Honoring Sacrifice: NC Veterans Relief Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 660

Short Title: Honoring Sacrifice: NC Veterans Relief Act. (Public)
Sponsors: Senators Applewhite, Smith, and Robinson (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S660-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO GRADUALLY INCREASE THE EXEMPTI ON AMOUNT UNDER THE 2
DISABLED VETERAN PRO PERTY TAX HOMESTEAD EXCLUSION, TO ALLOW 3
DISABLED VETERANS TO PREQUALIFY FOR THE DISABLED VETERAN 4
PROPERTY TAX HOMESTEAD EXCLUSION, TO EXCLUDE THE PRIMARY MOTOR 5
VEHICLE OWNED BY A O NE HUNDRED PERCENT D ISABLED VETERAN FROM 6
THE PROPERTY TAX, AN D TO REIMBURSE LOCAL GOVERNMENTS FOR A 7
PERCENTAGE OF THEIR RESULTING REVENUE LOSS. 8
Whereas, North Carolina strives to be the most veteran -friendly state in the nation; 9
and 10
Whereas, North Carolina recognizes the sacrifices of its veterans who have become 11
100% permanently and totally disabled due to service-connected conditions; and 12
Whereas, homeownership and reliable transportation are critical to the well -being of 13
disabled veterans, this act seeks to provide immediate financial relief through property tax 14
exemptions; and 15
Whereas, to ensure local governments remain financially stable, this act establishes a 16
hold harmless model to reimburse local governments up to 50% of revenue losses resulting from 17
the implementation of this act, ensuring a shared investment between the State and local 18
governments in honoring our disabled veterans; Now, therefore, 19
The General Assembly of North Carolina enacts: 20
21
PART I. DISABLED VETERAN PROPERTY TAX HOMESTEAD EXCLUSION 22
SECTION 1.(a) For taxes imposed for taxable years beginning on or after July 1, 23
2025, G.S. 105-277.1C reads as rewritten: 24
"§ 105-277.1C. Disabled veteran property tax homestead exclusion. 25
(a) Classification. – A permanent residence owned and occupied by a qualifying owner 26
is designated a special class of property under Article V, Section 2(2) of the North Carolina 27
Constitution and is taxable in accordance with this section. The first forty-five seventy-five 28
thousand dollar s ($45,000) ($75,000) of appraised value of the residence is excluded from 29
taxation. A qualifying owner who receives an exclusion under this section may not receive other 30
property tax relief. 31
(b) Definitions. – The following definitions apply in this section: 32
(1) Disabled veteran. – A veteran of any branch of the Armed Forces of the United 33
States whose character of service at separation was honorable or under 34
honorable conditions and who satisfies one of the following requirements: 35
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 660-First Edition
a. As of January 1 preced ing the taxable year for which the exclusion 1
allowed by this section is claimed, the veteran had received benefits 2
under 38 U.S.C. § 2101. 3
b. The veteran has received a certification by the United States 4
Department of Veterans Affairs or another federal ag ency indicating 5
that, as of January 1 preceding the taxable year for which the exclusion 6
allowed by this section is claimed, he or she has a service -connected, 7
permanent, and total disability. 8
c. The veteran is deceased and the United States Department of Veterans 9
Affairs or another federal agency has certified that, as of January 1 10
preceding the taxable year for which the exclusion allowed by this 11
section is claimed, the veteran's death was the result of a 12
service-connected condition. 13
(2) Repealed by Session Laws 2009-445, s. 22(c), effective for taxes imposed for 14
taxable years beginning on or after July 1, 2009. 15
(2a) Hold harmless amount. – The appraised value of a property excluded from 16
taxation under subsection (a) of this section multiplied by the applicable local 17
tax rate. 18
(3) Permanent residence. – Defined in G.S. 105-277.1. 19
(4) Property tax relief. – Defined in G.S. 105-277.1. 20
(4a) Qualifying owner. – An owner, as defined in G.S. 105-277.1, who is a North 21
Carolina resident and one of the following: 22
a. A disabled veteran. 23
b. The surviving spouse of a disabled veteran who has not remarried. 24
(5), (6) Repealed by Session Laws 2009-445, s. 22(c), effective for taxes imposed for 25
taxable years beginning on or after July 1, 2009. 26
(7) Service-connected. – Defined in 38 U.S.C. § 101. 27
(8) Total hold harmless amount. – The sum of the following: 28
a. The hold harmless amount for all property excluded from taxation 29
under subsection (a) of th is section in the county multiplied by fifty 30
percent (50%). 31
b. The hold harmless amount for all property excluded from taxation 32
under subsection (a) of thi s section in the cities located in the county 33
multiplied by fifty percent (50%). 34
… 35
(f) Application. – An application for the exclusion allowed under this section should be 36
filed during the regular listing period but may be filed and must be accepted at any time up to 37
and through June 1 preceding the tax year for which the exclusion is c laimed. An applicant for 38
an exclusion under this section must establish eligibility for the exclusion by providing a copy of 39
the veteran's disability certification or evidence of benefits received under 38 U.S.C. § 2101. An 40
assessor may accept the prequali fication notice under subsection (h) of this section to establish 41
eligibility for the exclusion provided in this section in lieu of a veteran 's disability certification 42
or evidence of benefits received under 38 U.S.C. § 2101. 43
(g) Reimbursement. – On or before September 1 of each year, each county tax collector 44
shall notify the Secretary of Revenue, in a manner prescribed by the Secretary, of the county 's 45
total hold harmless amount. A county that fails to notify the Secretary of Revenue of its total hold 46
harmless amount by the due date is barred from receiving a reimbursement under this subsection 47
for that taxable year. On or before December 31 of each year, the Secretary of Revenue shall 48
distribute to each county its respective total hold harmless amount; provided, however, that if the 49
hold harmless amount for any city or county exceeds one percent (1%) of its total general fund 50
General Assembly Of North Carolina Session 2025
Senate Bill 660-First Edition Page 3
revenue for the most recent fiscal year, the Secretary of Revenue shall also reimburse that city or 1
county for all amounts exceeding that threshold. 2
Any funds received by a county that are attributable to a city within the county must be 3
distributed to that respective city. Any funds received by a county or city because the county or 4
city was collecting taxes for another unit of government or special district must be credited to the 5
funds of that other unit or district in accordance with regulations issued by the Local Government 6
Commission. 7
In order to pay for the reimbursement under this section and the cost to the Department of 8
Revenue of administering the reimbursement, the Secretary of Revenue shall draw from 9
collections received under Part 2 of Article 4 of this Chapter an amount equal to the 10
reimbursement and the cost of administration. 11
(h) Prequalification. – A disabled veteran or the surviving spouse of a disabled veteran 12
who has not remarried may apply for prequalification of the property tax relief provided by this 13
section notwithstanding that the disabled veteran or the surviving spouse of a disabled veteran 14
who has not remarried is not an owner of a permanent residence at the time that the application 15
for prequalification is submitted. It is the intent of the General Assembly to allow taxpayers and 16
lenders to determine, in advance of the purchase of a primary residence, the availability of the 17
tax benefit provided by this section in order to facilitate omitting exempted amounts from 18
determinations of payment calculations. An application for prequalification under this subsection 19
may be filed at any time, must be submitted on a form approved by the Department, and must be 20
accompanied by a copy of the veteran 's disability certification or evidence of benefits received 21
under 38 U.S.C. § 2101. Application forms under this subsection must be made available by the 22
assessor. Upon receipt of an application under this subsection, the assessor of the county in which 23
the application is filed must notify the applicant of the applicant's qualification for eligibility for 24
property tax relief under this section within 30 days. Upon purchasing a permanent residence, an 25
applicant who has received prequalification under this subsection must apply for the property tax 26
relief provided by this section as required under subsection (f) of this section." 27
SECTION 1.(b) For taxes imposed for taxable years beginning on or after July 1, 28
2026, G.S. 105-277.1C(a), as amended by subsection (a) of this section, reads as rewritten: 29
"(a) Classification. – A permanent residence owned and occupied by a qualifying owner 30
is designated a special class of property under Article V, Section 2(2) of the North Carolina 31
Constitution and is taxable in accordance with this section. The first seventy-five one hundred 32
twenty-five thousand dollars ($75,000) ($125,000) of appraised value of the residence is 33
excluded from taxation. A qualifying owner who receives an exclusion under this section may 34
not receive other property tax relief." 35
SECTION 1.(c) For taxes imposed for taxable years beginning on or after July 1, 36
2027, G.S. 105-277.1C(a), as amended by subsection (b) of this section, reads as rewritten: 37
"(a) Classification. – A permanent residence owned and occupied by a qualifying owner 38
is designated a special class of property under Article V, Section 2(2) of the North Carolina 39
Constitution and is taxable in accordance with this section. The first one hundred twenty -five 40
thousand dollars ($125,000) of amount of the appraised value of the residence equal to the 41
exclusion amount is excluded from taxation. The exclusion amount is the lesser of five hundred 42
thousand dollars ($500,000) or one hundred percent (100%) of the appraised value of the 43
residence. A qualifying owner who receives an exclusion under this section may not receive other 44
property tax relief." 45
46
PART II. DISABLED VETERAN MOTOR VEHICLE PROPERTY TAX EXEMPTION 47
SECTION 2.(a) G.S. 105-275 reads as rewritten: 48
"§ 105-275. Property classified and excluded from the tax base. 49
The following classes of property are designated special classes under Article V, Sec. 2(2), 50
of the North Carolina Constitution and are excluded from tax: 51
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 660-First Edition
… 1
(5b) A motor vehicle (i) owned by a person who has a one hundred percent (100%) 2
disability rating certified by the United States Department of Veterans Affairs 3
and (ii) used by that person as their primary personal vehicle. The exclusion 4
provided by this subdivision shall not apply to vehicles used primarily for 5
business or commercial purposes. 6
…." 7
SECTION 2.(b) G.S. 105-330.4 is amended by adding a new subsection to read: 8
"(f) Hold Harmless Reimbursement. – On or before September 1 of each year, each county 9
tax collector shall notify the Secretary of Revenue, in a manner prescribed by the Secretary, of 10
the county's total hold harmless amount. A county that fails to notify the Secretary of Revenue 11
of its total hold harmless amount by the due date is barred from receiving a reimbursement under 12
this subsection for that taxable year. On or before December 31 of each year, the Secretary of 13
Revenue shall distribute to each county its respective total hold harmless amount ; provided, 14
however, that if the hold harmless amount for any city or county exceeds one percent (1%) of its 15
total general fund revenue for the most recent fiscal year, the Secretary of Revenue shall also 16
reimburse that city or county for all amounts exceeding that threshold. 17
Any funds received by a county that are attributable to a city within the county must be 18
distributed to that respective city. Any funds received by a county or city because the county or 19
city was collecting taxes for another unit of government or special district must be credited to the 20
funds of that other unit or district in accordance with regulations issued by the Local Government 21
Commission. 22
In order to pay for the reimbursement under this subsection and the cost to the Department 23
of Revenue of administering the reimbursement, the Secretary of Revenue shall draw from 24
collections received under Part 2 o f Article 4 of this Chapter an amount equal to the 25
reimbursement and the cost of administration. 26
The following definitions apply in this subsection: 27
(1) Hold harmless amount. – The appraised valu e of property excluded from 28
taxation under G.S. 105-275(5b) multiplied by the applicable local tax rate. 29
(2) Total hold harmless amount. – The sum of the following: 30
a. The hold harmless amount for all property excluded from taxation 31
under G.S. 105-275(5b) in the county multiplied by fifty percent 32
(50%). 33
b. The hold harmless amount for all property excluded from taxation 34
under G.S. 105-275(5b) in cities located in the county multiplied by 35
fifty percent (50%)." 36
SECTION 2.(c) This section is effective when it becomes law and applies to motor 37
vehicles registere d on or after that date and to applications for motor vehicle property tax 38
exemptions occurring on or after that date. 39
40
PART III. VETERANS' ECONOMIC DEVELOPMENT INCENTIVE GRANT 41
PROGRAM 42
SECTION 3. There is appropriated from the General Fund to the North Ca rolina 43
Department of Military and Veterans Affairs the sum of ten million dollars ($10,000,000) in 44
nonrecurring funds for the 2025-2026 fiscal year to be used for purposes consistent with Section 45
3A of this act. Funds appropriated by this section shall not revert but shall remain available for 46
purposes consistent with Section 3A of this act until expended. 47
SECTION 3A.(a) Veterans' Economic Development Incentive Grant Program 48
Established. – There is established the Veterans' Economic Development Incentive G rant 49
Program to be administered by the North Carolina Department of Military and Veterans Affairs. 50
The purpose of the program is to provide financial assistance in the form of grants to eligible 51
General Assembly Of North Carolina Session 2025
Senate Bill 660-First Edition Page 5
entities to promote affordable housing initiatives for vetera ns, infrastructure improvements for 1
veterans, and veteran employment programs, in accordance with this section. 2
SECTION 3A.(b) Definitions. – The following definitions apply in this section: 3
(1) Department. – The North Carolina Department of Military and Veterans 4
Affairs. 5
(2) Eligible entity. – Any of the following: 6
a. A nonprofit organization that (i) is organized and operated primarily 7
for the benefit and service of veterans and (ii) the Department 8
determines demonstrates a proven track record of adequat ely serving 9
the needs of veterans. 10
b. Local governments pursuing veteran-focused development initiatives, 11
as determined by the Department. 12
c. Nonprofit entities that collaborate with veterans' organizations to 13
provide employment opportunities or housing solutions to veterans, as 14
determined by the Department. 15
(3) Local government. – A city or county, as those terms are defined in 16
G.S. 160A-1 and G.S. 153A-1, respectively. 17
(4) Program. – The Veterans' Economic Development Incentive Grant Program 18
established by this section. 19
(5) Qualifying project. – A project by an eligible entity that (i) meets the 20
requirements of one or more qualifying purposes as defined in this subsection 21
and (ii) is a singular and self-contained project. 22
(6) Qualifying purposes. – Any of the following: 23
a. Affordable housing initiatives for veterans. – Programs that provide 24
down payment assistance to veterans, home repair funding to veterans, 25
or incentives for developers to create veteran-focused housing. 26
b. Infrastructure improvements. – Projects that improve accessibility for 27
disabled veterans in public facilities or community spaces. 28
c. Veteran employment programs. – Initiatives that offer workforce 29
training, job placement services, or entrepreneurship support tailored 30
to veterans. 31
SECTION 3A.(c) Eligibility. – An eligible entity is eligible for a grant under the 32
program. 33
SECTION 3A.(d) Application; Verification. – An eligible entity may apply for a 34
grant under the program. An applicant must apply to the Department on a form prescribed by the 35
Department and must include any supporting documentation required by the Department. The 36
Department may accept applications until the funds available under the program have been fully 37
awarded. The Department shall consult with applicants to sub stantiate applications prior to 38
awarding grants under the program. 39
SECTION 3A.(e) Grant Amount. – The total grant amount per qualifying project is 40
equal to one hundred thousand dollars ($100,000). 41
SECTION 3A.(f) Eligible Uses. – Grants can be used for qu alifying purposes as 42
defined in this section. 43
SECTION 3A.(g) Grant Program Limit. – The total of all funds granted under this 44
program may not exceed the amount allocated to the program under this act and under any future 45
act of the General Assembly. The Department must calculate the total amount of grants requested 46
from the applications filed under subsection (d) of this section. Grants shall be awarded on a first 47
come, first served basis. 48
SECTION 3A.(h) Administrative Expenses. – The Department may retain up to five 49
percent (5%) of the funds appropriated for the grant program established by this section for 50
administrative expenses. 51
General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 660-First Edition
1
PART IV. REVIEW AND REPORTING 2
SECTION 4. No later than September 1 of each year, the Department of Revenue 3
(Department), in consultation with the Department of Military and Veterans Affairs, shall 4
provide a report to the Joint Legislative Economic Development and Global Engagement 5
Oversight Committee and the Fiscal Research Division that consists of the following: 6
(1) An assessment of the financial impact on local governments of the provisions 7
of this act. 8
(2) Data on the number of veterans benefitting from the homestead exclusion and 9
motor vehicle tax exemption, as modified by this act. 10
(3) An evaluation of whether the Veteran s' Economic Development Incentive 11
Fund has contributed to workforce development for veterans, infrastructure 12
improvements for veterans, and affordable housing initiatives. 13
14
PART V. EFFECTIVE DATE 15
SECTION 5. Unless otherwise provided, this act is effective when it becomes law. 16