House committee substitute to the 2nd edition makes the following changes.

Amends proposed GS 105-277.03 as follows. Amends the limitation to provide that the total land area within incentive districts in a local government unit may not exceed 5% of the local government unit’s total area; moves this provision from the definition of incentive district into its own provision and adds a prohibition on a county including any land inside a municipality in an incentive district, unless the municipality’s governing body agrees by resolution to include the land in the incentive district. Sets out the process by which a municipality must notify the board of county commissioners of a proposed district. Allows the municipality’s governing body to proceed to approve the district unless the county board of commissioners where the incentive district is located disapproves the proposed district by resolution. Amends the triggers for ending the property tax exclusion so that it is now at the earlier of the sale of the property, or five years (was, ten years) from the time the property first received the property tax benefit.

Changes the effective date of the act so that it is effective for taxable years beginning on or after July 1, 2027 (was, 2026).