Section 1.1

Establishes a fifteen-member NC High School Redesign Commission (Commission), located administratively in the Department of Public Instruction (DPI) to explore and recommend changes to policies and systems governing high school and higher education that will better prepare North Carolina students for success as they transition to higher education or the workforce. Provides for the appointment of members, including four members from named nonprofits, a chair, meetings, terms, and vacancies. Tasks the Commission with examining promising practices in North Carolina and nationally to inform the Commission's recommendations, including the twelve specified. Tasks the chair with designating nonprofit members to plan meetings and providing staff. Instructs that funds appropriated to DPI to be used to contract with one or more organizations to plan and manage Commission meetings pursuant to the act will be divided equally among the organizations designated by the chair unless otherwise agreed by the chair and all designated organizations. Starting on April 30, 2027, requires the Commission to submit an annual report to the specified NCGA committee, including all recommendations approved by a majority of its members and the described summaries. Sunsets the Commission on the earlier of June 30, 2031, or upon the filing of its final annual report.

Section 1.2

Appropriates $3.6 million for 2026-27 from the General Fund to the Department of Public Instruction (DPI) to be allocated as a directed grant to the SME Education Foundation to create a pilot program for 2026-27 and 2027-28 school years for 10 high schools to receive equipment, curriculum, professional development, scholarships, and STEM-focused extracurricular activities for students and teachers that align with the SME Prime (Partnership Response in Manufacturing Education) Program. Specifies that funds do not revert and will remain available until the end of the 2027-28 fiscal year.

Section 1.3

Enacts new GS 115C-438.1 requiring DPI to create a procedure for reviewing monthly expenditures by local school administrative units from specific State-funded dollar allotments beginning with October of each school year. Requires local school administrative units that have expended more funds than allotted from a specific allotment to remit payment of the amount overexpended to DPI; requires that the State Board of Education (State Board) exercise its oversight authority when payment is not remitted for more than 60 days. Requires DPI, to the extent practicable, to conduct monthly audits of local school administrative unit State-funded position allotments to ensure compliance with GS Chapter 115C. Requires DPI to take action when a local school administrative unit is out of compliance.

Section 1.4

Changes the school year by which the Board must conduct a review of the operation and student performance of the local school administrative unit operating under an approved renewal school system plan under Section 6 of SL 2018-32 from the 2022-23 school year to the 2028-29 year and extends the followup review obligation from every three years after to every five years. Removes the four listed prongs of information (assessment instruments, described vacancies, student absences, and anything else deemed necessary) that a local school unit must annually report to the superintendent of DPI. Now requires those units submit those annual reports on five matters, including proficiency data on each end-of-grade or end-of-course exam, EVAAS growth data for the local school administrative unit, high school graduation rates, and chronic absenteeism. Authorizes local school administrative units operating under a renewal school system plan to use an alternative evaluation model to the North Carolina Educator Evaluation System (NCEES) when evaluating teacher effectiveness. Directs the NC Collaboratory to study the effect of the Renewal School System on student outcomes, with an analysis of how financial and personnel flexibilities permitted under a renewal school system plan have been utilized. Requires the NC Collaboratory to report its results to the specified NCGA committee by January 15, 2028.  Makes conforming changes.

Section 1.5

Expands the advanced courses to be offered by local boards of education when practicable to include English Language Arts courses under GS 115C-81.36. Makes conforming changes, including automatic enrollment in advanced learning opportunities for the next school year when a student scores at the highest level on the corresponding end-of-grade test. Requires that a parent or guardian wanting to remove a student from the advance learning opportunities or advanced courses be first given notice that the student's placement was determined by their achievement on the previous end-of-grade or end-of-course test. Specifies that the submission date for the annual report submitted by the Department of Public Instruction (DPI) to the specified NCGA committees is December 15, and requires DPI to include data on socioeconomic status collected for the current school year, as described. Makes technical, conforming, and organizational changes. Applies beginning with the 2026-27 school year.

Section 1.6

Adds new Part 12, Experiential Learning, to Article 16 of GS Chapter 115C, providing as follows. Sets out the purpose as allowing public school units to work with eligible partners to develop nontraditional, student-driven pathways through which students may select and complete Learning Accelerators. Defines Learning Accelerators as modular learning experiences focused on science, technology, engineering, and mathematics (STEM), that, when aggregated, will provide competency-based equivalency to traditional elective course credit.

Requires partners to be able to provide a menu of modular learning experiences that include opportunities for work-based learning. Requires public school units to enter into a memorandum of understanding with an eligible partner to establish certain requirements for the Learning Accelerator program and sets out four items that must be included in those requirements related to staffing, qualifications and standards for learning lab facilitators, facilitator’s duties, and operating schedule.

Allows contracting with additional nonlicensed personnel to provide timely, real-world content, industry expertise, and student learning experiences as part of the program.

Requires that public school units award elective credit in a Learning Accelerator to any student who completes a combination of learning experiences determined by the eligible partner to provide the competency-based equivalent of an elective credit in that course upon verification of successful completion of the learning experiences and integrity of student work products by the learning lab facilitator. Sets out additional parameters governing the award of course credit, including allowing a student to earn up to four credits in Learning Accelerators.

Limits the use of State funds provided to a public school unit for the program to salaries and benefits of learning lab facilitators or hiring contract personnel. Requires the State Board, to the extent funds are made available, to establish a funding allotment for the program learning lab facilitator positions, with funds allocated to provide one facilitator to each local school administrative unit.

Requires DPI to report annually to the specified NCGA committee on specified information about the program, disaggregated for each public school unit by grade level and school.

Appropriates $8,855,000 in recurring funds for 2026-27 from the General Fund to DPI to administer the Learning Accelerator learning lab facilitator allotment.

Specifies that SparkNC, Inc., is an eligible partner and appropriates $6.5 million in recurring funds for 2026-27 from the General Fund to DPI to be allocated as a grant to SparkNC, Inc., for administrative costs associated with being an eligible partner.

Appropriates $5,780,000 for 2026-27 from the General Fund to DPI to be allocated as a  directed grant to SparkNC, Inc., for start-up costs associated with expanding to provide services in additional schools, with the goal of providing services statewide. Specifies that funds remain available until June 30, 2029.

Effective July 1, 2026, and applies beginning with the 2026-27 school year.

Section 1.7

Adds new Part 7A, Extending Learning and Integrated Student Supports Grant Program, in Article 16 of GS Chapter 115C, providing as follows.

Establishes the Extended Learning and Integrated Student Supports Grant Program (Program). Allows nonprofit corporations and nonprofit corporations working in collaboration with local school administrative units operating relevant programs to apply for the Program. Sets out the Program’s purpose as funding high-quality, independently validated extended learning and integrated student support service programs for at-risk students that raise standards for student academic outcomes by focusing on the eight specified areas, including use of an evidence-based model with a proven track record of success, minimizing class size when providing instruction or instructional supports and interventions, and using digital content to expand learning time. Requires DPI to administer the Program in each year in which sufficient funds are available. Requires DPI to use up to $7 million from the At-Risk Student Services Alternative School Allotment each fiscal year to fund the Program; allows using up to $200,000 for administration expenses.

Allows grants to be used to award funds for new or existing eligible programs for at-risk students operated by nonprofit corporations and nonprofit corporations working in collaboration with local school administrative units. Requires a focus on serving: (1) at-risk students not performing at grade level as demonstrated by statewide assessments, (2) students at risk of dropout, and (3) students at risk of school displacement due to suspension or expulsion as a result of antisocial behaviors. Gives priority to models that focus services and programs in schools that are identified as low-performing. Limits grant to up to two years in an amount up to $500,000 each year. Sets out a matching requirement of $3 in grant funds for every $1 in nongrant funds.

Requires grant recipients to report annually to DPI on the expenditure of funds and the progress of the Program, as well as a final report with the specified information. Requires DPI to report annually on the Program to the specified NCGA committee.

Effective July 1, 2026, and applies beginning with the 2027-28 school year.

Section 1.8

Enacts new GS 160D-917 to require zoning regulations to allow siting school buildings primarily used for instructing students that are under the control of a public school unit in areas zoned for commercial use.

Section 1.9

Appropriates $43.3 million in recurring funds beginning in 2026-27 from the General Fund to DPI to be allocated to public school units participating in the Advanced Teaching Roles program to provide salary supplements.

Appropriates $4 million in recurring funds beginning in 2026-27 from the General Fund to DPI to expand the Advanced Teaching Roles grant program. Requires for 2026-27 that grant priority be given to public school units that qualified for a grant in 2025-26 but did not receive it due to insufficient funding. Effective July 1, 2026.

Section 1.10

Requires the State Board to establish the Teacher Evaluation Pilot Program (Program) for 2026-27 through 2029-30. Sets the purpose as establishing a robust set of meaningful teacher professional evaluation tools that support improved teacher professional development, providing opportunities for career advancement for teachers, providing additional insights for accountability for educator preparation programs, and facilitating licensure renewal.

Requires that the State Board, in consultation with listed entities, select by March 15, 2027, at least three professional evaluation tools for use by the local school administrative units, with tools required to meet the specified requirements. Allows local school administrative units to apply to participate in the Program and requires selecting units to participate beginning in the 2027-28 school year and ending in the 2029-30 school year. Allows participating in more than one school year. Allows participants to use one or more of the Professional Evaluation Tools selected by the State Board to determine proficiency for a teacher to maintain their current license status.

Requires the Board to report on the listed items to the specified NCGA committee.

Appropriates $6 million for 2026-27 from the General Fund to DPI to implement the Program. Specifies that the funds remain available until June 30, 2030.

Section 1.11

Requires the State Board to conduct an expedited revision of the NC Standard Course of Study for Healthful Living, Grades K-12 standards to be adopted and implemented beginning with the 2028-29 school year. Requires the revised standards to include standards on: (1) mental health awareness; (2) common mental health conditions, such as anxiety, depression, and trauma, and their warning signs; (3) help-seeking strategies for self and peers, including school and community resources; (4) the neurological basis of addiction; (5) the risks of alcohol, nicotine and vaping, cannabis, opioids, misuse of prescription drugs, and other illicit substances; (6) the relationship between mental health and substance abuse; (7) treatment, recovery, and prevention of mental health disorders, including reducing the stigma surrounding mental health disorders; (8) the effects of social media and other environmental influences on mental health and addictive behavior; and (9) protective factors, coping skills, and sound decision making.

Requires DPI to report on listed issues on the standards to the specified NCGA committee by December 15, 2028.

Section 1.12

Adds new Article 42 to GS Chapter 115C, providing as follows. Enacts GS 115C-650, establishing the AI Instructional Support Program (program). Authorizes public school units to contract with Khan Academy Inc. for use of academic support service Khanmigo, in grades six through twelve, for one-year terms. Describes Khanmigo services. Directs funds be allocated to each unit that decides to participate based on average daily membership and limits units' use of funds to contracting with Khan Academy for the described permitted purposes. Before subsequent contracts may be entered, requires units to perform specified evaluations using six identified data points on the use of the contracted services at the end of the school year. Requires units to submit their evaluations to the Department of Public Instruction (DPI) by July 15 of each year funds are used. Establishes class rostering system requirements for managing access to digital instruction resources and student information systems, and facilitating automated data integration between educational applications and school district systems. Requires DPI approval of class rostering systems. Requires DPI to contract with Khan for 500 Khanmigo licenses for use in schools operated by the Division of Juvenile Justice of the Department of Public Safety (Division). Directs DPI to provide technical support to the Division and requires the Division to comply with contract evaluation requirements in the same manner as public school units. Directs the Office of Learning Research (OLR) at the NC Collaboratory to conduct a study and report to the specified NCGA committee by April 1, 2028, regarding the effectiveness of using Khanmigo. Sets forth directives for the aggregation of evaluation reports and student performance data to be studied. Directs DPI to annually report eight data points to the specified NCGA regarding funds used under the program. 

Appropriates $10,060,560 in recurring funds to DPI for 2026-27 to allocate funds pursuant to new GS 115C-650. 

Section 1.13

Changes the title of Article 17D of GS Chapter 115 from Educator Preparation Programs to Educator Preparation. Reorganizes the Article into Parts. Recodifies GS 115C-269.31 as GS 115C-269.75 and GS 115C-269.32 as GS 115C-269.77. Makes conforming changes to GS 115C-269.5, GS 115C-269.10, GS 115C-269.45, and GS 115C-269.55.

Adds the following to Part 2 of Article 17D.

Establishes the TeachReadyNC Program to increase the number of professionally licensed teachers in the state and improve teacher competency, student outcomes, and teacher retention in the state. Requires DPI to administer TeachReadyNC in collaboration with ApprenticeshipNC. Requires DPI to issue, by November 1 each year, a request for applications from eligible units to participate in TeachReadyNC, beginning in the subsequent school year. Defines eligible unit as a local school administrative unit that is an Advanced Teaching Roles unit. Sets out required content for the applications.

Requires DPI to review applications for participation in TeachReadyNC every three months of each school year following the issuance of the request for applications. Applications are to be approved on a rolling basis for a term of three years as long as the application includes a clear strategy to support apprenticeships that complies with the set requirements. Requires participating units to: (1) be recognized as a registered teacher apprenticeship program under requirements established by the United States Department of Labor; (2) require each apprentice to work full-time in a classroom with an apprentice supervisor; (3) ensure that each apprentice meets the specified requirements related to education, licensing, and teaching; (4) provide each apprentice with the specified annual compensation and financial support for attending an eligible educator preparation program; and (5) provide salary supplements for each apprentice supervisor and each teacher who agrees to become a teacher of record for additional students because of the emergency position conversion allowed under the statute. Sets out the conditions under which a participating unit may be allowed to renew its term in TeachReadyNC.

Allows a participating unit to convert one position allocated to the participating unit for classroom teachers to its dollar equivalent at the salary on the first step of the "A" Teachers Salary Schedule, including benefits, for each apprentice employed by the unit. Funds made available may be used for: (1) salaries for apprentices, (2) annual salary supplements of up to $5,000 for each teacher accepting additional students as a result of an emergency position conversion occurring pursuant to this subsection, (3) the permitted purposes and maximum amounts identified in GS 115C-269.69(b).

Allows, to the extent funds are appropriated for TeachReadyNC, DPI to retain a certain amount for administration of the program. Allows DPI to establish new positions to support the program. Sets out additional DPI duties for the program.

Requires DPI, in consultation with Apprenticeship NC, to report annually to the specified NCGA committee on the current state of TeachReadyNC, including the specified information.

Requires DPI to allocate grant funds, to the extent funds are appropriated, to participating units each fiscal year for each apprentice position. Sets out steps to be taken if there are insufficient funds. Set out limits on the maximum amount of grant funds that can be used on annual salary supplements, program attendance costs, and salary supplements. Provides that funds awarded to a participating unit do not revert and remain available until October 1 of the subsequent fiscal year.

Amends GS 115C-269.25 by requiring the EEP annual reports reported to the State Board to also include specified information on apprentices.

Appropriates $1 million for 2026-27 from the General Fund to DPI to be awarded as grants under the TeachReadyNC program.

Effective July 1, 2026.

Requires DPI to issue the initial request for applications for the TeachReadyNC Program by November 1, 2026, for applications to establish registered teacher apprenticeship programs beginning in the 2027-28 school year. Requires DPI to provide its initial report on the impact of the TeachReadyNC Program by March 15, 2028.

Section 2.1

Establishes the Community College Seamless Skills Initiative (Initiative) to create a CBE model that seamlessly connects high school and community college, as described. Instructs Fayetteville Technical Community College (FTCC) and Wilkes Community College (WCC) to partner to implement the duties of the Initiative. Specifies seven project goals. Provides for a digital wallet as described. Tasks the Community Colleges System Office (Office) with providing ongoing technical support to community colleges participating in the Initiative. Appropriates $3.75 million from the General Fund to the Office for 2026-27 to be allocated to FTCC and WCC for the Initiative, as described. Specifies that the appropriated funds will not revert and will remain available to WCC until the end of 2029-30.

Section 2.2

Establishes the Competency-Based High School and Healthcare and High-Tech Pathways Program (Pathways Program) to create pathways that will utilize competency-based education (CBE). Specifies that pathways will result in obtaining either an associate degree or an industry recognized credential/certification/licensure based on the student's goal of employment or enrollment. Students will decide their college or career track at the end of their junior year with an initial emphasis on healthcare preparation. Instructs Mooresville Graded School District (MGSD) to partner with Mitchell Community College (MCC) to implement the Pathways Program. Establishes a timeline for the Pathways Program. Offers five described flexibilities to the Pathways Program, including permitting MGSD to offer Credit by Demonstrated Mastery assessments and CTE Proof of Learning assessments outside of existing State testing windows and allowing participating students to have access to all community college courses at MCC, regardless of pathway selection. Requires MGSD to partner with a selected a third-party vendor (Vendor) that is an educational support provider as described to develop standards-aligned proficiency scales for all content areas in grades nine through 12 to ensure educators in the participating schools have the tools necessary to successfully transition to CBE approaches. Appropriates $4 million for 2026-27, which would not revert but instead remain available until the end of 2028-29. Allocates the funds to MGSD for three specified purposes, including to contract with experts in CBE and designing stackable credentials.

Section 2.3

Establishes the Lighthouse Match Project (LMP) to increase the percentage of high school students who are (1) eligible to complete college level mathematics upon graduation from high school and (2) able to complete college level math either through dual enrollment while in high school or within the first year of college enrollment. Directs Wake Technical Community College (Wake Tech) to partner with the Wake County Public School System (WCPSS) for high school students at the two named schools to be eligible to participate in LMP at the Wake Tech East campus of Wake Tech. Instructs Wake Tech and WCPSS to partner with SparkNC to align LMP participants' ongoing efforts at the Wake Tech East campus with the design and implementation of LMP. Directs WCPSS, in collaboration with Wake Tech, to contract with Khan Academy Inc. (Khan) for use of the artificial intelligence student tutoring program Khanmigo for the purposes described. Requires Khan, in consultation with Wake Tech and WCPSS, to work to develop a self-paced, competency-based modular math course with appropriate student diagnostics and student assessments based on the college readiness math competencies provided as part of LMP. Appropriates $500,000 from the General Fund to DPI for the 2026-27 fiscal year to contract with Khan for the licenses for the Khanmigo application and to create the course developed as described above. Provides that the appropriated funds will not revert but remain available to accomplish the appropriated purposes until the end of the 2026-27 year. Appropriates $1 million from the General Fund to the Community Colleges Systems Office (Office) for 2026-27 to be used to establish time-limited positions at Wake Tech, as described. Provides that the appropriated funds will not revert but remain available to accomplish the appropriated purposes until the end of the 2029-30 fiscal year.

Section 2.4

Requires the Mooresville Graded School District, Mitchell Community College, Wake Technical Community College, Wake County Public School System, Fayetteville Technical Community College, Wilkes Community College, and SparkNC to collaborate to create a Competency-Based Education and High School Redesign Strategic Network (Network) and requires the Network to provide a way for each entity to share what it has learned and developed regarding CBE and high school redesign. States the goal of advancing the goals of developing a CBE approach to education across the state.

Section 2.5

Establishes the North Carolina Competency-Based Education Innovation Grant and Network Program (Program) to provide funding and support to schools and districts to support the transition to competency-based education (CBE) models that focus on mastery of learning rather than instructional time. Provides that the grant aims to promote innovative instructional practices, flexible assessment models, and systemic shifts to ensure all students progress based on demonstrated proficiency. Sets out Program objects related to redesigning learning pathways, assessment innovation, educator capacity building, and developing strategies for statewide scaling and best practices.

Requires the first phase of the Program begin with the 2026-27 school year and continue until the end of the 2029-30 school year. Sets out application timing and content requirements.

Sets grant awards at $330,000 to each participating school, which must use $95,000 each school year on training on implementing CBE in the school, with reaming funds used for costs associated with the transition to CBE. Specifies that grant funds remain available until the end of the 2029-30 fiscal year.

Requires DPI to select a third-party vendor that meets the specified criteria. Requires working with the vendor to develop publicly available, standards-aligned proficiency scales for all content areas and grade levels. Requires the vendor to provide annual professional development events throughout the state to ensure educators can engage in learning about CBE approaches.

Requires DPI to develop, in collaboration with the vendor, a CBE Network to support long-term transition to CBE and provide support and technical assistance, professional learning opportunities, and access to the CBE network for all grant recipients.

Requires participating schools to submit quarterly progress reports to DPI on implementation of CBE in the school. Requires DPI to submit a final report on the outcomes of Phase One of the Program to the specified NCGA committee by December 1, 2030; sets out what must be included in the report.

Appropriates $5.3 million from the General Fund to DPI to implement this section; specifies that funds remain available until the end of the 2029-30 fiscal year.

Section 2.6

Requires the Office of Learning Research at the North Carolina Collaboratory to study and evaluate the programs and initiatives established in Part II of the act and report to the specified NCGA committee by March 15, 2028, and annually thereafter, culminating in a final report on March 15, 2031, to include at least the three specified matters. Appropriates $450,000 from the General Fund to the Board of Governors of The University of North Carolina for the 2026-27 fiscal year to be allocated to the North Carolina Collaboratory for the Office of Learning Research to conduct the study and evaluation.

Section 3

Effective July 1, 2026, except as otherwise provided.

Amends Article 9C of GS Chapter 143 as follows.

Adds commercial building or structure, private construction inspection, private construction inspection firm, private construction inspector (Inspector), and residential building or structure to the definitions in GS 143-51.8. Expands the acts that constitute "willful misconduct, gross negligence, or gross incompetence" under the Article to include, refusing to accept, without legal authority, a private construction inspection report or private certificate of State Building Code (SBC) compliance that is required to be accepted under law.

Adds the following to the powers of the NC Code Officials Qualification Board (Board) under GS 143-151.12: (1) certification and registration of individuals as qualified private construction inspectors and registration of private commercial inspection firms for the purpose of conducting private construction inspections; (2) ensuring minimum standards and level of education and experience for private construction inspector instructors are met; and (3) establishing criteria to be used by the Office of State Fire Marshal (Office) to verify that private construction inspectors and firms meet the standards of the profession. 

Enacts GS 143-151.14A to require certification to engage in private construction inspection. Provides for a standard private construction inspector certificate (Certificate). Upon successfully passing an examination, provides for issuance of a certificate to building, electrical, mechanical, plumbing, fire, or residential changeout inspectors, with the certificate limiting the scope of practice to the specific inspection area and level. Allows for qualification for more than one standard certificate. Requires the Board to issue a Certificate to an individual currently certified as a Code-enforcement official under the Article for the same type of position and level for which the individual holds a valid Code-enforcement certificate as well licensed architects and engineers, without further examination. Authorizes the Board to require a short course on the Code before issuing a Certificate to an architect or engineer. Requires the Board to adopt rules on the qualifications, certificate levels, experience requirements, examinations, short courses, and other standards necessary to implement the statute. Enacts GS 143-151.14B, requiring annual professional development, as developed by the Board for Inspectors of not more than six credit hours. Authorizes initial professional development courses in the first year a person is certified as an Inspector, not exceeding six credit hours in each area they are certified. Allows the Board to impose continuing education as a condition of reactivating a Certificate. Authorizes the Board to adopt rules to implement the statute.

Expands the conditions under which a certificate issued by the Board is valid under GS 143-151.15 to include persons who are employees or contractors of private construction inspection firms or self-employed Inspectors. Makes conforming changes. Adds application fee of not more than $200 for certification as an Inspector in GS 143-151.16 and a renewal fee of not more than $50. Makes conforming changes. Expands the disciplinary provisions of GS 143-151.17 to Inspectors and private construction inspection firms (Firms). Adds conflict of interest provisions barring Inspectors, from inspecting property where they, their Firm, or a person with whom they have a close relationship with has ownership or a direct financial interest. Bars Inspectors from inspecting property where they or the firm have furnished labor, materials, designs, or other specified items or services for the project. Clarifies that compensation paid to an Inspector or Firm for inspection services does not, by itself, create a prohibited financial interest. Makes technical and conforming changes.

Prohibits, in GS 143-151.18, a person from representing that they are a code enforcement official or Inspector unless they currently hold a valid Board certificate and/or registration (Inspector). Prevents a legal entity from holding itself out as a Firm unless registered under GS 143-151.19A. Prohibits persons from engaging in code enforcement or inspecting unless they hold a valid certificate to do so. Applies to offenses committed on or after July 1, 2027.

Makes conforming changes to GS 143-151.19, concerning records kept by the Board, to account for Inspectors and Firms established by the act. Enacts GS 143-151.19A, requiring registration as an Inspector or Firm before conducting any inspections. Provides for application and submission of an inspection procedure plan. Requires the Board to maintain a public registry with the identifying information of Inspectors and Firms. Allows an Inspector or Firm to amend their registration with the Board within 30 days after any material change in the material required by the statute.  Authorizes registration fee not to exceed $50 for an individual Inspector and $200 for each Firm.

Effective July 1, 2027.

Part II.

Adds private construction inspection, Inspector, and Firm to GS 160D-1101 (definitions pertaining to building code enforcement). Prohibits local governments or the State Fire Marshal (Marshal) from barring inspections conducted by a Firm or Inspector in GS 160D-1102. Enacts GS 160D-1103.1 limiting private construction inspections to only being conducted by an Inspector qualified to conduct the type and level of inspection required for the building, structure, trade, system, or work being inspected. Clarifies that the duties and responsibilities of an inspection department do not include inspections by an Inspector. Increases the department's duties relating to certificates of compliance to include acceptance of such certificates in GS 160D-1104.

Authorizes, in GS 160D-1105, a local government to contract with an Inspector or Firm to conduct inspections. Allows the owner, permit holder, contractor, or other authorized agents to contract with an Inspector or Firm to conduct inspections of residential or commercial buildings and structures for compliance with the SBC. Prevents an employment contract or other device from barring a code enforcement official employed by a local government and certified and registered as an Inspector from engaging in private construction inspection outside of their local government employer’s jurisdiction.

Enacts GS 160D-1105.1 (private construction inspection authorized after delayed local inspection). Defines associated inspection, delayed inspection, and requestor. Allows a requestor (owner, permit holder, contractor, or other authorized agents) to request an inspection from the local inspection department and requires the local inspection department to conduct that inspection within ten business days after the inspection is first requested. Requires a local inspection department to inform the requestor in writing if it is unable to meet the inspection deadline. Authorizes the parties to agree to a different inspection day and time. If all that occurs, then allows the requestor to use an Inspector or Firm to conduct the inspection. Provides for notice of election and amended notices, a written contract between the requestor and the Firm or Inspector, and an inspection report,. Requires the local government and/or the Marshal (if applicable) to accept an inspection report stating that the work complies with the SBC so long as the eight listed conditions are met.

Preserves a local government’s and/or the Marshal’s authority to:

1. Conduct inspections necessary to determine compliance with any local law applicable to the construction of residential or commercial buildings or structures if that local law is not part of the SBC;
2. Conduct acceptance testing of, or to approve, a fire prevention system before issuing a certificate of compliance or temporary certificate of occupancy under new GS 160D-1105.2;
3. To, along with the Marshal, issue a stop work order, notice of violation, or other enforcement action when the local government or Marshal has reasonable cause to believe that construction is being performed in violation of the SBC or that an immediate danger to life, limb, or property exists;
4. Authorize an Inspect to inspect or enforce Code provisions pertaining to boilers or elevators;
5. Reject an incomplete inspection report or a report submitted by an unqualified inspector, or one who is in violation of the conflict-of-interest provisions set forth below or discussed above.

Prohibits an Inspector or Firm from conducting an inspection under the statute if the Inspector, Firm or a person affiliated with is currently employed by, affiliated with, or under common ownership or control with the owner, permit holder, contractor listed on the permit, or authorized agent, other than through the contract for private construction inspection services authorized by the statute. Authorizes the Board to establish by rule a look-back period for prior employment, affiliation, ownership, or control that disqualifies a private construction inspector or private construction inspection firm from inspecting a project. Upon acknowledging receipt of an inspection report, specifies that the local government or Marshal, its inspection departments, and its inspectors are not liable for a claim arising from or attributable to the inspection for which the inspection report was submitted pursuant to the statute.

Clarifies that the statute does not limit the ability of a permit holder to request that the Marshal assign personnel to conduct an inspection. If a request for an inspection has been made and the inspection has not been conducted when an election is made under the statute for the same item of work under the SBC, specifies that the election is not effective until the permit holder or requestor withdraws the request in writing or the Marshal declines to assign personnel to conduct the inspection. Prevents a person from using both a report of an inspection performed by the Marshal or its staff and an inspection report submitted under the statute to establish compliance of the same item of work with the SBC. Directs the local government to return any inspection fee at the conclusion of a project when the inspection fee is done by a Firm or Inspector in new GS 160D-1105.3. If a Firm or Inspector stops or otherwise abandons the inspection work and no substitute is provided, requires the local government to resume responsibility for the inspection upon request. Authorizes the local government to require submission of all accepted private construction inspection reports before resuming inspections and to charge a separate fee for resuming the inspection. Tasks the Board with developing uniform forms for private construction inspections in GS 160D-1105.4. Prohibits a local government from modifying those forms or requiring other information except for requiring a permit number, project number, parcel number, or other local identifier necessary to match the form to the local government's permit record.

Effective July 1, 2027, and apply to inspection requests made on or after that date.

Part III.

Specifies that a member of a local government inspection department is not in violation of GS 160D-1109 (failure to perform duties) when it acknowledges receipt of or accepts an inspection report by an Inspector or Firm or a private certificate of SBC compliance.

Directs a local inspection department to maintain the required notices pertaining to use of an Inspector or Firm under new GS 160D-1105.1, in GS 160D-1110.  Clarifies that the election to use an Inspector or Firm does require a new building permit or amendment of the existing permit. Clarifies that a local government issuing a building permit for a project for which one or more private construction inspections are conducted under new GS 160D-1105.1 should continue to perform any inspection or review that the local government is otherwise authorized or required by law to perform and that is not within the scope of the private construction inspection. Specifies that an election to use a Firm or Inspector is not, by itself, a change or deviation from the application, plans, or permit under GS 160D-1112 (changes in work).

For a project for which one or more private construction inspections are conducted, provides that the inspection department may rely on an inspection report submitted or a private certificate of SBC compliance in determining whether to issue a certificate of compliance under GS 160D-1116. Authorizes an Inspector to issue a private certificate of compliance with the SBC only for the building, structure, unit, trade, system, phase, or portion of the project within the scope of the private construction inspector's certificate, registration, notice, and written contract. Specifies that a private certificate is not a certificate of compliance issued by the inspection department and does not, by itself, authorize occupancy. Directs an Inspector issuing a private certificate of SBC compliance to provide the inspection department with a copy of the private certificate. For a project for which one or more private construction inspections are conducted, authorizes the inspection department to rely on an inspection report submitted or a private certificate of SBC compliance in determining whether to issue a temporary certificate of occupancy. Prohibits an inspection department from withholding a certificate of compliance or temporary certificate of occupancy solely because an inspection report or private certificate of SBC compliance has been submitted by an Inspector.  Authorizes the local government to rely on an Inspector’s inspection report or certificate of SBC compliance as evidence that the inspected work complies with the SBC and are not liable for a claim arising from or attributable to the Inspector’s inspection report or private certificate of SBC compliance. Clarifies that a private certificate of SBC compliance issued by an Inspector does not constitute approval of compliance with zoning, subdivision, stormwater, erosion and sedimentation control, driveway, utility, fire prevention system acceptance testing, or any other local or State law that is not part of the North Carolina State Building Code. Makes organizational and clarifying changes.

Makes conforming change to GS 160D-402 to account for credit or refund of local government inspection fee when a private inspection occurs under new GS 160D-1105.1. Clarifies that GS 143-139.4 does not limit the authority of an owner or other specified person to elect to use a Firm or Inspector under GS 160-1105.1. Specifies, if a request for work has already been made to the Marshal, that the election is not effective until the permit holder or requestor withdraws the request in writing or the Marshal declines to assign personnel to conduct the  inspection. Prevents a person from using both a report of an inspection performed by the Marshal or its staff and an inspection report submitted under the statute to establish compliance of the same item of work with the SBC.

Effective July 1, 2027.

Part IV.

Authorizes the Board and the Marshal to adopt temporary rules and begin rulemaking no later than 90 days after the act’s effective date. Allows a rule to become effective before July 1, 2027, but does not authorize private construction inspection before July 1, 2027. Allows the Board to develop the forms, registration process, the registry, and accept applications for certification and registration before July 1, 2027. A certificate or registration issued before July 1, 2027, does not authorize a person or firm to conduct a private construction inspection before July 1, 2027.

Adds new GS 62-130.1 to prohibit the Utilities Commission (NCUC) from establishing or allowing any retail electric rates that increase an electric public utility’s authorized rate of return on equity without NCGA ratification of an act that specifically approves such rates. Directs NCUC to order suspension of a retail electric rate that would allow such excess revenue recovery for the electric public utility upon filing of such rate. Provides that the suspension order shall remain in effect until the proposed rates are ratified by the NCGA. States that nothing in this section shall limit NCUC’s general authority to oversee electric public utilities and to prevent the charge of unreasonable rates. For retail electric rates ratified by NCGA, authorizes NCUC (1) to disallow the recovery of rates found to be unjust, unreasonable, discriminatory, or in violation of any other applicable law; (2) to impose conditions on the approval of rates; (3) to rescind, alter, or amend an order approving the rates; or (4) to revise or change the rates in a subsequent rate proceeding.

Amends GS 62-133.16(d)(3) to provide that a suspension of proposed rates subject to NCGA ratification under new GS 62-130.1 may exceed 330 days. Makes technical changes.

Amends GS 62-134(b) to except NCUC suspension orders issued for rates subject to NCGA ratification under new GS 62-130.1 from the requirements of this subsection.

Amends GS 62-135(a) to allow electric public utilities subject to new GS 62-130.1 to temporarily put such suspended rates into effect subject to the existing provisions of this section concerning hearing and suspension of rates. Makes technical changes.

Requires NCUC to conduct a study evaluating the cost of equity capital for electric public utilities doing business in North Carolina and sets out four specified considerations for evaluation. Directs NCUC to submit the study to the specified NCGA committees by January 1, 2027.

Appropriates $10,000 for 2026-27 from the General Fund to NCUC to implement this act.

Effective July 1, 2026.

Section 1

Adds new Part 3, “Guaranteed Energy Savings Contracts,” to GS Chapter 143, Article 3B. Provides citations for provisions recodified in new Part 3: GS 143-64.18 (was, GS 143-64.17B), GS 143-64.18D (was, GS 143-64.17D), GS 143-64.18E (was, GS 143-64.17E), GS 143-64.18F (was, GS 143-64.17F), GS 143-64.18J (was, GS 143-64.17G), and GS 143-64.18K (was, GS 143-64.17H).

As part of new Part 3, enacts GS 143-64.18A requiring a governmental unit to issue a request for qualifications (RFQ) before entering a guaranteed energy savings contract. Provides notice requirements for RFQs. Provides minimum content requirements of RFQ.

Requires the governmental unit to select the qualified provider that best meets the needs of the governmental unit based on an evaluation of: (1) demonstrated competence of the provider; (2) provider’s past performance on energy saving projects; (3) technical feasibility of the proposal; (4) the life cycle cost analysis; (5) certification by a licensed professional engineer that proposed measurement and verification protocol is capable of measuring actual savings; (6) the total project cost with a side-by-side comparison if multiple financing options are available; (7) for state governmental units, inclusion of a contract provision that requires an impartial third-party to conduct the annual measurement and verification review and include the third-party’s compensation in the total cost; and (8) any other criteria stated in the RFQ.

Requires the governmental unit to evaluate RFQ responses and develop a shortlist of the most highly qualified respondents. Permits the unit to proceed with the evaluation and selection without resoliciation, if only one response is received from a qualified provider and the unit makes a written determination that resoliciation is unlikely to increase competition. For state governmental units, if only one response is received, the State Energy Office must concur with the determination. Requires a qualified reviewer to review the shortlist and provide the unit with a written evaluation. Provides minimum requirements for that evaluation. Then, the unit must rank the shortlisted respondents, select the highest-ranked qualified provider, and negotiate the terms of the contract. If negotiations are unsuccessful, the unit can proceed to the next-ranked provider.

Requires the qualified provider to: (1) submit, prepare, and make available for public inspection a report that summarizes the estimated costs of installation, maintenance, repairs, and debt service, in addition to estimates of the amounts of energy or operating costs’ reduction, and includes a life-cycle cost analysis and (2) conduct an investment grade audit that includes a life cycle cost analysis of each energy conservation measure in the final proposal, unless the local governmental unit waives the audit requirement, permitted for a contract with a total cost below $250,000. If the audit results are not within 10% (state units) or 15% (local units) of both the guaranteed savings in the proposal and total proposal amount, either the governmental unit or the qualified provider may terminate the project with no additional obligation to the other party. If the governmental unit terminates the project after an audit is conducted and results are within the applicable variance, the unit must reimburse the qualified provider the reasonable cost incurred in conducting the audit, and the results of the audit must become the property of the unit.

Requires the qualified reviewer to review the qualified provider’s final proposal, cost-benefit analysis, and other relevant documents prior to the governmental unit entering a contract. Details process and requirements for the State Energy Office’s completion of such review for state units. Prohibits a unit from entering a contract until the State Energy Office has determined the proposal complies with Article 3B. Clarifies that nothing in GS 143-64.18A limits governmental unit authority as provided in GS Chapter 143, Article 3D.

Amends recodified GS 143-64.18B by (1) adding new subsection (c1) requiring a qualified provider to pay a non-refundable administrative fee of $1,000 to the State Energy Office to be applied to the costs of reviewing contracts and administering the program, within 30 days of entering a guaranteed energy savings contract. Prohibits provider from charging or seeking reimbursement of the administrative fee cost from the governmental unit and prohibits provider from including the cost in the total cost of the contract; (2) amending subsection (d), which provides what costs are included in the total cost, by adding capital funding to the list of funds to be subtracted out of the listed costs provided; (3) removes subsection (f) related to the investment grade audit qualified providers must complete.

Section 2

Makes conforming changes to GS 115C-47, GS 115D-20, GS 133-4.1, GS 143-129.4, GS 143-135.37, GS 160A-20, GS 143-64.12, GS 142-61, GS 142-63, GS 159-151, GS 143-64.17K, GS 142-63, and GS 143-64.17L .

Section 3

Amends GS 143-64.17 to make clear that the definitions apply both to Part 2 and new Part 3 of Article 3B and removes the request for proposals definition. Repeals GS 143-64.17A, related to solicitation of guaranteed energy savings contracts. Makes technical change to GS 143-64.17I through 143-64.17L, deleting the word “Part” wherever it appears and substituting the word “Article.”

Section 4

Requires the Department of Administration (Department) to adopt temporary rules (effective until permanent rules replace them) to implement Sections 1-3 and permanent rules to replace those temporary rules.

Section 5

Defines Financing Disclosure Rule by reference to 01 NCAC 41B .0302 (Solicitation Documents). Requires the Department to implement the Financing Disclosure Rule as provided in this section until the effective date of the revised permanent rule. Provides that solicitation documents must include the estimated cost of financing obtained from the Director of Debt Management, Office of the Treasurer, for state governmental units and permits local governmental units to obtain information on estimated cost of financing from the Office of the State Treasurer or from a qualified provider. Requires the Department to adopt a rule to amend the Financing Disclosure Rule consistent with this section and requires the permanent rule to be substantively identical. Section 5 expires when permanent rules adopted become effective.

Section 6

Defines Federal Funds Certification Rule by reference to 01 NCAC 41B .0305 (Prohibition on Federal Funds). Requires the Department to implement the Federal Funds Certification Rule as provided in this section until the effective date of the revised permanent rule. Provides that when a guaranteed energy savings contract will be paid in whole or in part with federal funds, the agency must certify prior to executing the contract that the use of federal funds complies with all applicable federal requirements. Requires certification and supporting confirmation to be included in the contract documents submitted to the Office of State Budget and Management. Requires written confirmation from one of the listed people to support the certification and that the confirmation’s form is appropriate to the funding source and addresses whether the proposed contract structure, procurement method, and use of funds are permissible under applicable federal award terms. Requires the Department to adopt a rule to amend the Federal Funds Certification Rule consistent with this section and requires the permanent rule to be substantively identical. Section 6 expires when permanent rules adopted become effective.

Section 7

Act is effective July 1, 2026, and applies to requests for qualifications issued on or after that date.

Part I.

Adds new Part 6A, Certain Emergency Response Planning and Operations, to Article 1 of GS Chapter 166A with the purpose of aligning operational authority between certain State agencies and associated emergency response activities. Directs the Office of the State Fire Marshal (Office) to manage firefighting, search and rescue, and hazardous materials response during emergency response. Directs the Office of the State Fire Marshal to support implementation costs with the Insurance Regulatory Fund in accordance with GS 58-6-25. Defines terms.

Sets out twelve powers and duties of the Office (as Lead State Agency) through the State Fire Marshal or their designee, as the designated Emergency Coordinating Officer for certain emergency support functions (ESFs) listed in new GS 166A-19.47, including coordinating State agency activities; preparing State plans for emergencies; promulgating requirements for local plans; developing training programs; conducting resource surveys; coordinating use of private property; preparing for Governor’s executive orders; cooperating with other states, the federal government, and other entities; coordinating communications network; administering grant funds; utilizing effective technology; and maintaining an effective statewide urban search and rescue program.

Requires the State Fire Marshal or their designee be integrated into the North Carolina Emergency Operations Plan (NCEOP) as an Emergency Coordinating Officer (ECO) for ESFs related to firefighting, search and rescue, and hazardous materials response and coordinate emergency response for those ESFs, including collaborating with the State Emergency Response Team. Requires ECO to coordinate mutual aid requests from local government units if requested pursuant to this Part or by contract or agreement.

Provides that nothing in this Part limits the Emergency Management Assistance Compact (EMAC) under Article 4 of this Chapter and the established EMAC Assistance Team. Provides that an ECO request for EMAC resources will be directed to the specified EMAC personnel after a verified state of emergency declaration by the Governor.

Provides that nothing in this Part limits a local fire department’s authority to send personnel and equipment outside territorial limits under Article 83 of GS Chapter 58.

Requires all ESF duties and associated functions of the Office and ECO to be consistent with federal law and policies including specified Presidential Policy Directive and Incident Command System (ICS) best practices.

Sets out ESF responsibilities of the Office for firefighting, search and rescue, and hazardous materials.

Specifies fifteen firefighting responsibilities, including providing guidelines to involved agencies; managing State firefighting activities (including detecting and suppressing fires, providing personnel/equipment/supplies, supporting local agencies, mobilizing resources, and using established procedures); managing mutual aid using the Incident Command System; assisting specified State agencies with fire suppression; ensuring coordination among resource providers and supporting agencies; providing search and rescue resources as may be required in a fire suppression scenario; providing coordination of necessary personnel into the fire suppression area; preparing Fire Management Assistance Grant request for Governor’s signature if recommended by State Forest Service; using any available resources to fulfill its mission as authorized by Article 78A of GS Chapter 58; exercising the primary support function for forest fire suppression; overseeing statewide fire training; coordinating personnel/equipment/resource reallocation as needed during major fire suppression; assuming responsibility for loaned equipment and personnel; providing engineers to assist with damage reassessment; and implementing the North Carolina Association of Fire Chief’s Emergency Response Plan as necessary.

Specifies fourteen search and rescue responsibilities, including providing State support to local governments by using State resources in daily disaster search and rescue activities; managing search and rescue activities including Urban Search and Rescue (USAR) teams, swift water rescue, helicopter-aquatic search and rescue, wilderness search and rescue, mountain search and rescue, and daily situation reports; coordinating and directing local search and rescue efforts; coordinating with local emergency managers and governments; coordinating the deployment of USAR teams with the Emergency Services Branch (ESB) in the event of a catastrophic disaster with widespread building collapse or other qualifying incident; requesting federal USAR assistance if needed; coordinating with ESB for specialized resource database maintained outside the scope of this ESF; maintaining resources database for search and rescue; providing a liaison to local governments and coordinating State, federal, and private search and rescue response; organizing and training emergency management personnel; coordinating additional training for State and local government units and volunteer agencies; ensuring specialized resources are capable through appropriate records; maintaining directory of qualified resources for search and rescue through specified professional organizations; and coordinating air assets to timely transport specialized resources.

Specifies eleven hazardous materials responsibilities, including managing procedures for multi-organization response to manage hazardous material discharge; responding to oil and hazardous substance discharges in accordance with North Carolina Area Contingency Plan as required by specified federal laws; submitting a federal resource request in a large-scale response; coordinating efforts to identify and consult with responsible party; coordinating deployment of State resources to provide operations in accordance with specified federal law; coordinating unified command in conjunction with specified and other State and federal agencies; coordinating with federal on-scene coordinator for command post location; ensuring State Emergency Response Team notifies National Response Center; activating the Environmental Technical Advisory Group as necessary; obtaining and providing data on resources in the State that may be endangered by the discharge; and coordinating with other State agencies responsible for coastal waterways.

Provides that the United States Coast Guard will assume control of response efforts in the event of a release or discharge from an underwater legacy environmental threat within the State’s coastal waters or that could otherwise impact the State.

Directs the Division of Emergency Management to have a representative on the Regional Response team and a representative on another state’s emergency operations center if the incident involves two or more states.

Provides that local Incident Commanders are responsible for situation assessment and determination of resource needs for the emergency, supporting the ICS and National Incident Management System (NIMS) structure.

Provides that local Incident Commanders are responsible for situation assessment and determination of resource needs for an incident in their jurisdiction and requests for firefighting assistance and resources are to be handled in accordance with mutual aid agreements or from the local emergency management agency to the ECO if the requests align with the enumerated ESFs.

Requires the Office to report to the specified NCGA committee and the Governor on a monthly basis during the state of emergency and sets out information to be included in the report.

Amends GS 166A-19.3 to add the Office of State Fire Marshal to the State Emergency Response Team.

Amends GS 166A-19.12 to add an exception for responsibilities listed in new GS 166A-19.46 from the list of the Division of Emergency Management’s powers and duties.

Amends GS 58-6-25 to provide that money credited to the Insurance Regulatory Fund will be used to reimburse the General Fund for money appropriated to the Department of Insurance incurred in connection with ESFs pursuant to new Part 6A of Article 1A of GS Chapter 166A during a declared state of emergency or major disaster.

Amends GS 58-78A-1 to provide that the Office of State Fire Marshal is responsible for controlling ESFs and associated provisions of new Part 6A of Article 1A of GS Chapter 166A, associated duties of membership on the State Emergency Response Team, and associated duties of assisting the Division of Emergency Management (NCEM) and Department of Public Safety (DPS) in updating and maintaining pertinent ESFs within the NCEOP.

Directs the Governor, DPS, NCEM, and the Office to revise the NCEOP to reflect the provisions of Part 6A of Article 1A of GS Chapter 166A by October 1, 2026. Addresses roles for lead technical agencies and support agencies, including changing NCEM from the lead state agency to a support agency for the firefighting ESFs. Effective when the act becomes law.

Directs NCEM and any other agency transferring lead state agency powers under Part 6A of Article 1A of GS Chapter 166A to transfer all personnel and resources to the Office that are necessary for the office to execute the firefighting, search and rescue, and hazardous materials ESFs. Provides that all memoranda of understanding, contracts, and agreements with a lead state agency pertaining to these ESFs are to be transferred to the Office as soon as practicable. Effective when the act becomes law.

Part II.

Reallocates any unspent or unencumbered funds under Section 2A.3(a)(10) of SL 2025-26 ($18 million Hurricane Helene Fire Department and Rescue Squad grant to the Office for listed counties) to new Office of State Fire Marshal Disaster Response Fund.

Adds new GS 166A-19.50, enacting the Office of State Fire Marshal Disaster Response Fund as a nonreverting special fund within the Office within the Department of Insurance. Sets out purpose and uses for the funds (including emergency grants to fire departments and rescue squads, disaster readiness and response). Provides that the Office may use up to 5% of the Fund to administer the fund each year. Allows the Office to use funds for procurement of specified resources if warranted by a large scale emergency or disaster, notwithstanding specified laws. Directs the Office to seek competitive pricing and maintain documentation to the extent practicable. Requires the Office to report on the Fund annually to the specified NCGA committees and division.

Effective July 1, 2026.

Part III.

Authorizes the Office to adopt rules to implement the provisions of this act.

Except as otherwise provided, effective October 1, 2026.

Contains whereas clauses.

Amends GS 110-86 by adding new subdivision (6a) defining a license-exempt family, friend, and neighbor (FFN) child care provider as an individual who (1) provides childcare to one or more children who are not the individual’s own biological, adopted, or step-children, or children the individual is a legal guardian of; (2) operates in a setting, including their home or the child's home, not required to be licensed as a child care facility due to the number of children served, nature of the arrangement, or an applicable exemption; (3) has a preexisting familial, social, or community relationship with the child or child’s family, including but not limited to a grandparent, aunt, uncle, sibling over 18 years old, family friend, or neighbor; and (4) is in compliance with all applicable requirements for legally operating a child care arrangement under State law. Provides that the term does not include individuals required to obtain a license under Article 7 – Child Care Facilities. Clarifies that the subdivision must not be construed to require license-exempt FFN providers to obtain a license, register with the State, or comply with any requirement not otherwise applicable to unlicensed child care arrangements.

Appropriates $30,000 for 2025-26 from the General Fund to the Department of Health and Human Services, Division of Child Development and Early Education (Division) to update public-facing materials to incorporate the definition of license-exempt FFN child care provider and to communicate to the public the legal status of FFN providers and the distinction between license-exempt FFN arrangements and licensed child care facilities, to revise internal legal guidance documents, policy manuals, and staff training materials to reflect the new statutory definition and its application, and to update the Division’s data collection and reporting systems to enable tracking of license-exempt FFN providers as a distinct provider category.

Provides that existing exemptions from child care facility licensing requirements under GS 110-86(2) are retained without modification and that new GS 110-86(6a) must be construed consistently with those exemptions.

Contains whereas clauses.

Adds new Part 10D, Child and Adult Care Food Program (CACFP) for Child Care Providers, to Article 3 of GS Chapter 143B.

New GS 143B-168.40 (a) defines CACFP as authorized by specified federal law and as administered by the State Division of Child Development and Early Education (Division) within the Department of Health and Human Services (DHHS). Defines family, friend, and neighbor (FFN) child care provider as an individual who is legally operating under applicable State law providing child care in specified settings and inclusive of individuals providing (i) child care that falls below the threshold requiring licensure under GS 110-86(3)b., (ii) arrangements excluded from the definition of child care under GS 110-86(2), and (iii) child care holding a license-exempt status recognized by DHHS.

New GS 143B-168.40(b) directs DHHS to take all feasible administrative action to extend CACFP access to FFN child care providers, which may include but is not limited to identifying sponsoring organizations capable of administering CACFP reimbursements to FFN providers, developing application/training/record-keeping requirements, applying for available federal programs, and establishing tiered compliance mechanisms.

New GS 143B-168.40(c) directs DHHS to report annually to the specified NCGA committee and division by July 1 and specifies four report requirements.

New GS 143B-168.40(d) provides that nothing in this statute should be construed to require an FFN provider to participate in CACFP, alter license requirements of GS Chapter 110, or conflict with federal law or regulations governing CACFP.

Directs the Division to publish an implementation plan including timelines, required rule changes, any necessary federal approvals, and resource requirements within 180 days of the act’s effective date.

Directs the Division to submit initial report required by new GS 143B-168.40(c) within 12 months of the act’s effective date.

Appropriates $150,000 for 2025-26 from the General Fund to the Division to develop the required implementation plan, including identifying feasible administrative approaches, determining required resources, outreach to existing and potential sponsoring organizations, piloting application/training/record-keeping procedures, and applying for available federal USDA flexibilities as described in new GS 143B-168.40(b). Appropriates $500,000 in recurring funds for 2025-26 for administrative costs and lists some included costs. Provides that funding will continue until federal CACFP reimbursements can cover these costs, at which point the Division must notify the Office of State Budget and Management and the Fiscal Research Division so appropriations can be reduced accordingly. Specifies that funds do not revert until expended or until June 30 of the second fiscal year following appropriation, whichever is first.

Enacts Part 20A, Article 10, GS Chapter 143B. Cites the Part as the "North Carolina Small Business Capital Access Act". Sets forth five legislative findings; the Part's purpose; and 11 defined terms. Establishes the Office of Small Business Capital Access (Office) within the Department of Commerce (Department) with seven specified duties relating to the administration of the North Carolina Small Business Capital Access Program (Program), including submitting annual reports to the Governor and the NCGA. Provides for appointment of an Office Director by the Secretary of the Department. Sets forth qualifications of the Director. Establishes the 11-member Small Business Capital Access Oversight Board (Board) and charges the Board with providing strategic oversight of the Program as specified, including submitting annual recommendations to the Governor and the NCGA. Provides for Board appointment, terms, and meetings.

Establishes the Program includes seven described components as follows. Requires the Office to develop an application process and compliance guidelines for each component in consultation with the Board and to ensure coordination among Program components. For the Small Business Loan Guarantee Program component, lists the purpose of the component and five minimum required guidelines for the program component, including, among other requirements, requiring guarantees for loans made by qualified lenders to eligible small businesses (defined to mean a business that employs less than 500 full-time employees) and qualifying businesses (defined as a business located in an underserved community, which is a census tract designated as a low-income community according to the most recent data from the US Census Bureau or is located in a rural area as defined by the North Carolina Rural Center) with coverage up to 90% of the loan amount for businesses located in development tier one area or in a persistent poverty census tract and up to 80% of the loan amount for other small business. Establishes and lists the purpose of the North Carolina Qualifying Business Growth Fund component, and sets forth three minimum required guidelines for the Growth Fund, including, among other requirements, requiring direct investments to qualified businesses ranging from $250,000 to $2 million. Provides for the purpose of the CDFI (defined as a Community Development Financial Institution certified by the US Department of Treasury) Support Initiative component and sets forth four minimum required guidelines, including, among other requirements, requiring the provision of direct grants to certified CDFIs operating in the State to be used for loan loss reserves, operating support, technological improvements, product development, and technical assistance capacity. Provides for the purpose of the Small Business Technical Assistance Network component and sets forth four required minimum guidelines, including, among other requirements, the provision of business development services to participants in all Program components and ensuring services are accessible in all regions of the State. Provides for the State Procurement Financing Initiative component and sets forth four minimum required guidelines, including, among other requirements, a bonding assistance program to help contractors secure required performance and payment bonds. Provides for the Small Business Innovation Fund component and sets forth four minimum required guidelines, including, among other requirements, the provision of matching grants of up to 50%, not to exceed $100,000, for recipients of federal Small Business Innovation research and Small Business Technology Transfer awards.

Establishes the Small Business Capital Access Fund (Fund) within the Department to consist of legislative appropriations, federal grant funds, private contributions and donations, loan repayments and investment returns, fess collected from program participants, and interest earnings. Limits use of funds to the purposes establishes by the section, including reasonable administrative expenses. Provides for separate accounting for program components as necessary. 

Directs the Office to develop and implement a comprehensive evaluation framework to measure the impact and effectiveness of the Program. Sets forth eight required performance metrics, including business revenue growth following program participation and default rates and program sustainability. (Appears to) direct the Office to contract for and procure an independent evaluation by a qualified external entity every three years. Requires annual reporting to the NCGA and Governor with six required components, including financial statements of the Fund. 

Reenacts Part 5, Tax Credits for Qualified Business Investments, of Article 4, GS Chapter 105 as it existed immediately before its repeal in 2014. Revises and adds to the Part as follows. Adds the following terms. Defines eligible investor to include a person subject to the franchise tax, income tax, or gross premium tax levied under state law. Defines eligible business as a business that meets the following seven criteria: is registered with the Secretary of State pursuant to state law; has received during the current year or preceding three years assistance from the Office; is headquartered and primarily operating in the State; has been in operation for at least one year; had gross revenues of $5 million or less on a consolidated basis during its most recent fiscal year before filing an application for registration; has 100 or fewer full-time employees; and at least an undetermined number of its full-time employees are new employees and were employed for a yet to be defined number of weeks of year for which a credit is allowed. Modifies subordinated debt to exclude any portion of indebtedness that matures earlier than three years (was, five years) after its issuance. Deletes the terms granting entity; North Carolina Enterprise Corporation; qualified business; qualified business venture; qualified grantee business; qualified licensee business; real estate related business; related person; selling or leasing at retail; and service related industry. 

Amends GS 105-163.011 to repeal subsection (b1), providing for the tax credit previously allowed for a pass through entity that purchases the equity securities or subordinated debt of a qualified business directly from the business. Modifies the tax credit allowed under subsection (b), making the credit available to eligible investors (was, individuals) who purchase the equity securities or subordinated debt of an eligible business (was, qualified business) directly from that business. Sets a new aggregate minimum for the credit at $10,000 and increases the aggregate cap from $50,000 to $500,000. Establishes new subsection (b2) to increase the credit allowed by 10% if the amount generating the credit is invested in an eligible business that is located in a development tier one or tier two area, or a MWBE (might intend qualifying business instead of MWBE). Makes conforming changes.

Amends GS 105-163.012, increasing the cap for the total of all tax credits allowed under the Part for investments made in a calendar year from $7.5 million to $10 million. 

Deletes GS 105-163.013 (providing for registration of qualified business ventures, qualified licensee businesses, and qualified grantee businesses and reporting to the Revenue Laws Study Committee by the Secretary of State). 

Amends GS 105-163.014 to specify that a credit under the Part is forfeited when, among other described events, (1) the eligible business received assistance pursuant to state law as a result of providing false information to the Office and assistance was withdrawn as a result; (2) within three years (was, one year) after the investment was made, the taxpayer transfers any of the qualifying securities received therefrom to another person or entity, subject to three listed exceptions; or (3) within three years (was, five years) after the investment was made, the eligible business in which the investment was made makes a redemption with respect to the securities received in the investment. Deletes subsection (d1), which provided an exception to forfeiture for qualified business ventures engaging primarily in motion picture film production.

Deletes the previous sunset provisions set forth in GS 105-163.015.

Appropriates $50 million in recurring funds from the General Fund to the Department beginning with 2026-27 to establish and implement the Program. Provides that the funds do not revert. Allocates the funds in specified amounts to the seven components of the Program. Directs the Department to adopt implementing rules.

Provides a severability clause. 

Effective July 1, 2026. Requires the Office Director be appointed within 60 days of that date and the Board be appointed and hold its first meeting within 90 days of that date. Requires the Office to develop and publish program guidelines for all Program components within 180 days of the effective date. Requires the Office to implement the Small Business Loan Guarantee Program, the CDFI Support Initiative, the Small Business Technical Assistance Network, and a unified application system for all components within one year of the effective date. Directs the Office to implement the MWBE Growth Fund (appears to intend the North Carolina Qualifying Business Growth Fund), the State Procurement Financing Initiative, and the initial regional innovation hubs within two years of the effective date. 

Amends GS 136-33 to add new subsections (d) and (e). New subsection (d) requires the Department of Transportation (DOT) to approve or deny a permit for a new outdoor advertising sign within 30 days of receiving the completed application (complete if it has all information and supporting documents required by DOT’s rules), all required fees, and documentation. If DOT does not provide written notice of its decision within 30 days, the application must be deemed approved and DOT must issue the permit. New subsection (e) prohibits DOT from revoking an outdoor advertising permit for a first-time violation of Article 11 or DOT rules, except as provided in GS 136-133.1(i). Requires DOT to provide written notice to a permit holder and at least 60 days to cure a subsequent violation associated with the same permit before revoking it. Permits DOT to pursue any other lawful remedies during the cure period. Clarifies that subsection (e) does not limit DOT’s authority to address immediate threats to public safety or fraud in the application process.

Amends GS 136-138 by adding limitations on DOT’s delegation authority. Requires any amendment or modification of the January 7, 1972, agreement between the State and US DOT implementing the federal Highway Beautification Act of 1965 to have prior approval of NCGA by joint resolution to be effective. Prohibits DOT from delegating or transferring permitting, enforcement, or other core regulatory authority under Article 11 to any county, municipality, or other political subdivision of North Carolina. Clarifies that this does not prohibit DOT from cooperating with local governments or enforcing local ordinances consistent with Article 11.

Amends GS 136-133.1 by:

(1) Removing all current text of subsection (a) concerning limitations on the cutting or removal zone for vegetation and replacing it with a provision allowing the owner of an outdoor advertising sign permitted under GS 136-129(4) or 136-129(5) to obtain an annual vegetation maintenance permit from DOT upon payment of a $400 fee;

(2) Removing all current text of subsection (b) and replacing it with a provision allowing the owner and owner’s designees to cut, thin, prune, remove, or maintain any tree, shrub, or underbrush within the maximum cut or removal zone for each sign face at any time during the permit year, upon issuance of the annual vegetation maintenance permit;

(3) Removing all current text of subsection (c) concerning submission of a site plan and replacing it with a provision requiring native dogwoods to be preserved, prohibiting any person from cutting or removing a native dogwood under GS 136-133.1. Clarifies that all other vegetation within the authorized zone can be cut, thinned, pruned, removed, or maintained without further application, site plan, tree survey, or additional fees;

(4) Removing all current text of subsection (d) concerning removal of existing trees and replacing it with a provision that states that the annual vegetation maintenance permit is valid for one year from the issue date and it may be renewed annually upon payment of a $500 fee;

(5) Removing all current text of subsection (e), which allowed removal of trees and vegetation of any age in the cut or removal zone upon submitting a plan for beautification and replanting and replacing it with a provision that clarifies that GS 136-133.1 is the sole authority for vegetation cutting or removal associated with outdoor advertising signs and that all prior requirements for selective vegetation removal permits, caliper-inch fees, replanting plans, and related processes are repealed and replaced by the annual permit process; and

(6) Removing all current text of subsection (f) concerning pruning of tree branches in the highway right-of-way and replacing it with a provision permitting an owner of an outdoor advertising sign permitted under GS 136-129(4) or 136-129(5) or owner’s designees to apply herbicides from the private property side along the fence line for the purpose of controlling vegetation encroachment. Defines fence line as the boundary line between the private property the outdoor advertising is located on and the adjacent state highway right-of-way. Limits use of applicators by an owner or designee to include only those licensed by the NC Department of Agriculture and Consumer Services and requires compliance with all federal and state pesticide laws and rules. Limits application to five feet into the right-of-way and prohibits its application to native dogwoods or trees with a diameter of four inches or more, measured six inches from the ground.

Amends GS 136-133.2 by (1) removing all current text of subsection (a) and replacing it with a provision that requires DOT to approve or deny an application for an annual vegetation maintenance permit, including the required $400 fee, within 30 days of receiving the application and provides that if DOT fails to provide written notice of its decision within 30 days, the application must be deemed approved and the permit must be issued and (2) removing all current text of subsection (b) and replacing it with a provision permitting DOT to deny an application only for failure to pay the required fee or failure to hold a valid outdoor advertising permit under GS 136-129(4) or 136-129(5).