Conference report replaces the third edition in its entirety with the following.

Makes conforming changes to act’s long and short titles.

Part I.

Section 1.1.

Specifies that if Senate Bill 257, 2025 Regular Session (the 2026 Appropriations Act) becomes law, then amends Section 5A.2(a)(2)a to update the statutory cross reference to the 2026 Budget for the $8 million previously allocated for capital recovery funds for public school facilities. Directs, that notwithstanding the 2026 Budget and related documents, of the programs and funds identified to be transferred to the Helene fund in Section 5A.2(a)(2), if a specified budget fund has insufficient funds to satisfy the specified transfer, then the Department of Public Instruction (DPI) must fully realize the total amount of Helene-related reductions, from prior Helene related appropriations, as specified.

Section 1.2.

If S 257 becomes law, then reduces the amount that the State Controller must transfer under the specified budget codes in Section 5A. l l(a) from $5 million to $4.5 million to The Office of State Budge and Management (OSBM) for the Town of Fair Bluff for the riverwalk project that was destroyed.

Part II.

Section 2.1.

If S 257 becomes law, then amends Section 7.60(a) so that the savings realized are from students previously attending a public school using scholarship grants to attend a nonpublic school (was, students previously attending nonpublic schools to enroll in private schools).

Section 2.3.

If S 257 becomes law, then modifies the following funds appropriated to DPI for 2026-27: (1) the reduction in requirements of DPI for State Textbook Fund Sunset, set forth in the specified budget codes, is reduced by $836,594 in recurring funds, with the total revised reduction $59,409,859; and (2) the reduction in receipts by DPI in the specified budget codes is reduced in those same amounts.

Section 2.4.

If S 257 becomes law, then makes the following changes to Section 7A.7 (pertaining to principal salaries). Sets out an annual salary schedule for principals from July 1, 2026, to December 31, 2026, ranging from a base of $80,126 for principals with an average daily membership of 0-200 to an exceeded growth of $120,188 with an average daily membership of over 1,601. Directs that a principal’s placement on the applicable salary schedule is determined according to the average daily membership of the school supervised by the principal, and the school growth scores, for each school the principal supervised in at least two of the prior three school years, regardless of a break in service, and provided the principal supervised each school as a principal for at least a majority of the school year. Specifies that a principal is paid on the exceeded growth scale when school growth scores show the school or schools exceeded expected growth in at least two of the prior three school years. Specifies three circumstances that allow the principal to be paid on the met growth scale, and two circumstances that allow the principal to be paid on the base column. Makes conforming changes to the 2026-27 principal annual salary schedule so that it only applies from January 1, 2027, to June 30, 2027. Changes the date by which DPI must provide a salary supplement to January 31, 2027 (was, October 31, 2026, and March 31, 2027). Replaces references to the October 31, 2026, salary supplement with the 2026 Principal Annual Salary Schedule and the March salary supplement with the payment of the January salary supplement to the 2027 Principal Annual Salary Schedule.

Section 2.5.

If S 257 becomes law, then the following funds appropriated to the Board of Governors of The University of North Carolina for the 2026-27 are modified as follows: (1) the described budget code is increased by $2.123 million in nonrecurring funds and $1million in recurring funds to be allocated to the University of North Carolina at Chapel Hill for the Mountain Area Health Education Center and (2) the described budget code for Healthcare Workforce Programs Expansion is reduced by $1 million in recurring funds and $500,000 in nonrecurring funds.

Section 2.6.

Extends the effective date for Section 2.1 (pertaining to the residency determination process for admission of the NC School of Science and Mathematics) in SL 2026-9 from the 2027-28 school year to the 2028-29 school year.

Section 2.7.

If S 257 becomes law, then reallocates $1 million in nonrecurring funds appropriated to the Board of Governors of The University of North Carolina and allocated to the University of North Carolina at Greensboro for the 2026-2027 fiscal year for its "Battery Research, Innovation, and Green Energy Harvesting Technology (BRIGHT) Institute" to its "Battery Research, Innovation, and next-Gen energy Harvesting Technologies (BRIGHT) Institute" for the purposes described in that item.

Section 2.8.

If S 257 becomes law, then removes the requirement in GS 115C-562.5 (nonpublic school requirements pertaining to opportunity scholarships), as amended by the act, that test performance data must be submitted to the Authority by July 15 of each year by the nonpublic school.

Part III.

Section 3.1.

If S 257 becomes law, then repeals Section 9E. l9 of the 2026 Budget (modifying GS 108A-58.3, pertaining to cost-sharing) and instead makes the following changes to GS 108A-58.3, as enacted by Section 3C.16 of SL 2026-1, effective July 1, 2027. Exempts dialysis, innovations waiver services, and traumatic brain injury waiver services from the requirement that the Department of Health and Human Services (DHHS) establish all Medicaid copayments at the maximum allowable under federal law.

Section 3.2.

If S 257 becomes law, then extends the effective dates under Section 9D.4 (pertaining to childcare subsidy rate changes) from July 1, 2026, to October 1, 2026.

Section 3.3.

Specifies that if Senate Bill 595 (Various Revenue Law Changes), 2025 Regular Session, becomes law, adds the following to GS 108A-117.l (transaction delays and refusals), as enacted by the act. Specifies the rights and remedies under the state are in addition to any rights and remedies for which the parties have contracted. Nothing in this statute limits any contractual rights or remedies.

Section 3.4.

If S 257 becomes law, then Section 9G.6 is amended as follows. Modifies two of the four factors that DMH/DD/SUS must use as part of its competitive, best-value procurement to identify a pool of drug manufacturers with which it may contract with so that DMH/DD/SUS must evaluate the availability of and reliable supply of intranasal or intramuscular opioid antagonist products (was, intranasal and intramuscular opioid antagonist products). Clarifies that the provisions of Section 9G.6 apply only to funds allocated in subdivision (a)(3) of Section 9G.5 (was, Section 9G.5).

Section 3.5.

If S 257 becomes law, then: (1) directs the State Controller to transfer $500,000 for 2026-27 from the described budget code to OSBM for a directed grant to the Boys and Girls Homes of North Carolina, Inc., a nonprofit corporation, for their Lake Waccamaw campus and (2) reduces the funds provided as a directed grant to the Boys and Girls Homes of North Carolina, Inc., for Carolyn's Kaleidoscope Child Advocacy Center by $500,000 so it can instead be used by the Boys and Girls Club, as described above.

Section 3.6.

If S 257 becomes law, then decreases funds for Dolly Parton's Imagination Library by $1 million for 2026-27.

Part IV.

Section 4.1.

Requires that $750,000 of the funds allocated to Warsaw by Section 12.9(e)(87) of SL 2022-74, as amended, be transferred to OSBM for a directed grant to Warsaw for land purchases related to the expansion of the Town’s wastewater treatment system.

Section 4.2.

Provides that if S 257 becomes law, then Section 12.3(a) (amending SL 2021-180 by changing the allocation of $801,983 from Valdese for extension of water and sewer lines to Burke County for water and wastewater infrastructure projects) is repealed.

Section 4.3.

If S 257 becomes law, then specified funds allocated to the Occupation Safety and Health Division of the Department of Labor may be used by the Commissioner of Labor to support additional positions to perform work considered by the Commission to be necessary and advisable to carry out the Department’s statutory duties.

Section 4.4.

If S 257 becomes law, amends GS 143B-437.012(d)92c)c. by amending the definition of a pharmaceutical manufacturing employer for purposes of eligibility under the Job Maintenance and Capital Development Fund to require that the business agree to create and maintain at least 500 new full-time jobs in the county in which the project is located over a period of time spanning 24 months before entering the agreement through the terms of the agreement (was, for the full term of the grant).

Section 4.5.

Allows funds allocated to New Hanover County for water and wastewater projects to be used by the county for any water or wastewater infrastructure project.

Section 4.6.

If S 257 becomes law, then from the funds appropriated to the Department of Natural and Cultural Resources, the allocation to the Complete the Trails Fund is reduced by $5,516,000 in nonrecurring funds, and that amount is allocated instead to the Great Trails Fund.

Section 4.7.

If S 257 becomes law, then of the funds appropriated to the Department of Natural and Cultural Resources for the Great Trails Fund, $650,000 for 2026-27 is transferred to OSBM for the following directed grants: (1) $100,000 to Hope Mills, (2) $50,000 to the Richmond County Sheriff’s Department, and (3) $500,000 to Baptist Children’s Homes of North Carolina Inc.

Section 4.8.

If S 257 becomes law, Section 11.13 (exempting the Utilities Commission staff from the Human Resources Act) is repealed.

Effective October 1, 2026, if S 1041 (Public Workforce Modernization Act) becomes law, repeals Sections 5.9(f), (g), and (h), which also concerned the Utilities Commission employees.

Part V.

Section 5.1.

If S 257 becomes law, then GS 7A-45.1 and Section 16.24 are amended by correcting cross-references to reflect all of the changes made to GS 7A-45.1 by the act.

Section 5.2.

If S 257 becomes law, Section 17.12 (requiring the Department of Adult Correction to eliminate positions from non-healthcare-related divisions that have been vacant for more than one year) is repealed.

Part VI.

Section 6.1.

If H 1126 (2026 DST Admin/Technical/Clarifying Changes) and S 1041 both become law, then GS 126A-15 is amended so that the definition of Specialized Treasurer's Office employees also includes designated employees under GS 135-6(g1) or GS 128-28(h1). Also requires the Revisor of Statutes to replace GS 126-5(c13) with GS 126A-15(6) in GS 135-6(g1)(1) and GS 128-28(h1)(1). Effective October 1, 2026.

Section 6.2.

Adds the following if S 257 becomes law.

Enacts new Section 26.10 providing as follows. Requires that of the funds appropriated in the act to OSBM—Special Appropriations for 2026-27, OSBM must allocate the following directed grants: (1) $1 million to Book Harvest, (2) $2.5 million to Camp Grier, (3) $500,000 to Yanceyville for capital projects, (4) $200,000 to the Lenoir County Sheriff's Office for capital improvements or equipment, (5) $500,000 to Charlotte Healthcare Coalition Inc., (6) $200,000 to Care Ring Inc., (7) $100,000 to Southeastern Healthcare of North Carolina Inc., (8) $10,000 to Cabarrus County for Odell Volunteer Fire Department #2.

Also amends the following directed grants allocated by OSBM—Special Appropriations for 2026-27: (1) increases the grant to Yanceyville for water and wastewater infrastructure; (2) changes the grant to the Friends of Craven County Sheriff’s Office to Craven County for the same purposes; (3) reduces the grant to Craven County for various capital improvements; (4) increases the grant to Craven County for the sheriff’s office for vehicles and related equipment; (5) reduces the grant to Greensboro for water and wastewater infrastructure; (6) reduces the grant to the Greensboro Science Center; (7) reduces the grant to Guilford Technical Community College; (8) reduces the grant to Lenoir County for the Neuseway Nature Center Campground; (9) reduces the grant to Mayodan for Washington Mills Park; (10) reduces the grant to Pleasant Garden for water and wastewater infrastructure; (11) reduces the grant to Yanceyville for capital improvements at the airport; (12) reduces the grant to the Ankise Miheret Bata Lemariam Ethiopian Orthodox Tewhedo Church for their youth school; (13) reduces the grant to Healthstar Community Care; (14) reduces the grant to the Diaper Bank of NC; (15) relocates the grant to ECU for a merit-based scholarship for students attending the fields of finance and artificial intelligence, with preference given to students from Onslow County, to the ECU Business School; (16) changes the use of the grant to Rutherford County—Sheriff’s Office Capital from the stated purposes to renovation of the Command Center; (17) requires that the directed grant to the NC Sickle Cell Syndrome Program in DHHS instead provide funds as a grant to the same program; (18) requires that the directed grant to the Sickle Cell Partners of the Carolinas be allocated to the Sickle Cell partners of the Carolinas; (19) changes the use of the grant to Iredell memorial Hospital Inc. for mental health beds to renovations and repairs to facilities within the System; (20) reallocates the grant to King for parking improvements so that it is allocated as a directed grant to the City; (21) reduces the grant to Rowan County for various purposes and requires that it be allocated to all of the listed volunteer fire departments except Odell Volunteer Fire Department #2; (22) reallocates the grant to Marvin Ridge High School Academic Booster Club as a directed grant to the Mavin Ridge High School Athletic Booster Club; (23) reallocates the grant to Fire 14 Revolution Inc. as a directed grant to the same corporation; (24) reallocates the grant to Martin County for a rural emergency care center to the University Health Systems of Eastern Carolina Inc. for the same purpose; (25) requires that the grant to Carteret County General Hospital Corporation for a medical facility in Emerald Isle be allocated to the same entity for medical facilities; (26) changes the title of the grant to Blue Ridge Healthcare System Inc. and requires that it be allocated for infrastructure, equipment, and expansion project needs; (27) allows the grant to Burke River Trail Association for capital improvements to also be used for trail projects and expansion; and (28) reallocates the grant to Burke County—Sheriff’s Office for vehicles and other equipment to Burke County instead.

Part VII.

Section 8.1.

If S 257 becomes law, Section 41.2 is amended by correcting internal cross-references.

Section 8.2.

If S 257 becomes law, Section 41.17 is amended by adding that sworn law enforcement employees of the State Bureau of Investigation and Alcohol Law Enforcement whose salaries are not set in the section on June 30, 2026, will receive a 13% raise in the 2026-27 fiscal year, effective July 1, 2026.

Section 8.3.

If S 257 becomes law, then GS 126-5(c1)(8) is amended to exempt from GS Chapter 126 [except as to Articles 6 (Equal Employment and Compensation Opportunity; Assisting in Obtaining State Employment) and 7 (The Privacy of State Employee Personnel Records)], UNC legal affairs professionals, health affairs professionals, and institutional development professionals. Makes those same changes if S 1041 becomes law effective October 1, 2026.

Part IX.

Section 9.1.

If S 257 becomes law, Section 42.1 is amended by increasing the amount for the DPS23-3 and DPS23-7 projects. Also makes changes to those projects under Section 42.2.

Part XI.

Section 11.2.

If S 257 becomes law, then Section 44.3(b) is amended by adding that for the purposes of applying the aggregate annual hospital sales tax refund amounts under GS 105-164.14 and GS 105-467 for fiscal years beginning July 1, 2026, the amounts are to be pro-rated on a daily basis and applied as follows: (1) for refunds issued for purchases made on or after July 1, 2026, and before the date this section becomes law, the portion of the aggregate annual refund amounts attributable to this period must be administered as the law existed before the section’s effective date and (2) for refunds issued for purchases made on or after the effective date of this section, the remainder of the aggregate annual refund amounts must be administered according to GS 105-164.14(b)(1).

Section 11.3.

If S 257 becomes law, Section 44.4 is amended by amending GS 105-251.2 by requiring that a person purchasing electricity for use at a qualifying datacenter or an eligible internet datacenter within 30 days of the end of each quarter provide the amount of tax paid on the electricity to the Secretary of Revenue.

Also amends GS 105-164.44K by also subtracting from the 44% of the net proceeds of the tax on electricity that is to be distributed to cities the amount of net proceeds derived from the tax paid on sales of electricity for use at qualifying datacenters and eligible internet datacenters.

Also amends the effective date of Section 44.4 so that it applies to the first billing period that is at least 30 days after enactment and that starts on or after the section’s effective date (was, applies to electricity billed on or after the section’s effective date for electricity sold on or after that date).

Part XII.

Section 12.1.

If S 257 becomes law, then the totals of Part II of the act are adjusted according to this act.

Section 12.2.

Effective July 1, 2026.