average State per pupil allocation for average daily 25
membership in the prior fiscal year, and no scholarship grant shall exceed the required tuition 26
and fees for the nonpublic school the eligible student will attend. 27
(b5) In addition to the amount of the scholarship grant, for any student receiving a 28
scholarship grant in grades three, eight, or 11, the Authority shall provide to the nonpublic school 29
an amount equal to the cost of the nationally standardized test required to be administered as 30
provided in G.S. 115C562.5." 31
SECTION 8A.3.(c) G.S. 115C-562.8(b) reads as rewritten: 32
"§ 115C-562.8. The Opportunity Scholarship Grant Fund Reserve. 33
(b) The General Assembly finds that, due to the critical need in this State to provide 34
opportunity for school choice for North Carolina students, it is imperative that the State provide 35
an increase of funds for 15 years to the Opportunity Scholarship Grant Fund Reserve. Therefore, 36
there There is appropriated from the General Fund to the Reserve the following amounts for each 37
fiscal year to be used for the purposes set forth in this section: 38
Fiscal Year Appropriation 39
2017-2018 $44,840,000 40
2018-2019 $54,840,000 41
2019-2020 $64,840,000 42
2020-2021 $74,840,000 43
2021-2022 $84,840,000 44
2022-2023 $94,840,000 45
2023-2024 $176,540,000 46
2024-2025 $191,540,000 47
2025-2026 $625,000,000 48
2026-2027 $675,000,000 49
2027-2028 $700,000,000$194,124,036 50
2028-2029 $725,000,000$176,276,589 51
General Assembly Of North Carolina Session 2025
Page 38 Senate Bill 440-First Edition
2029-2030 $750,000,000$156,209,738 1
2030-2031 $775,000,000$135,285,250 2
2031-2032 $800,000,000$114,800,340 3
2032-2033 $93,233,393 4
2033-2034 $70,197,091 5
2034-2035 $46,300,078 6
2035-2036 $22,046,485 7
For the 2032-2033 2036-2037 fiscal year and each fiscal year thereafter, there is appropriated 8
from the General Fund to the Reserve the sum of eight hundred twenty -five million dollars 9
($825,000,000) zero dollars ($0) to be used for the purposes set forth in this section. When 10
developing the base budget, as defined by G.S. 143C -11, for each fiscal year specified in this 11
subsection, the Director of the Budget shall include the appropriated amount specified in this 12
subsection for that fiscal year." 13
SECTION 8A.3.(d) The State Education Assistance Authority shall not award 14
scholarship funds to new recipients pursuant to Part 2A of Article 39 of Subchapter X of Chapter 15
115C of the General Statutes after the 2024-2025 academic year. 16
SECTION 8A.3.(e) G.S. 115C-562.5(a) is amended by adding a new subdivision to 17
read: 18
"§ 115C-562.5. Obligations of nonpublic schools accepting eligible students receiving 19
scholarship grants. 20
(3a) Academic Assessment. – A nonpublic school that accepts eligible students receiving 21
scholarship funds shall academically assess students on an annual basis for each school year at 22
the same grade levels as required by the State Board of Education for students in the public 23
schools pursuant to G.S. 115C-174.11(c)(1). An eligible student awarded scholarship funds who 24
is enrolled in a nonpublic school shall participate in the academic assessments to maintain 25
eligibility for receipt of the scholarship funds. 26
Assessment data shall be retained by the nonpublic school for a five-year period and shall be 27
subject to audit by the Authority to ensure compliance with this subsection. Assessment data 28
shall be provided to the parent or guardian of an eligible student, whose tuition and fees are paid 29
in whole or in part with scholarship funds, with an annual written explanation of the student 's 30
progress, including the results of the student 's academic assessment. Nothing in this subsection 31
shall be deemed to prohibit a nonpublic school from administering assessments at other grade 32
levels for its own purposes." 33
SECTION 8A.3.(f) G.S. 115C-562.7(b) is amended by adding a new subdivision to 34
read: 35
"§ 115C-562.7. Reporting requirements. 36
(6) Information on the compliance with the academic assessment requirement 37
pursuant to G.S. 115C-562.5(3a)." 38
SECTION 8A.3.(g) G.S. 115C-562.2 is amended by adding a new subsection to 39
read: 40
"§ 115C-562.2. Scholarship grants. 41
(c1) An eligible student awarded a scholarship grant shall participate in administration of 42
examinations required by G.S. 115 C-562.5 to maintain eligibility for receipt of the scholarship 43
grant." 44
SECTION 8A.3.(h) G.S. 115C-562.5 reads as rewritten: 45
"§ 115C -562.5. Obligations of nonpublic schools accepting eligible students receiving 46
scholarship grants. 47
(a) A nonpublic sch ool that accepts eligible students receiving scholarship grants shall 48
comply with the following: 49
(1) Provide to the Authority annually documentation for required tuition and fees 50
charged to the student by the nonpublic school. A nonpublic school that 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 39
accepts eligible students receiving scholarship grants shall not increase tuition 1
each year by more than the Consumer Price Index as calculated by the United 2
States Bureau of Labor Statistics and reported on January 1 of the year in 3
which the school is increasing tuition. 4
(2) Provide to the Authority a criminal background check conducted for the staff 5
member with the highest decision-making authority, as defined by the bylaws, 6
articles of incorporation, or other governing document, to ensure that person 7
has not been convicted of any crime listed in G.S. 115C332. 8
(3) Provide to the parent or guardian of an eligible student, whose tuition and fees 9
are paid in whole or in part with a scholarship grant, an annual written 10
explanation of the student's progress, incl uding the student's scores on 11
standardized achievement tests. 12
(4) Administer, at least once in each school year (or more as required by State or 13
Federal Requirements), tests as provided in this subdivision. Student-level test 14
performance data shall be submitted to the Authority by July 15 of each year 15
and retained by the nonpublic school for a five-year period and shall be subject 16
to audit by the Authority to ensure compliance with this subdivision.year. Test 17
Personally identifiable individual test performance data reported to the 18
Authority or audited or collected for evaluation purposes by the Authority 19
under this subdivision is not a public record under Chapter 132 of the General 20
Statutes. Nothing in this subdivision shall be deemed to prohibit a nonpublic 21
school from administering other standardized tests or tests at other grade 22
levels for its own purposes. Tests shall be administered to all eligible students 23
enrolled in grades three and higher whose tuition and fees are paid in whole 24
or in part with a scholarship grant as follows: 25
a. The nationally standardized test designated by the Authority in grades 26
three and eight. 27
b. The ACT in grade 11. 28
c. A nationally standardized test or other nationally standardized 29
equivalent measurement selected by the chief administrative officer of 30
the nonpublic school in all other grades four and higher. For grades 31
four through seven, the nationally standardized test or other equivalent 32
measurement selected must measure achievement in the areas of 33
English grammar, reading, spelling, and mathematics. For grades nine, 34
10, and 12, the nationally standardized test or other equivalent 35
measurement selected must measure either (i) achievement in the areas 36
of English grammar, reading, spelling, and mathematics or (ii) 37
competencies in the verbal and quantitative areas. 38
d. The assessments and tests required by the State Board of Education 39
for public schools to comply with federal law according to grade level 40
pursuant to G.S. 115C-174.11(c)(1). 41
(4b) Pursuant to G.S. 115C-107.6, educate each child with a disability awarded 42
scholarship funds in accordance with that child 's Individualized Education 43
Plan (IEP) and in compliance with the Individuals with Disabilities Act 44
(IDEA) and State Board of Education policies. 45
(5) Provide to t he Authority four-year cohort graduation rates of the students 46
receiving scholarship grants in a manner consistent with requirements of Title 47
I, Part A of ESEA and 34 C.F.R. § 200.19. nationally recognized standards. 48
(5b) Provide to the Authority by August 1 of each year attendance records of 49
students receiving scholarship grants during the previous school year 50
including the name of any schools attended during that time. 51
General Assembly Of North Carolina Session 2025
Page 40 Senate Bill 440-First Edition
(6) Contract with a certified public accountant to perform a financial reviewaudit, 1
consistent with generally accepted methods of accounting or any other 2
comprehensive basis of accounting recognized by the American Institute of 3
Certified Public Accountants (AICPA) a minimum of once every two years 4
for each school year in which the school enrolls 70 or more students receiving 5
scholarship grants or scholarship funds awarded by the Authority. students 6
who collectively receive more than one hundred thousand dollars ($100,000) 7
in scholarship grants awarded under this Part. If a nonpublic school accepts 8
students receiving less than one hundred thousand dollars ($100,000) in 9
scholarship grants, the school shall contract with a certified public accountant 10
to perform a financial audit once every three years. The nonpublic school shall 11
submit the audit report to the Authority by December 31 of each year an audit 12
is conducted. The Authority may require a school to be audited annually after 13
the school has two consecutive financial audits with findings. 14
The Authority shall ensure that all schools are audited in accordance with this 15
section. 16
(7) Maintain a school facility within the State where in -person instruction is 17
provided. This subdivision does not prohibit a school from offering 18
remote-only courses of instruction in addition to in-person instruction. 19
(8) Provide the following information annually to the Division: 20
a. Name and address of the school, including physical location address. 21
A school with more than one physical location shall establish a 22
separate notice of intent for each physical loc ation and shall provide 23
all information required by this subdivision for each physical location. 24
b. The name of the owners and chief administrator , as well as their 25
contact information. 26
c. Number of students in attendance at the school as of October 1. 27
d. Total number of students enrolled in the school as of the last day of 28
the previous school year. 29
e. Documentation of a completed fire inspection within the previous 365 30
days. 31
(9) In coordination with local law enforcement agencies, adopt a School Risk 32
Management Plan (SRMP) relating to incidents of school violence as detailed 33
in G.S. 115C-47 (40). In constructing and maintaining these plans, the school 34
shall utilize the School Risk and Response Management System (SRRMS) 35
established pursuant to G.S. 115C-105.49A. These plans are not considered a 36
public record as the term "public record" is defined under G.S. 132-1. 37
(10) Pursuant to G.S. 115C-105.53, provide schematic diagrams and keys to the 38
main entrance of school facilities to local law enforcement agencies. These 39
diagrams are not considered a public record as the term "public record " is 40
defined under G.S. 132-1. 41
(11) Pursuant to G.S. 115C-105.49, at least once a year, hold a full school -wide 42
lockdown exercise with local law enforcement and emergency manageme nt 43
agencies that are part of the qualified nonpublic school's SRMP. 44
(12) Provide the following: (i) schematic diagrams, including digital schematic 45
diagrams, and (ii) emergency response information requested by the 46
Department of Public Safety, Division of Emergency Management for the 47
SRMP. These diagrams and emergency response information are not 48
considered a public record as the term "public record " is defined under 49
G.S. 132-1. 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 41
(b) A nonpublic school that accepts students receiving scholarship grants shall not require 1
any additional fees based on the status of the student as a scholarship grant recipient. 2
(c) A nonpublic school enrolling more than 25 students in any grade whose tuition and 3
fees are paid in whole or in part with a scholarship grant shall provide and retain information on 4
student test performance in each grade with more than 25 students, as follows: 5
(1) Report to the Authority on the aggregate standardized test performance of the 6
individual student standardized test performance of eligible students in grades 7
three, eight, and 11 under subsection (4) of this section . Aggregate test 8
performance data reported to the Authority which does not contain personally 9
identifiable student data shall be a public record under Chapter 132 of the 10
General Statutes. The Authority shall make these reports of aggregate student 11
standardized test performance publicly available. Test performance data may 12
be shared with public or private institutions of higher education located in 13
North Carolina and shall be provided to an independent research organization 14
selected by the Authority for research purposes as permitted by the Federal 15
Education Rights and Privacy Act, 20 U.S.C. § 1232g. 16
(2) Retain standardized test performance data for eligible students in all other 17
grades and annually certify to the Authority compliance with the requirements 18
of subdivision (4) of subsection (a) of this section. 19
(c1) A nonpublic school shall not discriminate with respect to the categories listed in 42 20
U.S.C. § 2000d, as that statute read on January 1, 2014, and with respect to the definitions of an 21
individual with a disability as defined in the Americans With Disabilities Act of 1990, 42 U.S.C. 22
§ 12101 as that statute read on January 1, 2024." 23
SECTION 8A.3.(i) G.S. 115C-112.7 is amended by adding a new subsection to read: 24
"(c) The State Education Assistance Authority, in coordination with the Department of 25
Public Instruction, shall make publicly available by September 30 of each year school 26
achievement, growth, and performance scores and associated performance grades pursuant to 27
G.S. 115C-83.15 for nonpublic schools that enroll more than 25 students whose tuition and fees 28
are paid in whole or in part with a scholarship grant. This section is effective with the 2025 -26 29
school year. The first school achievement, growth, and perfo rmance scores and associated 30
performance grades shall be made publicly available by September 30, 2026." 31
SECTION 8A.3.(j) Section 8A.6(i) and Section 8A.6(j) of Session Law 2023 -134 32
are repealed. 33
SECTION 8A.3.(k) This provision is effective when it becom es law and applies 34
beginning with the 2025-26 school year. 35
36
PART IX. HEALTH AND HUMAN SERVICES 37
38
PART IX-A. AGING AND ADULT SERVICES [RESERVED] 39
40
PART IX-B. CENTRAL MANAGEMENT AND SUPPORT 41
42
COMMUNITY HEALTH GRANT PROGRAM 43
SECTION 9B.1.(a) Funds appropriated in this act to the Department of Health and 44
Human Services, Division of Central Management, Office of Rural Health, for each year of the 45
2025-2027 fiscal biennium for the Community Health Grant Program shall be used to continue 46
to admi nister the Community Health Grant Program as modified by Section 11A.8 of S.L. 47
2017-57. 48
SECTION 9B.1.(b) The Office of Rural Health shall make the final decision about 49
awarding grants under this Program, but no single grant award shall exceed one hundred fifty 50
thousand dollars ($150,000) during the fiscal year. In awarding grants, the Office of Rural Health 51
General Assembly Of North Carolina Session 2025
Page 42 Senate Bill 440-First Edition
shall consider the availability of other funds for the applicant; the incidence of poverty in the area 1
served by the applicant or the number of indigent clients served by the applicant; the availability 2
of, or arrangements for, after -hours care; and collaboration between the applicant and a 3
community hospital or other safety net organizations. 4
SECTION 9B.1.(c) Grant recipients shall not use these funds to do any of the 5
following: 6
(1) Enhance or increase compensation or other benefits of personnel, 7
administrators, directors, consultants, or any other persons receiving funds for 8
program administration; provided, however, funds may be used to hire or 9
retain health care providers. The use of grant funds for this purpose does not 10
obligate the Department of Health and Human Services to continue to fund 11
compensation beyond the grant period. 12
(2) Supplant existing funds, including federal funds traditionally recei ved by 13
federally qualified community health centers. However, grant funds may be 14
used to supplement existing programs that serve the purposes described in 15
subsection (a) of this section. 16
(3) Finance or satisfy any existing debt. 17
SECTION 9B.1.(d) The Office of Rural Health may use up to two hundred thousand 18
dollars ($200,000) in recurring funds for each fiscal year of the 2025 -2027 fiscal biennium for 19
administrative purposes. 20
SECTION 9B.1.(e) By September 1 of each year, the Office of Rural Health shall 21
submit a report to the Joint Legislative Oversight Committee on Health and Human Services on 22
community health grants that includes at least all of the following information: 23
(1) The identity and a brief description of each grantee and each program or 24
service offered by the grantee. 25
(2) The amount of funding awarded to each grantee. 26
(3) The number of individuals served by each grantee and, for the individuals 27
served, the types of services provided to each. 28
(4) Any other information requested by the Office of R ural Health as necessary 29
for evaluating the success of the Community Health Grant Program. 30
31
REPLACEMENT FOR CRITICAL IT SYSTEMS THAT SUPPORT SUBSTANCE USE 32
DISORDER PREVENTION AND TREATMENT 33
SECTION 9B.2. The Department of Health and Human Services shall develop and 34
implement a replacement for outdated data systems supporting substance use prevention and 35
treatment goals, specifically concerning the Driving While Impaired Services, the Drug 36
Education School, and the Drug Control Unit programs designed to prev ent progression of 37
misuse of substances through education and regulatory supports. The project shall not proceed 38
until the business case has been approved by the Office of State Budget and Management and 39
the State Chief Information Officer in the Enterpris e Project Management Office's Touchdown 40
System. Upon approval, Mixed Use Beverage tax receipts available in Budget Code 14460, 41
Budget Fund 134603, may be budgeted for transfer to Budget Code 24410 for information 42
technology projects in an amount not to exc eed two million dollars ($2,000,000). Following 43
project completion, the Division of Mental Health, Developmental Disabilities, and Substance 44
Use Services may use Mixed Use Beverage Tax receipts to cover operations and maintenance 45
costs for the new IT system. 46
47
USE OF TALC SETTLEMENT FUNDS 48
SECTION 9B.3.(a) The Ovarian Cancer Mitigation Fund (Fund) is created within 49
the Department of Health and Human Services, Division of Central Management and Support, 50
as a nonreverting special fund. The Fund shall consist o f (i) monies received by the State as a 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 43
beneficiary of the final consent judgment resolving the case, State of North Carolina, ex rel. 1
Joshua H. Stein, Attorney General v. Johnson & Johnson (J&J Case), and (ii) all interest and 2
investment earnings received on monies in the Fund. Monies in the Fund shall be expended only 3
by an act of appropriation by the General Assembly and in accordance with the final consent 4
judgment resolving the J&J Case. 5
SECTION 9B.3.(b) There is appropriated from the Ovarian Cancer Mitigation Fund 6
created in subsection (a) of this section to the Department of Health and Human Services, 7
Division of Central Management and Support, the sum of four million dollars ($4,000,000) in 8
nonrecurring funds for the 2024-2025 fiscal year and the sum of four million dollars ($4,000,000) 9
in nonrecurring funds for the 2025-2026 fiscal year to be allocated and used as follows: 10
(1) Up to two million dollars ($2,000,000) in nonrecurring funds for each year of 11
the 2025 -2027 fiscal biennium shall be used to support a public -private 12
partnership consisting of community-based organizations, medical providers, 13
and others to develop, strengthen, and promote improved access to ovarian 14
cancer educational materials, screenings, and care providers. Funds may be 15
used to contract with a lead community -based organization with statewide 16
reach to implement related initiatives, including technical assistance and 17
subgrants to other community-based organizations for these purposes. 18
(2) Up to seven hundred and fifty thousand d ollars ($750,000) in nonrecurring 19
funds for each year of the 2025 -2027 fiscal biennium shall be used to invest 20
in data collection and analysis infrastructure to support timely and accurate 21
cancer surveillance and improved capacity to address emerging threats. 22
(3) Up to one million two hundred fifty thousand dollars ($1,250,000) in 23
nonrecurring funds for each year of the 2025 -2027 fiscal biennium shall be 24
used to design and implement communication and education strategies 25
designed to raise awareness of ovarian cancer and promote preventive 26
measures, screening, and treatment. 27
In addition to these uses, the Department of Health and Human Services may use up 28
to two hundred thousand dollars ($200,000) of funds allocated by this subdivision for each year 29
of the fiscal biennium for administrative purposes. 30
SECTION 9B.3.(c) Funds allocated under subsection (b) of this section shall remain 31
available for expenditure in the amounts and for the purposes specified in subsection (a) of this 32
section until expended. 33
SECTION 9B.3.(d) Annually, beginning November 1, 2026, the Department of 34
Health and Human Services shall report to the Joint Legislative Oversight Committee on Health 35
and Human Services and the Fiscal Research Division on the expenditures made from the 36
Ovarian Cancer Mitigation Fund during the preceding fiscal year. 37
38
PART IX-C. CHILD AND FAMILY WELL-BEING [RESERVED] 39
40
PART IX-D. CHILD DEVELOPMENT AND EARLY EDUCATION 41
42
NC PRE -K PROGRAMS/ST ANDARDS FOR FOUR AND FIVE-STAR RATED 43
FACILITIES 44
SECTION 9D.1.(a) Eligibility. – The Department of Health and Human Services, 45
Division of Child Development and Early Education, shall continue implementing the 46
prekindergarten program (NC Pre -K). The NC Pre -K program shall serve children who are 4 47
years of age on or before August 31 of the program year. In determining eligibility, the Division 48
shall establish income eligibility requirements for the program not to exceed seventy-five percent 49
(75%) of the State median income. Up to twenty percent (20%) of children enrolled may have 50
family incomes in excess of seventy-five percent (75%) of median income if those children have 51
General Assembly Of North Carolina Session 2025
Page 44 Senate Bill 440-First Edition
other designated risk factors. Furthermore, any age -eligible child who is a child of either of the 1
following shall be eligible for the program: (i) an active duty member of the Armed Forces of the 2
United States, including the North Carolina National Guard, State military forces, or a reserve 3
component of the Armed Forces who was ordered to active duty by the proper authority within 4
the last 18 months or is expected to be ordered within the next 18 months, or (ii) a member of the 5
Armed Forces of the United States, including the North Carolina National Guard, State military 6
forces, or a reserve component of the Armed Forces who was injured or killed while serving on 7
active duty. Eligibility determinations for NC Pre -K participants may continue through local 8
education agencies and local North Carolina Partnership for Children, Inc., partnerships. 9
Other than developmental disabilities or other chronic health issues, the Division shall 10
not consider the health of a child as a factor in determining eligibility for participation in the NC 11
Pre-K program. 12
SECTION 9D.1.(a1) Staff-To-Child Ratio and Class Size. – The classroom shall not 13
exceed a maximum staff -to-child ratio of one to 10 with a maximum class size of 20 children, 14
with at least one teacher and one teacher assistant per classroom. A classroom of 10 children or 15
less shall have at least one teacher. The Child Care Commission shall adopt any rules and the 16
Division of Child Development and Early Education shall revise any rules or policies necessary 17
to implement the provisions of this subsection. 18
SECTION 9D.1.(b) Multi-year Contracts. – The Division of Child Development and 19
Early Education shall require the NC Pre-K contractor to issue multi-year contracts for licensed 20
private child care centers providing NC Pre-K classrooms. 21
SECTION 9D.1.(c) Building Standards. – Notwithstanding G.S. 110-91(4), private 22
child care facilities and public schools operating NC Pre -K classrooms shall meet the building 23
standards for preschool students as provided in G.S. 115C-521.1. 24
SECTION 9D.1.(d) Programmatic Standards. – Except as provided in subsection (c) 25
of this section, entities operating NC Pre -K classrooms shall adhere to all of th e policies 26
prescribed by the Division of Child Development and Early Education regarding programmatic 27
standards and classroom requirements. 28
SECTION 9D.1.(e) NC Pre-K Committees. – Local NC Pre-K committees shall use 29
the standard decision-making process developed by the Division of Child Development and Early 30
Education in awarding NC PreK classroom slots and student selection. 31
SECTION 9D.1.(f) Reporting. – The Division of Child Development and Early 32
Education shall submit an annual report no later than Mar ch 15 of each year to the Joint 33
Legislative Oversight Committee on Health and Human Services, the Office of State Budget and 34
Management, and the Fiscal Research Division. The report shall include the following: 35
(1) The number of children participating in the NC Pre-K program by county. 36
(2) The number of children participating in the NC Pre -K program who have 37
never been served in other early education programs such as child care, public 38
or private preschool, Head Start, Early Head Start, or early interventio n 39
programs. 40
(3) The expected NC Pre-K expenditures for the programs and the source of the 41
local contributions. 42
(4) The results of an annual evaluation of the NC Pre-K program. 43
SECTION 9D.1.(g) Audits. – The administration of the NC Pre-K program by local 44
partnerships shall be subject to the financial and compliance audits authorized under 45
G.S. 143B-168.14(b). 46
47
CHILD CARE SUBSIDY RATES 48
SECTION 9D.2.(a) The maximum gross annual income for initial eligibility, 49
adjusted annually, for subsidized child care ser vices shall be determined based on a percentage 50
of the federal poverty level as follows: 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 45
AGE INCOME PERCENTAGE LEVEL 1
0 – 5 200% 2
6 – 12 133% 3
The eligibility for any child with special needs, including a child who is 13 years of 4
age or older, shall be two hundred percent (200%) of the federal poverty level. 5
SECTION 9D.2.(b) Fees for families who are required to share in the cost of care 6
are established based on ten percent (10%) of gross family income. When care is received at the 7
blended rate, the copayme nt shall be eighty -three percent (83%) of the full -time copayment. 8
Copayments for part-time care shall be seventy-five percent (75%) of the full-time copayment. 9
SECTION 9D.2.(c) Payments for the purchase of child care services for low-income 10
children shall be in accordance with the following requirements: 11
(1) Religious sponsored child care facilities operating pursuant to G.S. 110-106 12
and licensed child care centers and homes that meet the minimum licensing 13
standards that are participating in the subsidize d child care program shall be 14
paid the one-star county market rate or the rate they charge privately paying 15
parents unless prohibited by subsection (f) of this section. 16
(2) Licensed child care centers and homes with two or more stars shall receive the 17
market rate for that rated license level for that age group unless prohibited by 18
subsection (g) of this section. 19
(3) No payments shall be made for transportation services charged by child care 20
facilities. 21
(4) Payments for subsidized child care services for postsecondary education shall 22
be limited to a maximum of 20 months of enrollment. This shall not be 23
determined before a family's annual recertification period. 24
(5) The Department of Health and Human Services shall implement necessary 25
rule changes to restructu re services, including, but not limited to, targeting 26
benefits to employment. 27
SECTION 9D.2.(d) Provisions of payment rates for child care providers in counties 28
that do not have at least 50 children in each age group for center -based and homebased care are 29
as follows: 30
(1) Except as applicable in subdivision (2) of this subsection, payment rates shall 31
be set at the statewide or regional market rate for licensed child care centers 32
and homes. 33
(2) If it can be demonstrated that the application of the statewide or regional 34
market rate to a county with fewer than 50 children in each age group is lower 35
than the county market rate and would inhibit the ability of the county to 36
purchase child care for low-income children, then the county market rate may 37
be applied. 38
SECTION 9D.2.(e) A market rate shall be calculated for child care centers and 39
homes at each rated license level for each county and for each age group or age category of 40
enrollees and shall be representative of fees charged to parents for each age group of enrollees 41
within the county. The Division of Child Development and Early Education shall also calculate 42
a statewide rate and regional market rate for each rated license level for each age category. 43
SECTION 9D.2.(f) The Division of Child Development and E arly Education shall 44
continue implementing policies that improve the quality of child care for subsidized children, 45
including a policy in which child care subsidies are paid, to the extent possible, for child care in 46
the higher quality centers and homes only. The Division shall define higher quality, and subsidy 47
funds shall not be paid for one or two-star-rated facilities. For those counties with an inadequate 48
number of four and five -star-rated facilities, the Division shall continue a transition period tha t 49
allows the facilities to continue to receive subsidy funds while the facilities work on the increased 50
General Assembly Of North Carolina Session 2025
Page 46 Senate Bill 440-First Edition
star ratings. The Division may allow exemptions in counties where there is an inadequate number 1
of four and five-star-rated facilities for non-star-rated programs, such as religious programs. 2
SECTION 9D.2.(g) Facilities licensed pursuant to Article 7 of Chapter 110 of the 3
General Statutes and facilities operated pursuant to G.S. 110-106 may participate in the program 4
that provides for the purchase of care in child care facilities for minor children of needy families. 5
Except as authorized by subsection (f) of this section, no separate licensing requirements shall 6
be used to select facilities to participate. In addition, child care facilities shall be required to meet 7
any additional applicable requirements of federal law or regulations. Child care arrangements 8
exempt from State regulation pursuant to Article 7 of Chapter 110 of the General Statutes shall 9
meet the requirements established by other State law and by the Social Services Commission. 10
County departments of social services or other local contracting agencies shall not 11
use a provider's failure to comply with requirements in addition to those specified in this 12
subsection as a condition for reducing the provider's subsidized child care rate. 13
SECTION 9D.2.(h) Payment for subsidized child care services provided with 14
Temporary Assistance for Needy Families Block Grant funds shall comply with all regulations 15
and policies issued by the Division of Child Development and Early Education for the subsidized 16
child care program. 17
SECTION 9D.2.(i) Non-citizen families who reside in this State legally shall be 18
eligible for child care subsidies if all other conditions of eligibility are met. If all other conditions 19
of eligibility are met, non -citizen families who reside in this State illegally shall be eligible for 20
child care subsidies only if at least one of the following conditions is met: 21
(1) The child for whom a child care subsidy is sought is receiving child protective 22
services or foster care services. 23
(2) The child for whom a child care subsidy is sought is developmentally delayed 24
or at risk of being developmentally delayed. 25
(3) The child for whom a child care subsidy is sought is a citizen of the United 26
States. 27
SECTION 9D.2.(j) The Department of Health and Human Services, Division of 28
Child Development and Early Education, shall require all county departments of social services 29
to include on any forms used to determine eligibility for child care subsidy whether th e family 30
waiting for subsidy is receiving assistance through the NC PreK Program or Head Start. 31
SECTION 9D.2.(k) Department of Defense -certified child care facilities licensed 32
pursuant to G.S. 110-106.2 may participate in the State -subsidized child care program that 33
provides for the purchase of care in child care facilities for minor children in needy families, 34
provided that funds allocated from the State -subsidized child care program to Department of 35
Defense-certified child care facilities shall suppleme nt and not supplant funds allocated in 36
accordance with G.S. 143B-168.15(g). Payment rates and fees for military families who choose 37
Department of Defense-certified child care facilities and who are eligible to receive subsidized 38
child care shall be as set forth in this section. 39
40
CHILD CARE ALLOCATION FORMULA 41
SECTION 9D.3.(a) The Department of Health and Human Services, Division of 42
Child Development and Early Education (Division), shall allocate child care subsidy voucher 43
funds to pay the costs of necessary child care for minor children of needy families. The 44
mandatory thirty percent (30%) North Carolina Partnership for Children, Inc., subsidy allocation 45
under G.S. 143B-168.15(g) shall constitute the base amount for each county's child care subsidy 46
allocation. The Department of Health and Human Services shall use the following method when 47
allocating federal and State child care funds, not including the aggregate mandatory thirty percent 48
(30%) North Carolina Partnership for Children, Inc., subsidy allocation: 49
(1) Funds shall be allocated to a county based upon the projected cost of serving 50
children under age 11 in families with all parents working who earn less than 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 47
the applicable federal poverty level percentage set forth in Section 9D.3(a) of 1
this act. 2
(2) The Division may withhold up to two percent (2%) of available funds from 3
the allocation formula for (i) preventing termination of services throughout 4
the fiscal year and (ii) repayment of any federal funds identified by counties 5
as overpayments, including ov erpayments due to fraud. The Division shall 6
allocate to counties any funds withheld before the end of the fiscal year when 7
the Division determines the funds are not needed for the purposes described 8
in this subdivision. The Division shall submit a report to the Joint Legislative 9
Oversight Committee on Health and Human Services and the Fiscal Research 10
Division, which report shall include each of the following: 11
a. The amount of funds used for preventing termination of services and 12
the repayment of any federal funds. 13
b. The date the remaining funds were distributed to counties. 14
c. As a result of funds withheld under this subdivision and after funds 15
have been distributed, any counties that did not receive at least the 16
amount the counties received the previous ye ar and the amount by 17
which funds were decreased. 18
The Division shall submit a report in each year of the 2025 -2027 fiscal 19
biennium 30 days after the funds withheld pursuant to this subdivision are 20
distributed but no later than April 1 of each respective year. 21
(3) The Division shall set aside four percent (4%) of child care subsidy allocations 22
for vulnerable populations, which include a child identified as having special 23
needs and a child whose application for assistance indicates that the child and 24
the child's family is experiencing homelessness or is in a temporary living 25
situation. A child identified by this subdivision shall be given priority for 26
receiving services until such time as set -aside allocations for vulnerable 27
populations are exhausted. 28
SECTION 9D.3.(b) The Division may reallocate unused child care subsidy voucher 29
funds in order to meet the child care needs of low -income families. Any reallocation of funds 30
shall be based upon the expenditures of all child care subsidy voucher funding, including N orth 31
Carolina Partnership for Children, Inc., funds within a county. Counties shall manage service 32
levels within the funds allocated to the counties. A county with a spending coefficient over one 33
hundred percent (100%) shall submit a plan to the Division for managing the county's allocation 34
before receiving any reallocated funds. 35
SECTION 9D.3.(c) When implementing the formula under subsection (a) of this 36
section, the Division shall include the market rate increase in the formula process rather than 37
calculate the increases outside of the formula process. Additionally, the Department shall do the 38
following: 39
(1) Deem a county's initial allocation as the county's expenditure in the previous 40
fiscal year or a prorated share of the county's previous fiscal year expenditures 41
if sufficient funds are not available. 42
(2) Effective immediately following the next new decennial census data release, 43
implement (i) one -third of the change in a county's allocation in the year 44
following the data release, (ii) an additional one -third of the change in a 45
county's allocation beginning two years after the initial change under this 46
subdivision, and (iii) the final one -third change in a county's allocation 47
beginning the following two years thereafter. 48
49
SMART START INITIATIVES 50
General Assembly Of North Carolina Session 2025
Page 48 Senate Bill 440-First Edition
SECTION 9D.4.(a) Policies. – The North Carolina Partnership for Children, Inc., 1
and its Board shall ensure policies focus on the North Carolina Partnership for Children, Inc.'s 2
mission of improving child care quality in North Carolina for children from birth to five years of 3
age. North Carolina Partnership for Children, Inc., funded activities shall include assisting child 4
care facilities with (i) improving quality, including helping one, two, and three -star-rated 5
facilities increase their star ratings, and (ii) im plementing prekindergarten programs. State 6
funding for local partnerships shall also be used for evidence -based or evidence -informed 7
programs for children from birth to five years of age that do the following: 8
(1) Increase children's literacy. 9
(2) Increase the parents' ability to raise healthy, successful children. 10
(3) Improve children's health. 11
(4) Assist four and five-star-rated facilities in improving and maintaining quality. 12
SECTION 9D.4.(b) Administration. – Administrative costs shall be equivalent to , 13
on an average statewide basis for all local partnerships, not more than ten percent (10%) of the 14
total statewide allocation to all local partnerships. For purposes of this subsection, administrative 15
costs shall include costs associated with partnership o versight, business and financial 16
management, general accounting, human resources, budgeting, purchasing, contracting, and 17
information systems management. The North Carolina Partnership for Children, Inc., shall 18
continue using a single statewide contract ma nagement system that incorporates features of the 19
required standard fiscal accountability plan described in G.S. 143B-168.12(a)(4). All local 20
partnerships are required to participate in the contract management system and, directed by the 21
North Carolina Partnership for Children, Inc., to collaborate, to the fullest extent possible, with 22
other local partnerships to increase efficiency and effectiveness. 23
SECTION 9D.4.(c) Salaries. – The salary schedule developed and implemented by 24
the North Carolina Partnership for Children, Inc., shall set the maximum amount of State funds 25
that may be used for the salary of the Executive Director of the North Carolina Partnership for 26
Children, Inc., and the directors of the local partnerships. The North Carolina Partnership f or 27
Children, Inc., shall base the schedule on the following criteria: 28
(1) The population of the area serviced by a local partnership. 29
(2) The amount of State funds administered. 30
(3) The amount of total funds administered. 31
(4) The professional experience of the individual to be compensated. 32
(5) Any other relevant factors pertaining to salary, as determined by the North 33
Carolina Partnership for Children, Inc. 34
The salary schedule shall be used only to determine the maximum amount of State 35
funds that may be used for compensation. Nothing in this subsection shall be construed to prohibit 36
a local partnership from using non-State funds to supplement an individual's salary in excess of 37
the amount set by the salary schedule established under this subsection. 38
SECTION 9D.4.(d) Match Requirements. – The North Carolina Partnership for 39
Children, Inc., and all local partnerships shall, in the aggregate, be required to match one hundred 40
percent (100%) of the total amount budgeted for the program in each fiscal year of the 2025-2027 41
biennium. Of the funds that the North Carolina Partnership for Children, Inc., and the local 42
partnerships are required to match, contributions of cash shall be equal to at least thirteen percent 43
(13%) and in-kind donated resources shall be equal t o no more than six percent (6%) for a total 44
match requirement of nineteen percent (19%) for each year of the 2025 -2027 fiscal biennium. 45
The North Carolina Partnership for Children, Inc., may carry forward any amount in excess of 46
the required match for a fi scal year in order to meet the match requirement of the succeeding 47
fiscal year. Only in-kind contributions that are quantifiable shall be applied to the in-kind match 48
requirement. Volunteer services may be treated as an in-kind contribution for the purpose of the 49
match requirement of this subsection. Volunteer services that qualify as professional services 50
shall be valued at the fair market value of those services. All other volunteer service hours shall 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 49
be valued at the statewide average wage rate as calculated from data compiled by the Division of 1
Employment Security of the Department of Commerce in the Employment and Wages in North 2
Carolina Annual Report for the most recent period for which data are available. Expenses, 3
including both those paid by cash a nd in -kind contributions, incurred by other participating 4
non-State entities contracting with the North Carolina Partnership for Children, Inc., or the local 5
partnerships also may be considered resources available to meet the required private match. In 6
order to qualify to meet the required private match, the expenses shall: 7
(1) Be verifiable from the contractor's records. 8
(2) If in-kind, other than volunteer services, be quantifiable in accordance with 9
generally accepted accounting principles for nonprofit organizations. 10
(3) Not include expenses funded by State funds. 11
(4) Be supplemental to and not supplant preexisting resources for related program 12
activities. 13
(5) Be incurred as a direct result of the Early Childhood Initiatives Program and 14
be necessary and reasonable for the proper and efficient accomplishment of 15
the Program's objectives. 16
(6) Be otherwise allowable under federal or State law. 17
(7) Be required and described in the contractual agreements approved by the 18
North Carolina Partnership for Children, Inc., or the local partnership. 19
(8) Be reported to the North Carolina Partnership for Children, Inc., or the local 20
partnership by the contractor in the same manner as reimbursable expenses. 21
Failure to obtain a nineteen percent (19%) match by June 30 of eac h year of the 22
2025-2027 fiscal biennium shall result in a dollar-for-dollar reduction in the appropriation for the 23
Program for a subsequent fiscal year. The North Carolina Partnership for Children, Inc., shall be 24
responsible for compiling information on the private cash and in-kind contributions into a report, 25
to be included in its annual report as required under G.S. 143B-168.12(d), in a format that allows 26
verification by the Department of Revenue. The same match requirements shall apply to any 27
expansion funds appropriated by the General Assembly. 28
SECTION 9D.4.(e) Bidding. – The North Carolina Partnership for Children, Inc., 29
and all local partnerships shall use competitive bidding practices in contracting for goods and 30
services on contract amounts as follows: 31
(1) For amounts of five thousand dollars ($5,000) or less, the procedures specified 32
by a written policy as developed by the Board of Directors of the North 33
Carolina Partnership for Children, Inc. 34
(2) For amounts greater than five thousand dollars ($5,0 00) but less than fifteen 35
thousand dollars ($15,000), three written quotes. 36
(3) For amounts of fifteen thousand dollars ($15,000) or more but less than forty 37
thousand dollars ($40,000), a request for proposal process. 38
(4) For amounts of forty thousand doll ars ($40,000) or more, a request for 39
proposal process and advertising in a major newspaper. 40
SECTION 9D.4.(f) Allocations. – The North Carolina Partnership for Children, Inc., 41
shall not reduce the allocation for counties with less than 35,000 in population below the 42
2012-2013 funding level. 43
SECTION 9D.4.(g) Performance-Based Evaluation. – The Department of Health 44
and Human Services shall continue to implement the performance-based evaluation system. 45
SECTION 9D.4.(h) Expenditure Restrictions. – Except as provided in subsection (i) 46
of this section, the Department of Health and Human Services and the North Carolina Partnership 47
for Children, Inc., shall ensure that the allocation of funds for Early Childhood Education and 48
Development Initiatives for the 2025-2027 fiscal biennium shall be administered and distributed 49
in the following manner: 50
General Assembly Of North Carolina Session 2025
Page 50 Senate Bill 440-First Edition
(1) Capital expenditures are prohibited for the 2025-2027 fiscal biennium. For the 1
purposes of this section, "capital expenditures" means expenditures for capital 2
improvements as defined in G.S. 143C-1-1(d)(5). 3
(2) Expenditures of State funds for advertising and promotional activities are 4
prohibited for the 2025-2027 fiscal biennium. 5
For the 2025-2027 fiscal biennium, local partnerships shall not spend any State funds 6
on marketing campaigns, advertising, or any associated materials. Local partnerships may spend 7
any private funds the local partnerships receive on those activities. 8
SECTION 9D.4.(i) Notwithstanding subsection (h) of this section, the North 9
Carolina Partnership for Children, Inc., and local partnerships may use up to one percent (1%) of 10
State funds for fundraising activities. The North Carolina Partnership for Children, Inc., shall 11
include in its annual report required under G.S. 143B-168.12(d) a report on the use of State funds 12
for fundraising. The report shall include the following: 13
(1) The amount of funds expended on fundraising. 14
(2) Any return on fundraising investments. 15
(3) Any other information deemed relevant. 16
17
PART IX-E. HEALTH BENEFITS 18
19
CONTINUE MEDICAID ANNUAL REPORT 20
SECTION 9E.1. The Department of Health and Human Services, Division of Health 21
Benefits (DHB), shall continue the publication of the Medicaid Annual Report and 22
accompanying tables. DHB shall publish the report and tables on its website no later than 23
December 31 following each State fiscal year. 24
25
VOLUME PURCHASE PLANS AND SINGLE SOURCE PROCUREMENT 26
SECTION 9E.2. The Department of Health and Human Services, Division of Health 27
Benefits, may, subject to the approval of a change in the State Med icaid Plan, contract for 28
services, medical equipment, supplies, and appliances by implementation of volume purchase 29
plans, single source procurement, or other contracting processes in order to improve cost 30
containment. 31
32
ADMINISTRATIVE HEARINGS FUNDING 33
SECTION 9E.3. Of the funds appropriated in this act to the Department of Health 34
and Human Services, Division of Health Benefits, for administrative contracts and interagency 35
transfers, the Department of Health and Human Services (DHHS) shall transfer the sum of one 36
million dollars ($1,000,000) for the 2025 -2026 fiscal year and the sum of one million dollars 37
($1,000,000) for the 2026 -2027 fiscal year to the Office of Administrative Hearings (OAH). 38
These funds shall be allocated by OAH for mediation services pro vided for Medicaid applicant 39
and recipient appeals and to contract for other services necessary to conduct the appeals process. 40
OAH shall continue the Memorandum of Agreement (MOA) with DHHS for mediation services 41
provided for Medicaid recipient appeals and contracted services necessary to conduct the appeals 42
process. Upon receipt of invoices from OAH for covered services rendered in accordance with 43
the MOA, DHHS shall transfer the federal share of Medicaid funds drawn down for this purpose. 44
45
ACCOUNTING FOR MEDICAID RECEIVABLES AS NONTAX REVENUE 46
SECTION 9E.4.(a) The Department of Health and Human Services, Division of 47
Health Benefits (DHB), receivables reserved at the end of the 2025 -2026 and 2026-2027 fiscal 48
years shall, when received, be accounted for as nontax revenue for each of those fiscal years. The 49
treatment under this section of any revenue derived from federal programs shall be in accordance 50
with the requirements specified in the Code of Federal Regulations, Title 2, Part 225. 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 51
SECTION 9E.4.(b) For the 2025-2026 fiscal year, the Department of Health and 1
Human Services shall deposit from its revenues one hundred seven million seven hundred 2
thousand dollars ($107,700,000) with the Department of State Treasurer to be accounted for as 3
nontax revenue. For the 2026-2027 fiscal year, the Department of Health and Human Services 4
shall deposit from its revenues one hundred nine million dollars ($109,000,000) with the 5
Department of State Treasurer to be accounted for as nontax revenue. These deposits shall 6
represent the return of advanced General Fund appropriations, nonfederal revenue, fund 7
balances, or other resources from State -owned and State operated hospitals that are used to 8
provide indigent and nonindigent care services. The return from State-owned and State operated 9
hospitals to the Department of Health and Human Services shall be made from nonfederal 10
resources in the following manner: 11
(1) The University of North Carolina Hospitals at Chapel Hill shall make the 12
following deposits: 13
a. For the 2025-2026 fiscal year, the amount of thirty -one million three 14
hundred sixty-five thousand three hundred five dollars ($31,365,305). 15
b. For the 2026-2027 fiscal year, the amount of thirty -one million three 16
hundred sixty-five thousand three hundred five dollars ($31,365,305). 17
(2) All State -owned and State operated hospitals, other than the University of 18
North Carolina Hospitals at Chapel Hill, that specialize in psychiatric care 19
shall annually deposit an amount equal to the amount of the payments from 20
DHB for uncompensated care. 21
22
LME/MCO INTERGOVERNMENTAL TRANSFERS 23
SECTION 9E.5.(a) The local management entities/managed care organizations 24
(LME/MCOs) shall make intergovernmental transfers to the Department of Health and Human 25
Services, Division of Health Benefits (DHB), in an aggregate amount of eighteen million 26
twenty-eight thousand two hundred seventeen dollars ($18,028,217) in the 2025-2026 fiscal year 27
and in an aggregate amount of eighteen million twenty -eight thousand two hundred seventeen 28
dollars ($18,028,217) for the 2026-2027 fiscal year. The due date and frequency of the 29
intergovernmental transfer required by this section shall be determined by DHB. The amount of 30
the intergovernmental transfer that each individual LME/MCO is required to make in each fiscal 31
year shall be as follows: 32
2024-2025 2026-2027 33
Alliance Behavioral Healthcare $4,508,857 $4,508,857 34
Partners Health Management $3,544,348 $3,544,348 35
Trillium Health Resources $6,448,693 $6,448,693 36
Vaya Health $3,526,319 $3,526,319 37
SECTION 9E.5.(b) In the event that a county disengages from an LME/MCO and 38
realigns with another LME/MCO during the 2025 -2027 fiscal biennium, DHB shall have the 39
authority to reallocate the amount of the intergovernmental transfer that each affected 40
LME/MCO is required to make under subsection (a) of this section, taking into consideration the 41
change in catchment area and covered population, provided that the aggregate amount of the 42
transfers received from all LME/MCOs in each year of the fiscal biennium is achieved. 43
44
CHILDREN AND FAMILIES SPECIALTY PLAN 45
SECTION 9E.6.(a) Section 9E.22(a) of S.L. 2023-134 reads as rewritten: 46
"SECTION 9E.22.(a) The Department of Health and Human Services (DHHS) shall issue 47
an initial request for proposals (RFP) to procure a single statewi de children and families (CAF) 48
specialty plan contract with services to begin no later than December 1, 2024 December 1, 2025. 49
The RFP shall be subject to the requirements in G.S. 108D-62, as enacted by subsection (k) of 50
this section. DHHS shall define the services available under the CAF specialty plan and the 51
General Assembly Of North Carolina Session 2025
Page 52 Senate Bill 440-First Edition
Medicaid beneficiaries who are eligible to enroll in the CAF specialty plan, except as otherwise 1
specified in this act or in law. For the purposes of this section, the CAF specialty plan shall be as 2
defined under G.S. 108D-1, as amended by subsection (c) of this section." 3
4
CONTINUE MEDICAID CO VERAGE FOR PREGNANT WOMEN FOR TWELVE 5
MONTHS POSTPARTUM 6
SECTION 9E.7.(a) Section 9D.13(c) of S.L. 2021-180 is repealed. 7
SECTION 9E.7.(b) G.S. 108A-146.5 reads as rewritten: 8
"§ 108A-146.5. Aggregate modernized assessment collection amount. 9
(a) The aggregate modernized assessment collection amount is an amount of money that 10
is calculated by sub tracting the modernized intergovernmental transfer adjustment component 11
under G.S. 108A-146.13 from the total modernized nonfederal receipts under subsection (b) of 12
this section and then adding the positive or negative amount of the modernized IGT actual 13
receipts adjustment component under G.S. 108A-146.14. 14
(b) The total modernized nonfederal receipts is the sum of all of the following: 15
(1) One-fourth of the State's annual Medicaid payment. 16
(2) The managed care component under G.S. 108A-146.7. 17
(3) The fee-for-service component under G.S. 108A-146.9. 18
(3a) The modernized HASP component under G.S. 108A-146.10. 19
(4) The GME component under G.S. 108A-146.11. 20
(5) Beginning April 1, 2022, and ending March 31, 2027 , the postpartum 21
coverage component under G.S. 108A-146.12. 22
(6) Beginning April 1, 2024, the home and community-based services component 23
under G.S. 108A-146.12A. (2021-61, s. 2; 2021 -180, s. 9D.13A(b); 2023 -7, 24
s. 1.7(c).)" 25
26
GROSS PREMIUM TAX OFFSET CHANGES 27
SECTION 9E.8.(a) Article 8B of Chapter 105 of the General Statutes is amended 28
by adding a new section to read: 29
"§ 105-228.11. Transfer to Health Advancement Receipts Special Fund. 30
Each fiscal year, the Secretary of Revenue shall transfer at the beginning of each quarter from 31
the State insurance tax net collections received by the Department of Revenue under Article 8B 32
of Chapter 105 of the General Statutes to the State Treasurer for the Health Advancement 33
Receipts Special Fund, the gross premiums tax offset amount, as defined in G.S. 108A-147.12. 34
The Office of State Budget and Management shall calculate the amount of the gross premiums 35
tax offset as defined in G.S. 108A-147.12 and certify the amount for the Secretary of Revenue 36
that is required to be transferred using data in the North Carolina Financial System." 37
SECTION 9E.8.(b) G.S. 108A-147.11 reads as rewritten: 38
"§ 108A-147.11. Health advancement reconciliation adjustment component. 39
(a) The health advancement reconciliation adjustment component is a positive or 40
negative dollar amount equal to the actual nonfederal expenditures for the quarter that is two 41
quarters prior to the current quarter minus the sum of the following specified amounts: 42
(1) The presumptive service cost component calculated under G.S. 108A-147.5 43
for the quarter that is two quarters prior to the current quarter. 44
(2) The positive or negative gross premiums tax offset amount calculated under 45
G.S. 105 -228.11108A-147.12(b) amount transferred during the current 46
quarter by the Department of Revenue to the State Treasurer for the Health 47
Advancement Receipts Special Fund under G.S. 105-228.11. 48
(3) The HASP health advancement component calculated under G.S. 108A-147.6 49
for the quarter that is two quarters prior to the current quarter. 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 53
(b) The IGT share of the reconciliation adjustment compon ent is a positive or negative 1
dollar amount that is calculated by multiplying the health advancement reconciliation adjustment 2
component calculated under subsection (a) of this section by the share of public hospital costs 3
calculated under subsection (c) of this section. 4
(c) The share of public hospital costs is calculated by adding total hospital costs for the 5
UNC Health Care System, total hospital costs for the primary affiliated teaching hospital for the 6
East Carolina University Brody School of Medicine, and sixty percent (60%) of the total hospital 7
costs for all public acute care hospitals and dividing that sum by the total hospital costs for all 8
acute care hospitals except for critical access hospitals and rural emergency hospitals." 9
SECTION 9E.8.(c) G.S. 143C-9-10 reads as rewritten: 10
"§ 143C-9-10. Health Advancement Receipts Special Fund. 11
(a) Creation. – The Health Advancement Receipts Special Fund is established as a 12
nonreverting special fund in the Department of Health and Human Services. 13
(b) Source of Funds. – Each State fiscal quarter, the Department of Health and Human 14
Services shall deposit in the Health Advancement Receipts Special Fund an amount of funds 15
equal to the total nonfederal receipts for health advancement calculated under 16
G.S. 108A-147.3(b) for that quarter, minus the State retention component under G.S. 108A-147.8 17
for that quarter, and plus the positive or negative gross premiums tax offset amount transferred 18
by the Department of Revenue to the State Treasurer for the Health Advanceme nt Receipts 19
Special Fund under G.S. 105 -228.11 transferred by the Department of Revenue to the State 20
Treasurer for the Health Advancement Receipts Special Fund under G.S. 105-228.11 calculated 21
under G.S. 108A-147.12(b) for that quarter. 22
(c) Use of Funds. – The Department of Health and Human Services shall use funds in the 23
Health Advancement Receipts Special Fund only for the purposes described in 24
G.S. 108A-147.13." 25
26
AMERICAN RESCUE PLAN ACT TEMPORARY SAVINGS FUND BALANCE 27
SECTION 9E.9.(a) The unappropriated balance in the ARPA Temporary Savings 28
Fund after all appropriated transfers have been made shall be transferred to the Division of Health 29
Benefits Budget Code 14445 to offset funds appropriated for the 2025-2026 fiscal year. 30
31
CREATE DESIGNATED STATE HEALTH PROGRAM SAVINGS BUDGET FUND 32
SECTION 9E.10.(a) Fund created. – The Designated State Health Programs budget 33
fund is created as a nonreverting budget fund within the Department of Health and Human 34
Services (DHHS), Division of Health Benefits (DHB) 24445 b udget code. The Division of 35
Central Management Services, Division of Child and Family Well -Being, Division of Mental 36
Health, Developmental Disabilities, and Substance Use Services, and Division of Public Health 37
shall transfer and deposit all freed -up state funds that result from additional receipts realized 38
through Designated State Health Programs authority in the North Carolina Medicaid Reform 39
Section 1115 Demonstration approved by the Centers for Medicare and Medicaid Services in 40
December 2024 to this budget fund. 41
SECTION 9E.10.(b) Funds shall only be re-invested in new Healthy Opportunities 42
capacity building efforts and services, or Justice Involved Re -Entry Initiative capacity building 43
and services authorized in the 1115 Demonstration approved in December 2024. 44
SECTION 9E.10.(c) It is the intent of the Governor to fully fund statewide expansion 45
of the Healthy Opportunities program when it is financially feasible to do so given recurring 46
costs. The sum of forty-six million, seventy-four thousand, three hundred and forty-nine dollars 47
($46,074,349) in nonrecurring funds for the 2025-2026 fiscal year and the sum of eleven million, 48
eight hundred and twelve thousand, five hundred and nineteen dollars ($11,812,519) in 49
nonrecurring funds for the 2026 -2027 fiscal year from the special fund created in Section 50
9E.10.(a) may be transferred to DHB for the sole purpose of providing the State share for capacity 51
General Assembly Of North Carolina Session 2025
Page 54 Senate Bill 440-First Edition
building or service provision of the expanded Healthy Opportunities program in the western 1
region of the state. 2
SECTION 9E.10.(d) DHB shall work collaboratively with the Office of State 3
Budget and Management on the implementation of new Healthy Opportunities capacity building 4
efforts and services to ensure the program stays within budget. DHB shall provide OSBM with 5
a monthly report of expenditures for Healthy Opportunities for both existing and expanding 6
programs. The report shall also detail the savings created by the Healthy Opportunities program 7
and provide a five-year forecast of recurring and nonrecurring needs for the program. 8
SECTION 9E.10.(e) This section expires December 31, 2031. 9
10
PART IX-F. HEALTH SERVICES REGULATION 11
12
INCREASE X-RAY FEE CAP 13
SECTION 9.F.1. G.S. 104E-19 reads as rewritten: 14
"§ 104E-19. Fees. 15
(a) An annual fee in the amount set by the Department is imposed on a person who is 16
required to be registered or licensed under this Chapter. The Department must set the fees at 17
amounts that provide revenue to offset its costs in performing its duties under this Chapter. 18
(b) Repealed by Session Laws 1987, c. 850, s. 13. 19
(c) The annual fees under subsection (a) of this section shall not exceed the maximum 20
amounts as follows: 21
(1) For tanning facilities: two hundred dollars ($200.00) for the first piece of 22
tanning equipment and thirty dollars ($30 .00) for each additional piece of 23
tanning equipment. 24
(2) For the following categories of facilities registered to use X-ray tubes or X-ray 25
equipment: clinics, chiropractors, dentists, educational, government, 26
podiatrists, industrial, physicians, veterinari ans, and other; two hundred 27
dollars ($200.00) four hundred dollars ($400.00) for the first X -ray tube or 28
piece of X-ray equipment and thirty dollars ($30.00) sixty dollars ($60.00) for 29
each additional X-ray tube or piece of X-ray equipment. 30
(3) For the following categories of facilities registered to use X-ray tubes or X-ray 31
equipment: industrial medical, health departments, and service; three hundred 32
dollars ($300.00)six hundred dollars (600.00) for the first X-ray tube or piece 33
of X-ray equipment and forty dollars ($40.00)eighty dollars (80.00) for each 34
additional X-ray tube or piece of X-ray equipment. 35
(4) For the following categories of facilities registered to use X-ray tubes or X-ray 36
equipment: hospitals and industrial radiography ; four hundred dol lars 37
($400.00)eight hundred dollars ($800.00) for the first X-ray tube or piece of 38
X-ray equipment and fifty dollars ($50.00)one hundred dollars ($100.00) for 39
each additional X-ray tube or piece of X-ray equipment." 40
41
PART IX -G. MENTAL HE ALTH/DEVELOPMENTAL DISABILITIES/SUBSTANCE 42
USE SERVICES 43
44
SINGLE STREAM FUNDING FOR DMH/DD/SUS COMMUNITY SERVICES 45
SECTION 9G.1.(a) For the purpose of mitigating cash flow problems that many 46
local management entities/managed care organizations (LME/MCOs) experience at the 47
beginning of each fiscal year relative to single stream funding, the Department of Health and 48
Human Services, Division of Mental Health, Developmental Disabilities, and Substance Use 49
Services (DMH/DD/SUS), shall distribute not less than one -twelfth of each LM E/MCO's base 50
budget allocation at the beginning of the fiscal year and subtract the amount of that distribution 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 55
from the LME/MCO's total reimbursements for the fiscal year. For each month of the fiscal year 1
after July, DMH/DD/SUS shall distribute, on the t hird working day of the month, one eleventh 2
of the amount of each LME/MCO's single stream allocation that remains after subtracting the 3
amount of the distribution that was made to the LME/MCO in July of the fiscal year. 4
SECTION 9G.1.(b) If, on or after Ju ne 1, 2025, the Office of State Budget 5
Management (OSBM) certifies a Medicaid budget surplus and sufficient cash in Budget Code 6
14445 to meet total obligations for the 2024 -2025 fiscal year, then DHB shall transfer to 7
DMH/DD/SUS funds not to exceed the amo unt of the certified surplus or thirty million dollars 8
($30,000,000), whichever is less, to be used for single stream funding. 9
SECTION 9G.1.(c) If, on or after June 1, 2026, the Office of State Budget 10
Management (OSBM) certifies a Medicaid budget surplus and sufficient case in Budget Code 11
14445 to meet total obligations for the 2025 -2026 fiscal year, then DHB shall transfer to 12
DMH/DD/SUS funds not to exceed the amount of the certified surplus or thirty million dollars 13
($30,000,000), whichever is less, to be used for single stream funding. 14
SECTION 9G.1.(d) If, on or after June 1, 2027, the Office of State Budget 15
Management (OSBM) certifies a Medicaid budget surplus and sufficient case in Budget Code 16
14445 to meet total obligations for the 2026 -2027 fiscal y ear, then DHB shall transfer to 17
DMH/DD/SUS funds not to exceed the amount of the certified surplus or thirty million dollars 18
($30,000,000), whichever is less, to be used for single stream funding. 19
20
LOCAL INPATIENT PSYCHIATRIC BEDS OR BED DAYS 21
SECTION 9G.2.(a) Use of Funds. – Funds appropriated in this act to the Department 22
of Health and Human Services, Division of Mental Health, Developmental Disabilities, and 23
Substance Use Services, shall continue to be used for the purchase of local inpatient psychiatric 24
beds or bed days. The Department of Health and Human Services (DHHS) shall continue to 25
implement a two-tiered system of payment for purchasing these local inpatient psychiatric beds 26
or bed days based on acuity level with an enhanced rate of payment for inpatient psychiatric beds 27
or bed days for individuals with higher acuity levels, as defined by DHHS. The enhanced rate of 28
payment for inpatient psychiatric beds or bed days for individuals with higher acuity levels shall 29
not exceed the lowest average cost per patient bed day among the State psychiatric hospitals. In 30
addition, at the discretion of the Secretary of Health and Human Services, existing funds allocated 31
to LME/MCOs for community -based mental health, developmental disabilities, and substance 32
use disorder services may be used to purchase additional local inpatient psychiatric beds or bed 33
days. DHHS may allocate funding to the LME/MCOs for the purchase of facility -based crisis, 34
nonhospital detoxification services and peer respite services to supp ort individuals that do not 35
meet the medical necessity for inpatient treatment and can be diverted from an inpatient hospital 36
stay. 37
SECTION 9G.2.(b) Distribution and Management of Beds or Bed Days. DHHS 38
shall work to ensure that any local inpatient psychiatric beds or bed days purchased in accordance 39
with this section are utilized solely for individuals who are medically indigent, except that DHHS 40
may use up to forty percent (40%) of the funds appropriated in this act to the Department of 41
Health and Human Services, Division of Mental Health, Developmental Disabilities, and 42
Substance Use Services, for the purchase of local inpatient psychiatric beds, bed days to pay for 43
facility-based crisis services, non-hospital detoxification services, and peer respite se rvices for 44
individuals in need of these services, regardless of whether the individuals are medically indigent. 45
For the purposes of this subsection, "medically indigent" shall mean uninsured persons who (i) 46
are financially unable to obtain private insurance coverage, as determined by DHHS and (ii) are 47
not eligible for government-funded health coverage such as Medicare or Medicaid. 48
In addition, DHHS shall work to ensure that any local inpatient psychiatric beds or 49
bed days purchased in accordance with this section are distributed across the State and according 50
to need, as determined by DHHS. DHHS shall ensure that beds or bed days for individuals with 51
General Assembly Of North Carolina Session 2025
Page 56 Senate Bill 440-First Edition
higher acuity levels are distributed across the State and according to greatest need based on 1
hospital bed ut ilization data. DHHS shall enter into contracts with LME/MCOs and local 2
hospitals for the purchase and management of the local inpatient psychiatric beds or days and 3
allocate up to forty percent (40%) of the total funding to the LME/MCO's for the purpose of 4
facility-based crisis services, nonhospital detoxification services, and peer respite services. 5
DHHS shall work to ensure that these contracts are awarded equitably around all regions of the 6
State. LME/MCOs shall manage and control these local inpatient psychiatric beds or bed days, 7
including the determination of the specific local hospital or State psychiatric hospital to which 8
an individual should be admitted pursuant to an involuntary commitment order. 9
SECTION 9G.2.(c) Funds to be Held in Statewide R eserve. Funds appropriated in 10
this act to DHHS for the purchase of local inpatient psychiatric beds or bed days shall not be 11
allocated to LME/MCOs but shall be held in a statewide reserve at the Division of Mental Health, 12
Developmental Disabilities, and Su bstance Use Services to pay for services authorized by the 13
LME/MCOs and billed by the hospitals through the LME/MCOs. LME/MCOs shall remit claims 14
for payment to DHHS within 15 working days after receipt of a clean claim from the hospital 15
and shall pay the hospital within 30 working days after receipt of payment from DHHS. 16
SECTION 9G.2.(d) Ineffective LME/MCO Management of Beds or Bed Days. – If 17
DHHS determines that (i) an LME/MCO is not effectively managing the beds or bed days for 18
which it has responsibil ity, as evidenced by beds or bed days in the local hospital not being 19
utilized while demand for services at the State psychiatric hospitals has not decreased, or (ii) the 20
LME/MCO has failed to comply with the prompt payment provisions of this section, DHHS may 21
contract with another LME/MCO to manage the beds or bed days or, notwithstanding any other 22
provision of law to the contrary, may pay the hospital directly. 23
SECTION 9G.2.(e) Reporting by LME/MCOs. LME/MCOs shall be required to 24
report to DHHS regarding the utilization of these beds or bed days. 25
SECTION 9G.2.(f) Reporting by DHHS. By no later than December 1, 2025, and 26
by no later than December 1, 2026, DHHS shall report to the Joint Legislative Oversight 27
Committee on Health and Human Services and the Fiscal Research Division on all of the 28
following: 29
(1) A uniform system for beds or bed days purchased during the preceding fiscal 30
year from (i) existing State appropriations and (ii) local funds. 31
(2) An explanation of the process used by DHHS to ensure tha t, except as 32
otherwise provided in subsection (a) of this section, local inpatient psychiatric 33
beds or bed days purchased in accordance with this section are utilized solely 34
for individuals who are medically indigent, along with the number of 35
medically indigent individuals served by the purchase of these beds or bed 36
days. 37
(3) The amount of funds used to pay for facility-based crisis services, along with 38
the number of individuals who received these services and the outcomes for 39
each individual. 40
(4) The amount of funds used to pay for nonhospital detoxification services, along 41
with the number of individuals who received these services and the outcomes 42
for each individual. 43
(5) Other DHHS initiatives funded by State appropriations to reduce State 44
psychiatric hospital use. 45
46
USE OF OPIOID SETTLEMENT FUNDS 47
SECTION 9G.3.(a) The State Controller shall transfer the sum of fifty-seven million 48
seventy-six thousand seven hundred seventy-three dollars ($60,858,049) for the 2025-2026 fiscal 49
year and the sum of fourteen mi llion dollars ($13,511,210) for the 2026 -2027 fiscal year from 50
funds available in the Opioid Abatement Reserve in the General Fund to the Opioid Abatement 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 57
Fund established under Section 9F.1 of S.L. 2021 -180. These funds are appropriated to the 1
Department of Health and Human Services to be used as set forth in subsection (b) of this section. 2
In addition to these uses, the Department of Health and Human Services may use up to one 3
million fifty thousand dollars ($1,050,000) of funds allocated by this subdivis ion for each year 4
of the fiscal biennium for administrative purposes to facilitate timely deployment and accounting 5
of funds, for provision of training and technical assistance to community providers and to conduct 6
required monitoring and oversight. 7
SECTION 9G.3.(b) During the 2025-2027 fiscal biennium, the funds appropriated 8
to the Department of Health and Human Service by subsection (a) of this section shall be used to 9
respond to the negative impacts of the opioid epidemic within the State of North Carol ina, as 10
follows: 11
(1) To expand employment and transportation supports through innovative pilot 12
programs in industries in North Carolina that suffered the greatest job losses 13
as a result of Hurricane Helene and are most relied upon by individuals 14
recovering from opioid use disorders to reenter the workforce, such as the food 15
service industry, the hotel and lodging industry, and the entertainment 16
industry. These funds may be used to support all of the following: 17
a. Employment support services for individuals in recovery from opioid 18
use disorder, such as job application support and placement with 19
partnering employers, with emphasis on supporting innovative pilot 20
programs to develop a more robust workforce in rural areas of the 21
State. 22
b. Training and development funding to encourage a consortium of 23
public and private employers, workforce development boards, and 24
vocational services providers to develop workplace recovery friendly 25
ecosystems. 26
c. Transportation support services to enable individuals recovering from 27
opioid use disorder to travel to their places of treatment and their 28
places of employment. 29
(2) To support individuals with opioid use disorder who are involved in the 30
criminal justice system through programs and initiatives designed to 31
accomplish any one or more of the following: 32
a. Establishment or expansion of existing prearrest and post -arrest 33
diversion programs. This includes prearrest diversion, post -arrest 34
diversion, and court -based diversion through treatment or recovery 35
courts. 36
b. Establishment, exp ansion, or sustainment of medication -assisted 37
treatment programs that provide to individuals who are incarcerated 38
any medication approved by the United States Food and Drug 39
Administration for opioid use disorder. Programs authorized under 40
this sub-subdivision that are funded in whole or in part by the Opioid 41
Abatement Fund shall be made available to individuals who were 42
already participating in a medication-assisted treatment program prior 43
to being incarcerated, as well as to individuals who initiate 44
medication-assisted treatment during their incarceration to address an 45
opioid use disorder. 46
c. Creation or expansion of reentry programs to connect individuals 47
exiting incarceration with harm reduction, treatment, and recovery 48
supports. 49
General Assembly Of North Carolina Session 2025
Page 58 Senate Bill 440-First Edition
(3) To expand evidence-based treatment supports and to improve connections to 1
care, especially for individuals hospitalized for overdose who are uninsured 2
or underinsured, through the following activities or initiatives: 3
a. Evidence-based addiction treatment, including medicatio n-assisted 4
treatment provided by inpatient or outpatient opioid treatment 5
programs. 6
b. Expanded access to cost -effective, low -cost, or no -cost 7
medication-assisted treatment in community-based settings. 8
c. Expanded care management services, including the use of peer support 9
specialists and care navigators in local health departments, detention 10
facilities, local departments of social services, and community -based 11
settings. Any funding provided pursuant to this sub -subdivision shall 12
be used to provide care man agement services involving outreach to, 13
engagement with, and coordination for individuals to assist them with 14
accessing opioid use disorder treatment. 15
d. Improve access to medications for opioid use disorder and other 16
clinical and recovery services through deployment of mobile opioid 17
treatment program units. 18
(4) To develop evidence -based supportive housing services, such as Housing 19
First, that are inclusive of individuals with substance use disorders. Qualifying 20
services that may be funded under this subdivision include the following: 21
a. Providing a move-in deposit, rental or utility assistance, or all of these 22
for individuals with substance use disorders who are in recovery or 23
transitioning from residential treatment or incarceration. 24
b. Providing community training sessions on tenancy rights and 25
responsibilities. 26
c. Establishing relationships with landlords to encourage the elimination 27
of preconditions for housing and to reduce potential incidences of 28
evictions due to substance misuse. 29
d. Providing other housing-related supports such as tents, sleeping bags, 30
or other supplies for outdoor living. 31
e. Funding or otherwise supporting recovery supported housing that 32
accepts individuals who are utilizing any medication approved by the 33
United States Food and Drug A dministration for the treatment of 34
opioid use disorder. 35
(5) To expand community based, peer, and collegiate recovery programs 36
providing recovery support services to individuals who have achieved or are 37
aiming to achieve recovery from opioid or other substance use disorders. 38
(6) To reduce opioid overdose deaths and improve overall health through the 39
following: 40
a. Increase overdose education and provide equitable access to opioid 41
overdose reversal medications. 42
b. Support evidence -based strategies to reduce overdose deaths 43
through expansion of syringe services programs. 44
(7) To expand workforce development activities aimed at increasing the number 45
of practitioners available to treat opioid and other substance use disorders. 46
These activities include, but are not limited to: 47
a. Addiction medicine fellowships; 48
b. Scholarships for students studying addiction and committed to 49
practicing the treatment of opioid use disorder upon completion of 50
study; and 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 59
c. Support for universities, colleges, and healthcare practition er training 1
programs to embed addiction training into the general curriculum in 2
fields of primary care, nursing, healthcare administration, social work, 3
counseling, psychology, medicine, and other affiliated healthcare 4
disciplines. 5
(8) To provide technical assistance to community organizations who have 6
received grant funding from the Opioid Abatement Fund to develop and 7
implement community programs and to the LME/MCOs that maximize 8
funding and achieve the best outcomes in their communities. Technical 9
assistance will include support in utilizing evidence -based practices, 10
budgeting, data collection and overall capacity building to ensure ongoing 11
viability of needed community programs. 12
(9) To collect data and evaluate programs to inform program planning and quality 13
improvement, and create data dashboards. 14
15
STATUTORILY APPROPRIATE OPIOID SETTLEMENT FUNDS TO THE DIVISION 16
OF MENTAL HEALTH, DE VELOPMENTAL DISABILI TIES AND SUBSTANCE 17
USE 18
SECTION 9G.4.(a) Section 9F.1(a) of S.L. 2021-180 is rewritten: 19
"The Opioid Abat ement Reserve (Reserve) is established in the General Fund to maintain 20
funds Starting in the 2026-27 fiscal year, funds received by the State as a beneficiary of the final 21
consent judgment resolving the case, State of North Carolina, ex rel. Joshua H. Stein, Plaintiff v. 22
McKinsey and Company, Inc., in the General Court of Justice, Superior Court Division, Wake 23
County and County, (ii) any other funds received by the State as a result of a settlement, as 24
defined in G.S. 114-2.4A, relating to claims regarding the manufacturing, marketing, 25
distribution, dispensing, or sale of opioids, and (iii) funds received by the State as a beneficiary 26
of a confirmation order by a bankruptcy court relating to claims regarding the manufacturi ng, 27
marketing, distribution, dispensing, or sale of opioids. shall be appropriated directly to the Opioid 28
Abatement Fund, established in Section 9F.1.(a) of S.L. 2021-180." 29
30
PART IX-H. PUBLIC HEALTH 31
32
LOCAL HEALTH DEPARTMENTS/COMPETITIVE GRANT PROCESS TO 33
IMPROVE MATERNAL AND CHILD HEALTH 34
SECTION 9H.1. Section 9H.1(b) of S.L. 2023-134 reads as rewritten: 35
"SECTION 9H.1.(b) The plan for administering the competitive grant process shall include 36
at least all of the following components: 37
(1) A request for application (RFA) process to allow local health departments to 38
apply for and receive State funds on a competitive basis. The Department shall 39
require local health departments to include in the application a plan to evaluate 40
the effectiveness, including measurable impact or outcomes, of the activities, 41
services, and programs for which the funds are being requested. 42
(2) A requirement that the Secretary prioritize grant awards to those local health 43
departments that are able to leverage non -State funds in addition to the grant 44
award. 45
(3) Ensures that funds received by the Department to implement the plan 46
supplement and do not supplant existing funds for maternal and child health 47
initiatives. 48
(4) Allows grants to be awarded to local health departments for up to twothree 49
years." 50
51
General Assembly Of North Carolina Session 2025
Page 60 Senate Bill 440-First Edition
USE OF JUUL SETTLEMENT FUNDS 1
SECTION 9H.2.(a) There is appropriated from the Youth Electronic Nicotine 2
Dependence Abatement Fund created in Section 9G.10(a) of S.L. 2021-180 to the Department of 3
Health and Human Services, Division of Public Health (DPH), three million two hundred fifty 4
thousand dollars ($3,250,000) in nonrecurring funds for the 2025 -2026 fiscal year and the sum 5
of two million seven hundred fifty thousand dollars ($2,750,000) in nonrecurring funds for the 6
2026-2027 fiscal year to be allocated and used as follows: 7
(1) Up to seven hundred fifty thousand dollars ($750,000) in nonrecurring funds 8
for each year of the 2025 -2027 fiscal biennium shall be used to support data 9
monitoring to track tobacco/nicotine use and exposure among y outh and 10
young adults and populations at risk; for independent evaluation of the reach, 11
effectiveness, and outcomes of the State's evidence based programs designed 12
to help youth addicted to nicotine through electronic cigarettes and other new 13
and emerging tobacco and nicotine products quit; and to prepare the report 14
required by subsection (c) of this section. 15
(2) The remainder of these allocated funds for each year of the 2025 -2027 fiscal 16
biennium shall be used to fund evidence -based electronic cigarette an d 17
nicotine dependence prevention and cessation activities targeting children, 18
youth, and young adults. 19
SECTION 9H.3.(b) Funds allocated under subsection (a) of this section shall remain 20
available for expenditure in the amounts and for the purposes specif ied in subsection (a) of this 21
section until expended. 22
SECTION 9H.4.(c) Annually, beginning November 1, 2025, the Department of 23
Health and Human Services shall report to the Joint Legislative Oversight Committee on Health 24
and Human Services and the Fiscal Research Division on the expenditures made from the Youth 25
Electronic Nicotine Dependence Abatement Fund during the preceding fiscal year. The report 26
shall include at least all of the following: 27
(1) An itemized list of expenditures and for each expenditure, an indication of the 28
authority under this section for the expenditure. 29
(2) An evaluation of the reach, effectiveness, and outcomes of each activity 30
funded pursuant to subdivision (a)(2) of this section. 31
(3) An evaluation of the reach, effectiveness, and outcomes of each activity 32
funded by Section 9G.10 of S.L. 2021 -180, as amended by Section 9G.3 of 33
S.L. 2022-74. 34
35
LOCAL MEDICAL EXAMINER FEES 36
SECTION 9H.3. G.S. 130A-387 reads as rewritten: 37
"§ 130A-387. Fees. 38
For each investigation and prompt filing of t he required report, the medical examiner shall 39
receive a fee paid by the State. However, if the deceased is a resident of the county in which the 40
death or fatal injury occurred, that county shall pay the fee. The fee shall be two hundred dollars 41
($200.00) four hundred dollars ($400.00)." 42
43
PART IX-I. SERVICES FOR THE BLIND/DEAF/HARD OF HEARING [RESERVED] 44
45
PART IX-J. SOCIAL SERVICES 46
47
TANF BENEFIT IMPLEMENTATION 48
SECTION 9J.1.(a) Beginning October 1, 2025, the General Assembly approves the 49
plan titled "North Carolina Temporary Assistance for Needy Families State Plan FFY 50
2026-2028," prepared by the Department of Health and Human Services and presented to the 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 61
General Assembly. The North Carolina Temporary Assistance for Needy Families State Plan 1
covers the period of October 1, 2025, through September 30, 2028. The Department shall submit 2
the State Plan, as revised in accordance with subsection (b) of this section, to the United Sta tes 3
Department of Health and Human Services. 4
SECTION 9J.1.(b) The counties approved as Electing Counties in the North 5
Carolina Temporary Assistance for Needy Families State Plan FFY 2026 -2028, as approved by 6
this section, are Beaufort, Caldwell, Catawba, Lenoir, Lincoln, Macon, and Wilson. 7
SECTION 9J.1.(c) Counties that submitted the letter of intent to remain as an 8
Electing County or to be redesignated as an Electing County and the accompanying county plan 9
for years 2026 through 2028, pursuant to G.S. 108A-27(e), shall operate under the Electing 10
County budget requirements effective July 1, 2025. For programmatic purposes, all counties 11
referred to in this subsection shall remain under their current county designation through 12
September 30, 2028. 13
SECTION 9J. 1.(d) For each year of the 2025 -2027 fiscal biennium, Electing 14
Counties shall be held harmless to their Work First Family Assistance allocations for the 15
2024-2025 fiscal year, provided that remaining funds allocated for Work First Family Assistance 16
and Work First Diversion Assistance are sufficient for payments made by the Department on 17
behalf of Standard Counties pursuant to G.S. 108A27.11(b). 18
SECTION 9J.1.(e) In the event that departmental projections of Work First Family 19
Assistance and Work First Diversion Assistance for the 2025-2026 fiscal year or the 2026-2027 20
fiscal year indicate that remaining funds are insufficient for Work First Family Assistance and 21
Work First Diversion Assistance payments to be made on behalf of Standard Counties, the 22
Department is authorized to deallocate funds, of those allocated to Electing Counties for Work 23
First Family Assistance in excess of the sums set forth in G.S. 108A-27.11, up to the requisite 24
amount for payments in Standard Counties. Prior to deallocation, the Depar tment shall obtain 25
approval by the Office of State Budget and Management. If the Department adjusts the allocation 26
set forth in subsection (d) of this section, then a report shall be made to the Joint Legislative 27
Oversight Committee on Health and Human Services and the Fiscal Research Division. 28
29
INTENSIVE FAMILY PRE SERVATION SERVICES F UNDING, PERFORMANCE 30
ENHANCEMENTS, AND REPORT 31
SECTION 9J.2.(a) Notwithstanding the provisions of G.S. 143B-150.6, the 32
Intensive Family Preservation Services (IFPS) Program sha ll provide intensive services to 33
children and families in cases of abuse, neglect, and dependency where a child is at imminent 34
risk of removal from the home and to children and families in cases of abuse where a child is not 35
at imminent risk of removal. Th e Program shall be implemented statewide on a regional basis. 36
The IFPS shall ensure the application of standardized assessment criteria for determining 37
imminent risk and clear criteria for determining out-of-home placement. 38
SECTION 9J.2.(b)The Department of Health and Human Services shall require that 39
any program or entity that receives State, federal, or other funding for the purpose of IFPS shall 40
provide information and data that allows for the following: 41
(1) An established follow-up system with a minimum of six months of follow-up 42
services. 43
(2) Detailed information on the specific interventions applied, including 44
utilization indicators and performance measurement. 45
(3) Cost-benefit data. 46
(4) Data on long-term benefits associated with IFPS. This data shall be obtained 47
by tracking families through the intervention process. 48
(5) The number of families remaining intact and the associated interventions 49
while in IFPS and 12 months thereafter. 50
General Assembly Of North Carolina Session 2025
Page 62 Senate Bill 440-First Edition
(6) The number and percentage, by race, of children who received IFPS compared 1
to the ratio of their distribution in the general population involved with Child 2
Protective Services. 3
SECTION 9J.2.(c) The Department shall continue implementing a 4
performance-based funding protocol and shall only provide funding to those programs and 5
entities providing the required information specified in subsection (b) of this section. The amount 6
of funding shall be based on the individual performance of each program. 7
SECTION 9J.2.(d) The Department shall submit an annual report to the Joint 8
Legislative Oversight Committee on Health and Human Services and the Fiscal Research 9
Division by December 1 of each year that provides the information and data collected pursuant 10
to subsection (b) of this section. 11
12
CHILD CARING INSTITUTIONS 13
SECTION 9J.3. Until the Social Services Commission adopts rules setting 14
standardized rates for child caring institutions as authorized under G.S. 143B-153(8), the 15
maximum reimbursement for child caring institutions shall not exceed the rate established for the 16
specific child caring institution by the Department of Health and Human Services, Office of the 17
Controller. In determining the maximum reimbursement, the State shall include county and IV-E 18
reimbursements. 19
20
USE FOSTER CARE BUDGET FOR GUARDIANSHIP ASSISTANCE PROGRAM 21
SECTION 9J.4. Of the funds available for the provision of foster care services, the 22
Department of Health and Human Services, Division of Social Services, may continue to provide 23
for the financial support of children who are deemed to be (i) in a permanent family placement 24
setting, (ii) eligible for legal guardianship, and (iii) otherwise unlikely to receive permanency. 25
No additional expenses shall be incurred beyond the funds budgeted for foster care for the 26
Guardianship Assistance Program (GAP). The Guard ianship Assistance Program shall include 27
provisions for extending guardianship services for individuals and youth who exited foster care 28
through the Guardianship Assistance Program after 14 years of age or who have attained the age 29
of 18 years and opt to continue to receive guardianship services until reaching 21 years of age if 30
the individual is (i) completing secondary education or a program leading to an equivalent 31
credential, (ii) enrolled in an institution that provides postsecondary or vocational education, (iii) 32
participating in a program or activity designed to promote, or remove barriers to, employment, 33
(iv) employed for at least 80 hours per month, or (v) incapable of completing the educational or 34
employment requirements of this section due to a me dical condition or disability. The 35
Guardianship Assistance Program rates shall reimburse the legal guardian for room and board 36
and be set at the same rate as the foster care room and board rates in accordance with rates 37
established under G.S. 108A-49.1. 38
39
CHILD WELFARE POSTSECONDARY SUPPORT PROGRAM (NC REACH) 40
SECTION 9J.5.(a) Funds appropriated in this act from the General Fund to the 41
Department of Health and Human Services for the child welfare postsecondary support program 42
shall be used to continue providing assistance with the "cost of attendance" as that term is defined 43
in 20 U.S.C. § 1087ll for the educational needs of foster youth aging out of the foster care system, 44
youth who exit foster care to a permanent home through the Guardianship Assistance Pro gram 45
(GAP), or special needs children adopted from foster care after age 12. These funds shall be 46
allocated by the State Education Assistance Authority. 47
SECTION 9J.5.(b) Of the funds appropriated in this act from the General Fund to 48
the Department of Health and Human Services, the sum of fifty thousand dollars ($50,000) for 49
each year of the 2025 -2027 fiscal biennium shall be allocated to the North Carolina State 50
Education Assistance Authority (SEAA). The SEAA shall use these funds only to perform 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 63
administrative functions necessary to manage and distribute scholarship funds under the child 1
welfare postsecondary support program. 2
SECTION 9J.5.(c) Of the funds appropriated in this act from the General Fund to 3
the Department of Health and Human Services, the su m of three hundred thirty -nine thousand 4
four hundred ninety-three dollars ($339,493) for each year of the 2025-2027 fiscal biennium shall 5
be used to contract with an entity to administer the child welfare postsecondary support program 6
described under subsection (a) of this section, which administration shall include the performance 7
of case management services. 8
SECTION 9J.5.(d) Funds appropriated in this act to the Department of Health and 9
Human Services for the child welfare postsecondary support program s hall be used only for 10
students attending public institutions of higher education in this State. 11
12
FEDERAL CHILD SUPPORT INCENTIVE PAYMENTS 13
SECTION 9J.6.(a) Centralized Services. The North Carolina Child Support 14
Services Section (NCCSS) of the Department of Health and Human Services, Division of Social 15
Services, shall retain up to fifteen percent (15%) of the annual federal incentive payments it 16
receives from the federal government to enhance centralized child support services. To 17
accomplish this requirement, NCCSS shall do the following: 18
(1) In consultation with representatives from county child support services 19
programs, identify how federal incentive funding could improve centralized 20
services. 21
(2) Use federal incentive funds to improve the effectiveness o f the State's 22
centralized child support services by supplementing and not supplanting State 23
expenditures for those services. 24
(3) Continue to develop and implement rules that explain the State process for 25
calculating and distributing federal incentive funding to county child support 26
services programs. 27
SECTION 9J.6.(b) County Child Support Services Programs. NCCSS shall allocate 28
no less than eighty-five percent (85%) of the annual federal incentive payments it receives from 29
the federal government to county child support services programs to improve effectiveness and 30
efficiency using the federal performance measures. To that end, NCCSS shall do the following: 31
(1) In consultation with representatives from county child support services 32
programs, examine the current methodology for distributing federal incentive 33
funding to the county programs and determine whether an alternative formula 34
would be appropriate. NCCSS shall use its current formula for distributing 35
federal incentive funding until an alternative formula is adopted. 36
(2) Upon adopting an alternative formula, develop a process to phase in the 37
alternative formula for distributing federal incentive funding over a four-year 38
period. 39
SECTION 9J.6.(c) Reporting by County Child Support Services Programs. – 40
NCCSS shall continue implementing guidelines that identify appropriate uses for federal 41
incentive funding. To ensure those guidelines are properly followed, NCCSS shall require county 42
child support services programs to comply with each of the following: 43
(1) Submit an annual plan describing how federal incentive funding would 44
improve program effectiveness and efficiency as a condition of receiving 45
federal incentive funding. 46
(2) Report annually on the following: (i) how federal incentive funding has 47
improved program effectiveness and efficiency and been reinvested into their 48
programs, (ii) provide documentation that the funds were spent according to 49
their annual plans, and (iii) explain any deviations from their plans. 50
General Assembly Of North Carolina Session 2025
Page 64 Senate Bill 440-First Edition
SECTION 9J.6.(d) Reporting by NCCSS. – NCCSS shall submit a report on federal 1
child support incentive funding to the Joint Legislative Oversight Committee on Health and 2
Human Services and the Fiscal Research Division by November 1 of each year. The report shall 3
describe how federal incentive funds en hanced centralized child support services to benefit 4
county child support services programs and improved the effectiveness and efficiency of county 5
child support services programs. The report shall further include any changes to the State process 6
that NCCSS used in calculating and distributing federal incentive funding to county child support 7
services programs and any recommendations for further changes. 8
9
SUCCESSFUL TRANSITION/FOSTER CARE YOUTH 10
SECTION 9J.7. The Foster Care Transitional Living Initiative Fund shall continue 11
to fund and support transitional living services that demonstrate positive outcomes for youth, 12
attract significant private sector funding, and lead to the development of evidence -based 13
programs to serve the at -risk population described in this section. The Fund shall continue to 14
support a demonstration project with services provided by Youth Villages to (i) improve 15
outcomes for youth ages 17-21 years who transition from foster care through implementation of 16
outcome-based Transitional Living Services, (ii) identify cost -savings in social services and 17
juvenile and adult correction services associated with the provision of Transitional Living 18
Services to youth aging out of foster care, and (ii i) take necessary steps to establish an 19
evidence-based transitional living program available to all youth aging out of foster care. In 20
continuing to implement these goals, the Foster Care Transitional Living Initiative Fund shall 21
support the following strategies: 22
(1) Transitional Living Services, which is an outcome-based program that follows 23
the Youth Villages Transitional Living Model. Outcomes on more than 7,000 24
participants have been tracked since the program's inception. The program has 25
been evaluated through an independent randomized controlled trial. Results 26
indicate that the Youth Villages Transitional Living Model had positive 27
impacts in a variety of areas, including housing stability, earnings, economic 28
hardship, mental health, and intimate partner violence in comparison to the 29
control population. 30
(2) Public-Private Partnership, which is a commitment by private -sector funding 31
partners to match at least twenty-five percent (25%) of the funds appropriated 32
to the Foster Care Transitional Living Initiative Fund for the 2025-2027 fiscal 33
biennium for the purposes of providing Transitional Living Services through 34
the Youth Villages Transitional Living Model to youth aging out of foster 35
care. 36
(3) Impact Measurement and Evaluation, which are services funded through 37
private partners to provide independent measurement and evaluation of the 38
impact the Youth Villages Transitional Living Model has on the youth served, 39
the foster care system, and on other programs and services provided by the 40
State which are utilized by former foster care youth. 41
(4) Advancement of Evidence -Based Process, which is the implementation and 42
ongoing evaluation of the Youth Villages Transitional Living Model for the 43
purposes of establishing the first evidence -based transitional living prog ram 44
in the nation. To establish the evidence-based program, additional randomized 45
controlled trials may be conducted to advance the model. 46
47
PART IX -K. DIVISION OF EMPLOYMENT AND IN DEPEDENCE FOR PEOPLE 48
WITH DISABILITIES [RESERVED] 49
50
PART IX-L. DHHS BLOCK GRANTS 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 65
1
DHHS BLOCK GRANTS 2
SECTION 9L.1.(a) Except as otherwise provided, appropriations from federal Block 3
Grant funds are made for each year of the fiscal biennium ending June 30, 2027, according to the 4
following schedule: 5
6
TEMPORARY ASSISTANCE FOR NEEDY FY 2025-2026 FY 2026-2027 7
FAMILIES (TANF) FUNDS 8
9
Local Program Expenditures 10
11
Division of Social Services 12
13
01. Work First Family Assistance $31,259,794 $31,259,794 14
15
02. Work First County Block Grants 80,093,566 80,093,566 16
17
03. Work First Electing Counties 2,378,213 2,378,213 18
19
04. Adoption Services – Special Children 20
Adoption Fund 4,001,676 4,001,676 21
22
05. Child Protective Services – Child Welfare 23
Workers for Local DSS 11,387,190 11,387,190 24
25
06. Child Welfare Program Improvement Plan 775,176 775,176 26
27
07. Child Welfare Collaborative 400,000 400,000 28
29
08. Child Welfare Initiatives 2,900,000 2,900,000 30
31
Division of Child Development and Early Education 32
33
09. Subsidized Child Care Program 45,813,694 45,813,694 34
35
10. Swap-Child Care Subsidy 12,600,000 12,600,000 36
37
11. NC Pre-K Services 68,300,000 68,300,000 38
39
Division of Public Health 40
41
12. Teen Pregnancy Prevention Initiatives 3,538,541 3,538,541 42
43
DHHS Administration 44
45
13. Division of Social Services 2,478,284 2,478,284 46
47
14. Division of Child and Family Well Being 3,976 3,976 48
49
15. Office of the Secretary 34,042 34,042 50
51
General Assembly Of North Carolina Session 2025
Page 66 Senate Bill 440-First Edition
16. Eligibility Systems – Operations and 1
Maintenance 431,733 431,733 2
3
17. NC FAST Implementation 428,239 428,239 4
5
18. Division of Social Services – Workforce 6
Innovation & Opportunity Act (WIOA) 93,216 93,216 7
8
19. Division of Social Services TANF Modernization 2,000,000 2,000,000 9
10
Transfers to Other Block Grants 11
12
Division of Child Development and Early Education 13
14
20. Transfer to the Child Care and Development Fund 21,773,001 21,773,001 15
16
Division of Social Services 17
18
21. Transfer to Social Services Block 19
Grant for Child Protective Services – Training 285,612 285,612 20
21
22. Transfer to Social Services Block 22
Grant for Child Protective Services 5,040,000 5,040,000 23
24
23. Transfer to Social Services Block 25
Grant for County Departments of 26
Social Services for Children's Services 13,166,244 13,166,244 27
28
24. Transfer to Social Services Block 29
Grant – Foster Care Services 3,422,219 3,422,219 30
31
25. Transfer to Social Services Block 1,582,000 1,582,000 32
Grant – Child Advocacy Centers 33
34
TOTAL TEMPORARY ASSISTANCE FOR 35
NEEDY FAMILIES (TANF) FUNDS $314,186,416 $314,186,416 36
37
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) 38
EMERGENCY CONTINGENCY FUNDS 39
40
Local Program Expenditures 41
42
Division of Child Development and Early Education 43
44
01. Subsidized Child Care $34,337,395 $34,337,395 45
46
TOTAL TEMPORARY ASSISTANCE FOR 47
NEEDY FAMILIES (TANF) EMERGENCY 48
CONTINGENCY FUNDS $34,337,395 $34,337,395 49
50
SOCIAL SERVICES BLOCK GRANT 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 67
1
Local Program Expenditures 2
3
Divisions of Social Services and Aging and Adult Services 4
5
01. County Departments of Social Services $19,837,388 $19,837,388 6
7
02. County Departments of Social Services 8
(Transfer From TANF) 13,166,244 13,166,244 9
10
03. EBCI Tribal Public Health and Human Services 244,740 244,740 11
12
04. Child Protective Services 13
(Transfer From TANF) 5,040,000 5,040,000 14
15
05. State In-Home Services Fund 1,943,950 1,943,950 16
17
06. Adult Protective Services 3,864,547 2,138,404 18
19
07. State Adult Day Care Fund 1,994,084 1,994,084 20
21
08. Child Protective Services/CPS 22
Investigative Services – Child Medical 23
Evaluation Program 901,868 901,868 24
25
09. Special Children Adoption Incentive Fund 462,600 462,600 26
27
10. Child Protective Services – Child 28
Welfare Training for Counties 29
(Transfer From TANF) 285,612 285,612 30
31
11. Home and Community Care Block 32
Grant (HCCBG) 2,696,888 2,696,888 33
34
12. Child Advocacy Centers 35
(Transfer from TANF) 1,582,000 1,582,000 36
37
13. Guardianship – Division of Social Services 1,802,671 1,802,671 38
39
14. Foster Care Services 40
(Transfer From TANF) 3,422,219 3,422,219 41
42
14A. Big Brothers Big Sisters of the Triangle, Inc. 350,000 350,000 43
44
Division of Mental Health, Developmental Disabilities, and Substance Abuse Services 45
46
15. Mental Health Services – Adult and 47
Child/Developmental Disabilities Program/ 48
Substance Abuse Services – Adult 4,149,595 4,149,595 49
50
15A. Autism Society of North Carolina, Inc. 2,541,392 2,541,392 51
General Assembly Of North Carolina Session 2025
Page 68 Senate Bill 440-First Edition
1
15B. The Arc of North Carolina, Inc. 271,074 271,074 2
3
15C. Easterseals UCP North Carolina & Virginia, Inc. 1,612,059 1,612,059 4
5
DHHS Program Expenditures 6
7
Division of Services for the Blind 8
9
16. Independent Living Program & Program Oversight 4,237,849 4,237,849 10
11
Division of Health Service Regulation 12
13
17. Adult Care Licensure Program 891,520 891,520 14
15
18. Mental Health Licensure and 16
Certification Program 266,158 266,158 17
18
Division of Social Services 19
20
19. Guardianship 3,825,443 3,825,443 21
22
DHHS Administration 23
24
20. Division of Aging and Adult Services 188,787 188,787 25
26
21. Division of Social Services 1,724,551 1,724,551 27
28
22. Office of the Secretary/Controller's Office 673,990 673,990 29
30
23. Legislative Increases/Fringe Benefits 293,655 587,310 31
32
24. Division of Child Development and 33
Early Education 13,878 13,878 34
35
25. Division of Mental Health, Developmental 36
Disabilities, and Substance Abuse Services 29,966 29,966 37
38
26. Division of Health Service Regulation 592,882 592,882 39
40
TOTAL SOCIAL SERVICES BLOCK GRANT $78,907,610 $77,475,122 41
42
LOW-INCOME ENERGY ASSISTANCE BLOCK GRANT 43
44
Local Program Expenditures 45
46
Division of Social Services 47
48
01. Low-Income Energy Assistance 49
Program (LIEAP) $56,369,281 $56,369,281 50
51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 69
02. Crisis Intervention Program (CIP) 44,804,354 44,804,354 1
2
Local Administration 3
4
Division of Social Services 5
6
03. County DSS Administration 8,037,889 8,037,889 7
8
DHHS Administration 9
10
Division of Central Management and Support 11
12
04. Administration 10,000 10,000 13
14
05. Energy Portal (FIS Transaction Fees) 25,000 25,000 15
16
06. Office of the Secretary/ Division of Information Resource 17
Management (DIRM) (Accountable Results for 18
Community Action (AR4CA) Replacement System) 166,750 166,750 19
20
07. Office of the Secretary/DIRM 278,954 278,954 21
22
08. Office of the Secretary/Controller's Office 18,378 18,378 23
24
09. NC FAST Development 627,869 627,869 25
26
10. NC FAST Operations and Maintenance 1,330,323 1,330,323 27
28
Transfers to Other State Agencies 29
30
Department of Environmental Quality 31
32
11. Weatherization Program 10,356,943 10,356,943 33
34
12. Heating Air Repair and Replacement 35
Program (HARRP) 5,898,508 5,898,508 36
37
13. Local Residential Energy Efficiency Service 38
Providers – Weatherization 574,945 574,945 39
40
14. Local Residential Energy Efficiency Service 41
Providers – HARRP 319,414 319,414 42
43
15. DEQ – Weatherization Administration 628,180 628,180 44
45
16. DEQ – HARRP Administration 393,944 393,944 46
47
Department of Administration 48
49
17. N.C. Commission on Indian Affairs 87,736 87,736 50
51
General Assembly Of North Carolina Session 2025
Page 70 Senate Bill 440-First Edition
TOTAL LOW-INCOME ENERGY 1
ASSISTANCE BLOCK GRANT $129,928,468 $129,928,468 2
3
CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT 4
5
Local Program Expenditures 6
7
Division of Child Development and Early Education 8
9
01. Child Care Services $471,880,848 $411,280,848 10
11
02. Smart Start Subsidy 7,392,654 7,392,654 12
13
03. Transfer from TANF Block Grant 14
for Child Care Subsidies 21,773,001 21,773,001 15
16
04. Quality and Availability Initiatives 17
(TEACH Program $3,800,000) 85,830,526 66,430,526 18
19
DHHS Administration 20
21
Division of Child Development and Early Education 22
23
05. DCDEE Administrative Expenses 12,710,886 12,710,886 24
25
06. Indirect Cost 7,346 7,346 26
27
Division of Social Services 28
29
07. Direct Deposit for Child Care Payments 5,000 5,000 30
31
08. Local Subsidized Child Care 32
Services Support 18,780,355 18,780,355 33
34
Division of Central Management and Support 35
36
09. NC FAST Operations and Maintenance 1,450,316 1,450,316 37
38
10. DHHS Central Administration – DIRM 39
Technical Services 1,029,762 1,029,762 40
41
11. DHHS Central Administration 118,000 118,000 42
43
Division of Child and Family Well-Being 44
45
12. Child Care Health Consultation Contracts 62,205 62,205 46
47
TOTAL CHILD CARE AND DEVELOPMENT 48
FUND BLOCK GRANT $621,040,899 $541,040,899 49
50
MENTAL HEALTH SERVICES BLOCK GRANT 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 71
1
Local Program Expenditures 2
3
01. Mental Health Services – Child $2,477,666 $2,477,666 4
5
02. Mental Health Services – Adult/Child 23,420,169 15,467,497 6
7
03. Mental Health Services – First 8
Psychotic Symptom Treatment 5,416,756 3,000,000 9
10
04. Child Behavioral Health (Division of Child 11
and Family Well-Being) 5,246,350 5,246,350 12
13
DHHS Administration 14
15
Division of Child and Family Well Being 16
17
05. Administration 140,000 140,000 18
19
Division of Mental Health, Developmental Disabilities, and Substance Abuse Services 20
21
06. Crisis Services 2,877,047 1,877,047 22
23
07. Administration 332,351 332,351 24
25
08. Adult/Child Mental Health Services 350,150 350,150 26
27
Division of Public Health 28
29
09. NC Detect – Behavioral Health ER 35,000 35,000 30
31
TOTAL MENTAL HEALTH SERVICES 32
BLOCK GRANT $40,295,489 $28,926,061 33
34
SUBSTANCE ABUSE PREVENTION, TREATMENT, AND RECOVERY SERVICES 35
BLOCK GRANT 36
37
Local Program Expenditures 38
39
Division of Mental Health, Developmental Disabilities, and Substance Use Services 40
41
01. Substance Abuse – IV Drug $2,000,000 $2,000,000 42
43
02. Substance Abuse Prevention 13,351,864 13,351,864 44
45
03. Substance Use Services – Treatment for 46
Children/Adults 40,038,949 40,038,949 47
48
04. Crisis Solutions Initiatives – Collegiate 49
Wellness/Addiction Recovery 1,545,205 1,545,205 50
51
General Assembly Of North Carolina Session 2025
Page 72 Senate Bill 440-First Edition
05. Veterans Initiatives 250,000 250,000 1
DHHS Administration 2
3
Division of Mental Health, Developmental Disabilities, and Substance Use Services 4
5
06. Administration 2,297,852 2,297,852 6
7
07. Controlled Substance Reporting System 8
Enhancement 675,000 675,000 9
10
TOTAL SUBSTANCE ABUSE PREVENTION 11
AND TREATMENT BLOCK GRANT $60,158,870 $60,158,870 12
13
MATERNAL AND CHILD HEALTH BLOCK GRANT 14
15
Local Program Expenditures 16
17
Division of Child and Family Well-Being 18
19
Children's Health Services $5,453,930 $5,453,930 20
21
Division of Public Health 22
23
02. Women's and Children's Health Services 11,646,618 11,646,618 24
25
03. Oral Health 58,413 58,413 26
27
04. Evidence-Based Programs in Counties 28
With Highest Infant Mortality Rates 1,727,307 1,727,307 29
30
DHHS Program Expenditures 31
32
05. Children's Health Services 1,287,619 1,287,619 33
34
06. Women's Health – Maternal Health 489,568 489,568 35
36
07. Women's and Children's Health – Perinatal 37
Strategic Plan Support Position 81,112 81,112 38
39
08. State Center for Health Statistics 158,583 158,583 40
41
09. Health Promotion – Injury and 42
Violence Prevention 87,271 87,271 43
44
DHHS Administration 45
46
11. Division of Public Health Administration 340,646 340,646 47
48
11. Division of Child and Family Well Being 49
Administration 211,925 211,925 50
51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 73
TOTAL MATERNAL AND CHILD 1
HEALTH BLOCK GRANT $21,542,992 $21,542,992 2
3
PREVENTIVE HEALTH AND HEALTH SERVICES BLOCK GRANT 4
5
Local Program Expenditures 6
7
01. Physical Activity and Prevention $3,081,442 $3,081,442 8
9
DHHS Program Expenditures 10
11
Division of Public Health 12
13
02. HIV/STD Prevention and 14
Community Planning 135,063 135,063 15
16
03. Oral Health Preventive Services 150,000 150,000 17
18
04. Injury and Violence Prevention 19
(Services to Rape Victims – Set-Aside) 217,935 217,935 20
21
05. Performance Improvement and 22
Accountability 1,384,421 1,199,557 23
24
06. State Center for Health Statistics 48,000 48,000 25
26
DHHS Administration 27
28
Division of Public Health 29
30
07. Division of Public Health 65,000 65,000 31
32
TOTAL PREVENTIVE HEALTH AND HEALTH 33
SERVICES BLOCK GRANT $5,081,861 $4,896,997 34
35
COMMUNITY SERVICES BLOCK GRANT 36
37
01. Community Action Agencies $22,260,015 $21,438,318 38
39
02. Limited Purpose Agencies/Discretionary Funding 615,037 549,638 40
41
03. Office of Economic Opportunity 1,070,001 1,024,351 42
43
04. Office of the Secretary/DIRM (Accountable Results 44
For Community Action (AR4CA) Replacement 45
System) 394,964 414,713 46
47
05. Office of Economic Opportunity – Workforce 48
Investment Opportunities Act (WIOA) 60,000 60,000 49
50
TOTAL COMMUNITY SERVICES 51
General Assembly Of North Carolina Session 2025
Page 74 Senate Bill 440-First Edition
BLOCK GRANT $24,400,017 $23,487,020 1
2
GENERAL PROVISIONS 3
SECTION 9L.1.(b) Information to be Included in Block Grant Plans. – The 4
Department of Health and Human Services shall submit a separate plan for each Block Grant 5
received and administered by the Department, and each plan shall include the following: 6
(1) A delineation of the proposed allocations by program or activity, including 7
State and federal match requirements. 8
(2) A delineation of the proposed State and local administrative expenditures. 9
(3) An identification of all new positions to be established through the Block 10
Grant, including permanent, temporary, and time-limited positions. 11
(4) A comparison of the proposed allocations by program or activity with two 12
prior years' program and activity budgets and two prior years' actual program 13
or activity expenditures. 14
(5) A projection of current year expenditures by program or activity. 15
(6) A projection of federal Block Grant funds available, including unspent federal 16
funds from the current and prior fiscal years. 17
(7) The required amount of maintenance of effort and the amount o f funds 18
qualifying for maintenance of effort in the previous year delineated by 19
program or activity. 20
SECTION 9L.1.(c) Changes in Federal Fund Availability. – If the Congress of the 21
United States increases the federal fund availability for any of the Block Grants or contingency 22
funds and other grants related to existing Block Grants administered by the Department of Health 23
and Human Services from the amounts appropriated in this act, the Department shall allocate the 24
increase proportionally across the progr am and activity appropriations identified for that Block 25
Grant in this section. In allocating an increase in federal fund availability, the Office of State 26
Budget and Management shall not approve funding for new programs or activities not 27
appropriated in this act. 28
If the Congress of the United States decreases the federal fund availability for any of 29
the Block Grants or contingency funds and other grants related to existing Block Grants 30
administered by the Department of Health and Human Services from the am ounts appropriated 31
in this act, the Department shall develop a plan to adjust the Block Grants based on reduced 32
federal funding. 33
Notwithstanding the provisions of this subsection, for fiscal years 2025 -2026 and 34
2026-2027, increases in the federal fund avai lability for the Temporary Assistance to Needy 35
Families (TANF) Block Grant shall be used only for the North Carolina Child Care Subsidy 36
program to pay for child care and shall not be used to supplant State funds. 37
Prior to allocating the change in federal f und availability, the proposed allocation 38
must be approved by the Office of State Budget and Management. If the Department adjusts the 39
allocation of any Block Grant due to changes in federal fund availability, then a report shall be 40
made to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal 41
Research Division. 42
SECTION 9L.1.(d) Except as otherwise provided, appropriations from federal 43
Block Grant funds are made for each year of the fiscal biennium ending June 30, 2027, according 44
to the schedule enacted for State fiscal years 2025-2026 and 2026-2027, or until a new schedule 45
is enacted by the General Assembly. 46
SECTION 9L.1.(e) Except as otherwise provided in subsection (e1) of this section, 47
all changes to the budgeted allocations to the Block Grants or contingency funds and other grants 48
related to existing Block Grants administered by the Department of Health and Human Services 49
that are not specifically addressed in this section shall be approved by the Office of State Budget 50
and Management. The Office of State Budget and Management shall not approve. funding for 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 75
new programs or activities not appropriated in this section The Office of State Budget and 1
Management shall consult with the Joint Legislative Oversight Committee on Health and Human 2
Services for review prior to implementing any changes. In consulting, the report shall include an 3
itemized listing of affected programs, including associated changes in budgeted allocations. All 4
changes to the budgeted allocations to the Block Grants shall be reported immediately to the Joint 5
Legislative Oversight Committee on Health and Human Services and the Fiscal Research 6
Division. This subsection does not apply to Block Grant changes caused by legislative salary 7
increases and benefit adjustments. 8
SECTION 9L.1.(e) The Department of Health and Human Services shall have the 9
authority to realign appropriated funds under subsection (a) of this section for Item 01 or 02 in 10
the Maternal and Child Health Block Grant to maintain federal complian ce and programmatic 11
alignment, so long as the realignment does not result in a reduction of funds designated for 12
subrecipients under subsection (a) of this section. The Department of Health and Human Services 13
is authorized to realign appropriated funds between the Maternal and Child Health Block Grant 14
categories as provided in this subsection without prior consultation with the Joint Legislative 15
Oversight Committee on Health and Human Services or without exceeding the total amount 16
appropriated for the items. 17
SECTION 9L.1.(f) Except as otherwise provided, the Department of Health and 18
Human Services shall have flexibility to transfer funding between the Temporary Assistance for 19
Needy Families (TANF) Block Grant and the TANF Emergency Contingency Funds Block Grant 20
so long as the total allocation for the line items within those Block Grants remains the same. 21
22
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) FUNDS 23
SECTION 9L.1.(g) The sum of eighty million ninety -three thousand five hundred 24
sixty-six dollars ($80,093,566) for each year of the 2025 -2027 fiscal biennium appropriated in 25
this act in TANF funds to the Department of Health and Human Services, Division of Social 26
Services, shall be used for Work First County Block Grants. The Division shall certify th ese 27
funds in the appropriate State-level services based on prior year actual expenditures. The Division 28
has the authority to realign the authorized budget for these funds among the State-level services 29
based on current year actual expenditures. The Divisio n shall also have the authority to realign 30
appropriated funds from Work First Family Assistance for electing counties to the Work First 31
County Block Grant for electing counties based on current year expenditures so long as the 32
electing counties meet Maintenance of Effort requirements. 33
SECTION 9L.1.(h) The sum of eleven million three hundred eighty-seven thousand 34
one hundred ninety dollars ($11,387,190) for each year of the 2025 -2027 fiscal biennium 35
appropriated in this act to the Department of Health and H uman Services, Division of Social 36
Services, in TANF funds for child welfare improvements shall be allocated to the county 37
departments of social services for hiring or contracting staff to investigate and provide services 38
in Child Protective Services cases; to provide foster care and support services; to recruit, train, 39
license, and support prospective foster and adoptive families; and to provide interstate and 40
post-adoption services for eligible families. 41
Counties shall maintain their level of expenditures in local funds for Child Protective 42
Services workers. Of the Block Grant funds appropriated for Child Protective Services workers, 43
the total expenditures from State and local funds for the 2025 -2026 and 2026-2027 fiscal years 44
shall not be less than the total expended from State and local funds for the 2012-2013 fiscal year. 45
SECTION 9L.1.(i) The sum of four million one thousand six hundred seventy -six 46
dollars ($4,001,676) for each year of the 2025 -2027 fiscal biennium appropriated in this act in 47
TANF funds to the Department of Health and Human Services, Special Children Adoption Fund, 48
shall be used in accordance with G.S. 108A-50.2. The Division of Social Services, in consultation 49
with the North Carolina Association of County Directors of Social Services and representatives 50
of licensed private adoption agencies, shall develop guidelines for the awarding of funds to 51
General Assembly Of North Carolina Session 2025
Page 76 Senate Bill 440-First Edition
licensed public and private adoption agencies upon the adoption of children described in 1
G.S. 108A-50 and in foster care. Payments received from t he Special Children Adoption Fund 2
by participating agencies shall be used exclusively to enhance the adoption services program. No 3
local match shall be required as a condition for receipt of these funds. 4
SECTION 9L.1.(j) The sum of two million nine hundre d thousand dollars 5
($2,900,000) appropriated in this act in TANF funds to the Department of Health and Human 6
Services, Division of Social Services, for each fiscal year of the 2025-2027 fiscal biennium shall 7
be used for child welfare initiatives to (i) enh ance the skills of social workers to improve the 8
outcomes for families and children involved in child welfare and (ii) enhance the provision of 9
services to families in their homes in the least restrictive setting. 10
11
SOCIAL SERVICES BLOCK GRANT 12
SECTION 9L.1. (k) The sum of nineteen million eight hundred thirty -seven 13
thousand three hundred eighty-eight dollars ($19,837,388) for the 2025-2026 fiscal year and the 14
sum of nineteen million eight hundred thirty -seven thousand three hundred eighty -eight dollars 15
($19,837,388) for the 2026-2027 fiscal year appropriated in this act in the Social Services Block 16
Grant to the Department of Health and Human Services, Division of Social Services, and the sum 17
of thirteen million one hundred sixty-six thousand two hundred forty-four dollars ($13,166,244) 18
for the 2025-2026 fiscal year and the sum of thirteen million one hundred sixty-six thousand two 19
hundred forty-four dollars ($13,166,244) for the 2026 -2027 fiscal year transferred from funds 20
appropriated in the TANF Block Grant shall be used for county Block Grants. The Division shall 21
certify these funds in the appropriate State-level services based on prior year actual expenditures. 22
The Division has the authority to realign the authorized budget for these funds, as well as Stat e 23
Social Services Block Grant funds, among the State -level services based on current year actual 24
expenditures. 25
SECTION 9L.1.(l) The sum of two hundred eighty-five thousand six hundred twelve 26
dollars ($285,612) appropriated in this act in the Social Services Block Grant to the Department 27
of Health and Human Services, Division of Social Services, for each fiscal year of the 2025-2027 28
fiscal biennium shall be used to support the state's child welfare training system. Training is 29
delivered to county child welfare staff that addresses the knowledge and skills needed to complete 30
their daily tasks in the areas of child protective services, foster care, on -going child welfare 31
services, and adoption. 32
SECTION 9L.1.(m) The Department of Health and Human Services is authorized, 33
subject to the approval of the Office of State Budget and Management, to transfer Social Services 34
Block Grant funding allocated for departmental administration between divisions that have 35
received administrative allocations from the Social Services Block Grant. 36
SECTION 9L.1.(n) Social Services Block Grant funds appropriated for the Special 37
Children Adoption Incentive Fund shall require a fifty percent (50%) local match. 38
SECTION 9L.1.(o) The sum of five million forty thousand dollars ($5,040,00 0) 39
appropriated in this act in the Social Services Block Grant for each fiscal year of the 2025 -2027 40
fiscal biennium transferred from funds appropriated in the TANF Block Grant shall be allocated 41
to the Department of Health and Human Services, Division of Social Services. The Division shall 42
allocate these funds to local departments of social services to replace the loss of Child Protective 43
Services State funds that are currently used by county governments to pay for Child Protective 44
Services staff at the lo cal level. These funds shall be used to maintain the number of Child 45
Protective Services workers throughout the State. These Social Services Block Grant funds shall 46
be used to pay for salaries and related expenses only and are exempt from 10A NCAC 71R 47
.0201(3) requiring a local match of twenty-five percent (25%). 48
SECTION 9L.1.(p) The sum of one million five hundred eighty -two thousand 49
dollars ($1,582,000) appropriated in this act in the Social Services Block Grant for each fiscal 50
year of the 2025-2027 fiscal biennium to the Department of Health and Human Services, Division 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 77
of Social Services, shall be used to continue support for the Child Advocacy Centers. These funds 1
are exempt from the provisions of 10A NCAC 71R .0201(3). 2
SECTION 9L.1.(q) The sum of thr ee million eight hundred twenty -five thousand 3
four hundred forty -three dollars ($3,825,443) for each fiscal year of the 2025 -2027 fiscal 4
biennium appropriated in this act in the Social Services Block Grant to the Department of Health 5
and Human Services, Di vision of Social Services, shall be used for guardianship services 6
pursuant to Chapter 35A of the General Statutes. The Department may expend funds allocated in 7
this section to support existing corporate guardianship contracts during the 2025 -2026 and 8
2026-2027 fiscal years. 9
SECTION 9L.1.(r) Of the three million eight hundred sixty -four thousand five 10
hundred forty -seven dollars ($3,864,547) in the 2025 -2026 fiscal year and two million one 11
hundred thirty -eight thousand four hundred four dollars ($2,138,404) for the 2026 -2027 12
fiscal year appropriated in this act in the Social Services Block Grant to the Division of Aging 13
and Adult Services for Adult Protective Services for each year of the 2025-2027 fiscal biennium, 14
the sum of eight hundred ninety-three thousand forty-one dollars ($893,041) for each year of the 15
2025-2027 fiscal biennium shall be used to increase the number of Adult Protective Services 16
workers where these funds can be the most effective. These funds shall be used to pay for salaries 17
and related expenses and shall not be used to supplant any other source of funding for staff. These 18
funds are also exempt from 10A NCAC 71R .0201(3) requiring a local match of twenty -five 19
percent (25%). 20
SECTION 9L.1.(s) The following amounts appropriated in this ac t in the Social 21
Services Block Grant for each fiscal year of the 2025-2027 fiscal biennium to the Department of 22
Health and Human Services, Division of Social Services or Division of Mental Health, 23
Developmental Disabilities, and Substance Use Services, for the nonprofit organizations 24
described in this subsection shall be exempt from the provisions of 10A NCAC 71R .0201(3): 25
(1) The sum of three hundred fifty thousand dollars ($350,000) for each fiscal 26
year of the 2025 -2027 fiscal biennium for Big Brothers B ig Sisters of the 27
Triangle, Inc. 28
(2) The sum of two million five hundred forty -one thousand three hundred 29
ninety-two dollars ($2,541,392) for each fiscal year of the 2025 -2027 fiscal 30
biennium for Autism Society of North Carolina, Inc. 31
(3) The sum of two hundred seventy -one thousand seventy -four dollars 32
($271,074) for each fiscal year of the 2025-2027 fiscal biennium for The Arc 33
of North Carolina, Inc. 34
(4) The sum of one million six hundred twelve thousand fifty -nine dollars 35
($1,612,059) for each fiscal y ear of the 2025 -2027 fiscal biennium for 36
Easterseals UCP of North Carolina & Virginia, Inc. 37
38
LOW-INCOME ENERGY ASSISTANCE BLOCK GRANT 39
SECTION 9L.1.(t) The Division of Social Services shall have the authority to 40
realign appropriated funds between the State -level services Low -Income Energy Assistance 41
Payments and Crisis Assistance Payments without prior consultation with the Joint Legislative 42
Oversight Committee on Health and Human Services to ensure needs are effectively met without 43
exceeding the total amou nt appropriated for these State -level service items. Additional 44
emergency contingency funds received may be allocated for Energy Assistance Payments or 45
Crisis Intervention Payments without prior consultation with the Joint Legislative Oversight 46
Committee on Health and Human Services. Additional funds received shall be reported to the 47
Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research 48
Division upon notification of the award. The Department of Health and Human Services shall 49
not allocate funds for any activities, including increasing administration, other than assistance 50
General Assembly Of North Carolina Session 2025
Page 78 Senate Bill 440-First Edition
payments, without prior consultation with the Joint Legislative Oversight Committee on Health 1
and Human Services. 2
SECTION 9L.1.(u) The sum of fifty-six million three hundred sixty-nine thousand 3
two hundred eighty -one dollars ($56,369,281) for each year of the 2025 -2027 fiscal biennium 4
appropriated in this act in the Low-Income Energy Assistance Block Grant to the Department of 5
Health and Human Services, Division of Social Services, shall be used for Energy Assistance 6
Payments for the households of (i) elderly persons age 60 and above with income up to one 7
hundred fifty percent (150%) of the federal poverty level and (ii) disabled persons eligible for 8
services funded through the Division of Aging and Adult Services. 9
County departments of social services shall submit to the Division of Social Services 10
an outreach plan for targeting households with 60 -year-old household members no later than 11
August 1 of each year. The outreach plan shall comply with the following: 12
(1) Ensure that eligible households are made aware of the available assistance, 13
with particular attention paid to the elderly population age 60 and above and 14
disabled persons receiving services through the Division of Aging and Adult 15
Services. 16
(2) Include efforts by the county department of social services to contact other 17
State and local governmental entities and community -based organizations to 18
(i) offer the opportunity to provide outreach and (ii) receive applications for 19
energy assistance. 20
(3) Be approved by the local board of social services or human services board 21
prior to submission. 22
23
CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT 24
SECTION 9L.1.(v) Payment for subsidized child care services provided with federal 25
TANF funds shall comply with all regulations and policies issued by the Division of Child 26
Development and Early Education for the subsidized child care program. 27
SECTION 9L.1.(w) If funds appropriated through the Child Care and Development 28
Fund Block Grant for any program cannot be obligated or spent in that program within the 29
obligation or liquidation periods allowed by the federal grants, the Department may move funds 30
to child care subsidies, unless otherwise prohibited by federal requirements of the grant, in order 31
to use the federal funds fully. 32
33
COMMUNITY MENTAL HEALTH SERVICES BLOCK GRANT 34
SECTION 9L.1.(x) The sum of five million four hundred sixteen thousand seven 35
hundred fifty-six dollars ($5,416,756) for the 2025 -2026 fiscal year and three million dollars 36
($3,000,000) for the 2026 -2027 fiscal year appropriated in this act in the Community Mental 37
Health Services Block Grant to the Department of Health and Human Services, Division of 38
Mental Health, Developmental Disabilities, and Substance Use Services, is to be used for Mental 39
Health Services – First Psychotic Symptom Treatment. 40
41
MATERNAL AND CHILD HEALTH BLOCK GRANT 42
SECTION 9L.1.(y) The sum of one million seven hundred twenty -seven thousand 43
three hundred seven dollars ($1,727,307) appropriated in this act in the Maternal and Child 44
Health Block Grant to the Department of Health and Human Services, Division of Public Health, 45
for each year of the 2025 -2027 fiscal biennium shall be used for evidence -based programs in 46
counties with the highest infant mortality rates. The Division shall report on (i) the counties 47
selected to receive the allocation, (ii) the specific evidence -based services provided, (iii) the 48
number of women served, and (iv) any impact on the counties' infant mortality rate. The Division 49
shall report its findings to the House of Representatives Appropriations Committee on Health 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 79
and Human Services, the Senate Appropriations Committee on Health and Human Services, and 1
the Fiscal Research Division no later than December 31 of each year. 2
SECTION 9L.1.(z) The sum of eighty -one thousand one hundred twelve dollars 3
($81,112) allocated in this section in the Maternal and Child Health Block Grant to the 4
Department of Health and Human Services, Division of Public Health, Women and C hildren's 5
Health Section, for each fiscal year of the 2025-2027 fiscal biennium shall not be used to supplant 6
existing State or federal funds. This allocation shall be used for a Public Health Program 7
Consultant position assigned full -time to manage the No rth Carolina Perinatal Health Strategic 8
Plan and provide staff support for the stakeholder work group. 9
SECTION 9L.1.(aa) Notwithstanding any provision of law to the contrary, the 10
Department of Health and Human Services, Division of Public Health, shall ha ve the authority 11
to realign appropriated funds between the Maternal and Child Health Block Grant categories to 12
maintain federal compliance and programmatic alignment without exceeding the total amount 13
appropriated for the Maternal and Child Health Block Grant. 14
15
PART X. AGRICULTURE AND CONSUMER SERVICES [RESERVED] 16
17
PART XI. COMMERCE 18
19
PART XI. COMMERCE 20
21
COMMUNITY DEVELOPMENT BLOCK GRANTS 22
SECTION 11.1.(a) Allocations. – Of the funds appropriated in this act for federal 23
block grant funds, the following allocations are made for the fiscal years ending June 30, 2025, 24
and June 30, 2026, according to the following schedule: 25
26
COMMUNITY DEVELOPMENT BLOCK GRANT 27
28
01. State Administration $1,488,189 29
30
02. Neighborhood Revitalization 25,784,790 31
32
03. Economic Development 14,000,000 33
34
04. Rural Community Development 5,000,000 35
36
TOTAL COMMUNITY DEVELOPMENT 37
BLOCK GRANT 2024 Program Year $46,308,393 38
2025 Program Year $46,272,979 39
2026 Program Year $46,272,979 40
41
SECTION 11.1.(b) Availability Reduction. – If federal funds are reduced below the 42
amounts specified in this section after the effective date of this act, then every program in each 43
of these federal block grants shall be reduced by the same percentage as the reduction in federal 44
funds. 45
SECTION 11.1.(c) Availability Increase. – Any block grant funds appropriated by 46
the Congress of the United States in addition to the funds specified in this section shall be 47
expended as follows: each program category under the Community Development Block Grant 48
shall be increased by the same percentage as the increase in federal funds. 49
SECTION 11.1.(d) Reallocation. – The Department of Commerce shall consult with 50
the Joint Legislative Commission on Governmental Operations (Commission) prior to 51
General Assembly Of North Carolina Session 2025
Page 80 Senate Bill 440-First Edition
reallocating Community Development Block Grant Funds. Notwithstanding the provisions of 1
this subsection, whenever the Director of the Budget finds either of the following conditions 2
exist: 3
(1) If a reallocation is required because of an emergency that poses an imminent 4
threat to public health or public safet y, then the Director of the Budget may 5
authorize the reallocation without consulting the Commission. The 6
Department of Commerce shall report to the Commission on the reallocation 7
no later than 30 days after it was authorized and shall identify in the report the 8
emergency, the type of action taken, and how it was related to the emergency. 9
(2) If the State will lose federal block grant funds or receive less federal block 10
grant funds in the next fiscal year unless a reallocation is made, then the 11
Department of Commerce shall provide a written report to the Commission 12
on the proposed reallocation and shall identify the reason that failure to take 13
action will result in the loss of federal funds. If the Commission does not hear 14
the issue within 30 days of receipt of the report, the Department of Commerce 15
may take the action without consulting the Commission. 16
SECTION 11.1.(e) Report. – By October 1, 2025, and September 1, 2026, the 17
Department of Commerce shall report to the chairs of the House of Representatives 18
Appropriations Committee on Agriculture and Natural and Economic Resources; the chairs of 19
the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources; the 20
chairs of the Joint Legislative Economic Development and Global Engagement Over sight 21
Committee; and the Fiscal Research Division on the use of Community Development Block 22
Grant Funds appropriated in the prior fiscal year. The report shall include the following: 23
(1) A discussion of each of the categories of funding, including informat ion on 24
the statewide need in each category. 25
(2) Information on the number of applications that were received in each category 26
and the total dollar amount requested in each category. 27
(3) A list of grantees, including the grantee's name, county, category under which 28
the grant was funded, the amount awarded, and a narrative description of the 29
project. 30
SECTION 11.1.(f) Neighborhood Revitalization. – Funds allocated to the 31
Neighborhood Revitalization Category in subsection (a) of this section shall be made avai lable 32
as grants for eligible activities listed in this subsection. The funds available for grants under this 33
category may be used for all of the following, subject to the national objectives and eligible 34
activities allowed under guidance issued by the United States Department of Housing and Urban 35
Development (HUD): 36
(1) Essential repairs to prevent abandonment and deterioration of housing in 37
low- and moderate- income neighborhoods. 38
(2) Demolition and rehabilitation of buildings and improvements. 39
(3) Public improvements, including parks, streets, sidewalks, and water and sewer 40
lines. 41
SECTION 11.1.(g) Economic Development. – Funds allocated to the Economic 42
Development Category in subsection (a) of this section shall be made available as grants for 43
eligible activities listed in this subsection. The funds available for grants under this category may 44
be used for all of the following, subject to the national objectives and eligible activities allowed 45
under guidance issued by HUD: 46
(1) Acquisition of real property. 47
(2) Demolition and rehabilitation of buildings and improvements. 48
(3) Removal of material and architectural barriers. 49
(4) Public improvements, including parks, streets, sidewalks, and water and 50
sewer lines. 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 81
(5) Loans and grants to public or private nonprofit entities for construction and 1
rehabilitation activities. 2
(6) Assistance to private, for-profit entities for economic development. 3
(7) Technical assistance to public or nonprofit entities for neighborhood 4
revitalization or economic development activities. 5
(8) Assistance to for-profit and nonprofit entities to facilitate economic 6
development activities. 7
SECTION 11.1.(h) Rural Community Development. – Funds allocated for the Rural 8
Community Development Category in subsection (a) of this section shall be mad e available as 9
grants for eligible activities listed in this subsection. These funds shall provide grants that support 10
community development and comprehensive growth projects to be awarded by the North 11
Carolina Department of Commerce. The Rural Community Development Category will provide 12
grants to units of local government in development Tier one and development Tier two areas, as 13
defined in G.S. 143B-437.08, and in rural census tracts, as defined in G.S. 143B-472.127(a)(2), 14
in any other area to support pro jects that promote broad -based community development 15
activities, increased local investment and economic growth, and stronger and more viable rural 16
neighborhoods. In awarding grants under this section, preference shall be given to projects in 17
development tier one areas, as defined in G.S. 143B-437.08. The funds available for grants under 18
this category may be used for all of the following, subject to the national objectives and eligible 19
activities allowed under guidance issued by HUD: 20
(1) Essential repairs to prevent abandonment and deterioration of housing in low 21
and moderate-income neighborhoods. 22
(2) Public improvements, including parks, streets, sidewalks, and water and sewer 23
lines. 24
(3) Public facilities, including neighborhood and community facilities and 25
facilities for individuals with special needs. 26
(4) Public services, including employment, crime prevention, and energy 27
conservation. 28
(5) Assistance to private, for-profit entities for economic development. 29
(6) Technical assistance to public or nonprofit entities for neighborhood 30
revitalization or economic development activities. 31
(7) Assistance to for -profit and nonprofit entities to facilitate economic 32
development activities. 33
SECTION 11.1.(i) Deobligated Funds. – Throughout each year, deobligated funds 34
arise in the various funding categories and program years of the Community Development Block 35
Grant (CDBG) program as a result of (i) projects coming in under budget, (ii) projects being 36
cancelled, or (iii) projects being required to repay funds. Surplus federal administrative funds in 37
the CDBG program may vary from year to year based upon the amount of State appropriated 38
funds allocated and the amount of eligible in -kind funds identified. To allow the Department of 39
Commerce to quickly deploy deobligated and surplus federal administrativ e funds as they are 40
identified throughout the program year, the following shall apply to the use of deobligated CDBG 41
funds and surplus federal administrative funds: 42
(1) All surplus federal administrative funds shall be divided proportionally 43
between the Department of Commerce programs and shall be used as provided 44
in subdivisions (2) and (3) of this subsection. 45
(2) All deobligated funds allocated to the Department of Commerce and any 46
surplus federal administrative funds, as provided for in subdivision (1) of this 47
subsection, may be used by the Department for all of the following: 48
a. To issue grants in the CDBG Economic Development or 49
Neighborhood Revitalization Program Category. 50
General Assembly Of North Carolina Session 2025
Page 82 Senate Bill 440-First Edition
b. For providing training and guidance to local governments relative to 1
the CDBG program, its management, and administrative requirements. 2
c. For any other purpose consistent with the Department's administration 3
of the CDBG program if an equal amount of State matching funds is 4
available. 5
6
COMMERCE NONPROFITS/REPORTING REQUIREMENTS 7
SECTION 11.2.(a) The entities listed in subsection (b) of this section shall do the 8
following for each year that State funds are expended: 9
(1) By September 1 of each year, and more frequently as requested, report to the 10
chairs of the Joint Legislative Oversight Comm ittee on Agriculture and 11
Natural and Economic Resources; the chairs of the House of Representatives 12
Appropriations Committee on Agriculture and Natural and Economic 13
Resources; the chairs of the Senate Appropriations Committee on Agriculture, 14
Natural, and Economic Resources; and the Fiscal Research Division on prior 15
State fiscal year program activities, objectives, and accomplishments and prior 16
State fiscal year itemized expenditures and fund sources. If State funds are 17
used to provide matching funds for co mpetitive grants from the federal 18
government or a nongovernmental entity, the report should include a list and 19
description of the grants that are awarded. 20
(2) Provide to the chairs of the Joint Legislative Oversight Committee on 21
Agriculture and Natural and Economic Resources; the chairs of the House of 22
Representatives Appropriations Committee on Agriculture and Natural and 23
Economic Resources; the chairs of the Senate Appropriations Committee on 24
Agriculture, Natural, and Economic Resources; and the Fiscal Rese arch 25
Division a copy of the entity's annual audited financial statement within 30 26
days of issuance of the statement. 27
SECTION 11.2.(b) The following entities shall comply with the requirements of 28
subsection (a) of this section: 29
(1) North Carolina Biotechnology Center. 30
(2) High Point Market Authority. 31
(3) RTI International. 32
33
NC BIOTECHNOLOGY CENTER 34
SECTION 11.3.(a) Except for the funds appropriated in subsection (b) of this 35
section, funds appropriated in this act to the Department of Commerce for the North Carolina 36
Biotechnology Center (Center) for each fiscal year in the 2023-2025 biennium shall be allocated 37
for the following purposes in the following proportions: 38
(1) Twenty-one percent (21%) for job creation, including funding for the 39
AgBiotech Initiative, economic and industrial development, and related 40
activities. 41
(2) Sixty-five percent (65%) for science and commerciali zation, including 42
science and technology development, Centers of Innovation, business and 43
technology development, education and training, and related activities. 44
(3) Fourteen percent (14%) for Center operations, including administration, 45
professional and techn ical assistance and oversight, corporate 46
communications, human resource management, financial and grant 47
administration, legal, and accounting. 48
SECTION 11.3.(b) Of the funds appropriated in this act to the Department of 49
Commerce for the Center, five hundre d thousand dollars ($500,000) of recurring funds in each 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 83
fiscal year of the biennium shall be used to support funding for early stage loans to North Carolina 1
agricultural technology companies. 2
SECTION 11.3.(c) The Center shall not use any of the recurring funds allocated in 3
subsection (b) of this section for administrative costs and shall report on the expenditure of those 4
funds each year pursuant to Section 11.2 of this act. 5
SECTION 11.3.(d) The Center shall prioritize funding and distribution of loans over 6
funding and distribution of grants. 7
SECTION 11.3.(e) Up to ten percent (10%) of the sum of each of the allocations in 8
subsection (a) of this section may be reallocated to subdivision (a)(1) or subdivision (a)(2) of this 9
section if, in the judgment of Center management, the reallocation will advance the mission of 10
the Center. 11
12
NORTH CAROLINA TECHNOLOGY COALITIONS STRATEGIC SUPPORT FUND 13
SECTION 11.4.(a) Overview. – The North Carolina Coalitions Strategic Support 14
Fund (Coalitions Fund) is established as a special fund in the Department of Commerce 15
(Department), and the Office of Science, Technology and Innovation in the Department shall be 16
responsible for administering the Coalitions Fund with oversight from the Board of Science, 17
Technology and Innovation. 18
SECTION 11.4.(b) Purposes. – Moneys in the Coalitions Fund shall be allocated 19
pursuant to this subsection. The Department shall award grants from the Coalitions Fund to 20
encourage regional technology-based economic growth by fostering collaboration throu ghout a 21
Technology Coalition and aligning State resource investment to scale critical and secure supply 22
chains. Moneys in the Coalitions Fund shall be used to provide Coalition Infrastructure support 23
and Coalition Cost Match, both defined in Section 11.4 (d) Use of Funds. 24
SECTION 11.4.(c) Definitions. – The following definitions apply in this section: 25
(1) Technology Coalition: A regional network of organizations, such as private 26
sector, academic, nonprofit, and government institutions, in a network of 27
formal and informal relationships that contribute to technological and 28
economic development in a technology-based industry sector. Coalitions may 29
also be referred to as a Hub, Cluster, or Alliance. Example technology areas 30
supported by the Coalitions Fund may include but not be limited to: Artificial 31
Intelligence, High -Performance Computing & Semiconductors, Quantum 32
Science and Technology, Advanced Manufacturing, Disaster Prevention, 33
Advanced Communications Technology, Cybersecurity, Biotechnology, 34
Advanced Energy Technology & Efficiency, and Material Science. 35
(2) Recipient: A North Carolina organization supported by the Coalitions Fund 36
that represents a Technology Coalition. Recipients may be an industry 37
alliance, nonprofit organization, local government, academic ins titution, or 38
State agency. 39
(3) Cost-Match: Financial or in -kind resources provided through the Coalitions 40
Fund to a Recipient, defined by a ratio of funding pursued or granted by 41
non-State sources to that provided by the Coalitions Fund. 42
(4) Regional: Area of serv ice by the Technology Coalition and the focus of 43
economic development metric analysis for a technology -based industry 44
sector. For the purpose of the Coalitions Fund, a regional area should be 45
defined within the boundaries of the State. 46
SECTION 11.4.(d) Eligibility. – To be eligible for a Coalitions Fund grant, a 47
prospective Recipient must satisfy all of the following conditions: 48
(1) The Recipient must be North Carolina-based. For the purposes of this section, 49
a North Carolina -based organization is one that has its principal place of 50
operation in the State. 51
General Assembly Of North Carolina Session 2025
Page 84 Senate Bill 440-First Edition
(2) The Recipient must certify that at least one hundred percent (100%) of 1
financial resources provided through the Coalition Infrastructure Support and 2
the Coalition Cost Match programs within the Coalitions Fun d will be 3
conducted in North Carolina and that the Recipient will remain a North 4
Carolina-based organization for the duration of the funds received. 5
(3) The Recipient must apply, under oath, to the Office of Science, Technology 6
and Innovation, for a grant unde r this section on a form prescribed by the 7
Office of Science, Technology and Innovation that includes at least all of the 8
following: 9
a. name of the business, the form of organization under which it is 10
operated, and the names and addresses of the principals or 11
management of the business; 12
b. description of how Coalitions Fund resources will aid the Technology 13
Coalition to advance its goals; 14
c. justifications for the use of Coalitions Fund resources for intended 15
Regional economic impact; and 16
d. any other information necessary for the Office of Science, Technology 17
and Innovation to evaluate the application. 18
(4) The Recipient shall not receive concurrent funding support from other sources 19
that duplicate the purpose of the Coalitions Fund resources. 20
(5) Coalition Cost Match program grant Recipients may not be duplicative in the 21
use of cost match from other State-funds or resources. 22
(6) Resources provided by the Coalitions Funds may only be for those activities 23
for which an application was submitted, and a grant was received under this 24
section. 25
SECTION 11.4.(e) Use of Funds. – Funding shall be distributed from the 26
Department, based on strategic and tactical programmatic needs within the following two 27
program areas and related administrative expenses: 28
(1) Coalition Infrastructure Support. Activ ities include but are not limited to 29
funding Recipients to provide external support and/or funding to State 30
agencies or divisions of State agencies to conduct market and economic 31
analyses; development of workforce training programs; support private, 32
foundational and federal grant identification and submission; and sponsorship 33
of Technology Coalition knowledge-sharing events. 34
(2) Coalition Cost Match. Provide financial or in-kind cost matching to Recipients 35
in support of non -State funding, including private, fou ndational, and federal 36
funding that drives the economic growth and maturation of a regional 37
technology industry. The Board of Science, Technology and Innovation may 38
set a cap on the cost match amount, number of awards per recipient, require 39
applicants to provide matching funds or in -kind support for a grant from the 40
Coalitions Fund, and provide prioritization in how the Coalitions Fund may 41
be used by the Recipient. 42
(3) Administrative Expenses. Of the money appropriated to the Fund, the 43
Department may use up to the greater of (i) one hundred thousand dollars 44
($150,000) or (ii) two percent (2%) annually to administer and promote the 45
Coalitions Fund. 46
SECTION 11.4.(f) Program Guidelines. – The Department shall develop guidelines 47
related to the administration of the Coalitions Fund. At least 20 days before the effective date of 48
any guidelines or nontechnical amendments to guidelines, the Department must publish the 49
proposed guidelines on the Department's Web site and provide notice to persons who have 50
requested notice of proposed guidelines. In addition, the Department must accept oral and written 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 85
comments on the proposed guidelines during the 15 business days beginning on the first day that 1
the Department has completed these notifications. For the purpose of this sec tion, a technical 2
amendment is either of the following: 3
(1) An amendment that corrects a spelling or grammatical error. 4
(2) An amendment that makes a clarification based on public comment and could 5
have been anticipated by the public notice that immediately preced ed the 6
public comment. 7
8
ADMINISTRATIVE EXPENSES FOR ONE NC SMALL BUSINESS PROGRAM 9
SECTION 11.5.(a) G.S. 143B-437.71 reads as rewritten: 10
"§ 143B-437.71. One North Carolina Fund established as a special revenue fund. 11
… 12
(c) [Special Account. –]There is created in the One North Carolina Fund a special account, 13
the One North Carolina Small Business Account, to be used for the North Carolina 14
SBIR/STTR Incentive Program and the North Carolina SBIR/STTR Matching Funds 15
Program, as specified in Part 2I of Article 10 of Chapter 143B of the General Statutes. Of 16
the total moneys in the One North Carolina Small Business Account, the Department may 17
use up to two percent (2%) annually for costs associated with administration of the North 18
Carolina SBIR/STTR Incentive Program and the North Carolina SBIR/STTR Matching 19
Funds Program. (2004-88, s. 1(d); 2005 -276, s.13.14(a); 2006 -162, s. 19; 2012 -142, s. 20
13.6(b); 2013-360, s. 15.16A; 2021-180, s. 11.8.)" 21
22
ENHANCE UNEMPLOYMENT INSURANCE BENEFITS 23
SECTION 11.6.(a) G.S. 96-14.2 reads as rewritten: 24
"§ 96-14.2. Weekly benefit amount. 25
(a) Weekly Benefit Amount. – The weekly benefit amount for an individual who is totally 26
unemployed is an amount equal to the wages paid to the individual in the last tw o 27
completed quarters of the individual's base period divided by 52 and rounded to the next 28
lower whole dollar. If this amount is less than fifteen dollars ($15.00), the individual is 29
not eligible for benefits. The weekly benefit amount may not exceed three hundred fifty 30
dollars ($350.00).four hundred seventy dollars ($470.00), adjusted annually for inflation. 31
Beginning July 1, 2026, and on each July 1 thereafter, the Division shall adjust the 32
maximum weekly benefit for claims filed on or after that date by the percentage change 33
in the annual average Consumer Price Index for All Items for All Urban Consumers 34
published by the Bureau of Labor Statistics for the preceding calendar year, rounded to 35
the nearest five dollars ($5.00)." 36
SECTION 11.6.(b) G.S. 96-14.3 reads as rewritten: 37
"§ 96-14.3. Duration of benefits. 38
(a) Duration. – The number of weeks an individual is allowed to receive unemployment 39
benefits depends on the seasonal adjusted statewide unemployment rate that applies to 40
the six-month base period in which the claim is filed. One six-month base period begins 41
on January 1 and one six -month base period begins on July 1. For the base period that 42
begins January 1, the average of the seasonal adjusted unemployment rates for the State 43
for the preceding months of July, August, and September applies. For the base period that 44
begins July 1, the average of the seasonal adjusted unemployment rates for the State for 45
the preceding months of January, February, and March applies. The Division must use 46
the most recent seasonal adjusted unemployment rate determined by the U.S. Department 47
of Labor, Bureau of Labor Statistics, and not the rate as revised in the annual benchmark. 48
Seasonal Adjusted Number 49
Unemployment Rate of Weeks 50
Less than or equal to 5.5%4.5% 1216 51
General Assembly Of North Carolina Session 2025
Page 86 Senate Bill 440-First Edition
Greater than 5.5%4.5% up to 6%5% 1318 1
Greater than 6%5% up to 6.5%5.5% 1420 2
Greater than 6.5%5.5% up to 7%6% 1522 3
Greater than 7%6% up to 7.5%6.5% 1624 4
Greater than 7.5% up to 8%6.5% 1726 5
Greater than 8% up to 8.5% 18 6
Greater than 8.5% up to 9% 19 7
Greater than 9% 20 8
…." 9
SECTION 11.6.(c) Subsections (a) and (b) apply to claims for benefits filed on or 10
after July 1, 2025. 11
SECTION 11.6.(d) G.S. 96-9.2 is amended by adding a new subsection to read: 12
"(f) 2025 Tax Credit. – An employer is allowed a tax credit f or a contribution to the 13
Unemployment Insurance Fund payable under this section for contributions due for the calendar 14
year 2025. The amount of the credit is equal to the amount of contributions payable for wages 15
paid during the fourth quarter of 2024 on t he report filed by the employer on or before January 16
31, 2025. If an employer remitted the contributions payable with the report due on or before 17
January 31, 2025, the credit will be applied to the contributions payable on the report due on or 18
before April 30, 2025. An employer must file the report to receive the credit. If the amount of the 19
credit exceeds the amount of contributions due on the report, the excess credit amount is 20
considered an overpayment and will be refunded pursuant to G.S. 96-9.15(b)." 21
SECTION 11.6.(e) Subsection (d) is effective when it becomes law. 22
23
PART XII. ENVIRONMENTAL QUALITY 24
25
ESTABLISH NON-TITLE V FEES IN STATUTE 26
SECTION 12.1.(a) G.S. 143-215.3(1b) reads as rewritten: 27
"§ 143-215.3. General powers of Commission and Department; auxiliary powers. 28
… 29
(1b) The fee to be charged pursuant to G.S. 143 -215.3(a)(1a) for processing an 30
application for a permit under G.S. 143 -215.108 and G.S. 143 -215.109 of 31
Article 21B of this Chapter may not exceed five hundred dollars ($500.00). 32
The Department shall charge permit fees pursuant to G.S. 143-215.3(a)(1a) to 33
non-Title V facilities subject to permitting under G.S. 143-215.108 and 34
G.S. 143-215.109 of Article 21B according to the following schedule: 35
a. For facilities seeking federally enforceable limits to avoid Title V 36
permitting, application fees of eight hundred dollars ($800.00) and 37
annual fees of three thousand seventy dollars ($3,070.00). 38
b. For facilities with a potential to emit below Title V thresholds, except 39
for general permits, application fees of one hundred dollars ($100.00) 40
and annual fees of four hundred dollars ($400.00). 41
c. The fee for an ownership change shall be fifty dollars ($50). 42
d. The Department may provide a discount of up to twenty -five percent 43
on annual fees authorized by subparagraphs (a) and (b) of this 44
subsection. 45
The fee to be charged pursuant to G.S. 143-215.3(a)(1a) for processing a 46
registration under Part 2A of this Article or Article 38 of this Chapter may not 47
exceed fifty dollars ($50.00) for any single registratio n. An additional fee of 48
twenty percent (20%) of the registration processing fee may be assessed for a 49
late registration under Article 38 of this Chapter. The fee for administering 50
and compliance monitoring under Article 21, other than Parts 1 and 1A, and 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 87
G.S. 143-215.108 and G.S. 143 -215.109 of Article 21B shall be charged on 1
an annual basis for each year of the permit term and may not exceed one 2
thousand five hundred dollars ($1,500) per year. Fees for processing all 3
permits under Article 21A and all other sections of Article 21B shall not 4
exceed one hundred dollars ($100.00) for any single permit. The total payment 5
for fees that are set by the Commission under this subsection for all permits 6
for any single facility shall not exceed seven thousand five hund red dollars 7
($7,500) per year, which amount shall include all application fees and fees for 8
administration and compliance monitoring. A single facility is defined to be 9
any contiguous area under one ownership and in which permitted activities 10
occur. For all permits issued under these Articles where a fee schedule is not 11
specified in the statutes, the Commission, or other commission specified by 12
statute shall adopt a fee schedule in a rule following the procedures established 13
by the Administrative Procedure Act. Fee schedules shall be established to 14
reflect the size of the emission or discharge, the potential impact on the 15
environment, the staff costs involved, relative costs of the issuance of new 16
permits and the reissuance of existing permits, and shall inc lude adequate 17
safeguards to prevent unusual fee assessments which would result in serious 18
economic burden on an individual applicant. A system shall be considered to 19
allow consolidated annual payments for persons with multiple permits. In its 20
rulemaking to establish fee schedules, the Commission is also directed to 21
consider a method of rewarding facilities which achieve full compliance with 22
administrative and self-monitoring reporting requirements, and to consider, in 23
those cases where the cost of renewal o r amendment of a permit is less than 24
for the original permit, a lower fee for the renewal or amendment." 25
SECTION 12.1.(b) G.S. 143B-279.19 reads as rewritten: 26
"§ 143B-279.19. Quadriennial adjustment of certain fees and rates. 27
(a) Adjustment for Legislatively Mandated Salaries and Benefits. – Beginning July 1, 28
2025, and every four years thereafter, the Department shall adjust the fees and rates imposed 29
pursuant to the statutes listed in this subsection in accordance with the Consumer Price Index 30
computed by the Bureau of Labor Statistics during the prior two bienniums. The adjustment for 31
per transaction rates shall be rounded to the nearest dollar ($1.00): 32
… 33
(21) G.S. 143-215.3(1b). 34
…." 35
36
MAKING INUNDATION MAPS PUBLICLY AVAILABLE 37
SECTION 12.2.(a) G.S. 143-215.31 reads as rewritten: 38
"§ 143-215.31. Supervision over maintenance and operation of dams. 39
… 40
(a1) (6) Information included in an Emergency Action Plan that constitutes sensitive 41
public security information, as provided in G.S. 132-1.7, shall be maintained as confidential 42
information and shall not be subject to disclosure under the Public Records Act. For purposes of 43
this section, "sensitive public security information" shall include Critical Energy Infrastructure 44
Information protected from discl osure under rules adopted by the Federal Energy Regulatory 45
Commission in 18 C.F.R. § 388.112. § 388.112, but shall not include Emergency Action Plans 46
or inundation maps for any impoundments or dams not regulated by the Federal Energy 47
Regulatory Commission. 48
…." 49
SECTION 12.2.(b) G.S. 66-58 is amended to read: 50
"§ 66‑58. Sale of merchandise or services by governmental units. 51
General Assembly Of North Carolina Session 2025
Page 88 Senate Bill 440-First Edition
… 1
(b) Subsection (a) of this section does not apply to any of the following: 2
… 3
(29) The Department of Environmental Quality in the provi sion of inundation 4
maps for the preparation of Emergency Action Plans to owners or operators 5
of high hazard potential dams." 6
7
MODIFY PAYMENT OF BROWNFIELDS PROPERTY REUSE ACT FEES 8
SECTION 12.3.(a) G.S. 130A-310.39 reads as rewritten: 9
"§ 130A-310.39. Fees. 10
(a) The Department shall collect the following fees: 11
(1) A prospective developer who submits a an application for a proposed 12
brownfields agreement for review by the Department shall pay an initial fee 13
of two thousand dollars ($2,000). 14
(2) A prospective de veloper who enters into a brownfields agreement with the 15
Department shall pay, on a schedule determined by the Department, a fee in 16
an amount equal to the full cost to the Department and the Department of 17
Justice of all activities related to the brownfields agreement, including but not 18
limited to negotiation of the brownfields agreement, public notice and 19
community involvement, and monitoring the implementation of and 20
compliance with the brownfields agreement and Notice of Brownfields 21
Property. The procedure by which the amount of this fee is determined shall 22
be established by agreement between the prospective developer and the 23
Department and shall be set out as a part of the brownfields agreement. The 24
fee imposed by this subdivision shall be paid in two ins tallments. The first 25
installment shall be due at the time the prospective developer and the 26
Department enter into the brownfields agreement and shall equal all costs that 27
have been incurred by the Department and the Department of Justice at that 28
time less the amount of the initial fee paid pursuant to subdivision (1) of this 29
subsection. The Department shall not enter into the brownfields agreement 30
unless the first installment is paid in full when due. The second installment 31
shall be due at the time the pros pective developer submits a final report 32
certifying completion of remediation under the brownfields agreement and 33
shall include any additional costs that have been incurred by the Department 34
and the Department of Justice, including all costs of monitoring the 35
implementation of the brownfields agreement. 36
(3) Any prospective developer or owner(s) of properties subject to a recorded 37
notice of brownfields property who are out of compliance with the notice of 38
brownfields property shall pay a fee to the Department and the Department of 39
Justice equivalent to the cos ts to the state to enforce against said 40
noncompliance or otherwise seek to correct said noncompliance." 41
42
SOLID WASTE BENEFICIAL REUSE CLARIFICATION 43
SECTION 12.4.(a) G.S. 130A-309.05 reads as rewritten: 44
"§ 130A‑309.05. Regulated wastes; certain exclusions. 45
(a) Certain Wastes Regulated as Nonhazardous. – Notwithstanding other provisions of 46
this Article, the following waste shall be regulated pursuant to this Part: 47
… 48
(b) Management of Ash Generated From Burning of Solid Waste. – Ash generated by a 49
solid waste management facility from the burning of solid waste shall be disposed of in a properly 50
designed solid waste disposal area that complies with standards developed by the Department for 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 89
the disposal of the ash. The Department sh all work with solid waste management facilities that 1
burn solid waste to identify and develop methods for recycling and reusing incinerator ash or 2
treated ash. 3
(c) Recovered Material. – Recovered material is not subject to regulation as permitting 4
requirements for solid waste under this Article. In order for a material that would otherwise be 5
regulated as solid waste to qualify as a recovered material, the The Department may require any 6
person who owns or has control over the material to demonstrate that th e material meets the 7
requirements of this subsection. In order to protect public health and the environment, the 8
Commission subsection or may require the person to obtain a beneficial use determination from 9
the Department in accordance with subsection (d) of this section. The Department may adopt 10
rules to implement this subsection. Materials that are accumulated speculatively, as that term is 11
defined under 40 Code of Federal Regulations § 261 (July 1, 2014 Edition), shall not qualify as 12
a recovered material, and shall be subject to regulation as solid waste. In order to qualify as a 13
recovered material, the material. The material shall be managed as a valuable commodity in a 14
manner consistent with the desired use or end use, and all of the following conditions shall be 15
met: 16
… 17
(d) Beneficial Use Determination. – For the purposes of preservation of landfill capacity, 18
economic development, energy savings, and reduction of greenhouse emissions, the Department 19
may determine whether nonhazardous solid waste may be us ed or reused for a particular site or 20
application as an alternative to disposal at a permitted solid waste management facility as set 21
forth in this subsection. 22
(1) A person seeking a beneficial use determination shall submit an application to 23
the Department. The Department, after a review of an application submitted 24
under this subsection, may take any of the following actions: 25
a. Authorize management of a specified type of nonhazardous solid 26
waste at a site other than a permitted solid waste management facility. 27
b. Issue a beneficial use determination with appropriate conditions for 28
use of specific types of solid waste in construction, land application, 29
or other projects and applications. 30
(2) An applicant for a determination under this subsection shall submi t 31
information on forms prescribed by the Department and any additional 32
information required by the Department necessary for a determination under 33
this subsection. In its review of the application and additional information, the 34
Department shall also consider internal research or information submitted by 35
any person or entity concerning the potential hazard to public health or the 36
environment of any type of solid waste. 37
(3) The Department may require submittal of a demonstration that the solid waste 38
is being managed in a manner to protect public health or the environment and 39
may include any of the following as a part of an authorization under 40
subdivision (1) of this subsection: 41
a. requirements for periodic testing of solid wastes; and 42
b. conditions to ensure t hat the product or by -products of a material 43
recovered or diverted for beneficial use shall not be discharged, 44
deposited, injected, dumped, spilled, leaked, or placed into or upon 45
any land or water so that the products or by -products or any 46
constituents thereof may enter other lands or be emitted into the air, or 47
discharged into any waters, including groundwaters, or otherwise enter 48
the environment or pose a threat to public health and safety. 49
General Assembly Of North Carolina Session 2025
Page 90 Senate Bill 440-First Edition
(4) Approvals granted under this subsection are valid for no l onger than five 1
years. Requests for renewal shall be made at least 60 days in advance of the 2
expiration date of the approval. 3
(5) The applicant for a determination under this subdivision shall submit to the 4
Department on an annual basis a report detailing the usage of material under 5
the approval and certifying compliance with this Article and any applicable 6
rules adopted under this Article. 7
(6) The Department may suspend or revoke an authorization and may modify an 8
authorization if it is determined that the activity is not in compliance with the 9
requirements of applicable laws or rules or if new information is provided to 10
the Department that impacts the determination of protection of public health 11
or the environment. 12
(7) The Department shall provide notice on its website of approved beneficial use 13
determinations. 14
(8) Facilities that manage source-separated materials for the purpose of recycling 15
as defined in G.S. 130A-290 are not subject to the provisions of this 16
subsection. 17
(9) The Department may adopt rules to implement this subsection and establish 18
application fees for a reuse determination under this subsection. All fees 19
collected under this subdivision shall be credited to the Solid Waste 20
Management Account established under G.S. 130A-295.8(a). In determining 21
the amount of the total application fee in rule, the Department shall have the 22
authority to establish separate fee amounts for annual fees for each year based 23
on the length of time for which the approval will be valid as requested by the 24
applicant." 25
SECTION 12.4.(b) This section becomes effective January 1, 2026. 26
27
UST NEW INSTALL REVIEW FEE 28
SECTION 12.5.(a) G.S. 143-215.94C reads as rewritten: 29
"§ 143-215.94C Commercial leaking petroleum underground storage tank cleanup fees. 30
… 31
(g) An owner or operator who submits a pre-construction or post-construction application 32
for installing or replacing an underground storage tank system or an underground storage tank 33
piping system regulated pursuant to G.S. 143-215.94T to the Department shall pay an application 34
fee of five hundred twenty dollars ($525.00) to the Department." 35
SECTION 12.5.(b) G.S. 143B-279.19 reads as rewritten: 36
"§ 143B-279.19. Quadriennial adjustment of certain fees and rates. 37
(a) Adjustment for Legislatively Mandated Salaries and Benefits. – Beginning July 1, 38
2025, and every four years thereafter, the Department shall adjust the fees and rates imposed 39
pursuant to the statutes listed in this subsection in accordance with the Consumer Price Index 40
computed by the Bureau of Labor Statistics during the prior two bienniums. The adjustment for 41
per transaction rates shall be rounded to the nearest dollar ($1.00): 42
… 43
(22) G.S. 143-215. 94C(g). 44
…." 45
SECTION 12.5.(c) This section becomes effective January 1, 2026. 46
47
EXPAND ELIGIBILITY FOR TARGETED INTEREST RATES 48
SECTION 12.6.(a) G.S. 159G-20(21) reads as rewritten: 49
"§ 159G-20. Definitions. 50
… 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 91
(21) Targeted interest rate project. – Either of the following types of projects: 1
a. A project that is awarded a loan from the Drinking Water Reserve or the 2
Wastewater Reserve based on affordability. 3
b. A project that is awarded a loan from the CWSRF or the DWSRF and is 4
in a category for which federal law or the Department encourages a special 5
focus." 6
7
RAISE LIMITS FOR MRF AND AIA GRANT FUNDING 8
Section 12.7.(a) G.S. 159G-36(c) is amended to read: 9
"§ 159G-36. Limits on loans and grants. 10
… 11
(c) Certain Reserve Recipient Limit. – The following limits apply to the loan or grant 12
types made from the Wastewater Reserve or the Drinking Water Reserve to the same local 13
government unit or nonprofit water corporation: 14
… 15
(4) The amount of merger/regionalization feasibility grants awarded for three 16
consecutive fiscal years for a fiscal year may not exceed fifty thousand dollars 17
($50,000) seventy-five thousand dollars ($75,000). 18
(5) The amount of asset inventory and assessment grants awarded for three 19
consecutive fiscal years may not exceed one hundred fifty thousand dollars 20
($150,000)two hundred twenty-five thousand dollars ($225,000)." 21
22
PART XIII. LABOR [RESERVED] 23
24
PART XIV. NATURAL AND CULTURAL RESOURCES 25
26
INCREASE THE ALLOWAB LE AMOUNT FOR REPAIR AND RENOVATION FOR 27
AQUARIUMS SPECIAL FUND 28
SECTION 14.1. G.S. 143B‑135.188 reads as rewritten: 29
"§ 143B-135.188. North Carolina Aquariums; fees; fund. 30
… 31
(d) Approval. – The Secretary may approve the use of the North Carolina Aquariums 32
Fund for repair and renovation projects at the aquariums -related facilities that comply with the 33
following: 34
(1) The total project cost is less than five hundred thousand dollars ($500,000). 35
less than or equal to two million dollars ($2,000,000). 36
(2) The project meets the criteria to be classified as a repair or renovation under 37
G.S. 143C-8-13(a). 38
(3) The project is paid for from funds appropriated to the Fund. 39
(4) The project does not obligate the State to provide increased recurring funding 40
for operations. 41
…." 42
43
INCREASE THE ALLOWAB LE AMOUNT FOR REPAIR AND RENOVATION FOR 44
ZOO SPECIAL FUND 45
SECTION 14.2. G.S. 143B‑135.209 reads as rewritten: 46
"§ 143B-135.209. North Carolina Zoo Fund. 47
… 48
(c) Approval. – The Secretary may approve the use of the North Carolina Zoo Fund for 49
repair and renovation projects at the North Carolina Zoological Park that comply with the 50
following: 51
General Assembly Of North Carolina Session 2025
Page 92 Senate Bill 440-First Edition
(1) The total project cost is less than five hundred thousand dollars ( $500,000). 1
less than or equal to two million dollars ($2,000,000). 2
(2) The project meets the criteria to be classified as a repair or renovation under 3
G.S. 143C-8-13(a). 4
(3) The project is paid for from funds appropriated to the Fund. 5
(4) The project does not obligate the State to provide increased recurring funding 6
for operations. 7
…." 8
9
TECHNICAL CORRECTION REGARDING CHARLOTTE HAWKINS BROWN $1 10
MILLION APPROPRIATION IN SECTION 9.1(D) OF S.L. 2021-189 11
SECTION 14.3. Section 40.17(a)(18) of S.L. 2021-180, as enacted by Section 9.1(d) 12
of S.L. 2021-189 reads as rewritten: 13
"SCIF GRANT CHANGES 14
"SECTION 40.17.(a) Notwithstanding any provision of law or the Committee Report 15
referenced in Section 43.2 of this act to the contrary, the following grants and funds allocated 16
from the State Capital and Infrastructure Fund are amended as follows: 17
… 18
(18) The funds to the Department of Natural and Cultural Resources for Charlotte 19
Hawkins Brown in the sum of one million dollars ($1,000,000) for the 20
2021-2022 fiscal year shall be used for the purchase and development of 21
approximately 100 acres adjacent to land acquisition for the historic site or, 22
repair and renovation projects , and capital projects at the Charlotte Hawkins 23
Brown State Historic Site in Guilford County. 24
…." 25
26
PART XV. WILDLIFE RESOURCES COMMISSION [RESERVED] 27
28
PART XVI. ADMINISTRATIVE OFFICE OF THE COURTS [RESERVED] 29
30
PART XVII. INDIGENT DEFENSE SERVICES [RESERVED] 31
32
PART XVIII. JUSTICE [RESERVED] 33
34
PART XIX. ADULT CORRECTION 35
36
PART XIX-A. DEPARTMENT OF ADULT CORRECTION ADMINISTRATION 37
38
STATEWIDE MISDEMEANANT CONFINEMENT PROGRAM FUNDING TRANSFER 39
SECTION 19A.1. Of the funds appropriated in this act for the Statewide 40
Misdemeanant Confinement Program: 41
(1) The sum of one million dollars ($1,000,000) shall be transferred each fiscal 42
year to the North Carolina Sheriffs' Association, Inc., a nonprofit corporation, 43
to support the Program and for administrative and operating expenses of the 44
Association and its staff. 45
(2) The sum of two hundred twenty -five thousand dollars ($225,000 ) shall be 46
allocated each fiscal year to the Department of Adult Correction for its 47
administrative and operating expenses for the Program. 48
(3) Up to the sum of five hundred thousand dollars ($500,000) may be used in 49
each fiscal year of the 2025 -2027 fiscal biennium to reimburse sheriffs 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 93
utilizing inmate labor pursuant to the provisions of Section 19C.10 of S.L. 1
2021-180. 2
3
INMATE MEDICAL REPORTING 4
SECTION 19A.2. G.S. 143B-1470 reads as rewritten: 5
"§ 143B-1470. Medical costs for inmates. 6
(c) The Department of Adult Correction shall report quarterly annually by September 1 7
of each year to the Joint Legislative Oversight Committee on Justice and Public Safety and the 8
chairs of the Justice and Public Safety Appropriations Committees on: 9
(1) The percentage of th e total inmates requiring hospitalization or hospital 10
services who receive that treatment at each hospital. 11
… 12
(10) The reimbursement rate for contracted providers. The Department shall 13
randomly audit high -volume contracted providers to ensure adherence to 14
billing at the contracted rate. 15
Reports submitted on August 1 shall include totals for the previous fiscal year for all the 16
information requested." 17
18
USE OF CAPITAL FUNDS 19
SECTION 19A.3. Notwithstanding S.L. 2006 -66 and S.L. 2015 -241, the 20
Department of Adult Correction may use up to one million six hundred twelve thousand four 21
hundred eighty-one and fourteen cents ($1,612,481.14) from the projects described in Section 22
23.12(g) of S.L. 2006-66 and Section 31.22 of S.L. 2015 -241 to finance capital facility costs of 23
HVAC projects at state facilities. No additional special indebtedness may be issued or incurred 24
to finance these projects. The use of funds authorized by this section shall not require further 25
approval by the Council of State pursuant to Chapter 142 of the General Statutes. 26
27
USE OF AVAILABLE FUNDS FOR REPAIR AND RENOVATION PURPOSES 28
SECTION 19A.4. G.S. 143C-8-13 is amended by adding a new subsection to read: 29
"§ 143C-8-13. Repairs and Renovations. 30
... 31
(e) Notwithstanding any provision of G.S. 143C-8-7 to the contrary, the Secretary of the 32
Department of Adult Correction may pay for projects for repairs and renovations with funds 33
available to the agency according to the following: 34
(1) The project meets all of the following requirements: 35
a. The total project costs do not exceed one million dollars ($1,000,000). 36
b. The project is one of the types set forth in subdivisions (1) through 37
(13) of subsection (a) of this section, regardless of whether the relevant 38
facilities and related infrastructure are supp orted from the General 39
Fund or the State Capital and Infrastructure Fund. 40
(2) The Department reports on projects undertaken pursuant to this subsection to 41
the Fiscal Research Division on a quarterly basis. The report shall include all 42
of the following information for each project: 43
a. The facility at which the project is being undertaken. 44
b. The nature and scope of the project." 45
46
REIMBURSE COUNTIES F OR HOUSING AND EXTRA ORDINARY MEDICAL 47
EXPENSES 48
SECTION 19A.5. Notwithstanding G.S. 143C-6-9, the Department of Adult 49
Correction may use funds available to the Department for the 2025 -27 fiscal biennium to 50
reimburse counties for the cost of housing convicted inmates, parolees, and post -release 51
General Assembly Of North Carolina Session 2025
Page 94 Senate Bill 440-First Edition
supervisees awaiting transfer to the State prison system, as provided in G.S. 148-29. The 1
reimbursement may not exceed forty dollars ($40.00) per day per prisoner awaiting transfer. The 2
Department shall report annually by February 1 of each year to the chairs of the Joint Legislative 3
Oversight Committee on Justice and Public Safety and the chairs of the House of Representatives 4
Appropriations Committee on Justice and Public Safety and the Senate Appropriations 5
Committee on Justice and Public Safety on the expenditure of funds to reimburse counties for 6
prisoners awaiting transfer. 7
8
PART XIX-B. PRISONS 9
10
CENTER FOR COMMUNITY TRANSITIONS/CONTRACT AND REPORT 11
SECTION 19B.1. The Department of Adult Correction may continue to contract 12
with The Center for Community Transitions, Inc., a nonprofit corporation, for the purchase of 13
prison beds for minimum security female inmates during the 2025 -27 fiscal biennium. The 14
Center for Community Transitions, Inc., shall report by February 1 of each year to the chairs of 15
the House of Representatives Appropriations Committee on Justice and Public S afety and the 16
Senate Appropriations Committee on Justice and Public Safety on the annual cost per inmate and 17
the average daily inmate population compared to bed capacity using the same methodology as 18
that used by the Department of Adult Correction. 19
20
NURSE STAFFING AT STATE PRISONS 21
SECTION 19B.2. Notwithstanding any other provision of law, the Department of 22
Adult Correction may, in its discretion and subject to the approval of the Office of State Budget 23
and Management, convert funds appropriated for contrac tual nursing services to permanent 24
nursing positions when it is determined to promote security, generate cost savings, and improve 25
health care quality. The Department shall report on any such conversions to the Fiscal Research 26
Division. 27
28
DOT CONTRACT OF INMATE LITTER CREW 29
SECTION 19B.3.(a) After the issuance of a request for information (RFI) and 30
receipt of bids by the Department of Transportation for litter pickup on State highways and roads, 31
the Department of Transportation shall first offer the contra ct to the Department of Adult 32
Correction upon the same terms and conditions as the most favorable bid received by the 33
Department of Transportation from a suitable contractor. The Department of Adult Correction 34
shall have 30 days to accept or decline the offered contract. 35
SECTION 19B.3.(b) It is the policy of the General Assembly that the Department 36
of Transportation shall utilize inmate litter crews for litter pickup on State highways and roads 37
as often as is necessary and practicable. 38
39
PART XIX-C. COMMUNITY SUPERVISION 40
41
INTERSTATE COMPACT F EES TO SUPPORT TRAIN ING PROGRAMS AND 42
EQUIPMENT PURCHASES SECTIONS 43
SECTION 19C.1. Notwithstanding the provisions of G.S. 148-65.7, fees collected 44
for the Interstate Compact Fund during the 2025 -27 fiscal biennium may be used by the 45
Department of Adult Correction during the 2025-27 fiscal biennium to provide training programs 46
and equipment purchases for the Division of Community Supervision, but only to the extent 47
sufficient funds remain available in the Fund to support th e mission of the Interstate Compact 48
Program. 49
50
PART XIX-D. REHABILITATION AND REENTRY [RESERVED] 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 95
1
PART XIX-E. PUBLIC SAFETY [RESERVED] 2
3
PART XIX-F. DEPARTMENT OF PUBLIC SAFETY ADMINSTRATION [RESERVED] 4
5
PART XIX-G. LAW ENFORCEMENT [RESERVED] 6
7
PART XIX-H. JUVENILE JUSTICE [RESERVED] 8
9
PART XIX-I. EMERGENCY MANAGEMENT AND NATIONAL GUARD [RESERVED] 10
11
PART XIX-M. STATE BUREAU OF INVESTIGATION 12
13
CONTINUED EXEMPTION FROM IT CONSOLIDATION 14
SECTION 19M.1. G.S. 143B-1325 reads as rewritten: 15
"§ 143B -1325. State information technology consolidated under Department of 16
Information Technology. 17
… 18
(c) Participating Agencies. – The State CIO shall prepare detailed plans to transition each 19
of the participating agencies. As the transition plans are completed, the followin g participating 20
agencies shall transfer information technology personnel, operations, projects, assets, and 21
appropriate funding to the Department of Information Technology: 22
(1) Department of Natural and Cultural Resources. 23
… 24
(13) Department of Public Safety, with the exception of the following: 25
a. State Bureau of Investigation. 26
b. State Highway Patrol. 27
c. Division of Emergency Management. 28
…." 29
30
PART XX. ADMINISTRATION [RESERVED] 31
32
PART XXI. ADMINISTRATIVE HEARINGS [RESERVED] 33
34
PART XXII. OFFICE OF THE STATE AUDITOR [RESERVED] 35
36
PART XXIII. BUDGET AND MANAGEMENT 37
38
STATE FISCAL RECOVERY FUND FLEXIBILITY 2025 39
SECTION 23.1.(a) Notwithstanding any provision of law to the contrary, and 40
subject to the conditions set out in part (b) of this section, below, the North Car olina Pandemic 41
Recovery Office (NCPRO), in consultation with the Director of the Budget, may reallocate State 42
Fiscal Recovery Funds (SFRF) appropriated by this act or any act of the General Assembly, 43
including but not limited to: 44
(a) S.L. 2021-180. 45
(b) S.L. 2021-189. 46
(c) S.L. 2022-6. 47
(d) S.L. 2022-74. 48
(e) S.L. 2023-134. 49
(f) S.L. 2024-1. 50
(g) S.L. 2024-40. 51
General Assembly Of North Carolina Session 2025
Page 96 Senate Bill 440-First Edition
(h) S.L. 2024-53. 1
(i) S.L. 2024-55. 2
SECTION 23.1.(b) The funds set out in part (a) of this section may be reallocated 3
only when all of the following conditions are met: 4
(a) The appropriated funds have not been expended by December 31, 2025. 5
(b) There is a reasonable expectation that the funds will not be e xpended before the 6
deadline established by applicable federal law or guidance. 7
(c) The reallocation is made to support one or more SFRF related activities authorized 8
and receiving appropriations under this act or one of the acts listed above in part (a) of this 9
Section. Reallocated funds shall not be used for any new activity, purpose, or program. 10
SECTION 23.1.(c) Any funds remain after the reallocation process authorized in 11
subsection (b) shall be allocated to the State Treasurer up to an amount equal to the remaining 12
unreimbursed COVID-19 related expenses incurred by the North Carolina State Health Plan for 13
Teachers and State Employees between March 3, 2021 and December 31, 2024. 14
SECTION 23.1.(d) To the extent that funds reallocated pursuant to this sect ion are 15
unappropriated, including interest accrual exceeding that which is anticipated in this act, those 16
funds are hereby appropriated and available for use pursuant to this section. 17
SECTION 23.1.(e) Reporting. – Beginning March 31, 2025, the Office of S tate 18
Budget and Management (OSBM) shall report to the Fiscal Research Division quarterly on the 19
reallocations made pursuant to this section. 20
21
INTEREST TO SUPPORT NC PANDEMIC RECOVERY EFFORTS 22
SECTION 23.2. Any interest earned on the following is appropria ted to the Office 23
of State Budget and Management (OSBM) for operations pertaining to pandemic recovery: 24
(a) Local Fiscal Recovery Fund, Budget Code 63009, Budget Fund 610000; 25
(b) Homeowner Assistance Fund, Budget Code 23023, Budget Fund 214150, that is 26
allowed to be retained by the State; and 27
(c) Economic Development Assistance Strategy and Tourism grant funds, Budget Code 28
23025, Budget Funds 214250 and 214251, that is allowed to be retained by the State. 29
30
INNOVATION & MODERNIZATION FOR PERFORMANCE, ACCOUNTABILITY, & 31
COST-EFFECTIVE TRANSFORMATION ('IMPACT') CENTER 32
SECTION 23.3.(a) Of the funds appropriated in this act to the Office of State Budget 33
and Management (OSBM), the sum of twenty million dollars ($20,000,000) in nonrecurring and 34
nonreverting funds s hall be allocated to the Innovation & Modernization for Performance, 35
Accountability, & Cost-Effective Transformation ('IMPACT') Center to: 36
(a) Partner with agencies on projects that substantially improve government operations 37
through applied research and p rivate sector best practices, including the use of procurement 38
optimization, agile project management, user -centered (UX) design, data analytics, artificial 39
intelligence, A/B testing, and performance management. 40
(b) Target efficiency gains in state program s and policies, aiming to create cost -savings 41
while maintaining or improving service delivery outcomes. 42
(c) Hire, on a temporary basis, external contractors, researchers and experts to empower 43
agencies to identify and implement efficiency transformations. 44
(d) Develop standardized efficiency improvement models, with associated training 45
materials, that can be shared across state agencies to empower more widespread replications of 46
the approach and foster a culture of innovation, constructive challenge, and accountability. 47
SECTION 23.3.(b) Beginning September 1, 2026, OSBM shall report annually to 48
the North Carolina General Assembly on progress made by the IMPACT Center during the prior 49
fiscal year. This report should set out key metrics demonstrating the program's impact, including: 50
(a) The number of projects under way and completed; 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 97
(b) Reductions in administrative costs achieved; 1
(c) Improvements in service delivery, speed, and responsiveness; 2
(d) Improvements in public satisfaction scores with the program; 3
(e) Identification of programs or policies (or components thereof) that should be 4
discontinued, and recommendations for the redeployment of taxpayer dollars to more effective 5
uses. 6
7
MITIGATE FEDERAL FUNDING ACTIONS 8
SECTION 23.4.(a) For the 2025-2027 fiscal biennium, the Office of Stat e Budget 9
and Management (OSBM) may use funds available in the Federal Infrastructure Match Reserve 10
to assist state agencies in mitigating the fiscal impacts of federal spending freezes, federal 11
government shutdowns, or federal spending reductions. This ass istance includes, but is not 12
limited to, providing legally required personnel -related or contractual expenses resulting from 13
the discontinuation or delay of federal funds that an agency cannot otherwise support within 14
existing resources. 15
SECTION 23.4.(b) Agencies shall submit documentation of the shortfall resulting 16
from the discontinuation or delay of federal funds to the Director of the Budget. The Office of 17
State Budget and Management (OSBM) may, at the discretion of the Director, allocate funds 18
available to the state agency to meet current liabilities. The funds are appropriated from the 19
Federal Infrastructure Match Reserve for the purposes set out in this section, at the time the 20
Director deems such a transfer necessary. 21
SECTION 23.4.(c) To the extent possible, state agencies shall reimburse these funds 22
to OSBM. OSBM shall revert all reimbursed funds to the Federal Infrastructure Match Reserve 23
by June 30, 2027. 24
SECTION 23.4.(d) Not later than September 1, 2026, and September 1, 2027, 25
OSBM shall submit a written report to the Senate Appropriations Committee on General 26
Government and Information Technology, the House of Representatives Appropriations 27
Committee on General Government, the Joint Legislative Oversight Committee on General 28
Government, the Joi nt Legislative Commission on Governmental Operations, and the Fiscal 29
Research Division which shall include all of the following for each recipient of funds from 30
OSBM: 31
(a) The name of any state agency receiving funds pursuant to in subsection (a) of this 32
section; 33
(b) The reason for the request for funds, including name of each federal program that was 34
impacted by a funding spending freeze, a federal government shutdown, or a federal spending 35
reduction, and a brief description of the impact; 36
(c) The amount of funds provided from the Federal Infrastructure Match Reserve; and 37
(d) The amount of funds reimbursed to the Federal Infrastructure Match Reserve. 38
39
PART XXIV. BUDGET AN D MANAGEMENT – SPECIAL APPROPRIATIONS 40
[RESERVED] 41
42
PART XXV. OFFICE OF STATE CONTROLLER 43
44
OVERPAYMENTS AUDITS 45
SECTION 25.1. G.S. 147-86.22(c) reads as rewritten: 46
"(c) Collection Techniques. – The State Controller, in conjunction with the Office of the 47
Attorney General, shall establish policies and procedures to govern techniques for collection of 48
accounts receivable. These techniques may include use of credit reporting bureaus, judicial 49
remedies authorized by law, and administrative setoff by a reduction of a tax refund pursuant to 50
the Setoff Debt Collection Act, Chapter 105A of the General Sta tutes, or a reduction of another 51
General Assembly Of North Carolina Session 2025
Page 98 Senate Bill 440-First Edition
payment, other than payroll, due from the State to a person to reduce or eliminate an account 1
receivable that the person owes the State. 2
The State Controller shall negotiate a contract with a third party to perform an audit and 3
collection process of inadvertent overpayments by State agencies to vendors as a result of pricing 4
errors, neglected rebates and discounts, miscalculated freight charges, unclaimed refunds, 5
erroneously paid excise taxes, and related errors. The third party shall be compensated only from 6
funds recovered as a result of the audit. Of the recovered funds and subject to availability, the 7
State Controller may use up to one hundred thousand dollars ($100,000) annually to develop and 8
provide governmental accounting education for state agency fiscal staff . Savings realized in 9
excess of costs and any funds used by the State Controller for the aforementioned purpose shall 10
be transferred from the agency to the Office of State Budget and Management and placed in a 11
special reserve account for future direction by the General Assembly. Any disputed savings shall 12
be settled by the State Controller. This paragraph does not apply to the purchase of medical 13
services by State agencies or payments used to reimburse or o therwise pay for health care 14
services." 15
16
ELECTRONIC PAYMENT PROCESSING 17
SECTION 25.2. G.S. 147-86.22 reads as rewritten: 18
"§ 147-86.22. Statewide accounts receivable program. 19
… 20
(b) Electronic Payment. – Notwithstanding the provisions of G.S. 147-86.20 and 21
G.S. 147-86.21, this subsection applies to debts owed a community college, a local school 22
administrative unit, an area mental health, developmental disabilities, and substance abuse 23
authority, and the Administrative Office of the Courts, and to debts payab le to or through the 24
office of a clerk of superior court or a magistrate, as well as to debts owed to other State agencies 25
as defined in G.S. 147-86.20. 26
The State Controller shall establish policies that allow accounts receivable to be payable 27
under certai n conditions by electronic payment. These policies shall be established with the 28
concurrence of the State Treasurer. In addition, any policies that apply to debts payable to or 29
through the office of a clerk of superior court or a magistrate shall be establ ished with the 30
concurrence of the Administrative Officer of the Courts. The Administrative Officer of the Courts 31
may also establish policies otherwise authorized by law that apply to these debts as long as those 32
policies are not inconsistent with the Controller's policies. 33
A condition of payment by electronic payment is receipt by the appropriate State agency of 34
the full amount of the account receivable owed to the State agency. A Notwithstanding the 35
provisions of this section or any other provision of law, a State agency may enter into a contract 36
with a payment processor that authorizes the processor to retain their fee for providing the 37
processing service at the time each transaction is made. The terms of any contract executed under 38
this subsection shall b e approved by the State Controller with the concurren ce of the State 39
Treasurer and the Administrative Office of the Courts, as applicable. In the absence of a contract 40
with a processor to retain service fees, the State agency may charge a debtor who pays b y 41
electronic payment may be required to pay any fee or charge associated with the use of electronic 42
payment. Fees fees to cover the costs incurred in accepting the payment electronically, but in no 43
event shall the debtor be required to pay a fee that is gr eater than four percent (4%) of the 44
electronic payment. If the State agency does not require the debtor to pay a fee associated with 45
processing electronic paymentspayments, the fee may be paid out of the General Fund and 46
Highway Fund if the payment of the fee by the State is economically beneficial to the State and 47
the payment of the fee by the State has been approved by the State Controller and State Treasurer. 48
The State Controller and State Treasurer shall consult with the Joint Legislative Commission 49
on Governmental Operations before establishing policies that allow accounts receivable to be 50
payable by electronic payment and before authorizing fees associated with electronic payment to 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 99
be paid out of the General Fund and Highway Fund. A payment of an account receivable that is 1
made by electronic payment and is not honored by the issuer of the card or the financial institution 2
offering electronic funds transfer does not relieve the debtor of the obligation to pay the account 3
receivable. 4
… 5
(d) Annual Report. – The State Controller shall report annually to the Joint Legislative 6
Commission on Governmental Operations and the Fiscal Research Division on the revenue 7
deposited into Special Reserve Account 24172 and the disbursement of that revenue." 8
9
PART XXVI. ELECTIONS 10
11
USE OF HELP AMERICA VOTE ACT 12
SECTION 26.1. The State Board of Elections shall use federal Help America Vote 13
Act (HAVA) funds appropriated in this act for the 2025 -2026 fiscal biennium for the following 14
purposes: 15
(1) Continued funding for equipment and software for critical IT operations. 16
(2) Continuing the funding of information technology and regional support 17
positions, including the IT Security and Compliance Manager. 18
19
PART XXVII. GENERAL ASSEMBLY [RESERVED] 20
21
PART XXVIII. GOVERNOR [RESERVED] 22
23
PART XXIX. HOUSING FINANCE AGENCY [RESERVED] 24
25
PART XXIX-A. OFFICE OF STATE HUMAN RESOURCES 26
27
MAKE APPLYING FOR STATE JOBS EASIER 28
SECTION 29A.1.(a) Chapter 126 of the General Statutes is amended by adding a 29
new section to read: 30
"§ 126-14.2A. Increasing efficiency of state job application process. 31
(a) The Office of State Human Resources shall allow applicants to apply for state jobs by 32
uploading a resume or website profile, then having an electronic tool import text from the resume 33
or website profile into the format used on the state job application form. The Office shall structure 34
the job application process to make applying by an imported resume or website profile as easy 35
and efficient as possible while still providing the information that is reasonably necessary for 36
merit-based hiring under G.S. 126-14.2 and G.S. 126-14.3. Applicants are responsible for 37
ensuring that all information required for initial screening is included in the state job application 38
form after importing resume or website profile. 39
(b) To the extent that a job application requires references, supplemental questions, or 40
other information that would not commonly be found on a resume and is not required for initial 41
screening, state agencies may delay requiring that information until job interviews or until later 42
in the selection process. 43
(c) At least once each year, the Office of State Human Resources shall present the state 44
application form and demonstrate the import process to the State Human Resources Commission 45
for the Commission's informal feedback." 46
SECTION 29A.1.(b) G.S. 126-5(c7) reads as rewritten: 47
"(c7) Except as to the policies, rules, and plans established by the Commission pursuant to 48
G.S. 126-4(1), 126 -4(2), 126 -4(3), 126 -4(4), 126 -4(5), 126 -4(6), 126 -14.3, and except as to 49
G.S. 126-14.2, G.S. 126-14.2A, G.S. 126-34.02(b)(1) and (2), and Articles 6 and 7 of this 50
Chapter, this Chapter does not apply to exempt managerial positions." 51
General Assembly Of North Carolina Session 2025
Page 100 Senate Bill 440-First Edition
SECTION 29A.1.(c) G.S. 126-5(c17) reads as rewritten: 1
"(c17) Except as to the policies, rules, and plans established by the Commission pursuant to 2
G.S. 126-4(1), 126-4(2), 126-4(3), 126-4(4), 126-4(5), 126-4(6), 126-7, 126-14.3, and except as 3
to the provisions of G.S. 126-14.2, G.S. 126-14.2A, G.S. 126-34.1(a)(2), and Articles 6 and 7 of 4
this Chapter, the provisions of this Chapter shall not apply to a warden of an adult corrections 5
facility." 6
SECTION 29A.1.(d) G.S. 126-5(c18) reads as rewritten: 7
"(c18) Except as to the policies, rules, and plans established by the Commission pursuant to 8
G.S. 126-4(1), 126-4(2), 126 -4(3), 126-4(4), 126 -4(5), 126-4(6), 126 -4(7), and 126 -14.3, and 9
except as to the provisions of G.S. 126-14.2, G.S. 126-14.2A, 126 -34.02(b)(1) and (2), and 10
Articles 6 a nd 7 of this Chapter, this Chapter does not apply to the warden of a State adult 11
correctional facility. Employees in these positions shall be public servants under 12
G.S. 138A-3(70) and shall file Statements of Economic Interest under G.S. 138A-22. Employees 13
in these positions shall receive the protections of former G.S. 126-5(e) if the employees were 14
hired before the date of its repeal and have the minimum cumulative service to qualify under that 15
subsection." 16
SECTION 29A.1.(e) Section 39A.1 shall be effective when it becomes law. OSHR 17
shall modify the state job application process no later than November 1, 2025, to implement the 18
authority granted by this section 19
20
ALLOW PERMANENTLY HI RING CERTAIN TEMPORA RY EMPLOYEES UNDER 21
SPECIFIC CONDITIONS 22
SECTION 29A.2. Chapter 126 of the General Statutes is amended by adding a new 23
section to read: 24
"§ 126-14.3A. Temp-to-perm hiring. 25
The Council of State, the executive branch agencies, the Community College System Office, 26
and the University of North Carolina may directly hire temporary employees into vacant 27
positions so long as all of the following conditions are met: 28
(1) The position to which the temporary employee would be appointed is vacant; 29
(2) The temporary employee must have been working, for at least six months not 30
including any mandatory breaks under G.S. 126-6.3, in a role that is 31
substantially equivalent to the appointed position with satisfactory 32
performance; 33
(3) The temporary employee must meet the minimum education and experience 34
requirements for the position classification and have a salary set within the 35
classification range; and 36
(4) The temporary employee must have been hired through the Temporary 37
Solutions Program of the North Carolina Office of State Human Resources 38
(OSHR). 39
The Director of the Office of State Human Resources may grant an exception to requirement 40
(3). 41
Except as otherwise provided in this section, the hiring shall be exempt from Chapter 126 of 42
the General Statutes, including any procedural or substantive requirements such as publicly 43
posting the position, requiring an application, holding an interview or new reference checks, 44
selecting the applicants from the pool of the most qualified persons, and following the priorities 45
for certain types of applicants under State law. The hiring shall not be exempt from G.S. 126-14, 46
G.S. 126-14.1, G.S. 126-14.5, and Articles 6 and 7 of Chapter 126 of the General Statutes. The 47
exemption from Chapter 126 of the General Statutes for the hiring process shall not affect 48
whether the position is subject to Chapter 126 of the General Statutes once the employee is hired." 49
50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 101
MAKE STATE AGENCY HI RING, PAY, AND CLASS IFICATION FLEXIBILIT Y 1
PERMANENT 2
SECTION 29A.3.(a) Chapter 126 of the General Statutes is amended by adding a 3
new section to read: 4
"§ 126-3.1. Agency Hiring, Pay, and Classification Flexibility. 5
Notwithstanding any provision of Chapter 126 of the General Statutes to the contrary, the 6
Council of State, the executive branch agencies, the Community College System Office, and The 7
University of North Carolina are each authorized to do the following: 8
(1) Allow an individual the option of having the individual 's application 9
considered for future job postings at the same agency and at other agencies if 10
the individual has been identified as a qualified applicant within the same or 11
comparable classification. 12
(2) Allow agencies to recruit and hire applicants from a job posting that applies 13
to all vacancies for a particular classification at all state agencies. 14
(3) Classify or reclassify their positions according to the classification system 15
established by th e State Human Resources Commission (SHRC) as long as 16
the employee meets the minimum requirements of the classification. 17
(4) Set salaries for their employees within the salary ranges for the respective 18
position classification established by the SHRC. 19
However, nothing in this section shall reduce the authority granted to the Director of the 20
Office of State Human Resources to implement corrective actions in cases of employer 21
noncompliance." 22
23
MODERNIZE AND SIMPLIFY THE STATE HUMAN RESOURCES ACT 24
SECTION 29A.4.( a) No later than March 15, 2026, the Office of State Human 25
Resources (OSHR) shall report to the President Pro Tempore of the Senate, the Speaker of the 26
House of Representatives, and the Fiscal Research Division on suggested changes to Chapter 126 27
of the General Statutes in order to update the North Carolina Human Resources Act to simplify 28
the Chapter and reflect human resource best practices. At a minimum, the report should address 29
legislative changes needed to: 30
(1) Streamline hiring, 31
(2) Enhance recruitment and make state employment more attractive, 32
(3) Develop and maintain a high-quality, well-trained state workforce, and 33
(4) Improve employee retention. 34
OSHR shall work with state agencies, local governments, and other relevant 35
stakeholders in developing these recommended changes. 36
37
EXTEND TEMPORARY REMOVAL OF BARRIERS TO ALLOW RETIREES OF THE 38
TEACHERS' AND STATE EMPLOYEES' RETIREMEN T SYSTEM AND THE 39
LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM TO RETURN 40
TO WORK ON A PART-TIME, TEMPORARY, OR INTERIM BASIS 41
SECTION 29A.5. Section 12.1(a) of S.L. 2024-51 reads as rewritten: 42
"SECTION 12.1.(a) For individuals who retired under the Teachers' and State Employees' 43
Retirement System (TSERS) on or after April 1, 2024, but before October 1, 2024,March 1, 2025, 44
the six-month separation from service from an employer required under G.S. 135-1(20) in order 45
for a retirement to become effective shall not apply and instead a one-month separation shall be 46
required, provided that the position to which the individual returns i s needed due to the state of 47
emergency related to Hurricane Helene or associated Hurricane Helene recovery efforts, as 48
certified to the Retirement Systems Division of the Department of State Treasurer by the 49
employing agency." 50
General Assembly Of North Carolina Session 2025
Page 102 Senate Bill 440-First Edition
"SECTION 12.1.(b) Upon the e xpiration of subsection (a) of this section, all of the 1
following shall apply: 2
(1) The six-month separation from an employer required under G.S. 135-1(20) 3
shall again be applicable to individuals who retired under TSERS on or after 4
April 1, 2024, but before October 1, 2024. March 1, 2025. 5
(2) In order for a member's retirement under TSERS on or after April 1, 2024, but 6
before October 1, 2024, March 1, 2025, to become effective in any month, the 7
member must perform no work for an employer, including par t-time, 8
temporary, substitute, or contractor work, at any time between the expiration 9
of subsection (a) of this section and the end of the six months immediately 10
following the effective date of retirement, provided the expiration of the 11
six-month period of separation did not occur while subsection (a) of this 12
section was in effect. 13
"SECTION 12.1.(c) For individuals who retired under TSERS on or after April 1, 2024, but 14
before October 1, 2024,March 1, 2025, any time worked between September 25, 2024, and th e 15
time subsection (a) of this section expires shall not be considered work for the purposes of the 16
six-month separation required under G.S. 135-1(20) or for the purposes of G.S. 135-3(d), 17
provided the position held by the individual is needed due to the st ate of emergency related to 18
Hurricane Helene or associated Hurricane Helene recovery efforts, as certified to the Retirement 19
Systems Division of the Department of State Treasurer by the employing agency. 20
"SECTION 12.1.(d) For individuals who retired prior to October 1, 2024, March 1, 2025, 21
any earnings received between September 25, 2024, and the time that subsection (a) of this 22
section expires shall not be treated as earned by a TSERS beneficiary under the provisions of 23
G.S. 135-3(a)(8)c., provided those earnings are related to a position needed due to the state of 24
emergency related to Hurricane Helene or associated Hurricane Helene recovery efforts, as 25
certified to the Retirement Systems Division of the Department of Sta te Treasurer by the 26
employing agency. 27
"SECTION 12.1.(e) For individuals who retired prior to October 1, 2024, March 1, 2025, 28
any earnings received between September 25, 2024, and the time that subsection (a) of this 29
section expires shall not be treated as earned by a beneficiary of the Local Governmental 30
Employees Retirement System (LGERS) under the provisions of G.S. 128-24(5)c., provided 31
those earnings are related to a position needed due to the state of emergency related to Hurricane 32
Helene or associated Hurricane Helene recovery efforts, as certified to the Retirement Systems 33
Division of the Department of State Treasurer by the employing unit. 34
… 35
"SECTION 12.1.(g) Subsection (a) of this section expires June 30, 2026 and is applicable 36
to any activity on or before that date.when the statewide declaration of emergency issued by the 37
Governor in Executive Order No. 315, concurred to by the Council of State and as extended 38
pursuant to this act and any other enactment of a general law, expires." 39
40
PART XXX. INSURANCE 41
42
DEPARTMENT OF INSURANCE LEASE EXPENSES 43
SECTION 30.1. Section 7.(a) of S.L. 2023-114 reads as rewritten: 44
"SECTION 7.(a) The General Assembly authorizes the Department of Insurance to fund, 45
with receipts or from other non -General Fund and non -State C apital and Infrastructure Fund 46
sources available to the Department, a sum not to exceed eighteen million dollars 47
($18,000,000)twenty-five million dollars ($25,000,000) to enter into a lease agreement for the 48
temporary relocation of the Department's offices and a sum not to exceed one million 49
($1,000,000) for costs associated with the temporary relocation. The lease agreement funded by 50
the sum authorized in this subsection shall be for a term not to exceed five years and shall not be 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 103
renewed without prior approval from the General Assembly five years, with the option to renew 1
for two additional five year consecutive periods. The Department shall complete the relocation 2
process no later than October 15, 2023." 3
4
PART XXXI. INSURANCE – INDUSTRIAL COMMISSION [RESERVED] 5
6
PART XXXII. LIEUTENANT GOVERNOR [RESERVED] 7
8
PART XXXIII. MILITARY AND VETERANS AFFAIRS 9
10
CEMETERY TRUST FUND 11
SECTION 33.1. Article 14 of Chapter 14B of the General Statute is amended by 12
adding a new Section to read: 13
"§ 143B-1219. North Carolina Veterans Cemeteries Trust Fund. 14
(a) There is established the North Carolina Veterans Cemetery Trust Fund (hereinafter 15
"Fund"), a special fund within the Department of Military and Veterans Affairs. The Fund shall 16
be maintained as a special fund and shall be administered by the Department to carry out the 17
provisions of this section for the operations and maintenance of State veterans' cemeteries. Fund 18
resources may also be used to cover the projected cashflow needs of cemetery expansion projects 19
funded by grants from the U.S. Department of Veterans Affairs. Interest accruing from the 20
monies in the Fund shall be credited to the Fund. The Fund shall consist of the following sources 21
of funding: 22
(1) All interest and investment earnings received on monies in the Fund. 23
(2) Funds or monies received by the Department, the receipt of which does not 24
exclude any other source of revenue, from the United States, any federal 25
agency or institution, or individual reimbursement, for the support of veterans 26
cemeteries. 27
(3) Any other funds, as directed by the General Assembly. 28
(b) The Department is authorized to use up to four hundred thousand dollars ($400,000) 29
of the interest earned on the Fund to crea te up to four positions to maintain and operate the 30
existing state veteran cemeteries. The amount allowed to the Department for costs under this 31
section may be increased as needed to reflect legislatively mandated salary or benefit increases. 32
…." 33
34
AUTHORIZE FUNDING TO CONSTRU CT A STATE VETERANS HOME IN WAKE 35
COUNTY 36
SECTION 33.2. Notwithstanding Section 36.7(d) of S.L. 2018 -5, as enacted by 37
Section 9.1(a) of S.L. 2019 -97, the Department of Military and Veterans Affairs may Utilize 38
funds in an amount not exceeding twenty nine million nine hundred ninety five thousand dollars 39
($29,995,000) funds appropriated in this act the total cost of the project from the North Carolina 40
Veterans Home Trust Fund established under G.S. 143B-1293 to provide the required State 41
match for federal funding for the construction of a new State veterans nursing facility in Wake 42
County. Any federal funds received for this purpose are hereby appropriated. 43
44
CLARIFICATION OF VETERANS DEFINITIONS 45
SECTION 33.3. G.S. 143B-1213 reads as rewritten: 46
"§ 143B-1213. Definitions. 47
Except where provided otherwise, the following definitions apply in this Chapter: 48
(1) Department. – The Department of Military and Veterans Affairs. 49
(2) Secretary. – The Secretary of Military and Veterans Affairs. 50
(3) Veteran. – One of the following, as applicable. 51
General Assembly Of North Carolina Session 2025
Page 104 Senate Bill 440-First Edition
a. For qualifying as a voting member of the State Board of Veterans 1
served honorably during a period of war as defined in Title 38, United 2
States Code. 3
b. For entitlement to the services of the Department of Milit ary and 4
Veterans Affairs, a person who may be entitled to any benefits or rights 5
under the laws of the United States by reason of service in the Armed 6
Forces of the United States under the U.S. Department of Defense 7
(Army, Marine Corps, Navy, Air Force, Space Force, National Guard) 8
and the U.S. Department of Homeland Security (Coast Guard), and the 9
reserve components thereof. 10
c. For this Chapter, unless otherwise stated "Armed Forces of the United 11
States" means the Armed Forces of the United States under the United 12
States Department of Defense (Army, Marine Corps, Navy, Air Force, 13
Space Force, National Guard) and the United States Department of 14
Homeland Security (Coast Guard), the reserve components thereof. 15
…." 16
17
PART XXXIV. REVENUE 18
19
SCRAP TIRE DISPOSAL TAX 20
SECTION 34.1. G.S. 105-187.19(a) reads as rewritten: 21
"§ 105-187.19. Use of tax proceeds. 22
(a) The Secretary shall distribute the taxes collected under this Article, less the allowance 23
to the Department of Revenue for administrative expenses, in accordance wit h this 24
section. The Secretary may retain the cost of collection by the Department, not to 25
exceed four hundred twenty -five thousand dollars ($425,000) six hundred 26
seventy-five thousand dollars ($675,000) a year as reimbursed to the Department. 27
…." 28
29
WHITE GOODS DISPOSAL TAX 30
SECTION 34.2. G.S. 105-187.24 reads as rewritten: 31
"§ 105-187.24. Use of tax proceeds. 32
The Secretary shall distribute the taxes collected under this Article, less the Department of 33
Revenue's allowance for administrative expenses, in accordance with this section. The Secretary 34
may retain the Department's cost of collection, not to exceed four hundred twenty-five thousand 35
dollars ($425,000)six hundred seventy-five thousand dollars ($675,000) a year, as reimbursement 36
to the Department. 37
…." 38
39
PART XXXV. SECRETARY OF STATE [RESERVED] 40
41
PART XXXVI. TREASURER [RESERVED] 42
43
PART XXXVII. GENERAL GOVERNMENT – MISCELLANEOUS [RESERVED] 44
45
PART XXXVIII. INFORMATION TECHNOLOGY [RESERVED] 46
47
PART XXXIX. SALARIES AND BENEFITS 48
49
ELIGIBLE STATE -FUNDED EMPLOYEES AW ARDED COST-OF-LIVING 50
ADJUSTMENT/ LEGISLATIVE SALARY INCREASES 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 105
SECTION 39.1.(a) Effective July 1, 2025, exce pt as provided by subsection (b) of 1
this section, a person (i) whose salary is set by this Part, pursuant to the North Carolina Human 2
Resources Act or as otherwise authorized in this act and (ii) who is employed in a State -funded 3
position on June 30, 2025, is awarded a compensation adjustment as follows: 4
(1) Two percent (2%) effective July 1, 2025. 5
(2) As otherwise allowed or provided by law. 6
SECTION 39.1.(b) For the 2025 -2027 fiscal biennium, the following persons are 7
not eligible to receive the legislative salary increases provided by subsection (a) of this section: 8
(1) Employees of local boards of education. 9
(2) Local community college employees. 10
(3) Employees of The University of North Carolina 11
(4) Clerks of superior court compensated under G.S. 7A-101. 12
(5) Correctional employees to which Section 39.18 of this Part applies. 13
(6) Law enforcement officers to which Section 39.19.(a) of this Part applies. 14
(7) Probation and parole officers to which Section 39.20.(a) of this Part applies. 15
(8) Employees of schools operated by the Depa rtment of Health and Human 16
Services, the Department of Public Safety, and the State Board of Education 17
who are paid based on the Teacher Salary Schedule. 18
SECTION 39.1.(c) Permanent part -time employees shall receive the increase 19
authorized by this section on a prorated and equitable basis. 20
SECTION 39.1.(d) No eligible State -funded employee shall be prohibited from 21
receiving the full salary increase provided in this section solely because the employee's salary 22
after applying the legislative increase is abov e the maximum of the salary range prescribed by 23
the State Human Resources Commission. 24
25
LABOR MARKET ADJUSTMENT RESERVE 26
SECTION 39.2.(a) Of the Labor Market Adjustment Reserve funds appropriated in 27
this Act, agencies shall award salary adjustments to ident ified employees pursuant to the 28
following requirements: 29
(1) Any increase provided to an employee shall not exceed the greater of fifteen 30
thousand dollars ($15,000) or fifteen percent (15%) of their current base 31
salary. 32
(2) Any increase provided to an employee may not result in the employee's salary 33
exceeding the maximum salary of the salary range associated with the 34
position. 35
(3) If an agency has 500 or more employees, no more than twenty -five percent 36
(25%) of the agency's permanent employees may receive a salary increase 37
from the funds appropriated for this purpose. If an agency has fewer than 500 38
employees, no more than 50% of the agency's permanent employees may 39
receive a salary increase. 40
(4) Funds may not be awarded to employees in positions with salarie s set in law 41
or paid based on an experience-based salary schedule that is eligible to receive 42
funding from the Pay Plan Reserve. 43
SECTION 39.2.(b) The Director of the Budget may adjust a State agency's budgeted 44
receipts to provide an equivalent two percent (2%) Labor Market Adjustment Reserve for the 45
2025-2027 fiscal biennium subject to the requirements in subsection (a) of this section, provided 46
that sufficient receipts are available. Agency receipts needed to implement this section are 47
appropriated for the 2025-26 fiscal year and the 2026-27 fiscal year. 48
SECTION 39.2.(c) The Office of State Human Resources (OSHR) shall compile a 49
single report detailing how these funds were distributed by each agency. OSHR shall develop a 50
uniform reporting mechanism for ag encies that displays the salary increases made for each 51
General Assembly Of North Carolina Session 2025
Page 106 Senate Bill 440-First Edition
position classification, the average increase provided to employees in each position classification, 1
and the market -based justification for the awarded salary increases. Agencies receiving Labor 2
Market Adjustment Reserve appropriations shall report to OSHR by January 30, 2026. By 3
February 30, 2026, OSHR shall submit the report containing the agency responses to the Fiscal 4
Research Division. 5
6
STATE EMPLOYEE BONUS 7
SECTION 39.3.(a) Any person (i) whose salary is set by Section 7A.(5), Section 8
7A.(8), Section 7A.(9) or by this Part, pursuant to the North Carolina Human Resources Act, 9
who is employed on September 30th, 2025, shall be awarded a bonus for the 2025-26 fiscal year 10
in the amount of one thousand dollars ($1,000.00), payable during the month of October 2025. 11
SECTION 39.3.(b) Notwithstanding Subsection (d) of Section 39.33, any funds 12
appropriated for bonuses in excess of the amounts required to implement the bonuses shall revert 13
and not be credited to the Pay Plan Reserve. 14
SECTION 39.3.(c) Notwithstanding G.S. 135-1(7a), the compensation bonuses 15
awarded by this section is not compensation under Article 1 of Chapter 135 of the General 16
Statutes, the Teachers' and State Employees' Retirement System. 17
SECTION 39.3.(d) The compensation bonuses awarded by this section are not part 18
of annual salary and shall be paid out separately. The compensation bonus shall be awarded to 19
eligible permanent employees without regard to an employee's placement within the salary range, 20
including employees at the top of the salary range. The compensation bonus shall be adjusted pro 21
rata for permanent part-time employees. 22
23
ADDITIONAL VACATION DAYS FOR STATE EMPLOYEES 24
SECTION 39.4. The number of annual vacation leave credits provided to employees 25
subject to the State Human Resources Act who are full -time or over half -time and have a 26
permanent, trainee, time -limited or probationary appointment and who are in pay status for 27
one-half of the regularly scheduled workdays and holidays in a pay peri od shall be increased to 28
the following amounts: 29
Years of Total Service Days Granted Each Year 30
Less than 1 year 15 31
1 but less than 5 years 17 32
5 but less than 10 years 20 33
10 but less than 15 years 22 34
15 but less than 20 years 24 35
20 or more years 27 36
37
GOVERNOR AND COUNCIL OF STATE 38
SECTION 39.5.(a) The salary of the Governor, as provided by G.S. 147-11(a), shall 39
remain unchanged. 40
SECTION 39.5.(b) The annual salaries for members of the Council of State, payable 41
monthly, for the 2025-2027 fiscal biennium are as follows: 42
43
Council of State FY 2025-26 FY 2026-27 44
Lieutenant Governor $171,752 $171,752 45
Attorney General 171,752 171,752 46
Secretary of State 171,752 171,752 47
State Treasurer 171,752 171,752 48
State Auditor 171,752 171,752 49
Superintendent of Public Instruction 171,752 171,752 50
Agriculture Commissioner 171,752 171,752 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 107
Insurance Commissioner 171,752 171,752 1
Labor Commissioner 171,752 171,752 2
3
CERTAIN EXECUTIVE BRANCH OFFICIALS 4
SECTION 39.6. The annual salaries, payable monthly, for the following execut ive 5
branch officials for the 2025-2027 fiscal biennium are as follows: 6
7
Executive Branch Officials FY 2025-26 FY 2026-27 8
Chairman, Alcoholic Beverage 9
Control Commission $143,661 $143,661 10
State Controller 200,041 200,041 11
Commissioner of Banks 161,238 161,238 12
Chair, Board of Review, Division 13
of Employment Security 158,156 158,156 14
Members, Board of Review, 15
Division of Employment Security 156,223 156,223 16
Chairman, Parole Commission 158,156 158,156 17
Full-Time Members of the Parole Commission 146,231 146,231 18
Chairman, Utilities Commission 179,280 179,280 19
Members of the Utilities Commission 161,238 161,238 20
Executive Director, North Carolina 21
Agricultural Finance Authority 139,904 139,904 22
State Fire Marshall 141,831 141,831 23
24
JUDICIAL BRANCH 25
SECTION 39.7.(a) The annual salaries, payable monthly, for the following judicial 26
branch officials for the 2025-2027 fiscal biennium are as follows: 27
28
Judicial Branch Officials FY 2025-26 FY 2026-27 29
Chief Justice, Supreme Court $209,165 $209,165 30
Associate Justice, Supreme Court 203,736 203,736 31
Chief Judge, Court of Appeals 200,514 200,514 32
Judge, Court of Appeals 195,310 195,310 33
Judge, Senior Regular Resident Superior Court 179,478 179,478 34
Judge, Superior Court 174,199 174,199 35
Chief Judge, District Court 172,574 172,574 36
Judge, District Court 167,499 167,499 37
Chief Administrative Law Judge 149,078 149,078 38
District Attorney 172,357 172,357 39
Assistant Administrative Officer of the Courts 156,369 156,369 40
Public Defender 172,357 172,357 41
Director of Indigent Defense Services 173,622 173,622 42
SECTION 39.7.(b) The district attorney or public defender of a judicial district, with 43
the approval of the Administrative Officer of the Courts or the Commission on Indigent Defense 44
Services, respectively, shall set the salarie s of assistant district attorneys or assistant public 45
defenders, respectively, in that district such that the average salaries of assistant district attorneys 46
or assistant public defenders in that district, for the 2025 -2027 biennium, do not exceed one 47
hundred and four thousand three hundred thirty-eight dollars ($104,338) and the minimum salary 48
of any assistant district attorney or assistant public defender is at least fifty -six thousand 49
twenty-one dollars ($56,021), effective July 1, 2025. 50
51
General Assembly Of North Carolina Session 2025
Page 108 Senate Bill 440-First Edition
CLERKS OF SUPERIOR COURT 1
SECTION 39.8. Effective July 1, 2025, G.S. 7A-101(a) reads as rewritten: 2
"(a) The clerk of superior court is a full -time employee of the State and shall receive an 3
annual salary, payable in equal monthly installments, based on the number of Sta te-funded 4
assistant and deputy clerks of court as determined by the Administrative Office of Court's 5
workload formula, according to the following schedule: 6
Assistants and Deputies Annual Salary 7
0-19 $111,726$115,078 8
20-29 123,488127,193 9
30-49 135,248139,305 10
50-99 147,010151,420 11
100+ 149,949154,447." 12
13
ASSISTANT AND DEPUTY CLERKS OF SUPERIOR COURT 14
SECTION 39.9. Effective July 1, 2025, G.S. 7A-102(c1) reads as rewritten: 15
"(c1) A full-time assistant clerk or a full-time deputy clerk, and up to one full-time deputy 16
clerk serving as head bookkeeper per county, shall be paid an annual salary subject to the 17
following minimum and maximum rates: 18
Assistant Clerks and Annual Salary 19
Head Bookkeeper 20
Minimum $40,482$41,696 21
Maximum 74,79277,036 22
23
Deputy Clerks Annual Salary 24
Minimum $35,257$37,404 25
Maximum 57,02960,502." 26
27
MAGISTRATES 28
SECTION 39.10. Effective July 1, 2025, G.S. 7A-171.1 reads as rewritten: 29
"§ 7A-171.1. Duty hours, salary, and travel expenses within county. 30
(a) The Administrative Officer of the Courts, after consultation with the chief district 31
judge and pursuant to the following provisions, shall set an annual salary for each magistrate: 32
(1) A full-time magistrate shall be paid the annual salary indicated in the table set 33
out in this subdivision. A full-time magistrate is a magistrate who is assigned 34
to work an average of not less than 40 hours a week during the term of office. 35
The Administrative Officer of the Courts shall designate whether a magistrate 36
is full-time. Initial appointment shall be at the entry rate. A magistrate's salary 37
shall increase to the next step every two years on the anniversary of the date 38
the magistrate was originally appointed for increases to Steps 1 through 3, and 39
every four years on the anniversary of the date the mag istrate was originally 40
appointed for increases to Steps 4 through 6. 41
Table of Salaries of Full-Time Magistrates 42
Step Level Annual Salary 43
Entry Rate $47,228$48,645 44
Step 1 50,71452,235 45
Step 2 54,47556,109 46
Step 3 58,45760,211 47
Step 4 63,22865,125 48
Step 5 68,97371,042 49
Step 6 75,41577,677." 50
51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 109
LEGISLATIVE EMPLOYEES 1
SECTION 39.11.(a) Effective July 1, 2025, the annual salaries of the Legislative 2
Services Officer and of nonelected employees of the General Assembly in effect on June 30, 3
2025, shall be legislatively increased by two percent (2%). 4
SECTION 39.11.(b) Nothing in this act limits any of the provisions of G.S. 120-32. 5
6
GENERAL ASSEMBLY PRINCIPAL CLERKS 7
SECTION 39.12. Effective July 1, 2025, G.S. 120-37(c) reads as rewritten: 8
"(c) The principal clerks shall be full-time officers. Each principal clerk shall be entitled 9
to other benefits available to permanent legislative employees and shall be paid an annual salary 10
of one hundred thirty -three thousand nine hundred thirty -six dollars ($133,936), one hundred 11
thirty-six thousand six hundred fifteen dollars ($136,615), payable monthly. Each principal clerk 12
shall also receive such additional compensation as approved by the Speaker of the House of 13
Representatives or the President Pro Tempore of the Senate, resp ectively, for additional 14
employment duties beyond those provided by the rules of their House. The Legislative Services 15
Commission shall review the salary of the principal clerks prior to submission of the proposed 16
operating budget of the General Assembly t o the Governor and shall make appropriate 17
recommendations for changes in those salaries. Any changes enacted by the General Assembly 18
shall be by amendment to this paragraph." 19
20
SERGEANTS-AT-ARMS AND READING CLERKS 21
SECTION 39.13. Effective July 1, 2025, G.S. 120-37(b) reads as rewritten: 22
"(b) The sergeant-at-arms and the reading clerk in each house shall be paid a salary of five 23
hundred twenty -eight dollars ($528) five hundred thirty nine dollars ($539) per week plus 24
subsistence at the same daily rate provided for members of the General Assembly, plus mileage 25
at the rate provided for members of the General Assembly for one round trip only from their 26
homes to Raleigh and return. The sergeants -at-arms shall serve during sessions of the General 27
Assembly and at such time prior to the convening of, and subsequent to adjournment or recess 28
of, sessions as may be authorized by the Legislative Services Commission. The reading clerks 29
shall serve during sessions only." 30
31
COMMUNITY COLLEGES 32
SECTION 39.14.(a) Community college personnel shall receive the following 33
cost-of-living adjustments: 34
(1) Effective July 1, 2025, the State Board of Community Colleges shall provide 35
community college faculty and non -faculty personn el with an 36
across-the-board salary increase in the amount of two percent (2%). 37
SECTION 39.14.(b) The minimum salaries for nine -month, full -time curriculum 38
community college faculty for the 2025-2027 fiscal biennium are as follows: 39
Education Level FY 2025-26 FY 2026-27 40
Vocational Diploma/Certificate or Less $43,982 $43,982 41
Associate Degree or Equivalent 44,594 44,594 42
Bachelor's Degree 47,247 47,247 43
Master's Degree or Education Specialist 49,602 49,602 44
Doctoral Degree 52,995 52,995 45
SECTION 39.14.(c) No full-time faculty member shall earn less than the minimum 46
salary for his or her education level. The pro rata hourly rate of the minimum salary for each 47
education level shall be used to determine the minimum salary for part-time faculty members. 48
49
UNIVERSITY OF NORTH CAROLINA SYSTEM 50
General Assembly Of North Carolina Session 2025
Page 110 Senate Bill 440-First Edition
SECTION 39.15.(a) Effective for the 2025-2027 fiscal biennium, the annual salaries 1
of University of North Carolina SHRA employees shall be increased as provided by Section 39.1 2
of this act. 3
SECTION 39.15.(b) For the 2025-2027 fiscal biennium, the Board of Governors of 4
The University of North Carolina may provide EHRA employees a salary increase pursuant to 5
the policies adopted by the Board. Funds for EHRA compensation increases may be used for any 6
one or more of the following purpos es: (i) merit pay, (ii) across the board increases, (iii) 7
recruitment bonuses, (iv) retention increases, and (v) any other compensation increase pursuant 8
to those policies. 9
SECTION 39.15.(c) The Board of Governors of The University of North Carolina 10
shall make a report on the use of compensation increase and bonus funds to the General Assembly 11
by no later than March 1 of each year of the biennium. 12
13
CORRECTIONAL OFFICERS/YOUTH COUNSELOR TECHNICIANS/YOUTH 14
SERVICES BEHAVIORAL SPECIALISTS/YOUTH COUNSELORS – SALARY 15
SCHEDULE 16
SECTION 39.16.(a) State employees serving as correctional officers in the 17
Department of Adult Correction shall be compensated at a specific pay rate on the basis of a 18
salary schedule determined according to the duration of the employee's correctional officer work 19
experience. 20
SECTION 39.16.(a1) State employees serving in the Department of Public Safety, 21
Division of Juvenile Justice and Delinquency Prevention, shall be compensated at a specific pay 22
rate set on the basis of a salary schedule determined according to the duration of the employee's 23
work experience, as follows: 24
(1) Youth Counselor Technicians shall be paid under the Correctional Officer I 25
salary schedule. 26
(2) Youth Behavioral Specialists shall be paid under the Correctional Officer II 27
salary schedule. 28
(3) Youth Counselors shall be paid under the Correctional Officer III salary 29
schedule. 30
SECTION 39.16.(b) The following annual salary schedule applies under subsections 31
(a) and (a1) of this section for the 2025-2027 fiscal biennium, effective for on July 1, 2025: 32
33
FY 2025-26 FY 2026-27 34
Experience COI COII COIII COI COII COIII 35
0 $40,066 $41,385 $44,259 $40,066 $41,385 $44,259 36
1 $42,869 $44,281 $47,358 $42,869 $44,281 $47,358 37
2 $45,444 $46,985 $50,201 $45,444 $46,985 $50,201 38
3 $47,715 $49,285 $52,711 $47,715 $49,285 $52,711 39
4 $49,623 $51,256 $54,819 $49,623 $51,256 $54,819 40
5 $51,113 $52,793 $56,463 $51,113 $52,793 $56,463 41
6+ $52,135 $53,850 $57,593 $52,135 $53,850 $57,593 42
43
STATE LAW ENFORCEMENT OFFICER SALARY SCHEDULE 44
SECTION 39.17.(a) Law enforcement officers of the State Bureau of Investigation, 45
Alcohol Law Enforcement, and State Capitol Police shall be compensated pursuant to an 46
experience-based salary schedule and shall be compensated based on the officer's respective 47
work experience pursuant to the salary schedule in subsection (b) of this section. 48
SECTION 39.17.(b) The following annual salary schedule applies under subsection 49
(a) of this section for the 2025-2027 fiscal biennium, effective July 1, 2025, and July 1, 2026, for 50
each respective fiscal year: 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 111
1
Years of Experience FY 2025-26 FY 2026-27 2
0 55,081 55,081 3
1 58,663 58,663 4
2 62,476 62,476 5
3 66,537 66,537 6
4 70,862 70,862 7
5 75,468 75,468 8
6+ 80,374 80,374 9
10
STATE HIGHWAY PATROL SALARY SCHEDULE 11
SECTION 39.18.(a) Law enforcement officers of the State Highway Patrol 12
compensated pursuant to an experience -based salary schedule and shall be compensated based 13
on the officer's respective work experienc e pursuant to the salary schedule in subsection (b) of 14
this section. 15
SECTION 39.18.(b) The following annual salary schedule applies under subsection 16
(a) of this section for the 2025-2027 fiscal biennium, effective July 1, 2025, and July 1, 2026, for 17
each respective fiscal year: 18
19
Years of Experience FY 2025-26 FY 2026-27 20
0 56,650 56,650 21
1 60,332 60,332 22
2 64,253 64,253 23
3 68,430 68,430 24
4 72,878 72,878 25
5 77,615 77,615 26
6+ 82,660 82,660 27
28
PROBATION AND PAROLE OFFICERS/JUVENILE COURT COUNSELORS – 29
SALARY SCHEDULE 30
SECTION 39.19.(a) Probation and parole officers shall be compensated pursuant to 31
the experience -based salary schedule based on the officer's respective work experience, as 32
established in subsection (b) of this section. 33
SECTION 39.19.(a1) State employees serving in the Department of Public Safety, 34
Division of Juvenile Justice and Delinquency Prevention, as Juvenile Court Counselors shall be 35
compensated under the probation and parole officer salary schedule. 36
SECTION 39.19.(b) The following annual salary schedule applies under subsection 37
(a) of this section for the 2025-2027 fiscal biennium, effective July 1, 2025, and July 1, 2026, for 38
each respective fiscal year: 39
40
Years of Experience FY 2025-26 FY 2026-27 41
0 46,785 46,785 42
1 49,825 49,825 43
2 53,066 53,066 44
3 56,514 56,514 45
4 60,188 60,188 46
5 64,100 64,100 47
6+ 68,266 68,266 48
49
STATE AGENCY TEACHERS 50
General Assembly Of North Carolina Session 2025
Page 112 Senate Bill 440-First Edition
SECTION 39.20.(a) Employees of schools operated by the Department of Health 1
and Human Services, the Department of Public Safety, and the State Board of Education who are 2
paid on the Teacher Salary Schedule shall be paid as authorized by Section 8.1 of this act. 3
SECTION 39.20.(b) Employees of the School of Science and Mathematics of The 4
University of North Carolina who are paid pursuant to a salary schedule adopted by the North 5
Carolina School of Science and Math Board of Trustees shall be paid in accordance with the 6
schedule adopted by the Board. 7
8
ALL STATE -SUPPORTED PERSONNEL /FLEXIBLE ADMINISTRA TION OF 9
COST-OF-LIVING ADJUSTMENTS 10
SECTION 39.21.(a) The cost-of-living adjustments authorized by this act for the 11
2025-2026 fiscal year shall be paid effective on July 1, 2025, a nd do not apply to persons 12
separated from service due to resignation, dismissal, reduction in force, death, or retirement or 13
whose last workday is prior to June 30, 2025. 14
SECTION 39.21.(b) The Director of the Budget is granted flexibility to administer 15
the compensation increases enacted by this act. The State employer contribution rates enacted by 16
this act for retirement and related benefits may be deemed by the Director of the Budget for 17
administrative purposes to become effective after July 1 of the appl icable fiscal year to provide 18
flexibility in the collection and reconciliation of salary-related contributions as required by law, 19
provided the estimated amount contributed to any affected employee benefit trust equals the 20
amount that would have been contr ibuted to the employee benefit trust if the enacted employer 21
contribution rates had been effective on July 1 of the applicable fiscal year. 22
SECTION 39.21.(c) This section applies to all employees paid from State funds, 23
whether or not subject to or exempt from the North Carolina Human Resources Act, including 24
employees of public schools, community colleges, and The University of North Carolina. 25
26
MOST STATE EMPLOYEES 27
SECTION 39.22. Unless otherwise expressly provided by this part, the annual 28
salaries in effect for the following persons on June 30, 2025, shall be legislatively increased as 29
provided by Section 39.1 of this act: 30
(1) Permanent, full -time State officials and persons whose salaries are set in 31
accordance with the State Human Resources Act. 32
(2) Permanent, full-time State officials and persons in positions exempt from the 33
State Human Resources Act. 34
(3) Permanent, part-time State employees. 35
(4) Temporary and permanent hourly State employees. 36
37
USE OF FUNDS APPROPRIATED FOR COST-OF-LIVING ADJUSTMENT/BENEFIT 38
INCREASES 39
SECTION 39.23.(a) The Office of State Budget and Management shall ensure that 40
the appropriations made in this act for cost-of-living adjustments and employee benefits are used 41
only for these purposes. 42
SECTION 39.23.(b) If the Director of the Budget determines that funds appropriated 43
to a State agency for mandated salary increases and employee benefits exceed the amount 44
required by that agency for those purposes, the Director may reallocate those funds to other State 45
agencies that received insufficient funds for required cost-of-living and benefit increases. 46
SECTION 39.23.(c) Funds appropriated for cost -of-living adjustments and 47
employee benefit increases may not be used to adjust the budgeted salaries of vacant positions, 48
or to provide salar y increases in excess of those required by the General Assembly except to 49
increase the budgeted salary of any position to the minimum of the position's salary range. 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 113
SECTION 39.23.(d) Any funds appropriated for cost -of-living adjustment and 1
employee benefit increases or minimum of salary range adjustments in excess of the amounts 2
required to implement the increases shall be credited to the Pay Plan Reserve. 3
SECTION 39.23.(e) No later than March 1 of each year of the biennium, the Office 4
of State Budget an d Management shall report to the Joint Legislative Commission on 5
Governmental Operations on the expenditure of funds for legislatively mandated salary increases 6
and employee benefits. This report shall include at least the following information for each State 7
agency: 8
(1) The total amount of funds that the agency received for legislatively mandated 9
salary increases and employee benefits. 10
(2) The total amount of funds transferred from the agency to other State agencies 11
pursuant to subsection (b) of this secti on. This section of the report shall 12
identify the amounts transferred to each recipient State agency. 13
(3) The total amount of funds used by the agency for legislatively mandated salary 14
increases and employee benefits. 15
(4) The amount of funds used pursuant so subsection (c) of this section. 16
17
MITIGATE BONUS LEAVE 18
SECTION 39.24. During the 2023 -2025 fiscal biennium, State agencies, 19
departments, institutions, the North Carolina Community College System, and The University of 20
North Carolina may offer State employees the opportunity to use or to cash in special bonus leave 21
benefits that have accrued pursuant to Section 28.3A of S.L. 2002-126, Section 30.12B(a) of S.L. 22
2003-284, Section 29.14A of S.L. 2005 -276, and Section 35.10A of S.L. 2014 -100, but only if 23
all of the following requirements are met: 24
(1) Employee participation in the program must be voluntary. 25
(2) Special leave that is liquidated for cash payment to an employee must be 26
valued at the amount based on the employee's current annual salary rate. 27
(3) By September 1, 2026, and September 1, 2027, a report on the use of this 28
provision shall be submitted to the respective agency head or employing 29
agency and to the Fiscal Research Division. 30
31
SALARY-RELATED CONTRIBUTIONS 32
SECTION 39.25.(a) Notwithstanding G.S. 135-8(d)(3a), effective July 1, 2025, the 33
State's employer contribution rates budgeted for retirement and related benefits as a percentage 34
of covered salaries for the 2025 -2026 fiscal year for teachers and State employees, State law 35
enforcement officers (LEOs), the University and Community Colleges Optional Retirement 36
Programs (ORPs), the Consolidated Judicial Retirement System (CJRS), and the Legislative 37
Retirement System (LRS) are as set forth below: 38
Teachers 39
and State State 40
Employees LEOs ORPs CJRS LRS 41
Retirement 17.39% 17.39% 6.84% 38.95% 20.34% 42
Disability 0.07% 0.07% 0.07% 0.00% 0.00% 43
Death 0.13% 0.13% 0.00% 0.00% 0.00% 44
Retiree Health 7.27% 7.27% 7.27% 7.27% 7.27% 45
NC 401(k) 0.00% 5.00% 0.00% 0.00% 0.00% 46
47
Total Contribution 48
Rate 24.86% 29.86% 14.18% 46.22% 27.61% 49
The rate for teachers and State employees and State law enforcement officers includes 50
one one-hundredth percent (0.01%) for the Qualified Excess Benefit Arrangement. 51
General Assembly Of North Carolina Session 2025
Page 114 Senate Bill 440-First Edition
SECTION 39.25.(b) Notwithstanding G.S. 135-8(d)(3a), effective July 1, 2026, the 1
State's employer contribution rates budgeted for retirement and related benefits as a percentage 2
of covered salaries for the 2026 -2027 fiscal year for teachers and State employees, State law 3
enforcement officers (LEOs), the Unive rsity and Community Colleges Optional Retirement 4
Programs (ORPs), the Consolidated Judicial Retirement System (CJRS), and the Legislative 5
Retirement System (LRS) are as set forth below: 6
Teachers 7
and State State 8
Employees LEOs ORPs CJRS LRS 9
Retirement 16.79% 16.79% 6.84% 37.73% 19.32% 10
Disability 0.07% 0.07% 0.07% 0.00% 0.00% 11
Death 0.13% 0.13% 0.00% 0.00% 0.00% 12
Retiree Health 7.56% 7.56% 7.56% 7.56% 7.56% 13
NC 401(k) 0.00% 5.00% 0.00% 0.00% 0.00% 14
15
Total Contribution 16
Rate 24.55% 29.55% 14.47% 45.29% 26.88% 17
The rate for teachers and State employees and State law enforcement officers includes 18
one one-hundredth percent (0.01%) for the Qualified Excess Benefit Arrangement. 19
SECTION 39.25.(c) Effective July 1, 2025, the maximum annual employer 20
contributions, payable monthly, by the State to the North Carolina State Health Plan for Teachers 21
and State Employees for each covered employee and the average covered retiree are as follows: 22
(1) For employees, eight thousand five hundred dollars ($8,500). 23
(2) For retirees, five thousand six hundred seventy -five dollars ($5,675). In 24
applying this subdivision, the annual employer contribution for the average 25
retiree shall be calculated assuming the retiree enrollment counts remain at the 26
April 2025 level throughout the 2025-2026 fiscal year. 27
SECTION 39.25.(d) Effective July 1, 2026, the maximum annual employer 28
contributions, payable monthly, by the State to the North Carolina State Health Plan for Teachers 29
and State Employees for each covered employee and the average covered retiree are as follows: 30
(1) For employees, eight thousand nine hundred twenty-five dollars ($8,925). 31
(2) For retirees, five thousand nine hundred fifty -nine dollars ($5,959). In 32
applying this subdivision, the annual employer contribution for the average 33
retiree shall be calculated assuming the retiree enrollment counts remain at the 34
April 2026 level throughout the 2026-2027 fiscal year. 35
36
PROVIDE COST-OF-LIVING ADJUSTMENT FOR RETIREES OF THE TEACHERS' 37
AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE CONSOLIDATED 38
JUDICIAL RETIREMENT SYSTEM , AND THE LEGISLATIV E RETIREMENT 39
SYSTEM 40
SECTION 39.26.(a) G.S. 135-5 is amended by adding new subsections to read: 41
"(aaaa) After September 1, 2025, but on or before October 31, 2025, a onetime cost of living 42
supplement payment shall be made to or on account of beneficiaries who are living as of 43
September 1, 2025, and whose retirement commenced on or before September 1, 2025. The 44
payment shall be two percent (2%) of the beneficiary 's annual retirement allowance payable as 45
of September 1, 2025, and shall not be prorated for date of retirement commencement. If the 46
beneficiary dies before the payment is made, then the payment shall be payable to the member's 47
legal representative. No beneficiary shall be deemed to have acquired a vested right to any future 48
supplemental payments. " 49
SECTION 39.26.(b) G.S. 135-65 is amended by adding a new subsection to read: 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 115
"(ll) After September 1, 2025, but on or before October 31, 2025, a onetime cost of living 1
supplement payment shall be made to or on account of beneficiaries who are living as of 2
September 1, 2025, and whose retirement commenced on or before September 1, 2025. The 3
payment shall be two percent (2%) of the beneficiary 's annual retirement allowance payable as 4
of September 1, 2025, and shal l not be prorated for date of retirement commencement. If the 5
beneficiary dies before the payment is made, then the payment shall be payable to the member's 6
legal representative. No beneficiary shall be deemed to have acquired a vested right to any future 7
supplemental payments." 8
SECTION 39.26.(c) G.S. 120-4.22A is amended by adding a new subsection to read: 9
"(ff) In accordance with subsection (a) of this section, after September 1, 202 5, but on or 10
before October 31, 2025, a onetime cost of living supplemen t payment shall be made to or on 11
account of beneficiaries who are living as of September 1, 2025, and whose retirement 12
commenced on or before September 1, 2025. The payment shall be two percent (2%) of the 13
beneficiary's annual retirement allowance payable as of September 1, 2025, and shall not be 14
prorated for date of retirement commencement. If the beneficiary dies before the payment is 15
made, then the payment shall be payable to the member 's legal representative. No beneficiary 16
shall be deemed to have acquired a vested right to any future supplemental payments." 17
18
PART XL. CAPITAL 19
20
GENERAL FUND CAPITAL APPROPRIATIONS/INTRODUCTION 21
SECTION 40.1. The appropriations made by the 2025 General Assembly for capital 22
improvements are for constructing, repairing, or re novating State buildings, utilities, and other 23
capital facilities, for acquiring sites for them where necessary, and for acquiring buildings and 24
land for State government purposes. 25
26
CAPITAL APPROPRIATIONS/STATE CAPITAL AND INFRASTRUCTURE FUND 27
SECTION 40.2. This subsection authorizes the capital projects listed in the 28
Committee Report, and appropriates funding from the State Capital and Infrastructure Fund to 29
the Office of State Budget and Management for the 2025 -2027 fiscal biennium based upon 30
projected cash flow needs for the authorized projects. The amounts authorized in this subsection 31
represent the maximum amounts of funding from the State Capital and Infrastructure Fund that 32
may be expended on each project. An additional action by the General Assembly is required to 33
increase the maximum authorization for any of the projects listed. 34
35
CAPITAL IMPROVEMENT & REPAIRS AND RENOVATIONS APPROPRIATIONS 36
SECTION 40.3. Section 40.1 of S.L. 2023-134 reads as rewritten: 37
"SECTION 40.1.(a) The following agency capital improvement projects have been assigned 38
a project code for reference to allocations in this Part, past allocations, and for intended project 39
support by the General Assembly for future fiscal years: 40
Agency Capital Improvement Project Project Code 41
Department of Agriculture and Consumer Services 42
Tidewater Research Station–Swine Unit Replacements DACS21-2 43
NCFS–Region 1 Headquarters DACS21-4 44
Troxler Science Building–Overflow Parking DACS23-1 45
Western NC Farmers Market DACS23-2 46
Raleigh State Farmers Market–Improvements DACS23-3 47
Pesticide Storage, Loading, & Cleaning Facilities DACS23-4 48
Cherry Research Station–Administrative Office DACS23-5 49
Griffith Forest Center–Central Warehouse & Office DACS23-6 50
D-6 HQ (Cumberland Co.)–Maintenance Shop Replacement DACS23-7 51
General Assembly Of North Carolina Session 2025
Page 116 Senate Bill 440-First Edition
Research Stations–New Maintenance Shop Facilities DACS23-8 1
Piedmont Research Station–Bridge DACS23-9 2
Research Stations–Multipurpose Facilities DACS23-10 3
NCFS–New County Offices, Region 3 DACS23-11 4
Tuttle Educational State Forest–Office & Education Center DACS23-12 5
D-12–New Headquarters & Shop DACS23-13 6
NCFS–Property Purchase DACS23-14 7
New Cherokee County NC Forest Service Office DACS25-15 8
State Fair Midway Center Expansion DACS25-16 9
Western NC Agricultural Center Expansion DACS25-17 10
Charlotte Farmer's Market DACS25-18 11
Western NC Farmer's Market DACS25-19 12
13
Department of Environmental Quality 14
Reedy Creek Laboratory DEQ21-1 15
Reedy Creek Laboratory Campus Expansion DEQ25-2 16
Water Resource Development Grant – Tar-Pamlico Flood Mitigation DEQ25-3 17
Water Resource Development Grant – Carolina Beach Storm Mitigation DEQ25-4 18
Water Resource Development Grant – Kure Beach Storm Mitigation DEQ25-5 19
Water Resource Development Grant – Wrightsville Beach Storm Mitigation DEQ25-6 20
Water Resource Development Grant – Ocean Isle Storm Mitigation DEQ25-7 21
Water Resource Development Grant – B. Everette Jordan Reservoir DEQ25-8 22
Water Resource Development Grant – Holden Beach Storm Mitigation DEQ25-9 23
Water Resource Development Grant – Oak Island Storm Mitigation DEQ25-10 24
25
Department of Health and Human Services 26
Walter B. Jones–New Medical Office Bldg. DHHS23-1 27
Broughton Hospital–New Maintenance & Warehouse Facility DHHS23-2 28
Cherry Hospital–New Maintenance Bldg. DHHS23-3 29
South Piedmont Medical Examiner DHHS23-4 30
O'Berry Neuro-Medical Treatment Center DHHS25-5 31
Julian Keith Alcohol & Drug Abuse Treatment Center DHHS25-6 32
Raleigh Medical Examiners Office Expansion DHHS25-7 33
34
Department of Natural and Cultural Resources 35
Fort Fisher Aquarium–Aquarium Expansion DNCR21-5 36
NC Museum of History–Expansion DNCR21-13 37
Zoo–New Aviary DNCR23-1 38
NC Museum of Art at Winston-Salem/SECCA DNCR23-2 39
Stone Mountain State Park–Parking Lot DNCR23-4 40
North Carolina Maritime Museum at Beaufort DNCR23-5 41
Town Creek Indian Mound State Historic Site– 42
Visitor Center & Exhibit Improvements DNCR23-6 43
State Historic Sites–Three New Visitor Centers DNCR23-7 44
Thomas Day House–Site Development DNCR23-8 45
Lake Waccamaw State Park–New Campground DNCR23-12 46
Lumber River State Park–Wire Pasture Access Development DNCR23-13 47
NC Maritime Museum at Southport DNCR23-14 48
NC Transportation Museum DNCR23-15 49
Fort Fisher Historic Site DNCR23-16 50
Fort Fisher Aquarium Expansion & Renovations DNCR25-17 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 117
Stone Mountain State Park – New Visitor Center DNCR25-18 1
State Historic Sites – Maintenance and Services Facilities DNCR25-19 2
NC Museum of Art at Winston-Salem Expansion DNCR25-20 3
NC Zoo Modular Staff Offices DNCR25-21 4
African American Monument at the State Capitol DNCR25-22 5
State Parks – Chimney Rock DNCR25-23 6
NC Zoo Park Security & Safety DNCR25-24 7
8
Department of Administration 9
State Government Executive Headquarters DOA22-1 10
Department of Instruction Building Renovation DOA22-3 11
Service Campus DOA23-1 12
State Agency Lease DOA23-2 13
Archdale Building Demolition DOA23-3 14
Caswell Square Demolition DOA23-4 15
Parking Deck–Wilmington Street DOA23-5 16
Albemarle Building Facility Improvements DOA23-6 17
Secure Records and Technology Center DOA25-7 18
Bicentennial Mall Replacement DOA25-8 19
State Government Child Care Centers DOA25-9 20
Replacement Administration Building DOA25-10 21
22
Department of Commerce 23
Wanchese Marine Industrial Park–Covered Workspace COMM23-1 24
25
Department of Adult Correction 26
Stun Fencing DAC23-1 27
DARTCenter–Exterior Envelope Repairs DAC23-2 28
Sampson CC–Gatehouse DAC23-3 29
Gaston CC–Modular Medical Office DAC23-4 30
Storage Buildings DAC23-6 31
Institution Roof Systems DAC25-7 32
Institution Perimeter Security DAC25-8 33
Institution Interior Life Safety Fire Alarm Systems DAC25-9 34
HVAC Enhancements DAC25-10 35
36
Department of Public Safety 37
Samarcand Training Academy for Safer Schools Supplemental DPS25-1 38
State Highway Patrol– 39
Viper Building DPS21-6 40
Auditorium DPS23-3 41
Training Academy Facilities Enhancement–Phases 3-6 DPS23-4 42
Training Center Cadet Dorm & Training Bldg. DPS23-7 43
State Bureau of Investigation– 44
Headquarters & Building 12 Renovation DPS21-9 45
Logistics Building–Phase 1 DPS23-11 46
Juvenile Justice– 47
Richmond YDC DPS21-1 48
New Youth Detention Center DPS23-1 49
Cabarrus YDC–Perimeter Fence Modifications DPS23-5 50
Cabarrus–New Modular Office DPS23-6 51
General Assembly Of North Carolina Session 2025
Page 118 Senate Bill 440-First Edition
Richmond Juvenile Detention Center DPS25-7 1
Emergency Management– 2
Badin Logistics Support Center Shed DPS23-8 3
Badin Warehouse Expansion DPS23-9 4
Badin Lot Acquisition DPS23-10 5
National Guard– 6
NCNG Matching Fund NG23-1 7
Ballentine Building/NCNG Museum NG23-2 8
Constable Building NG23-3 9
Rocky Mount Complex/MILCON NG23-4 10
Special Forces Complex NG23-5 11
Winston Salem Storage Buildings NG23-6 12
Louisburg Readiness Center NG23-9 13
National Guard Matching Fund NG25-10 14
Western Region RSOI Site – Morganton NC25-11 15
16
State Bureau of Investigation 17
Headquarters & Building 12 Renovation DPS21-9 18
Logistics Building – Phase 1 DPS23-11 19
Logistics Building – Phase 2 SBI25-1 20
State Highway Patrol Maintenance Building SBI25-2 21
22
Department of Public Instruction 23
Center for the Advancement of Teaching DPI21-1 24
25
Department of Insurance 26
Office of State Fire Marshal– 27
Land Development & Training Center DOI21-1 28
Statewide Building Evaluations DOI25-2 29
30
Department of Transportation 31
North Carolina Global TransPark Authority– 32
Aircraft Maintenance Repair & Overhaul Facility TRAN23-1 33
DOT– New County Buildings TRAN23-2 34
35
General Assembly 36
Education Campus Project NCGA21-3 37
Education Campus Parking Deck NCGA23-1 38
Education Campus Demolition NCGA23-2 39
Education Campus Supplemental NCGA25-4 40
41
Department of Military and Veterans Affairs 42
Fayetteville Veterans Home DMVA25-1 43
44
The University of North Carolina 45
Appalachian State University– 46
Peacock Hall/Business UNC/ASU21-1 47
Hickory Campus UNC/ASU22-1 48
Walker Hall–Interior Renovation UNC/ASU23-1 49
University of North Carolina at Charlotte– 50
Smith Hall–Comprehensive Renovation UNC/CLT23-1 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 119
Colvard Hall–Comprehensive Renovation UNC/CLT23-2 1
Esports UNC/CLT23-3 2
Stadium Upgrades UNC/CLT23-4 3
University of North Carolina at Chapel Hill– 4
Business School UNC/CH20-1 5
Nursing School Renovation UNC/CH20-2 6
Gardner Hall–Comprehensive Renovation UNC/CH23-1 7
Wilson Library – Comprehensive Renovation UNC/CH25-3 8
Carolina North Infrastructure UNC/CH25-4 9
Elizabeth City State University– 10
Flight School UNC/ECS21-4 11
Infrastructure Repairs–Phase 3 UNC/ECS23-1 12
Jenkins Hall/Dixon Hall–Labs/Classroom/Bldg. Renovation UNC/ECS23-2 13
Sky Bridge Increase UNC/ECS25-5 14
East Carolina University– 15
Brody School of Medicine UNC/ECU21-1 16
Howell Science Building North–Comprehensive Renovation UNC/ECU23-1 17
Leo Jenkins Building/Health Sciences–Comprehensive Renovation UNC/ECU23-2 18
Medical Examiner Office UNC/ECU23-3 19
Regional Children's Behavioral Health Facility UNC/ECU23-4 20
Dental School Planning UNC/ECU23-5 21
Brody School of Medicine Expansion UNC/ECU25-6 22
UNC Coastal Studies Institute Housing UNC/ECU25-7 23
Fayetteville State University– 24
College of Education UNC/FSU21-2 25
Butler Targeted Renovation UNC/FSU23-1 26
H.L. Cook Building–Renovation & Addition UNC/FSU23-2 27
North Carolina Agricultural & Technical State University– 28
Marteena Hall–Renovation, Phase 2 UNC/A&T23-1 29
Health and Human Sciences Bldg. UNC/A&T23-2 30
North Carolina Central University– 31
Dent Building–Comprehensive Renovation UNC/NCC23-1 32
Edmonds Classroom Building–Comprehensive Renovation UNC/NCC23-2 33
University Theater Renovation UNC/NCC23-3 34
North Carolina State University– 35
S.T.E.M. Building UNC/NCS20-1 36
Mann Hall–Renovation, Phase 2 UNC/NCS23-1 37
Dabney Hall–Renovation, Phase 2 UNC/NCS23-2 38
Polk Hall–Renovation, Phase 2 UNC/NCS23-3 39
Veterinary School–Large Animal Hospital UNC/NCS23-4 40
Engineering Classroom Building UNC/NCS23-5 41
Nuclear Study UNC/NCS23-6 42
Business School UNC/NCS23-7 43
Poe Hall UNC/NCS25-8 44
North Carolina School of Science and Math– 45
Morganton Campus 46
Wellness Center UNC/SSM23-1 47
Durham Campus 48
Renovation of Residence Halls UNC/SSM23-2 49
Academic Commons Addition UNC/SSM23-4 50
University of North Carolina at Asheville– 51
General Assembly Of North Carolina Session 2025
Page 120 Senate Bill 440-First Edition
Lipinsky Hall–Comp. Modernization/Addition UNC/AVL23-1 1
Sherrill Center UNC/AVL23-2 2
Gateway Signage UNC/AVL23-3 3
Repairs & Renovations UNC/AVL23-4 4
University of North Carolina at Greensboro– 5
Moore Building–Renovation UNC/GBO23-1 6
University of North Carolina at Pembroke– 7
Health Sciences Center UNC/PEM21-1 8
Givens Performing Arts Center–Renovation UNC/PEM23-1 9
University of North Carolina School of the Arts– 10
Stevens Center–Renovation, Phase 2 UNC/SA23-1 11
New High School Residence Hall UNC/SA23-2 12
University of North Carolina at Wilmington– 13
Cameron Hall–Comprehensive Renovation/Expansion UNC/WIL23-1 14
Kenan Auditorium–Comprehensive Renovation/Expansion UNC/WIL23-2 15
DeLoach Hall–Modernization UNC/WIL23-3 16
Health Education Bldg. UNC/WIL23-4 17
Western Carolina University– 18
Replacement Engineering Building UNC/WCU23-1 19
Winston-Salem State University– 20
K.R. Williams Auditorium UNC/WSS21-1 21
Eller Hall–Renovation & Elevator Addition UNC/WSS23-1 22
Pegram Hall–Renovation & Elevator Addition UNC/WSS23-2 23
Campus Police Improvements UNC/WSS23-3 24
New Dining Hall UNC/WSS25-4 25
West Campus Regional Heating Plant UNC/WSS25-5 26
New Parking Deck UNC/WSS25-6 27
UNC Board of Governors– 28
UNC Lease Funds UNC/BOG21-1 29
NC Care Health Clinics UNC/BOG23-1 30
NC Care Hospital Investment UNC/BOG23-2 31
Children's Hospital UNC/BOG23-3 32
PBS North Carolina UNC/PBS23-1 33
34
Repairs and Renovations–The University of North Carolina UNC/R&R21 35
Repairs and Renovations–State Agencies (non-UNC) R&R21 36
SCIF-Related Personnel PERS21 37
OSBM Flexibility Funds FLEX21 38
Debt Payoff DST23-1 39
Wildlife Resources Commission–Setzer Hatchery Revision WRC23-1 40
SECTION 40.1.(b) This subsection authorizes the following capital projects in the 41
2023-2025 fiscal biennium based upon projected cash flow needs for the authorized projects. The 42
authorizations provided in this subsection represent the maximum amount of funding from the 43
State Capital and Infrastructure Fund that may be expended on each project and do not reflect 44
authorizations from other non-State Capital and Infrastructure Fund sources. An additional action 45
by the General Assembly is required to increase the maximum authorization for any of the 46
projects listed: 47
Capital Improvements– 48
State Capital and Previous New/Updated 49
Infrastructure Fund Project Authorization Project Authorization 50
DACS21-2 $3,518,000 $7,018,000 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 121
DACS21-4 4,000,000 8,100,000 1
DACS23-1 N/A 2,500,000 2
DACS23-2 N/A 200,000 3
DACS23-3 N/A 13,000,000 4
DACS23-4 N/A 1,750,000 5
DACS23-5 N/A 749,000 6
DACS23-6 N/A 750,000 7
DACS23-7 N/A 4,000,000 8
DACS23-8 N/A 5,000,000 9
DACS23-9 N/A 750,000 10
DACS23-10 N/A 6,200,000 11
DACS23-11 N/A 3,000,000 12
DACS23-12 N/A 4,000,000 13
DACS23-13 N/A 5,000,000 14
DACS23-14 N/A 12,000,000 15
DACS25-15 N/A 1,500,000 16
DACS25-16 N/A 2,000,000 17
DACS25-17 N/A 2,250,000 18
DACS25-18 N/A 10,000,000 19
DACS25-19 N/A 3,500,000 20
DEQ21-1 55,000,000 68,300,000 21
DEQ25-2 N/A 48,000,000 22
DEQ25-3 N/A 8,000,000 23
DEQ25-4 N/A 3,070,250 24
DEQ25-5 N/A 2,878,615 25
DEQ25-6 N/A 1,889,462 26
DEQ25-7 N/A 1,976,154 27
DEQ25-8 N/A 437,994 28
DEQ25-9 N/A 125,000 29
DEQ25-10 N/A 400,000 30
DHHS23-1 N/A 1,352,000 31
DHHS23-2 N/A 5,983,000 32
DHHS23-3 N/A 5,405,000 33
DHHS23-4 N/A 20,000,000 34
DHHS25-5 N/A 21,303,730 35
DHHS25-6 N/A 4,668,701 36
DHHS25-7 N/A 35,260,920 37
DNCR21-5 15,000,000 45,000,000 38
DNCR21-13 60,000,000 180,000,000 39
DNCR23-1 N/A 60,000,000 40
DNCR23-2 N/A 15,000,000 41
DNCR23-4 N/A 620,000 42
DNCR23-5 N/A 10,000,000 43
DNCR23-6 N/A 5,500,000 44
DNCR23-7 N/A 16,721,240 45
DNCR23-8 N/A 4,000,000 46
DNCR23-12 N/A 3,000,000 47
DNCR23-13 N/A 2,500,000 48
DNCR23-14 N/A 2,000,000 49
DNCR23-15 N/A 5,000,000 50
DNCR23-16 N/A 2,800,000 51
General Assembly Of North Carolina Session 2025
Page 122 Senate Bill 440-First Edition
DNCR25-17 N/A 20,000,000 1
DNCR25-18 N/A 10,662,000 2
DNCR25-19 N/A 9,150,000 3
DNCR25-20 N/A 4,400,000 4
DNCR25-21 N/A 5,800,000 5
DNCR25-22 N/A 5,000,000 6
DNCR25-23 N/A 2,630,000 7
DNCR25-24 N/A 7,600,000 8
DOA22-1 88,000,000 88,000,000 9
DOA22-3 15,000,000 60,000,000 10
DOA23-1 N/A 33,744,000 11
DOA23-2 N/A 4,500,000 12
DOA23-3 N/A 11,000,000 13
DOA23-4 N/A 15,000,000 14
DOA23-5 N/A 45,000,000 15
DOA23-6 N/A 5,000,000 16
DOA25-7 N/A 102,172,000 17
DOA25-8 N/A 8,746,960 18
DOA25-9 N/A 1,000,000 19
DOA25-10 N/A 1,400,000 20
COMM231 N/A 250,000 21
DAC23-1 N/A 23,992,000 22
DAC23-2 N/A 2,960,212 23
DAC23-3 N/A 1,521,000 24
DAC23-4 N/A 1,078,000 25
DAC236 N/A 3,488,000 26
DAC25-7 N/A 97,376,135 27
DAC25-8 N/A 80,000,000 28
DAC25-9 N/A 50,000,000 29
DAC25-10 N/A 12,480,000 30
DPS21-1 10,702,952 14,702,952 31
DPS21-6 7,139,374 10,634,998 32
DPS23-1 N/A 40,450,000 33
DPS23-3 N/A 35,000,000 34
DPS23-4 N/A 194,000,000 35
DPS23-5 N/A 886,000 36
DPS23-6 N/A 690,000 37
DPS23-7 N/A 43,336,785 38
DPS23-8 N/A 527,000 39
DPS23-9 N/A 5,048,828 40
DPS23-10 N/A 4,198,414 41
DPS23-11 N/A 13,883,000 42
DPS25-1 N/A 36,200,000 43
DPS25-7 N/A 2,802,000 44
NG23-2 N/A 12,500,000 45
NG23-3 N/A 16,428,582 46
NG23-4 N/A 8,500,000 47
NG23-5 N/A 8,000,000 48
NG23-6 N/A 550,000 49
NG23-9 N/A 3,666,667 50
NG25-10 N/A 10,000,000 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 123
NC25-11 N/A 6,600,000 1
SBI25-1 N/A 24,048,000 2
SBI25-2 N/A 7,039,000 3
DPI21-1 23,416,952 30,416,952 4
DOI21-1 3,500,000 58,500,000 5
DOI25-2 N/A 7,500,000 6
TRAN23-1 N/A 350,000,000 7
TRAN23-2 N/A 3,400,000 8
NCGA21-3 269,000,000 320,000,000 9
NCGA23-1 N/A 65,000,000 10
NCGA23-2 N/A 10,000,000 11
NCGA25-4 N/A 11,300,000 12
DMVA25-1 N/A 10,000,000 13
UNC/ASU21-1 25,000,000 40,000,000 14
UNC/ASU22-1 9,000,000 50,000,000 15
UNC/ASU23-1 N/A 18,000,000 16
UNC/CLT23-1 N/A 36,000,000 17
UNC/CLT23-2 N/A 45,000,000 18
UNC/CLT23-3 N/A 1,500,000 19
UNC/CLE23-4 N/A 25,000,000 20
UNC/CH20-1 75,000,000 89,250,000 21
UNC/CH20-2 65,200,000 87,900,000 22
UNC/CH23-1 N/A 25,000,000 23
UNC/CH25-3 N/A 150,000,000 24
UNC/CH25-4 N/A 80,000,000 25
UNC/ECS21-4 34,000,000 54,000,000 26
UNC/ECS23-1 N/A 20,000,000 27
UNC/ECS23-2 N/A 12,500,000 28
UNC/ECS25-5 N/A 5,000,000 29
UNC/ECU21-1 215,000,000 265,000,000 30
UNC/ECU23-1 N/A 46,000,000 31
UNC/ECU23-2 N/A 18,900,000 32
UNC/ECU23-3 N/A 35,000,000 33
UNC/ECU23-4 N/A 50,000,000 34
UNC/ECU23-5 N/A 1,000,000 35
UNC/ECU25-6 N/A 10,000,000 36
UNC/ECU25-7 N/A 15,000,000 37
UNC/FSU23-1 N/A 20,750,000 38
UNC/FSU23-2 N/A 10,000,000 39
UNC/A&T23-1 N/A 9,700,000 40
UNC/A&T23-2 N/A 125,500,000 41
UNC/NCC23-1 N/A 12,073,798 42
UNC/NCC23-2 N/A 12,999,424 43
UNC/NCC23-3 N/A 8,500,000 44
UNC/NCS23-1 N/A 30,000,000 45
UNC/NCS23-2 N/A 80,000,000 46
UNC/NCS23-3 N/A 63,000,000 47
UNC/NCS23-4 N/A 120,000,000 48
UNC/NCS23-5 N/A 200,000,000 49
UNC/NCS23-6 N/A 3,000,000 50
UNC/NCS23-7 N/A 4,500,000 51
General Assembly Of North Carolina Session 2025
Page 124 Senate Bill 440-First Edition
UNC/NCS25-8 N/A 180,000,000 1
UNC/SSM23-1 N/A 12,000,000 2
UNC/SSM23-2 N/A 28,988,042 3
UNC/SSM23-4 N/A 10,000,000 4
UNC/AVL23-1 N/A 26,150,000 5
UNC/AVL23-2 N/A 5,000,000 6
UNC/AVL23-3 N/A 1,000,000 7
UNC/AVL23-4 N/A 4,000,000 8
UNC/GBO23-1 N/A 24,200,000 9
UNC/PEM23-1 N/A 61,000,000 10
UNC/SA23-1 N/A 51,000,000 11
UNC/SA23-2 N/A 24,500,000 12
UNC/WIL23-1 N/A 40,050,000 13
UNC/WIL23-2 N/A 21,600,000 14
UNC/WIL23-3 N/A 12,150,000 15
UNC/WIL23-4 N/A 8,000,000 16
UNC/WCU23-1 N/A 95,300,000 17
UNC/WSS23-1 N/A 10,800,000 18
UNC/WSS23-2 N/A 16,000,000 19
UNC/WSS23-3 N/A 4,000,000 20
UNC/WSS25-4 N/A 25,000,000 21
UNC/WSS25-5 N/A 14,000,000 22
UNC/WSS25-6 N/A 25,000,000 23
UNC/BOG21-1 15,000,000 18,750,000 24
UNC/BOG23-1 N/A 210,000,000 25
UNC/BOG23-2 N/A 150,000,000 26
UNC/BOG23-3 N/A 319,746,392 27
UNC/PBS23-1 N/A 49,500,000 28
FLEX21 100,000,000 175,000,000 29
WRC/23-1 N/A 20,000,000 30
…" 31
32
SIX-YEAR INTENDED PROJECT ALLOCATION SCHEDULE 33
SECTION 40.4. Section 40.2 of S.L. 2023-134 reads as rewritten: 34
"SECTION 40.2. It is the intent of the General Assembly to fund capital improvement 35
projects on a cash flow basis and to plan for future project funding based upon projected 36
availability in the State Capital and Infrastructure Fund. Nothing in this section shall be construed 37
(i) to appropriate funds or (ii) as an obligation by the General Assembly to appropriate funds for 38
the projects listed in future years. The following schedule lists capital improvement projects that 39
will begin or be completed in fiscal years outside of the 2023-2025 fiscal biennium and estimated 40
amounts (in thousands) needed for completion of those projects: 41
42
Project Code FY23-24 FY24-25 FY25-26 FY26-27 FY27-28 FY28-29 43
44
UNC/R&R21 280,503 250,000200,000210,000 200,000 200,000 200,000 45
R&R21 200,000 200,000200,000210,000 200,000 200,000 200,000 46
DACS21-2 N/A 2,000 1,500 N/A N/A N/A 47
DACS21-4 750 1,850 1,500 N/A N/A N/A 48
DACS23-3 N/A 3,000 2,000 4,000 4,000 N/A 49
DACS23-7 N/A N/A 4,000 N/A N/A N/A 50
DACS23-8 N/A N/A 2,000 1,000 1,000 1,000 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 125
DACS23-9 N/A N/A 750 N/A N/A N/A 1
DACS23-10 N/A N/A 2,000 2,000 2,200 N/A 2
DACS23-11 N/A N/A N/A 1,500 1,500 N/A 3
DACS23-12 N/A N/A N/A 4,000 N/A N/A 4
DACS23-13 N/A N/A N/A 5,000 N/A N/A 5
DACS25-15 N/A N/A 1,500 N/A N/A N/A 6
DACS25-16 N/A N/A 2,000 N/A N/A N/A 7
DACS25-17 N/A N/A 1,000 1,250 N/A N/A 8
DACS25-18 N/A N/A 2,000 6,000 2,000 N/A 9
DACS25-19 N/A N/A N/A 750 2,750 N/A 10
DEQ21-1 3,325 28,650 17,075 N/A N/A N/A 11
DEQ25-2 N/A N/A 5,000 15,000 15,000 13,000 12
DEQ25-3 N/A N/A 4,000 4,000 N/A N/A 13
DEQ25-4 N/A N/A N/A 3,070.25 N/A N/A 14
DEQ25-5 N/A N/A N/A 2,878.615 N/A N/A 15
DEQ25-6 N/A N/A N/A 1,889.462 N/A N/A 16
DEQ25-7 N/A N/A N/A 1,976.154 N/A N/A 17
DEQ25-8 N/A N/A 437.994 N/A N/A N/A 18
DEQ25-9 N/A N/A N/A 125 N/A N/A 19
DEQ25-10 N/A N/A N/A 400 N/A N/A 20
DHHS25-5 N/A N/A 10,000 10,000 N/A N/A 21
DHHS25-6 N/A N/A 4,668.701 N/A N/A N/A 22
DHHS25-7 N/A N/A 17,630.46 17,630.46 N/A N/A 23
DNCR21-13 15,000 24,250 86,800 30,950 N/A N/A 24
DNCR23-1 3,000 3,000 30,000 24,000 N/A N/A 25
DNCR23-7 2,000 7,721.24 7,000 N/A N/A N/A 26
DNCR25-17 N/A N/A 20,000 N/A N/A N/A 27
DNCR25-18 N/A N/A N/A 10,662 N/A N/A 28
DNCR25-19 N/A N/A 1,650 7,500 N/A N/A 29
DNCR25-20 N/A N/A 4,400 N/A N/A N/A 30
DNCR25-21 N/A N/A 1,000 4,800 N/A N/A 31
DNCR25-22 N/A N/A 5,000 N/A N/A N/A 32
DNCR25-23 N/A N/A 2,630 N/A N/A N/A 33
DNCR25-24 N/A N/A 1,600 6,000 N/A N/A 34
DOA22-1 N/A N/A 8,800 22,000 35,200 22,000 35
DOA22-3 N/A N/A N/A N/A 21,000 N/A 36
DOA23-1 500 N/A N/A1,500 N/A16,1221,00015,622 20,244N/A 37
DOA23-2 2,900 800 800 N/A N/A N/A 38
DOA23-3 N/A N/A N/A N/A N/A 11,000 39
DOA23-4 N/A N/A 15,000 N/A N/A N/A 40
DOA23-5 2,000 3,000 40,000 N/A N/A N/A 41
DOA25-7 N/A N/A 12,000 30,000 30,000 20,000 42
DOA25-8 N/A N/A 8,746.96 N/A N/A N/A 43
DOA25-9 N/A N/A 1,000 N/A N/A N/A 44
DOA25-10 N/A N/A 1,400 N/A N/A N/A 45
DOI21-1 5,500 13,750 22,000 13,750 N/A N/A 46
DOI25-2 N/A N/A 7,500 N/A N/A N/A 47
DAC23-1 4,776.39 9,607.8 9,607.8 N/A N/A N/A 48
DAC23-6 N/A 449 2,439 600 N/A N/A 49
DAC25-7 N/A N/A 5,000 5,000 5,000 5,000 50
DAC25-8 N/A N/A 5,000 5,000 5,000 5,000 51
General Assembly Of North Carolina Session 2025
Page 126 Senate Bill 440-First Edition
DAC25-9 N/A N/A 50,000 N/A N/A N/A 1
DAC25-10 N/A N/A 12,480 N/A N/A N/A 2
DPS21-6 N/A 836.88 2,658.75 N/A N/A N/A 3
DPS21-9 3,268.05 30,000 19,793.24 N/A N/A N/A 4
DPS23-1 N/A 600 10,000 29,850 N/A N/A 5
DPS23-3 N/A 4,400 8,500 13,600 8,500 N/A 6
DPS23-4 N/A N/A N/A N/A N/A 19,000 7
DPS23-7 2,000 4,333.68 10,834.2 17,334.71 8,834.2 N/A 8
DPS23-9 1,000 2,024.4 2,024.4 N/A N/A N/A 9
DPS23-11 2,028.5 5,927.25 5,927.25 N/A N/A N/A 10
DPS25-1 N/A N/A 27,100 9,120 N/A N/A 11
DPS25-12 N/A N/A 3,623 10,212.5 10,212.5 N/A 12
DPS25-13 N/A N/A 1,070 2,984.5 2,984.5 N/A 13
DPS25-7 N/A N/A 2,802 N/A N/A N/A 14
NG23-1 4,000 6,000 6,000 N/A N/A N/A 15
NG23-2 1,500 6,000 5,000 N/A N/A N/A 16
NG23-4 N/A 2,000 6,500 N/A N/A N/A 17
NG23-5 N/A N/A 800 4,000 3,200 N/A 18
NG23-9 N/A 666.7 3,000 N/A N/A N/A 19
NG25-10 N/A N/A 10,000 N/A N/A N/A 20
NG25-11 N/A N/A 600 6,000 N/A N/A 21
TRAN23-1 50,000 125,000 125,000 50,000 N/A N/A 22
NCGA21-3 N/A N/A 65,250 74,750 N/A N/A 23
NCGA23-1 6,500 16,250 26,000 16,250 N/A N/A 24
NCGA25-4 N/A N/A 11,300 N/A N/A N/A 25
DMVA25-1 N/A N/A 10,000 N/A N/A N/A 26
WRC23-1 8,000 6,000 6,000 N/A N/A N/A 27
UNC/ASU21-1 N/A 7,500 7,500 N/A N/A N/A 28
UNC/ASU22-1 N/A 4,100 12,300 14,350 10,250 N/A 29
UNC/ASU23-1 N/A 1,800 6,300 9,900 N/A N/A 30
UNC/CLT23-1 N/A 3,600 N/A 12,600 19,800 N/A 31
UNC/CLT23-2 N/A N/A N/A N/A 4,500 N/A 32
UNC/CH20-2 N/A 15,756.95 17,693.05 N/A N/A N/A 33
UNC/CH23-1 N/A N/A N/A N/A 2,500 10,000 34
UNC/CH25-3 N/A N/A N/A 2,000 N/A N/A 35
UNC/CH25-4 N/A N/A N/A 4,000 N/A N/A 36
UNC/ECS21-4 N/A 30,827.27 9,172.73 N/A N/A N/A 37
UNC/ECS23-1 N/A 2,000 8,000 10,000 N/A N/A 38
UNC/ECS23-2 N/A N/A N/A N/A 1,250 N/A 39
UNC/ECS25-5 N/A N/A N/A 5,000 N/A N/A 40
UNC/ECU21-1 N/A 20,000 84,007.3 85,742.72 N/A N/A 41
UNC/ECU23-1 N/A 4,600 13,800 16,100 11,500 N/A 42
UNC/ECU23-2 N/A N/A N/A N/A 1,890 N/A 43
UNC/ECU23-3 8,750 17,500 8,750 N/A N/A N/A 44
UNC/ECU25-6 N/A N/A 1,250 8,750 N/A N/A 45
UNC/ECU25-7 N/A N/A 1,500 N/A 5,102.8 8,397.2 46
UNC/FSU21-2 N/A 36,376.1 6,573.9 N/A N/A N/A 47
UNC/FSU23-1 N/A N/A N/A N/A 2,075 N/A 48
UNC/FSU23-2 1,000 3,500 5,500 N/A N/A N/A 49
UNC/A&T23-1 970 3,395 5,335 N/A N/A N/A 50
UNC/A&T23-2 N/A N/A N/A N/A 2,000 18,825 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 127
UNC/NCC23-1 1,207.4 N/A 4,829.5 6,036.9 N/A N/A 1
UNC/NCC23-2 N/A 1,299.94 N/A 4,549.8 7,149.68 N/A 2
UNC/NCC23-3 N/A 850 N/A 2,975 4,675 N/A 3
UNC/NCS20-1 N/A 6,025.2 22,224.8 N/A N/A N/A 4
UNC/NCS23-1 N/A 3,000 27,000 N/A N/A N/A 5
UNC/NCS23-2 N/A 8,000 24,000 28,000 20,000 N/A 6
UNC/NCS23-3 N/A 6,300 18,900 22,050 15,750 N/A 7
UNC/NCS23-4 N/A N/A 35,000 35,000 N/A N/A 8
UNC/NCS23-5 N/A N/A N/A 20,000 60,000 60,000 9
UNC/NCS25-8 N/A N/A 25,048.753 74,957.88 79,993.367 N/A 10
UNC/SSM23-2 N/A 12,750 3,500 N/A 12,738.42 N/A 11
UNC/SSM23-4 N/A N/A N/A N/A 1,000 N/A 12
UNC/AVL23-1 2,615 6,537.5 11,767.5 5,230 N/A N/A 13
UNC/GBO23-1 N/A 2,420 N/A 8,470 13,310 N/A 14
UNC/PEM21-1 N/A N/A N/A N/A 36,400 22,750 15
UNC/PEM23-1 N/A 6,100 24,400 30,500 N/A N/A 16
UNC/SA23-1 5,100 12,750 22,950 10,200 N/A N/A 17
UNC/SA23-2 N/A N/A N/A N/A 2,450 8,575 18
UNC/WIL23-1 N/A 4,005 10,012.5 16,020 10,012.5 N/A 19
UNC/WIL23-2 N/A 2,160 5,400 8,640 5,400 N/A 20
UNC/WIL23-3 N/A 1,215 4,860 6,075 N/A N/A 21
UNC/WCU23-1 N/A 2,000 N/A 9,530 33,355 50,415 22
UNC/WSS21-1 N/A N/A N/A N/A 22,800 14,250 23
UNC/WSS23-1 N/A 800 1,080 N/A 3,780 5,140 24
UNC/WSS23-2 N/A 800 1,600 N/A 5,600 8,000 25
UNC/WSS25-4 N/A N/A 2,462.965 N/A N/A 15,597.035 26
UNC/WSS25-5 N/A N/A 1,000 N/A N/A 8,000 27
UNC/WSS25-6 N/A N/A 1,500 N/A N/A N/A 28
UNC/BOG21-1 3,750 3,750 3,750 3,750 N/A N/A 29
UNC/BOG23-1 25,000 80,000 105,000 N/A N/A N/A 30
UNC/BOG23-3 143,864.4 72,382 103,500 N/A N/A N/A 31
UNC/PBS23-1 N/A 4,950 N/A 17,325 27,225 N/A 32
…." 33
34
NON-GENERAL FUND/NON-SCIF CAPITAL PROJECT AUTHORIZATIONS 35
SECTION 40.5. The General Assembly authorizes the following capital projects to 36
be funded with receipts or from other non-General Fund and non-State Capital and Infrastructure 37
Fund sources available to the appropriate department: 38
Amount of Non-General Fund/Non-SCIF 39
Name of Project Funding Authorized 40
FY 2025-2026 FY 2026-2027 41
42
Department of Natural and Cultural Resources 43
Jennette's Pier Aquarium- Solar Covered Walkway 450,000 044
45
Roanoke Island Aquarium- Invertebrate Tank 500,000 0 46
Pine Knoll Shores Aquarium- Invertebrate Tank 2,000,000 47
Department of Agriculture and Consumer Services 48
NC Forest Service Nursery Greenhouse 0 250,000 49
Department of Public Safety 50
Alcoholic Beverage Control– 51
General Assembly Of North Carolina Session 2025
Page 128 Senate Bill 440-First Edition
ABC Warehouse Repairs 1,150,000 0 1
Wildlife Resources Commission 2
Sykes Depot Greenhouse 331,600 0 3
D7 Storage Building 400,000 0 4
Caswell Shooting Range Renovation 3,850,000 0 5
Coastal Restoration and Resiliency 6,500,000 0 6
Ransom Road Depot 9,000,000 0 7
Land Acquisition 5,000,000 5,000,000 8
WRC Game Land Improvements 0 2,000,000 9
Butner Lab and Office Building 0 0 10
McKinney Lake Hatchery Building Replacement 1,300,000 0 11
Table Rock Hatchery Residence 0 640,000 12
WRC New Shooting Range 0 2,000,000 13
New Tillery Office Depot 0 1,500,000 14
Caswell Depot Expansion 100,000 0 15
16
TOTAL AMOUNT OF NON-GENERAL 17
FUND/NON-SCIF CAPITAL PROJECTS 18
AUTHORIZED $33,526,600 $13,290,000 19
20
PUBLIC SCHOOL BOND ACT OF 2025 21
SECTION 40.6.(a) Short Title. – This section may be cited as the "Public School 22
Bond Act of 2025." 23
SECTION 40.6.(b) Purpose. – It is the intent of the General Assembly by this act to 24
provide, subject to a vote of the qualified voters of the State, for the issuance of fo ur billion 25
($4,00,000,000) providing funds, with any other available funds, to invest in the State's public 26
school facilities, without limitation, for construction, repair, renovation, and furnishing of new 27
facilities in order to ensure that the people of North Carolina have access to high quality 28
educational facilities. 29
SECTION 40.6.(c) Findings – The General Assembly also finds: 30
(1) There is a documented need of over $13 billion for the construction and 31
renovation of Public School Facilities. 32
(2) The State has prudently managed its finances. 33
(3) The State has achieved the highest credit rating available by independent 34
credit rating agencies. 35
(4) The debt proposed by this Act is affordable and preferable to address the needs 36
of the people of the State. 37
(5) According to the Debt Affordability Advisory Committee, the State's General 38
Fund has additional debt capacity of approximately $9.96 billion in the 39
2025-2026 fiscal year. 40
(6) With issuance of this bond, debt service would not exceed the 2024 -2025 41
fiscal year level of $466,138,169 until the 2030-2031 fiscal year and then and 42
decline again beginning in the 2032-2033 fiscal year. 43
SECTION 40.6.(d) Definitions. – The following definitions apply in this section 44
unless the context otherwise requires: 45
(1) Bonds. – Bonds issued under this section. 46
(2) Cost. – The term includes all of the following: 47
a. The cost of constructing, reconstructing, renovating, repairing, 48
enlarging, acquiring, and improving State capital facilities, including 49
the acquisition of land, rig hts of way, easements, franchises, 50
equipment, machinery, furnishings, and other interests in real or 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 129
personal property acquired or used in connection with a State capital 1
facility. 2
b. The cost of engineering, architectural, and other consulting services as 3
may be required. 4
c. Administrative expenses and charges. 5
d. The cost of providing personnel to ensure effective project 6
management. 7
e. The cost of bond insurance, investment contracts, credit enhancement 8
and liquidity facilities, interest rate swap agreements or other 9
derivative products, financial and legal consultants, and related costs 10
of bond and note issuance, to the extent and as determined by the State 11
Treasurer. 12
f. Finance charges, reserves for debt service, and other types of reserves 13
required pursuant to the terms of any bond or note or related 14
documents, interest before and during construction or acquisition of a 15
State capital facility and, if considered advisable by the State 16
Treasurer, for a period not exceeding two years after the estimated date 17
of completion of construction or acquisition. 18
g. The cost of bond insurance, investment contracts, credit enhancement 19
facilities and liquidity facilities, interest rate swap agreements or other 20
derivative products, financial and legal consultants, and related costs 21
of the incurrence or issuance of any bond or note. 22
h. The cost of reimbursing the State for any payments made for any cost 23
described in this subdivision. 24
i. Any other costs and expenses necessary or incidental to the purposes 25
of this section. 26
(3) Credit facility. – An agreement entered into by the State Treasurer on behalf 27
of the State with a bank, savings and loan association, or other banking 28
institution, an insurance company, reinsurance company, surety company or 29
other insurance insti tution, a corporation, investment banking firm, or other 30
investment institution, or any financial institution or other similar provider of 31
a credit facility, which provider may be located within or without the United 32
States, such agreement providing for prompt payment of all or any part of the 33
principal or purchase price (whether at maturity, presentment or tender for 34
purchase, redemption, or acceleration), redemption premium, if any, and 35
interest on any bonds or notes payable on demand or tender by the own er, in 36
consideration of the State agreeing to repay the provider of the credit facility 37
in accordance with the terms and provisions of such agreement. 38
(4) Notes. – Notes issued under this section. 39
(5) Par formula. – A provision or formula adopted by the State to provide for the 40
adjustment, from time to time, of the interest rate or rates borne by any bonds 41
or notes, including the following: 42
a. A provision providing for such adjustment so that the purchase price 43
of such bonds or notes in the open market would be as close to par as 44
possible. 45
b. A provision providing for such adjustment based upon a percentage or 46
percentages of a prime rate or base rate, which percentage or 47
percentages may vary or be applied for different periods of time. 48
c. Such other provisio n as the State Treasurer may determine to be 49
consistent with this act and will not materially and adversely affect the 50
General Assembly Of North Carolina Session 2025
Page 130 Senate Bill 440-First Edition
financial position of the State and the marketing of bonds or notes at a 1
reasonable interest cost to the State. 2
(6) State. – The State of North Carolina, including any State agency. 3
(7) State agency. – Any agency, institution, board, commission, bureau, council, 4
department, division, officer, or employee of the State. The term does not 5
include counties, municipal corporations, political sub divisions, local boards 6
of education, or other local public bodies. 7
SECTION 40.6.(e) Authorization of Bonds and Notes. – Subject to a favorable vote 8
of a majority of the qualified voters of the State who vote on the question of issuing public 9
improvement bonds in the election called and held as provided in this section, the State Treasurer 10
is hereby authorized, by and with the consent of the Council of State, to issue and sell, at one 11
time or from time to time, general obligation bonds of the State to be designated "State of North 12
Carolina Public Improvement Bonds," with any additional designations as may be determined to 13
indicate the issuance of bonds from time to time, or notes of the State as provided in this section, 14
in an aggregate principal amount not exceeding four billion dollars ($4,000,000,000) for the 15
purpose of providing funds, with any other available funds, for the purposes authorized in this 16
section. 17
SECTION 40.6.(f) Pursuant to the provisions of part (e) of this section, no more than 18
four hundred million dollars ($400,000,000) of bonds shall be issued in the 2026 -2027 fiscal 19
year, and no more than eight hundred million dollars ($800,000,000) shall be issued in the 20
2027-2028 fiscal year to ensure that debt service does not increase above the cost incurred in the 21
2024-2025 fiscal year. 22
SECTION 40.6.(g) Use of Public Improvement Bond and Note Proceeds. – (1) 23
Subject to the provisions of subdivision (2) of this subsection, the proceeds of public 24
improvement bonds and notes, including premium thereon, if any, shall be used for the projects 25
in the following general amounts set forth below: 26
27
Public Instruction 28
29
Public Schools 30
Capital Assistance Program New Schools, Additions, Renovations $4,000,000,000 31
Total for Public Instruction $4,000,000,000 32
33
(1b) Process for Allocating Funds from the Unforeseen Costs Reserve. – The 34
Office of State Budget and Management (OSBM) shall set out the process for 35
applying for funds from the Unforeseen Costs Reserve, together with the 36
criteria for assessing such applica tions, in a Budget Memo. OSBM may 37
allocate funds from the Unforeseen Costs Reserve only when it is satisfied 38
that the conditions set out under these criteria have been met. Once agreed, 39
funds may only be drawn down as needed, in line with project cashflow 40
requirements. 41
(2) Special Allocation Provisions. – In determining the use of the proceeds of 42
public improvement bonds and notes, including premium thereon, if any, set 43
forth in subdivision (1) of this subsection, the following special allocation 44
provisions apply: 45
a. The proceeds of public improvement bonds and notes, including 46
premium thereon, if any, for public instruction for public schools 47
capital assistance, as provided in subdivision (1) of this subsection, 48
shall be allocated as follows: 49
1. One billion one hundred and fifty million ($1,150,000,000) of 50
such proceeds shall be allocated equally to each local education 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 131
agency (LEA). Each LEA shall receive a base payment of five 1
million dollars ($10,000,000). 2
2. Two billion eight hundred fifty mil lion ($2,850,000,000) of 3
such proceeds shall be allocated among local school 4
administrative units on the basis of average daily membership 5
for the 2024-2025 fiscal year where the numerator is average 6
daily membership for the local administrative unit and t he 7
denominator is the total average daily membership for the state 8
for the 2024-2025 fiscal year. 9
3. Any county receiving bond proceeds allocated shall provide 10
local matching funds from county funds, other non-State funds, 11
or a combination of these sources for such proceeds, unless 12
they are a county designated as a development tier one area. 13
The amount of matching funds shall be (i) one dollar ($1.00) 14
of local matching funds for every two dollars ($2.00) of such 15
proceeds for a local school administrative un it located in a 16
county that is a development tier two area, as defined in 17
G.S. 143B-437.08, and (iii) one dollar ($1.00) of local 18
matching funds for every one dollar ($1.00) of such proceeds 19
for a local school administrative unit located in a county that is 20
a development tier three area, as defined in G.S. 143B-437.08. 21
The match requirement may be satisfied by non -State 22
expenditures for public school facilities made on or after 23
January 1, 2021. If a debt has been incurred since January 1, 24
2021, for the gene ral purpose of public school facilities, then 25
the face amount of the debt shall be considered as a non -State 26
expenditure for public school facilities for the purpose of the 27
match. No other expenditures made or debts incurred before 28
January 1, 2022, may be used to satisfy the match requirement. 29
As counties satisfy the match requirements of this subsection, 30
they shall document the extent to which they have done so in 31
periodic reports to the State Board of Education. These reports 32
shall include any information and documentation required by 33
the State Board of Education. The State Board of Education 34
shall certify to the State Treasurer from time to time the extent 35
to which the match requirements of this subsection have been 36
met with respect to each county. Bond p roceeds shall be 37
distributed for expenditure only as, and to the extent, the 38
matching requirement of this section are satisfied, as certified 39
by the State Board of Education. The State Board of Education 40
shall also require counties to report annually on th e impact of 41
funds provided under this act on the property tax rate for that 42
year. These reports shall be public documents and shall be 43
furnished to any citizen upon request. If the State Board of 44
Education determines that a county has not met the matching 45
requirement set forth in this subdivision by January 1, 2031, 46
the State Board of Education shall certify that fact to the State 47
Treasurer by March 1, 2031. The State Board of Education 48
shall reallocate unmatched funds in the following manner: 49
(i) Proceeds allocated under subdivision (1) shall be 50
reallocated to local administrative units receiving funds 51
General Assembly Of North Carolina Session 2025
Page 132 Senate Bill 440-First Edition
under subdivision (1) for which the State Board of 1
Educated has certified matching funds. 2
(ii) Proceeds allocated under subdivision (2) shall be 3
reallocated to local administrative units receiving funds 4
under subdivision (2) for which the State Board of 5
Educated has certified matching funds. 6
4. A local school administrative unit that receives proceeds under 7
this section shall ensure that such proceeds are used: 8
(i) For acquisition of real property and construction, 9
acquisition, reconstruction, enlargement, renovation, 10
or replacement of buildings and other structures, and 11
(ii) To supplement local funds for public school capital 12
outlay projects and shall not decr ease local funds for 13
those projects from one fiscal year to the next fiscal 14
year, as measured by the most recent five -year annual 15
average capital outlay expenditure. 16
SECTION 40.6.(h) Allocation and Tracking of Proceeds. – 17
(1) Public improvement bonds. – The proceeds of public improvement bonds and 18
notes, including premium thereon, if any, except the proceeds of bonds the 19
issuance of which has been anticipated by bond anticipation notes or the 20
proceeds of refunding bonds or notes, shall be placed by the Sta te Treasurer 21
in a special fund to be designated "Public Improvement Bonds Fund," which 22
may include such appropriate special accounts therein as may be determined 23
by the State Treasurer and shall be disbursed as provided in this section. 24
Monies in the Publi c Improvement Bonds Fund shall be allocated and 25
expended as provided in this section. 26
Any additional monies that may be received by means of a grant or grants 27
from the United States of America or any agency or department thereof or 28
from any other source for deposit to the Public Improvement Bonds Fund may 29
be placed in the Public Improvement Bonds Fund or in a separate account or 30
fund and shall be disbursed, to the extent permitted by the terms of the grant 31
or grants, without regard to any limitations imposed by this section. 32
Monies in the Public Improvement Bonds Fund or any separate account 33
established under this section may be invested from time to time by the State 34
Treasurer in the same manner permitted for investment of monies belonging 35
to the State or h eld in the State treasury, except with respect to grant money 36
to the extent otherwise directed by the terms of the grant. Investment earnings, 37
except investment earnings with respect to grant monies to the extent 38
otherwise directed or restricted by the ter ms of the grant, may be (i) credited 39
to the Public Improvement Bonds Fund, (ii) used to pay debt service on the 40
bonds authorized by this section, (iii) used to satisfy compliance with 41
applicable requirements of the federal tax law, or (iv) transferred to t he 42
General Fund of the State. 43
The proceeds of public improvement bonds and notes, including premium 44
thereon, if any, may be used with any other monies made available by the 45
General Assembly for funding the projects authorized by this section, 46
including the proceeds of any other State bond issues, whether heretofore 47
made available or that may be made available at the session of the General 48
Assembly at which this section is ratified or any subsequent sessions. The 49
proceeds of public improvement bonds and notes, including premium thereon, 50
if any, shall be expended and disbursed under the direction and supervision of 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 133
the Director of the Budget. The funds provided by this section shall be 1
disbursed for the purposes provided in this section upon warrants drawn on 2
the State Treasurer by the State Controller, which warrants shall not be drawn 3
until requisition has been approved by the Director of the Budget and which 4
requisition shall be approved only after full compliance with the State Budget 5
Act, Chapter 143C of the General Statutes. 6
(2) Tracking of bond proceeds. – The State Treasurer or the State Treasurer's 7
designee is hereby authorized and directed to set up a comprehensive system 8
of tracking the proceeds of the public improvement bonds and notes, including 9
premium thereon, if any, to the extent necessary to enable the State Treasurer 10
or the State Treasurer's designee to properly account for the use of such 11
proceeds for compliance with applicable requirements of the federal tax law 12
or otherwise. All recipients o f such proceeds shall comply with any tracking 13
system implemented by the State Treasurer or the State Treasurer's designee 14
for this purpose. The State Treasurer may withhold such proceeds from any 15
State agency or department not complying with this subdivision. 16
(3) Costs. – Allocations to the costs of a capital improvement or undertaking in 17
each case may include allocations to pay the costs set forth in subdivisions c. 18
through g. of subdivision (2) of subsection (d) of this section in connection 19
with the issuance of bonds for that capital improvement or undertaking. 20
SECTION 40.6.(i) Election. – The question of the issuance of the bonds authorized 21
by this section shall be submitted to the qualified voters of the State at a Statewide election to be 22
held in No vember of 2025. Any other primary, election, or referendum validly called or 23
scheduled by law at the time the election on the bond question provided for in this subsection is 24
held may be held as called or scheduled. Notice of the election shall be given in the manner and 25
at the times required by G.S. 163-33(8). The election and the registration of voters therefore shall 26
be held under and in accordance with the general laws of the State. 27
Ballots, voting systems authorized by Article 14A of Chapter 163 of the General 28
Statutes, or both may be used in accordance with rules prescribed by the State Board of Elections. 29
The bond question to be used in the ballots or voting systems shall be in substantially the 30
following form: 31
"[ ] FOR [ ] AGAINST 32
Authorize the issua nce of four billion dollars ($4,000,000,000) in public school 33
bonds, plus interest, to pay the cost of constructing and renovating public school buildings, 34
secured by a pledge of the faith and credit and taxing power of the State." If a majority of those 35
voting on the bond question in the election vote in favor of the issuance of the bonds described 36
in the question, those bonds may be issued as provided in this section. If a majority of those 37
voting on a bond question in the election do not vote in favor of the issuance of the bonds 38
described in the question, those bonds shall not be issued. The results of the election shall be 39
canvassed and declared as provided by law for elections for State officers; the results of the 40
election shall be certified by the State Board of Elections to the Secretary of State in the manner 41
and at the time provided by the general election laws of the State." 42
SECTION 40.6.(j) Issuance of Bonds and Notes. – 43
(1) Terms and conditions. – Bonds or notes may bear a date or dates, may be serial 44
or term bonds or notes, or any combination thereof, may mature in such 45
amounts and at such time or times, not exceeding 40 years from their date or 46
dates, may be payable at such place or places, either within or without the 47
United States of America , in such coin or currency of the United States of 48
America as at the time of payment is legal tender for payment of public and 49
private debts, may bear interest at such rate or rates, which may vary from 50
time to time, and may be made redeemable before matur ity, at the option of 51
General Assembly Of North Carolina Session 2025
Page 134 Senate Bill 440-First Edition
the State or otherwise as may be provided by the State, at such price or prices, 1
including a price less than or greater than the face amount of the bonds or 2
notes, and under such terms and conditions, all as may be determined by the 3
State Treasurer, by and with the consent of the Council of State. 4
(2) Signatures; form and denomination; registration. – Bonds or notes may be 5
issued in certificated or uncertificated form. If issued in certificated form, 6
bonds or notes shall be signed on behalf of the State by the Governor or shall 7
bear the Governor's facsimile signature, shall be signed by the State Treasurer 8
or shall bear the State Treasurer's facsimile signature, and shall bear the Great 9
Seal of the State, or a facsimile of the Seal shal l be impressed or imprinted 10
thereon. If bonds or notes bear the facsimile signatures of the Governor and 11
the State Treasurer, the bonds or notes shall also bear a manual signature 12
which may be that of a bond registrar, trustee, paying agent, or designated 13
assistant of the State Treasurer. Should any officer whose signature or 14
facsimile signature appears on bonds or notes cease to be such officer before 15
the delivery of the bonds or notes, the signature or facsimile signature shall 16
nevertheless have the same validity for all purposes as if the officer had 17
remained in office until delivery. Bonds or notes may bear the facsimile 18
signatures of persons, who at the actual time of the execution of the bonds or 19
notes shall be the proper officers to sign any bond or note, although at the date 20
of the bond or note such persons may not have been such officers. The form 21
and denomination of bonds or notes, including the provisions with respect to 22
registration of the bonds or notes and any system for their registration, shal l 23
be as the State Treasurer may determine in conformity with this section. 24
(3) Manner of sale; expenses. – Subject to the approval by the Council of State as 25
to the manner in which bonds or notes shall be offered for sale, whether at 26
public or private sale , whether within or without the United States, and 27
whether by publishing notices in certain newspapers and financial journals, 28
mailing notices, inviting bids by correspondence, negotiating contracts of 29
purchase, or otherwise, the State Treasurer is authorized to sell bonds or notes 30
at one time or from time to time at any rates of interest, which may vary from 31
time to time, and at any prices, including a price less than or greater than the 32
face amount of the bonds or notes, as the State Treasurer may determi ne. All 33
expenses incurred in the preparation, sale, and issuance of bonds or notes shall 34
be paid by the State Treasurer from the proceeds of bonds or notes or other 35
available moneys. 36
(4) Notes; repayment. – 37
a. By and with the consent of the Council of State, the State Treasurer is 38
hereby authorized to borrow money and to execute and issue notes of 39
the State for the same, but only in the following circumstances and 40
under the following conditions: 41
1. For anticipating the sale of bonds, the issuance of whi ch the 42
Council of State has approved, if the State Treasurer considers 43
it advisable to postpone the issuance of the bonds; 44
2. For the payment of interest on or any installment of principal 45
of any bonds then outstanding, if there are not sufficient funds 46
in the State treasury with which to pay the interest or 47
installment of principal as they respectively become due; 48
3. For the renewal of any loan evidenced by notes authorized in 49
this section; 50
4. For the purposes authorized in this section; and 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 135
5. For refunding bonds or notes as authorized in this section. 1
b. Funds derived from the sale of bonds or notes may be used in the 2
payment of any bond anticipation notes issued under this section. 3
Funds provided by the General Assembly for the payment of interest 4
on or principal of bonds shall be used in paying the interest on or 5
principal of any notes and any renewals thereof, the proceeds of which 6
shall have been used in paying interest on or principal of the bonds. 7
(5) Refunding bonds and notes. – By and with the consent of the Council of State, 8
the State Treasurer is authorized to issue and sell refunding bonds and notes 9
pursuant to the provisions of the State Refunding Bond Act for the purpose of 10
refunding bonds or notes issued pursuant to this section. The refunding bonds 11
and notes may be combined with any other issues of State bonds and notes 12
similarly secured. Refunding bonds or notes may be issued at any time prior 13
to the final maturity of the debt obligation to be refunded. The proceeds from 14
the sale of any refun ding bonds or notes shall be applied to the immediate 15
payment and retirement of the bonds or notes being refunded or, if not required 16
for the immediate payment of the bonds or notes being refunded, the proceeds 17
shall be deposited in trust to provide for th e payment and retirement of the 18
bonds or notes being refunded and to pay any expenses incurred in connection 19
with the refunding. Money in a trust fund may be invested in (i) direct 20
obligations of the United States government, (ii) obligations the principal of 21
and interest on which are guaranteed by the United States government, (iii) 22
obligations of any agency or instrumentality of the United States government 23
if the timely payment of principal and interest on the obligations is 24
unconditionally guaranteed by the United States government, or (iv) 25
certificates of deposit issued by a bank or trust company located in the State 26
if the certificates are secured by a pledge of any of the obligations described 27
in (i), (ii), or (iii) above having an aggregate market va lue, exclusive of 28
accrued interest, equal at least to the principal amount of the certificates so 29
secured. This section does not limit the duration of any deposit in trust for the 30
retirement of bonds or notes being refunded but that have not matured and are 31
not presently redeemable, or if presently redeemable, have not been called for 32
redemption. 33
(6) Tax exemption. – Bonds and notes shall at all times be free from taxation by 34
the State or any political subdivision or any of their agencies, excepting estate, 35
inheritance, or gift taxes, income taxes on the gain from the transfer of bonds 36
or notes, and franchise taxes. The interest on bonds or notes is not subject to 37
taxation as income. 38
(7) Investment eligibility. – Bonds and notes are securities in which all o f the 39
following may invest, including capital in their control or belonging to them: 40
public officers, agencies, and public bodies of the State and its political 41
subdivisions, all insurance companies, trust companies, investment 42
companies, banks, savings banks, savings and loan associations, credit unions, 43
pension or retirement funds, other financial institutions engaged in business 44
in the State, executors, administrators, trustees, and other fiduciaries. Bonds 45
and notes are hereby made securities which may properly and legally be 46
deposited with and received by any officer or agency of the State or political 47
subdivision of the State for any purpose for which the deposit of bonds, notes, 48
or obligations of the State or any political subdivision is now or may hereafter 49
be authorized by law. 50
General Assembly Of North Carolina Session 2025
Page 136 Senate Bill 440-First Edition
(8) Faith and credit. – The faith and credit and taxing power of the State are hereby 1
pledged for the payment of the principal of and the interest on bonds and notes. 2
The State expressly reserves the right to amend any provisi on of this section 3
to the extent it does not impair any contractual right of a bond owner. 4
(9) Other agreements. – The State Treasurer may authorize, execute, obtain, or 5
otherwise provide for bond insurance, investment contracts, credit and 6
liquidity facilities, interstate swap agreements and other derivative products, 7
and any other related instruments and matters the State Treasurer determines 8
are desirable in connection with issuance, incurrence, carrying, or securing of 9
bonds or notes. The State Treasurer is authorized to employ and designate any 10
financial consultants, underwriters, and bond attorneys to be associated with 11
any bond or note issue under this section as the State Treasurer considers 12
necessary. 13
SECTION 40.6.(k) Variable Rate Demand Bonds and Notes. – In fixing the details 14
of bonds and notes, the State Treasurer may provide that any of the bonds or notes may: 15
(1) Be made payable from time to time on demand or tender for purchase by the 16
owner, if a credit facility supports the bonds or notes, u nless the State 17
Treasurer specifically determines that a credit facility is not required upon a 18
finding and determination by the State Treasurer that the absence of a credit 19
facility will not materially and adversely affect the financial position of the 20
State and the marketing of the bonds or notes at a reasonable interest cost to 21
the State; 22
(2) Be additionally supported by a credit facility; 23
(3) Be made subject to redemption or a mandatory tender for purchase prior to 24
maturity; 25
(4) Bear interest at a rate or rates that may vary for any period of time, as may be 26
provided in the proceedings providing for the issuance of the bonds or notes, 27
including, without limitation, such variations as may be permitted pursuant to 28
a par formula; and 29
(5) Be made the subject of a remarketing agreement whereby an attempt is made 30
to remarket bonds or notes to new purchasers prior to their presentment for 31
payment to the provider of the credit facility or to the State. 32
If the aggregate principal amount payable by the State under a credit facility is in 33
excess of the aggregate principal amount of bonds or notes secured by the credit facility, whether 34
as a result of the inclusion in the credit facility of a provision for the payment of interest for a 35
limited period of time or the payment of a redemption premium or for any other reason, then the 36
amount of authorized but unissued bonds or notes during the term of such credit facility shall not 37
be less than the amount of such excess, unless the payment of such excess is otherwise provided 38
for by agreement of the State executed by the State Treasurer. 39
SECTION 40.6.(l) Interpretation of Section. – 40
(1) Additional method. – The foregoing subsections of this section shall be 41
deemed to provide an additional and alternative method for the doing of the 42
things authorized under it and shall be regarded as supplemental and 43
additional to powers conferred by other laws and shall not be regarded as in 44
derogation of any powers now existing. 45
(2) Statutory references. – References in this section to specific sections or 46
Chapters of the General Statutes or to specific acts are intended to be 47
references to such sections, Chapters, or acts as they may be amended from 48
time to time by the General Assembly. 49
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 137
(3) Broad construction. – This section, being necessary for the health and welfare 1
of the people of the State, shall be broadly construed to effect the purposes 2
thereof. 3
(4) Inconsistent provisions. – Insofar as the provisions of this section are 4
inconsistent with the provisions of any general, special, or local laws, or parts 5
thereof, the provisions of this section shall be controlling. 6
(5) Severability. – If any provision of this section or the application thereof to any 7
person or circumstance is held invalid, such invalidity shall not affect other 8
provisions or applications of the section which can be given effect without the 9
invalid provision or application, and to this end the provisions of this section 10
are declared to be severable. 11
SECTION 40.6.(m) This section is effective when it becomes law. 12
13
UNC REPAIR AND RENOVATION PROGRAM 14
SECTION 40.7. The Board of Governors of The University of North Carolina shall 15
prioritize funds allocated for project code UNC/R&R21 for repairs and renovations pursuant to 16
G.S. 143C-8-13 and, notwithstanding G.S. 143C-8-13(a), for projects listed in subsection 17
40.1.(d) of S.L. 2021-180. The cost for any single repair and renovation project other than those 18
specifically listed in Section 40.1.(d) of S.L. 2021 -180 shall not exceed fifteen million dollars 19
($15,000,000). The Boar d of Governors may reallocate funds in accordance with 20
G.S. 143C-8-13(b) or to projects listed in subsection 40.1.(d) of S.L. 2021 -180; provided, 21
however, reallocation of funds intended for a project located at a particular constituent institution 22
may only be reallocated for repairs and renovations projects at that particular constituent 23
institution. The provisions of G.S. 143C-8-13(b)(4), as enacted by Section 40.10(b) of this act, 24
shall not apply to the projects listed in subsection 40.1.(d) of S.L. 2021 -180. The Board of 25
Governors shall report actions taken under G.S. 143C-8-13(b)(4) to the Joint Legislative 26
Commission on Governmental Operations and the Joint Legislative Oversight Committee on 27
Capital Improvements. 28
29
PART XLI. TRANSPORTATION 30
31
CASH FLOW HIGHWAY FUND AND HIGHWAY TRUST FUND APPROPRIATIONS 32
SECTION 41.1.(a) Subsections (b) and (c) of Section 41.1 of S.L. 2023 -134 are 33
repealed. 34
SECTION 41.1.(b) The General Assembly authorizes and certifies anticipated 35
revenues for the Highway Fund as follows: 36
For Fiscal Year 2027-2028 $ 3,399 million 37
For Fiscal Year 2028-2029 $ 3,553 million 38
For Fiscal Year 2029-2030 $ 3,612 million 39
For Fiscal Year 2030-2031 $ 3,666 million 40
For Fiscal Year 2031-2032 $ 3,723 million. 41
SECTION 41.1.(c) The General Assembly authori zes and certifies anticipated 42
revenues for the Highway Trust Fund as follows: 43
For Fiscal Year 2027-2028 $ 2,614 million 44
For Fiscal Year 2028-2029 $ 2,685 million 45
For Fiscal Year 2029-2030 $ 2,738 million 46
For Fiscal Year 2030-2031 $ 2,780 million 47
For Fiscal Year 2031-2032 $ 2,853 million. 48
SECTION 41.1.(d) The Department of Transportation, in collaboration with the 49
Office of State Budget and Management, shall develop a 10 -year revenue forecast. The 10-year 50
revenue forecast developed under this subsection sha ll be used (i) to develop the five -year cash 51
General Assembly Of North Carolina Session 2025
Page 138 Senate Bill 440-First Edition
flow estimates included in the biennial budgets, (ii) to develop the Strategic Transportation 1
Improvement Program, and (iii) by the Department of the State Treasurer to compute 2
transportation debt capacity. 3
4
CAPITAL, REPAIRS, AND RENOVATIONS 5
SECTION 41.2.(a) For the 2023 -2025 fiscal biennium, the funds appropriated in 6
this act from the Highway Fund to the Department of Transportation for capital, repairs, and 7
renovations shall be used as follows: 8
9
Capital – Highway Fund 10
FY 2025-26 FY 2026-27 11
Jones County Maintenance Yard Relocation $3,143,356 $18,541,168 12
Wake County Maintenance Yard Relocation $3,569,383 $29,252,105 13
14
SECTION 41.2.(b) The Governor and General Assembly anticipate appropriating 15
the following additional funds in the 2027 -28 fiscal year to complete the projects set out in 16
subsection (a) of this section: 17
18
Capital – Highway Fund FY 2027-28 19
Jones County Maintenance Yard $6,650,000; 20
Wake County Maintenance Yard $14,100,000. 21
22
23
FERRY CAPITAL SPECIAL FUND 24
SECTION 41.3. G.S. 136.82 reads as rewritten: 25
"… 26
(c2) Ferry Capital Special Fund. – The Ferry Capital Special Fund is established as a 27
special fund separate from the Highway Fund within the Department of Transportation , to fund 28
ferry vessel replacement projects, ferry facilities and other ferry capital projects. 29
(d) Use of Toll Proceeds. – The Department of Transportation shall deposit the proceeds 30
from tolls collected on North Carolina Ferry System routes and route -generated receipts 31
authorized under subsection (f) of this section to fund codes within the Ferry Capital Special 32
Fund for each of the Highway Divisions in which system terminals are located and fares are 33
earned. For the purposes of this subsection, fares are earned based on the terminals f rom which 34
a passenger trip originates and terminates. Commuter pass receipts shall be deposited 35
proportionately to each fund code based on the distribution of trips originating and terminating 36
in each Highway Division. The proceeds deposited to each fund c ode shall be used exclusively 37
for prioritized North Carolina Ferry System ferry passenger vessel replacement projects or 38
related facilities or buildings in the Division in which the proceeds are earned. Proceeds may be 39
used to fund ferry passenger vessel replacement projects or supplement funds allocated for ferry 40
passenger vessel replacement projects approved in the Transportation Improvement Program. 41
…." 42
43
AMEND SAFETY INSPECTION FEE 44
SECTION 41.4. G.S. 20-183.7 reads as rewritten: 45
"§ 20 -183.7. Fees for p erforming an inspection and issuing an electronic inspection 46
authorization to a vehicle; use of civil penalties. 47
(a) Fee Amount. – When a fee applies to an inspection of a vehicle or the issuance of an 48
electronic inspection authorization, the fee must be c ollected. The following fees apply to an 49
inspection of a vehicle and the issuance of an electronic inspection authorization: 50
Type Inspection Authorization 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 139
Safety Only $12.75 $ .85$2.00 1
Emissions and Safety 23.75 6.25. 2
The fee for performing an inspection of a vehicle applies when an inspection is performed, 3
regardless of whether the vehicle passes the inspection. The fee for an electronic inspection 4
authorization applies when an electronic inspection authorization is issued to a vehicle. The fee 5
for inspecting after-factory tinted windows shall be ten dollars ($10.00), and the fee applies only 6
to an inspection performed with a light meter after a safety inspection mechanic determined that 7
the window had after-factory tint. A safety inspection mechanic shall not inspect an after-factory 8
tinted window of a vehicle for which the Division has issued a medical exception permit pursuant 9
to G.S. 20-127(f). 10
A vehicle that is inspected at an inspection station and fails the inspection is entitled to be 11
reinspected at the same station at any time within 60 days of the failed inspection without paying 12
another inspection fee. 13
The inspection fee for an emissions and safety inspection set out in this subsection is the 14
maximum amount that an inspection station or an inspec tion mechanic may charge for an 15
emissions and safety inspection of a vehicle. An inspection station or an inspection mechanic 16
may charge the maximum amount or any lesser amount for an emissions and safety inspection 17
of a vehicle. The inspection fee for a safety only inspection set out in this subsection may not be 18
increased or decreased. The authorization fees set out in this subsection may not be increased or 19
decreased. 20
(b) Self-Inspector. – The fee for an inspection does not apply to an inspection performed 21
by a self-inspector. The fee for issuing an electronic inspection authorization to a vehicle applies 22
to an inspection performed by a self-inspector. 23
(c) Fee Distribution. – Fees collected for electronic inspection authorizations are payable 24
to the Divi sion of Motor Vehicles. The amount of each fee listed in the table below shall be 25
credited to the Highway Fund, the Volunteer Rescue/EMS Fund established in G.S. 58-87-5, the 26
Rescue Squad Workers' Relief Fund established in G.S. 58-88-5, and the Division of Air Quality 27
of the Department of Environmental Quality: 28
Recipient Safety Only Emissions and 29
Electronic Safety 30
Authorization Electronic 31
Authorization 32
33
Highway Fund .551.43 5.30 34
Volunteer Rescue/EMS Fund .18 .18 35
Rescue Squad Workers' Relief Fund .12 .12 36
Division of Air Quality .00 .27 .65 37
…." 38
39
PART XLII. FINANCE PROVISIONS 40
41
MAINTAIN PERSONAL INCOME TAX RATE 42
SECTION 42.1.(a) G.S. 105-153.7(a) reads as rewritten: 43
"§ 105-153.7. Individual income tax imposed. 44
(a) Tax. – A tax is imposed for each taxable year on the North Carolina taxable income 45
of every individual. The tax shall be levied, collected, and paid annually. Except as otherwise 46
provided in subsection (a1) of this section, t The tax is a percentage of the taxpayer's North 47
Carolina taxable income computed as follows: 48
Taxable Years Beginning Tax 49
In 2022 4.99% 50
In 2023 4.75% 51
General Assembly Of North Carolina Session 2025
Page 140 Senate Bill 440-First Edition
In 2024 4.5% 1
In 2025After 2024 4.25%4.25%. 2
After 2025 3.99%." 3
SECTION 42.1.(b) G.S. 105-153.7.(a1) is repealed. 4
SECTION 42.1.(c) This section is effective for taxable years beginning on or after 5
January 1, 2025." 6
7
MAINTAIN COMPETITIVE CORPORATE INCOME TAX RATE 8
SECTION 42.2.(a) G.S. 105-130.3 reads as rewritten: 9
"§ 105-130.3. Corporations 10
A tax is imposed on the State net income of every C Corporation doing business in this State. 11
An S Corporation is not subject to the tax levied in this section. The tax is a percentage of 12
theequal to 2.25% the taxpayer's State net income income. computed as follows: 13
Taxable Years Beginning Tax 14
In 2025 2.25% 15
In 2026 2% 16
In 2028 1% 17
After 2029 0%." 18
SECTION 42.2.(b) This section is effective for taxable years beginning on or after 19
January 1, 2025." 20
21
ENACT BACK TO SCHOOL SALES AND USE TAX HOLIDAY 22
SECTION 42.3(a) Part 3 of Article 5 of Chapter 105 of the General Statutes is 23
amended by adding a new section to read: 24
"§ 105-164.13G. Educational sales and use tax holiday. 25
(a) The state and local taxes imposed by this Article do not apply to the following items 26
of tangible personal property if sold between 12:01 AM on the first Friday of August and the 27
11:59PM the following Sunday: 28
(1) Clothing with a sales price of one hundred dollars ($100.00) or less per item. 29
(2) School supplies with a sales price of one hundred dollars ($100.00) or less per 30
item. 31
(3) Computers with a sales price of seven hundred and fifty dollars ($750) or less 32
per item. 33
(3a) Computer supplies with a sales price of two hundred fifty dollars ($250.00) or 34
less per item. 35
(b) The exemption allowed by this section does not apply to the following: 36
(1) Sales of clothing accessories or equipment. 37
(2) Sales of protective equipment. 38
(3) Sales of furniture. 39
(4) Sales of an item for use in a trade or business. 40
(5) Rentals. 41
(c) Hold Harmless. – The purpose of this section is to hold county and municipal 42
governments harmless for the revenue losses resulting from the sales tax holiday established in 43
this section (a) of this section. The amount each county may receive is determined as follows: 44
(1) Distribution Amount. – The distribution amount is nine million three hundred 45
thousand ($9,300,000) for the fiscal year beginning July 1, 2025. For fiscal 46
years beginning on or after July 1, 2026, the distribution amount is equal to 47
the amount for the preceding year multi plied by 3.5% and rounded to the 48
nearest one hundred thousand dollars ($100,000). 49
(2) County Allocation. – The Secretary shall, in October of each fiscal year, 50
allocate to each taxing county the distribution amount on a per capita basis as 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 141
calculated in G.S. 105-486(a). For the purposes of this section, "taxing 1
county" means a county that levies the first one -half cent (1/2¢) local sales 2
and use tax under Article 40 of this Chapter." 3
SECTION 42.3(b) This section is effective for fiscal years beginning on or after July 4
1, 2025." 5
6
ENACT WORKING FAMILIES TAX CREDIT 7
SECTION 42.4(a) G.S. 105-151.31 is reenacted as it existed immediately before its 8
expiration and reads as rewritten: 9
"§ 105-151.31. Earned IncomeWorking Families Tax Credit. 10
(a) Credit. An individual who claims for the taxable year an earned income tax credit 11
under section 32 of the Code is allowed a credit against the tax imposed by this Part equal to a 12
percentage twenty percent (20%) of t he amount of credit the individual qualified for under 13
section 32 of the Code. A nonresident or part-year resident who claims the credit allowed by this 14
section must reduce the amount of the credit by multiplying it by the fraction calculated under 15
G.S. 105 134.5(b) or (c), as appropriate. The percentage is as follows: 16
(1) For taxable year 2013, four and one-half percent (4.5%). 17
(2) For all other taxable years, five percent (5%). 18
(b) Credit Refundable. If the credit allowed by this section exceeds t he amount of tax 19
imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary 20
must refund the excess to the taxpayer. The refundable excess is governed by the provisions 21
governing a refund of an overpayment by the ta xpayer of the tax imposed in this Part. Section 22
3507 of the Code, Advance Payment of Earned Income Credit, does not apply to the credit 23
allowed by this section. In computing the amount of tax against which multiple credits are 24
allowed, nonrefundable credits are subtracted before refundable credits." 25
SECTION 42.4(b) Section (c) of G.S. 105-151.31 is repealed. 26
SECTION 42.4(c) This section is effective for taxable years beginning on or after 27
January 1, 2025." 28
29
REPLACE CHILD TAX DEDUCTION WITH A REFUNDABLE CHILD CREDIT 30
SECTION 42.5(a) Section (a1) of G.S. 105-153.5 is repealed. 31
SECTION 42.5.(b) G.S. 105-153.10 is reenacted as it existed immediately before its 32
expiration and reads as rewritten: 33
"§ 105-153.10. Credit for children. 34
(a) Credit. – A taxpayer who is allowed a federal child tax credit under section 24 of the 35
Code for the taxable year is allowed a credit against the tax imposed by this Part for each 36
dependent child for whom the taxpayer is allowed the federal credit. A taxpayer is allowed a 37
credit against the tax imposed by this Part for each qualifying child of the taxpayer. A "qualifying 38
child" is defined by section 152(c) of the Code. The amount of credit allowed under this section 39
for the taxable year is equal to the amount listed in the table below based on the taxpayer's 40
adjusted gross income, as calculated under the Code: 41
Filing Status Agi Credit Amount 42
Married, filing jointly/ Up to $40,000 $125.00$150 43
surviving spouse Over $40,000 44
Up to $60,000 125 45
Over $60,000 46
Up to $80,000 100 47
Over $80,000 48
Up to $100,000 $100.0075 49
Over $100,000 0 50
Up to $120,000 50 51
General Assembly Of North Carolina Session 2025
Page 142 Senate Bill 440-First Edition
Over $120,000 1
Up to $140,000 25 2
Over $140,000 0 3
Head of Household Up to $30,000$32,000 $125.00$150 4
Over $30,000$32,000 5
Up to $45,000 125 6
Over $45,000 7
Up to $60,000 100 8
Over $60,000 9
Up to $80,000$75,000 $100.0075 10
Over $80,000$75,000 0 11
Up to $90,000 50 12
Over $90,000 13
Up to $105,000 25 14
Over $105,000 0 15
Single Up to $20,000 $125.00$150 16
Over $20,000 17
Up to $30,000 125 18
Over $30,000 19
Up to $40,000 100 20
Over $40,000 21
Up to $50,000 $100.0075 22
Over $50,000 0 23
Up to $60,000 50 24
Over $60,000 25
Up to $70,000 25 26
Over $70,000 0 27
Married, filing separately Up to $20,000 $125.00$150 28
Over $20,000 29
Up to $30,000 125 30
Over $30,000 31
Up to $40,000 100 32
Over $40,000 33
Up to $50,000 $100.0075 34
Over $50,000 0 35
Up to $60,000 50 36
Over $60,000 37
Up to $70,000 25 38
Over $70,000 0. 39
(b) Limitations. – A nonresident or part -year resident who claims the credit allowed by 40
this section shall reduce the amount of the credit by multiplying it by the fraction calculated under 41
G.S. 105-134.5(b) or (c), as appropriate. The credit allowed under this section may not exceed 42
the amount o f tax imposed by this Part for the taxable year reduced by the sum of all credits 43
allowed, except payments of tax made by or on behalf of the taxpayer. G.S. 105-153.4. Married 44
individuals qualifying for a credit under this section who file separate returns may not collectively 45
claim more than the maximum credit allowed under a joint return. 46
(c) Credit Refundable. – If the credit allowed by this section exceeds the amount of tax 47
imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary 48
must refund the excess to the taxpayer. The refundable excess is governed by the provisions 49
governing a refund of an overpayment by the taxpayer of the tax imposed in this Part. In 50
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 143
computing the amount of tax against which multiple cred its are allowed, nonrefundable credits 1
1are subtracted before refundable credits." 2
SECTION 42.5.(c) This section is effective for taxable years beginning on or after 3
January 1, 2025." 4
5
REENACT MODIFIED CHILD AND DEPENDENT CARE TAX CREDIT 6
SECTION 42.6.(a) G.S. 105-151.11 is reenacted as it existed immediately before its 7
expiration, is recodified as G.S. 105-153.11, and reads as rewritten: 8
"§ 105-151.11. Credit for child care and certain employment-related expenses. 9
(a) Credit. – A person who is allowed a credit against federal income tax for a percentage 10
of employment-related expenses under section 21 of the Code shall be allowed as a credit against 11
the tax imposed by this Part an amount equal to the applicable percentage50% of the amount of 12
the credit pr ovided for in Section 21 of the Code Code, except as reduced by the percentage 13
reduction in subsection (c), which is claimed and allowed pursuant to the Internal Revenue Code. 14
To claim the credit allowed by this section, the taxpayer must provide with the tax return the 15
information required by the Secretary of Revenue. 16
(a1) Applicable Percentage. - For employment-related expenses that are incurred only with 17
respect to one or more dependents who are seven years old or older and are not physically or 18
mentally incapable of caring for themselves, the applicable percentage is the appropriate 19
percentage in the column labeled "Percentage A" in the table below, based on the taxpayer's 20
adjusted gross income determined under the Code. For employment -related expenses w ith 21
respect to any other qualifying individual, the applicable percentage is the appropriate percentage 22
in the column labeled "Percentage B" in the table below, based on the taxpayer's adjusted gross 23
income determined under the Code. 24
Filing Status Adjusted Gross Income Percentage A Percentage B 25
Head of Up to $20,000 9% 13% 26
Household 27
Over $20,000 8% 11.5% 28
up to $32,000 29
30
Over $32,000 7% 10% 31
32
Surviving 33
Spouse or 34
Joint Return Up to $25,000 9% 13% 35
36
Over $25,000 37
up to $40,000 8% 11.5% 38
39
Over $40,000 7% 10% 40
41
Single Up to $15,000 9% 13% 42
43
Over $15,000 44
up to $24,000 8% 11.5% 45
46
Over $24,000 7% 10% 47
48
Married 49
Filing 50
Separately Up to $12,500 9% 13% 51
General Assembly Of North Carolina Session 2025
Page 144 Senate Bill 440-First Edition
1
Over $12,500 2
up to $20,000 8% 11.5% 3
4
Over $20,000 10% 5
(b) Employment Related Expenses. – The amount of employment -related expenses for 6
which a credit may be claimed may not exceed three thousand dollars ($3,000) if the taxpayer's 7
household includes one qual ifying individual, as defined in section 21(b)(1) of the Code, and 8
may not exceed six thousand dollars ($6,000) if the taxpayer's household includes more than one 9
qualifying individual. The amount of employment -related expenses for which a credit may be 10
claimed is reduced by the amount of employer-provided dependent care assistance excluded from 11
gross income. 12
(c) Phaseout. – The credit allowed by this section shall be reduced by a percentage listed 13
below, rounded to the nearest percentage point, based on the taxpayer's adjusted gross income as 14
calculated under the Code: 15
16
Filling Status For AGI Exceeding Percentage Reduction 17
Married, filing jointly $150,000 The lesser of 100% or 18
[(Taxpayer's AGI – $150,000) / $50,000] 19
Head of Household $112,500 The lesser of 100% or 20
[(Taxpayer's AGI – $112,500) / $37,500] 21
Single or Married, The lesser of 100% or 22
Filing Separately $75,000 [(Taxpayer's AGI – $75,000) / $25,000] 23
(c)(d) Limitations. – A nonresident or part -year resident who claims the credit allowed by 24
this section shall reduce the amount of the credit by multiplying it by the fraction calculated under 25
G.S. 105-134.5(b) or (c), G.S. 105-153.4(b) or (c), as appropriate. No credit shall be allowed 26
under this section for amounts deducted in calculating North Carolina taxable income. The credit 27
allowed by this section may not exceed the amount of tax imposed by this Part for the taxable 28
year reduced by the sum of all credits allowable, except for payments of tax made by or on behalf 29
of the taxpayer. 30
(e) Credit Refundable. – If the credit allowed by this section exceeds the amount of tax 31
imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary 32
must refund the excess to the taxpayer. The refundable excess is gover ned by the provisions 33
governing a refund of an overpayment by the taxpayer of the tax imposed in this Part . In 34
computing the amount of tax against which multiple credits are allowed, nonrefundable credits 35
are subtracted before refundable credits." 36
SECTION 42.6.(b) This section is effective for taxable years beginning on or after 37
January 1, 2025. 38
39
PART XLIII. MISCELLANEOUS 40
41
STATE BUDGET ACT APPLIES 42
SECTION 43.1. The provisions of the State Budget Act, Chapter 143C of the 43
General Statutes, are reenacted and shall remain in full force and effect and are incorporated in 44
this act by reference. 45
46
MOST TEXT APPLIES ONLY TO THE 2025-2027 FISCAL BIENNIUM 47
SECTION 43.2. Except for statutory changes or other provisions that clearly indicate 48
an intention to have effects beyond the 2025-2027 fiscal biennium, the textual provisions of this 49
act apply only to funds appropriated for, and activities occurring during, the 2025 -2027 fiscal 50
biennium. 51
General Assembly Of North Carolina Session 2025
Senate Bill 440-First Edition Page 145
1
EFFECT OF HEADINGS 2
SECTION 43.3. The headings to the Parts, subparts, and sec tions of this act are a 3
convenience to the reader and are for reference only. The headings do not expand, limit, or define 4
the text of this act, except for effective dates referring to a Part or subpart. 5
6
SEVERABILITY CLAUSE 7
SECTION 43.4. If any section o r provision of this act is declared unconstitutional 8
or invalid by the courts, it does not affect the validity of this act as a whole or any part other than 9
the part so declared to be unconstitutional or invalid. 10
11
EFFECTIVE DATE 12
SECTION 43.5. Except as ot herwise provided, this act becomes effective July 1, 13
2025. 14