Instructs State departments, authorities, and other State and local entities, including, the eleven listed, that are using the development tier designations determined pursuant to GS 143B-437.08 to discontinue the use of those designations by July 1, 2028. Tasks each entity with independently developing proposed replacement criteria designed to achieve the objectives of all tier system programs for which that entity is responsible, to be used in place of development tier designations. Requires the proposed criteria to be objective and based on verifiable date. Prohibits the proposed criteria from altering the substantive purpose of any program or expand or contract eligibility except as necessary to replace the use of the development tier designations. Requires each entity to report its developed criteria to the specified NCGA committees and division by February 1, 2027. Specifies that no proposed criteria can become effective until enacted by an act of the NCGA. Authorizes an entity required to discontinue use of the development tier designations to use the last published development tier designations until the earlier of developed replacement criteria or July 1, 2028. Expresses the NCGA’s intent to enact criteria to better tailor program objectives to programmatic outcomes when compared to the current use of the development tier designations.

Appropriates $1.1 million from the General Fund to the Office of State Budget and Management (OSBM) for 2026-27 to be allocated to the impacted State entities to discontinue the tiers and to develop substitute criteria. Effective July 1, 2026.

Prohibits the Secretary of Commerce from changing the current designation for a development tier one area or lower a development tier two area to a development tier three area for the 2026, 2027, or 2028 calendar years as a result of the annual ranking. Clarifies that nothing in the section prohibits a county from moving to a higher development tier area  in any calendar year as a result of the annual ranking.