Section 1.

Titles this part the “Human Trafficking Identification and Reporting Act.” Sets out legislative findings.

Amends GS 7A-354(c) to give the North Carolina Human Trafficking Commission (HTC) the power to develop and implement a human trafficking reporting and response system in accordance with new section GS 7A-354.2.

Enacts GS 7A-354.2 directing the North Carolina Human Resources Commission (HRC), in consultation with the Department of Information Technology, to develop and implement a human trafficking report and response system. Sets out eight requirements for the system. Authorizes mandated reporters to use the system as the primary mechanism to report suspected human trafficking. Provides that the system will notify law enforcement and child protection officials of high priority reports, provide a secure dashboard of reports, and support real-time communication between investigators and survivors or reporters with consent. Sets out system data privacy expectations and requirements. Authorizes HRC to spend any funds available for this purpose to administer these provisions notwithstanding compliance with other provisions of law. Directs HRC to submit a quarterly report to the specified NCGA committee and describes information to be included in the report. Directs HRC to commission an independent evaluation of the system every two years and to make such evaluations available to the public.

Directs HTC to develop and implement a public awareness campaign on the new reporting system.

Requires HRC’s first quarterly report to be submitted by March 1, 2027.

Appropriates $200,000 for 2026-27 and $100,000 for 2027-28 from the General Fund to the Administrative Office of the Courts (AOC), HTC to implement the response system and to provide vendor grants for costs incurred.

Effective July 1, 2026.

Section 2.

Adds new Article 2F, Harmful Materials Tax, to GS Chapter 105.

Defines harmful materials vendor as a retailer selling material harmful to minors at a physical retail location in the state. Defines harmful to minors as quality of material or performance that (1) the average adult person applying contemporary community standards would find that the material or performance has a predominant tendency to appeal to a prurient interest of minors in sex;  (2) the average adult person applying contemporary community standards would find that the depiction of sexually explicit nudity or sexual activity in the material or performance is patently offensive to prevailing standards in the adult community concerning what is suitable for minors; and (3) the material or performance lacks serious literary, artistic, political, or scientific value for minors. Defines material as physical depictions or representations, including those created using artificial intelligence, but excluding material consisting entirely of written words. Defines retailer pursuant to GS 105-164.3(229) and Secretary as Secretary of Revenue.

Imposes a 10% tax on harmful materials vendors, due when a return is required to be filed (quarterly, by the 20th day of the relevant month, on a form prescribed by the Secretary). Requires persons to keep records of all documents used to determine information provided in the return to be open to Secretary inspection for the applicable statute of limitations.

Requires harmful materials vendors to register with the Secretary.

Directs Secretary to credit 50% of tax proceeds to the AOC for allocation to HTC and the remainder to the Domestic Violence Center Fund.

Effective October 1, 2026.

Section 3.

Amends GS 143-805 to add officials or employees investigating matters involving incarcerated offenders or matters related to misuse of Department of Adult Correction devices to list of exceptions to prohibition on viewing pornography on government devices. Effective upon becoming law and applicable to investigations before, on, or after that date.

Amends GS 42A-39 (Human trafficking awareness reporting and training requirements for vacation rentals) to require third-party contractors to ensure that employees performing housekeeping or check-in/check-out services receive human trafficking awareness training. Effective upon becoming law and applicable to training required to be completed on or after that date.

Amends GS 130A-511(b)(1) to provide that human trafficking training for lodging establishment employees does not have to conform to the requirements of the Administrative Procedure Act. Effective upon becoming law and applicable to training developed or identified before, on, or after that date.

Section 4.

Appropriates $150,000 for 2026-27 and $150,000 for 2027-28 from the General Fund to the Department of Public Safety to be allocated to the Cleveland County Sheriff’s Office to establish a counter trafficking task force.

Effective July 1, 2026.

Section 5.

Except as otherwise provided, effective when the act becomes law.