Senate committee substitute to the 1st edition replaces the content of the previous edition with the following and makes conforming title changes.

Part I.

Requires the State Controller to transfer $1,140,148,886 for 2025-26 to the Savings Reserve.

Reduces the funds appropriated pursuant to GS 143C-5-4(b) for the 2025-2027 fiscal biennium to Future Building Reserves for the building and operating expenses of State agencies by $42,206,909 in recurring funds for each year of the 2025-27 fiscal biennium.

Part II.

Section 2.1

Requires the State Controller to transfer $40 million for 2025-26 from the State Emergency Response and Disaster Relief Fund to the State Match Fund. Appropriates $40 million for 2025-26 from the State Match Fund to the Department of Public Safety, Division of Emergency Management, to provide the nonfederal share for Federal Emergency Management Agency disaster recovery programs for qualifying disasters that occurred before Hurricane Helene.

Section 2.2

Requires that, in conjunction with previously enacted funding for providing necessary relief and assistance to citizens of this State from Potential Tropical Cyclone #8 and Tropical Storm Debby, the State Controller transfer $20 million for 2025-26 from the State Emergency Response and Disaster Relief Fund to the OSBM Disaster Relief Reserve. Appropriates the same from the OSBM Disaster Relief Reserve to the Office of State Budget and Management to allocate to Robeson County for State matching requirements for federal funding for the community-led Lumber River Basin Coalition waterway restoration project to mitigate damage from those storms. Requires that remaining unspent funds appropriated under this section revert to the Savings Reserve on June 30, 2027.

Part III.

Section 3.1

Appropriates the following recurring amounts from the General Fund to the Community Colleges System Office for each year of the 2025-2027 fiscal biennium: (1) $94,935,267 in total requirements and (2) $19,936,664 in receipts. Requires these appropriations, resulting in a total net appropriation of $74,998,603 in recurring funds, to be used to account for an increase in enrollment at community colleges in the State.

Section 3.2

Appropriates from the General Fund to the Department of Public Instruction (DPI) $104,248,624 in recurring funds for each year of the 2025-2027 fiscal biennium for changes in average salaries, special population headcounts, supplemental funding in low-wealth counties, and other technical adjustments.

Section 3.3

Appropriates from the General Fund to the UNC Board of Governors $46,375,508 in recurring funds for each year of the 2025-2027 fiscal biennium to be allocated to the UNC constituent institutions to account for increased enrollment at those institutions.

Section 3.4

Appropriates from the General Fund to the UNC Board of Governors $9,500,000 in recurring funds for each year of the 2025-2027 fiscal biennium to account for increased enrollment of undergraduate resident and nonresident students receiving reduced tuition rates under the NC Promise Tuition Plan at Elizabeth City State University, Fayetteville State University, the University of North Carolina at Pembroke, and Western Carolina University.

Section 3.5

Appropriates from the General Fund to DPI $3,984,491 for the 2025-2026 fiscal year to provide additional funds to the ADM Contingency Reserve to fund growing public school units.

Section 3.6

Appropriates from the General Fund to DPI $9,400,000 in recurring funds for the 2025-2026 and 2026-2027 fiscal years to increase funding for the Uniform Education Reporting System for costs associated with transitioning to a new student information system.

Section 3.7

Appropriates from the General Fund to the UNC Board of Governors specified amounts to support the operation and maintenance of completed capital projects at North Carolina State University, UNC-Chapel Hill, and the North Carolina School of Science and Mathematics.

Section 3.8

Allows of the funds appropriated to the UNC Board of Governors and allocated to the State Education Assistance Authority for need-based scholarships for students attending private institutions of higher education that are unexpended at the end of the 2024-2025 fiscal year, the Authority to reallocate up to $2,100,000 in nonrecurring funds for the 2025-2026 fiscal year to instead support scholarships for children of wartime veterans awarded for the spring 2025 academic semester and for the 2025-2026 academic year.

Section 3.9

Appropriates from the General Fund to the Community Colleges System Office $5 million in nonrecurring funds for each year of the 2025-2027 fiscal biennium to provide funds to Wilson Community College to support the operation of its biologics training center.

Section 3.10

Appropriates from the General Fund to the UNC Board of Governors for each year of the 2025-2027 fiscal biennium, $2,800,000 in recurring funds to support tuition grants for eligible high school graduates of the North Carolina School of Science and Mathematics and the UNC School of the Arts.

Section 3.11

Requires DPI, for the 2025-2027 fiscal biennium, to use $82,100 per fiscal year of lapsed salary funds to provide dedicated operating funds for the Charter Schools Review Board, including funds for meeting expenses, non-employee travel and subsistence reimbursement, and legal services. Allows legal counsel retained by the Review Board and funded by this section to provide litigation services to the Review Board.

Section 3.12

Enacts new GS 116-36.10 establishing the Rural Residency Medical Education and Training Fund (Fund) to support training and residency programs at medical schools and health affairs programs operated by UNC constituent institutions. Specifies that the Fund consists of funds appropriated by the NCGA. Requires the UNC Carolina System Office to allocate to the Rural Residency Medical Education and Training Fund all funds that were appropriated to the Board of Governors pursuant to SL 2023-134 for the Rural Residency Medical Education and Training Fund. Effective June 30, 2025.

Section 3.13

Allocate funds in the specified amounts from the Education Lottery Fund for the 2025-2027 fiscal biennium to Noninstructional Support Personnel, Pre-kindergarten Program, Public School Building Capital Fund, Needs-Based Public School Capital Fund, Public School Repair & Renovation, Scholarship Reserve Fund for Public Colleges and Universities, Children of Wartime Veterans Scholarship, and School Transportation. Reduces funds appropriated under GS 143C-5-4(b) to the Longleaf Commitment Community College Grant Program from the Escheat Fund for each year of the 2025-2027 fiscal biennium by $12,375,000 in recurring funds. Reduces the funds appropriated for the program from the General Fund for each year of the 2025-2027 fiscal biennium by $125,000. Reduces funds appropriated pursuant to GS 143C-5-4(b) to the Children of Wartime Veterans Scholarship from the Escheat Fund for each year of the 2025-2027 fiscal biennium by the sum of $11,070,964 in recurring funds. Appropriates from the Escheat Fund to the Need-Based Scholarship for Public Colleges and Universities program $96,445,964 in recurring funds for each year of the 2025-2027 fiscal biennium. Reduces the funds appropriated pursuant to GS 143C-5-4(b) to the Need-Based Scholarship for Public Colleges and Universities program by $73 million in recurring funds for each year of the 2025-2027 fiscal biennium. Reduces the funds appropriated pursuant to GS 143C-5-4(b) to DPI for the State Public School Fund for school transportation by $160,807,612 in recurring funds for the 2025-2026 fiscal year and by $164,647,612 in recurring funds for the 2026-2027 fiscal year.

Section 3.14

Amends Section 2A.4 of SL 2024-57, which appropriates funds to East Carolina University, University of North Carolina at Asheville, University of North Carolina at Greensboro, University of North Carolina at Pembroke, and Winston-Salem State University to offset enrollment-related funding losses, by adding that these funds do not revert at the end of the 2024-25 fiscal year and remain available until the end of the 2025-2026 fiscal year. Effective June 30, 2025.

Part IV.

Section 4.1

Appropriates from the General Fund to the Department of Health and Human Services, Division of Health Benefits, $640,000,000 in recurring funds and associated receipts for each year of the 2025-27 fiscal biennium to adjust Medicaid funding to account for projected changes in enrollment, enrollment mix, service and capitation costs, and federal match rates, as well as the implementation of the Children and Families Specialty Plan in December 2025.

Section 4.2

Enacts new GS 105-228.5C requiring the Secretary of Revenue, each fiscal year, to quarterly transfer from the State insurance tax net collections to the State Treasurer for the Health Advancement Receipts Special Fund, the gross premiums tax offset amount, adjusted as provided based on whether the amount is negative. Sets out provisions governing the calculation and certification of the amount. Makes conforming changes to GS 108A-147.11 (health advancement reconciliation adjustment component) and GS 143C-9-10 (Health Advancement Receipts Special Fund). Sets Section 1.6(d) of SL 2023-7 (which stated the NCGA’s intent to appropriate, for each fiscal year, recurring funds to the Department of Health and Human Services, Division of Health Benefits, equaling the total of the gross premiums tax offset amount calculated under GS 108A-147.12(b) for all four quarters of the State fiscal year) to expire on June 30, 2025. Reduces the appropriation to the Department of Health and Human Services, Division of Health Benefits, as provided under GS 143C-5-4, by $22,261,000 in recurring funds for each year of the 2025-2027 fiscal biennium.

Section 4.3

Appropriates from the General Fund to the Department of Health and Human Services, Division of Central Management and Support, $12,192,124 in recurring funds for each year of the 2025-2027 fiscal biennium to provide increased funding for implementation of the Transitions to Community Living Initiative Plan designed to achieve compliance with the 2012 US Department of Justice Settlement. Sets out how the fund are to be allocated.

Section 4.4

Appropriates from the General Fund to the Department of Health and Human Services, Division of Health Benefits $49.2 million in recurring funds and associated receipts and $34.4 million in nonrecurring funds and associated receipts for each year of the 2025-2027 fiscal biennium to be used for contracts needed to operate the State's Medicaid managed care program.

Section 4.5

Appropriates from the General Fund to the Department of Health and Human Services, Division of Central Management and Support, $1,816,894 in recurring funds for each year of the 2025-2027 fiscal biennium for statewide operations and maintenance of the new Partnership and Technology Hub (PATH NC) child welfare information technology system.

Section 4.6

Requires that the Department of Health and Human Services, Division of Health Benefits (DHB), receivables reserved at the end of the 2025-2026 and 2026-2027 fiscal years be accounted for as nontax revenue for each of those fiscal years. Requires for the 2025-2026 fiscal year, that the Department of Health and Human Services deposit $171.4 million, and for the 2026-2027 fiscal year, deposit $109 million from its revenue with the Department of State Treasurer to be accounted for as nontax revenue. Provides that the deposits represent the return of advanced General Fund appropriations, nonfederal revenue, fund balances, or other resources from State-owned and State-operated hospitals that are used to provide indigent and nonindigent care services. Requires that the return from State-owned and State-operated hospitals to the Department of Health and Human Services be made from UNC hospital and from all State-owned and State-operated hospitals, other than the UNC Hospitals at Chapel Hill, in the specified amounts.

Section 4.7

Requires that local management entities/managed care organizations (LME/MCOs) make intergovernmental transfers to the Department of Health and Human Services, Division of Health Benefits (DHB), in an aggregate amount of $18,028,217 in the 2025-2026 fiscal year and an aggregate amount of $18,028,217 for the 2026-2027 fiscal year. Sets out the amounts of the transfer that the following are required to make: Alliance Behavioral Healthcare, Partners Health Management, Trillium Health Resources, and Vaya Health. Sets out the reallocation process allowed when a county disengages from an LME/MCO and realigns with another LME/MCO during the 2025-2027 fiscal biennium.

Section 4.8

Appropriates from the General Fund to the Department of Health and Human Services, Division of Health Benefits, $30 million in nonrecurring funds and associated receipts for the 2025-2026 fiscal year for the continued operations of the Healthy Opportunities Pilots program in current pilot counties.

Section 4.9

Amends Section 9D.19A of SL 2021-180, as amended, which concerns pharmacy reimbursement rates in Medicaid managed care, so that it is effective until June 30, 2031 (was, 2026).

Section 4.10

Reduces the funds appropriated under GS 143C-5-4(b) for the 2025-2027 fiscal biennium to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Use Services (DMH/DD/SUS), for Single Stream Funding by $14 million in recurring funds for each year of the 2025-2027 fiscal biennium. Repeals Section 9F.2 of SL 2022-74, which established a two-year pilot program to gauge the effectiveness of prescription digital therapeutics (PDTs). Requires the State Controller to transfer $1,850,000 in nonrecurring funds for the 2025-2026 fiscal year from funds available in the Opioid Abatement Fund (due to the repeal of the Prescription Digital Therapeutics Pilot Program) to the Opioid Abatement Reserve. Requires the State Controller to transfer $14 million in recurring funds for each year of the 2025-2027 fiscal biennium from funds available in the Opioid Abatement Reserve to the DMH/DD/SUS, to be used to offset the reduction in Single Stream Funding authorized by this section.

Section 4.11

Appropriates from the General Fund to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Use Services, $1 million in nonrecurring funds for the 2025-2026 fiscal year to purchase 8-milligram intranasal opioid antagonist, to reverse the effects of opioid overdose.

Part V.

Section 5.1

Appropriates from the General Fund to the Department of Natural and Cultural Resources (DNCR) $10,078,149 in recurring funds for the 2025-2026 fiscal year and $10,078,149 in recurring funds for the 2026-2027 fiscal year, to be allocated as specified for up to three full-time equivalent (FTE) positions and operating costs for the expanded visitor center and grounds at the Fort Fisher State Historic Site, up to three FTE positions and operating costs for the newly renovated powerhouse and car repair shed at the North Carolina Transportation Museum, up to 12 FTE positions and operating costs associated with the renovation and expansion of the Fort Fisher Aquarium, up to 54 FTE positions and operating costs associated with the new Asia complex at the North Carolina Zoo, and up to 20 FTE positions dispersed among Wilderness Gateway State Trail, Pettigrew and Lake Waccamaw State Parks, Bakers Lake, Bob's Creek, and Salmon Creek State Natural Areas, and for operating costs for State parks that have been expanded through Connect NC bonds or other capital appropriations. Appropriates from the General Fund to DNCR $6,936,900 in nonrecurring funds for the 2025-2026 fiscal year and $4.5 million in nonrecurring funds for the 2026-2027 fiscal year, to be allocated in the specified amounts for the expansion at the Fort Fisher State Historic Site, to replace receipts while the Fort Fisher Aquarium is closed for renovations, for costs associated with the new Asia complex at the North Carolina Zoo, and for costs associated with the expansion of State parks through Connect NC bonds or other capital appropriations.

Section 5.2

Amends GS 143B-279.19 which requires DNCR to adjust the fees and rates imposed under the 20 listed statutes in accordance with the Consumer Price Index, as follows. Requires the adjustment to be made every two years instead of four years. Limits any increase in a fee or rate to the cost of the service being provided. Requires that if a fee or rate was increased during the prior biennium by the enactment of a general law, the adjustment under this provision must reflect only the change in the CPI since that enactment. Amends the statutes that are impacted to also include GS 143-215.3(a)(1b). Effective June 30, 2025.

Section 5.3

Appropriates from the General Fund to DACS the recurring sum of $581,788 for each year of the 2025-2027 fiscal biennium for the State meat inspection cost-share program for inspection services at meat and poultry establishments within the State.

Section 5.4

Appropriates from the General Fund to the DACS the recurring sum of $2,200,000 for each year of the 2025-2027 fiscal biennium for an additional 10 full-time equivalent positions and operating expenses for the Veterinary Division to support the response and monitoring of avian flu.

Section 5.5

Amends GS 143B-283 to allow, instead of the Environmental Management Commission’s (EMC) clerical and other services required by the Commission to be supplied by the Secretary of Environmental Quality, for the EMC to employ professional, administrative, technical, and clerical personnel as it determines is necessary. Requires the chair to organize and direct the work of the EMC’s staff. Provides for the staff’s salaries and compensation, and allows the chair to authorize and approve travel, subsistence, and related expenses of the staff while traveling on official business. Appropriates from the General Fund to the Department of Environmental Quality, $700,000 in recurring funds for each year of the 2025-2027 biennium for up to five full-time equivalent positions as dedicated staff for the EMC, including a deputy secretary, agency general counsel, engineer, environmental program consultant, and administrative officer III.

Section 5.6

Amends Section 5.1 of SL 2024-44 by exempting temporary and permanent rules related to modernizing wastewater permitting adopted pursuant to the section from GS 150B-21.3(b1) and (b2). Effective retroactive to July 8, 2024.

Section 5.7

Amends Article 21 of GS Chapter 143 by adding a new Part 8E, "Beach and Inlet Management Planning."

Repeals Section 4.9 of SL 2017-10, which amended Section 13.9(d) of SL 2000-67 by eliminating the biennial report on the implementation of the North Carolina Beach and Inlet Plan.

Codifies Section 13.9 of SL 2000-67 (concerning beach management plans) is codified within Part 8E, as specified, repealing Section 13.9(e) which included an outdated reporting requirement.

Amends the content of new Part 8E as follows. Amends findings: (1) to now include that beach nourishment projects such as those at Wrightsville Beach and Carolina Beach have been very successful and greatly reduced property damage during hurricanes and other coastal storms that have impacted the State's coast (was, during Hurricane Fran); (2) to update reference from the Department of Environment and Natural Resources to DEQ; and (3) to make clarifying changes. Changes from the Department of Environment and Natural Resources to DEQ and updates Division names throughout. Expands upon what must be done by the multiyear beach management and restoration strategy and plan to require the inclusion of a four-year cycle of planned maintenance and resiliency projects for the State's beaches and inlets.

Requires DEQ to make an interim report by March 1, 2026, on its progress toward updating the beach and inlet management plan and meeting the March 1, 2027, deadline in GS 143-215.73O(c). Requires the report to be provided to the specified NCGA commissions and division.

Appropriates $400,000 from the General Fund to DEQ for the 2025-2026 fiscal year to update the Beach and Inlet Management Plan consistent with Part 8E.

Section 5.8

If the Economic Investment Committee (EIC) awards a Job Development Investment Grant for a qualifying transformative project for an airplane manufacturer in Guilford County, appropriates $118.1 million from the Stabilization and Inflation Reserve to the Department of Commerce (Department) for the 2025-26 fiscal year and $133.9 million for the 2026-2027 fiscal year to be allocated for acquisitions and improvements at the project site as provided in this section. Prohibits a funding recipient, for a term of years the Department deems appropriate, who uses the funds to acquire or improve land (other than water and sewer improvements) from: (1) selling or otherwise encumbering the land or improvement (other than utility and access easements and road 18 rights-of-way) or (2), absent the consent of the EIC, leasing the land or improvement; any such lease must require the land or improvement to be used by the business for the purposes set out in the agreement. Defines a qualifying transformative project as a transformative project for which the Department enters into a binding contract with the business that requires, over a period of time not to exceed the base period, that the business invests at least $4.5 billion in private funds and creates at least 14,000 eligible positions with an average annual wage of at least $89,400. Sets out requirements for the contract, including requiring the business to repay an appropriate, proportionate amount of costs incurred by the State, or reimbursement paid to the business, for improvement of the airport for any failure by the business to meet and maintain the applicable performance criteria on which the cost incurred or reimbursement paid was based. States the NCGA’s intent to appropriate an additional $198 million over the next four succeeding fiscal years, if the requirements of the contract continue to be met. For funds allocated to the Piedmont Triad Airport Authority (Authority), allows the Authority to contract for the design and construction using any delivery method it deems appropriate, and requires the Department to pay the costs of the design and construction. Also allows the Authority to authorize, in writing, the business operating the improvements to contract for the design and construction of the improvements, and the Department or the Authority, if delegated by the Department, must pay the costs of the design and construction. Requires the funds appropriated in this section to be allocated in the specified amounts to the following, to be used for the specified purposes related to the project: Piedmont Triad Airport Authority, DOT, and Greensboro.

Requires the Department to report on the use of the funds in each year that funds appropriated for the airport remain unexpended, to the specified NCGA committee and division and the House. Sets out what must be included in the report.

Section 5.9

Reduces by $5 million the funds appropriated in GS 143C-5-4(b) to the Future Building Reserves which have been transferred to the Department of Commerce, Division of Community Revitalization, in recurring funds for each year of the 2025-2027 fiscal biennium.

Section 5.10

Appropriates $250 million from the Stabilization and Inflation Reserve for the 2025-2026 fiscal year, to be allocated to the DACS for the Agricultural Disaster Crop Loss Program (Program), for verifiable losses from an agricultural disaster in 2024, excluding Hurricane Helene. Makes the funds subject to all requirements of the Program set out in Section 2D.2 of SL 2025-2 and requires DACS to include the funds in the report under Section 2D.2(i) of SL 2025-2. Excludes the funds from Section 2D.2(h) of SL 2025-2 (which allows the Commissioner of Agriculture to also use the funds appropriated for the Program for purposes related to Hurricane Helene recovery for farmers). Requires funds that are not expended or encumbered on the date the Program expires to revert to the Savings Reserve.

Section 5.11

Requires that funds appropriated to the Department of Natural and Cultural Resources (DNCR) for the Sunday Opening Sate Historic Site Pilot Program be used to open and operate the 14 listed sites on Sundays during each site’s peak season. Requires the new operating hours to be provided by DNCR. Requires DNCR to submit specified interim and final reports on the program to the specified NCGA committee.

Appropriates $114,000 in each year of the 2025-27 biennium from the General Fund to the DNCR to implement the program.

Part VI.

Section 6.1

Appropriates (1) $4.5 million in recurring funds for 2025-26, (2) $10 million in nonrecurring funds for 2025-26, and (3) $5 million in nonrecurring funds for 2026-27, from the General Fund to the Administrative Office of the Courts, Office of Indigent Defense Services to be deposited into the Private Assigned Counsel Fund and used for the purposes of that Fund.

Section 6.2

Appropriates $6,283,710 in nonrecurring funds for each year of the 2025-27 fiscal biennium from the General Fund to the Administrative Office of the Courts, to be used for eCourts-related time-limited technology and business personnel.

Section 6.3

Appropriates $2.9 million in recurring funds beginning 2025-26 from the General Fund to the State Highway Patrol, to be used for VIPER network maintenance and operation.

Section 6.4

Defines community partner and school health support personnel for purposes of the section. Mandates that the Executive Director of the Center for Safer Schools (Director) establish the School Safety Grants Program (Program) for the 2025-27 fiscal biennium and provides the program’s purpose.

Allows a public school unit (unit) to apply to the Director for one or more grants in each year of the biennium and requires the application to include an assessment of the unit’s need to improve school safety performed in conjunction with a local law enforcement agency. Mandates that the Director develop criteria and guidelines for administering and using the grants and lists factors the Director must consider when assessing grant applications.

Provides details for the Program’s Grants for Students in Crisis, awarded by the Director in consultation with the Department of Health and Human Services (DHHS), awarded to units to contract with community partners to provide or pay for the listed crisis services. Limits use of funds for any other crisis services, beyond those services that are specified, to $350,000 in each fiscal year of the biennium.

Provides details for the Program’s Grants for Training to Increase School Safety, awarded by the Director in consultation with DHHS, awarded to units to contract with community partners to provide training to help students develop healthy responses to trauma and stress. Details requirements for trainings and provides a list of services the trainings that can include. Limits use of funds for any other training services beyond those that are specified to $350,000 in each fiscal year of the biennium.

Provides details for the Program’s Grants for Safety Equipment, awarded by the Director, to public school units for purchasing safety equipment for school buildings and providing training to use the equipment. Allows charter schools to receive grants for this equipment notwithstanding GS 115C-218.105(b).

Permits the Director to use funds appropriated for grants provided in Section 6.4 to cover unmet needs for school resource officer (SRO) grants if the Director receives applications for SRO grants under GS 143B-1208.20 in excess of the appropriated funding in the 2025-27 biennium.

Declares that grants provided under this Program must be used to supplement, not supplant State or non-State funds already provided for these services.

Permits the Director to retain up to $100,000 each fiscal year of the 2025-27 biennium for administrative costs of the Program.

Allows the Director to enter a memorandum of understanding with the Department of Public Instruction to disburse the Program’s grants.

Requires the Director to report on the Program to the Joint Legislative Education Oversight Committee, the Joint Legislative Oversight Committee on Health and Human Services, the Joint Legislative Oversight Committee on Justice and Public Safety, the Joint Legislative Commission on Governmental Operations, the Senate Appropriations/Base Budget Committee, the House Committee on Appropriations, and the Fiscal Research Division no later than April 1 of each fiscal year funds are awarded pursuant to Section 6.4. Details information required in the report.

Appropriates $35 million in nonrecurring funds for each fiscal year of the 2025-27 biennium from the General Fund to the Center for Safer Schools to be used to establish the Program.

Section 6.5

Amends Section 7.36 of SL 2023-134, as amended by Sections 3J.12 and 3J.17(h) of SL 2024-57, regarding the AI School Safety Pilot Program (Pilot Program) in the following ways.

Amends Section 7.36.(h) by requiring the Department of Public Instruction (DPI) to allocate the unexpended and unencumbered portion of the $3.2 million previously directed to New Hanover County Schools as a directed grant to Alamance-Burlington Schools. Changes the date that public school units participating in the Pilot Program, in coordination with the Center for Safer Schools, must report the listed information to the Joint Legislative Oversight Committee from January 15, 2026, to no later than January 15, 2028. Adds Section 7.36.(h1), clarifying that the nonrecurring funds appropriated for directed grants under Section 7.36(h) do not revert to the General Fund and must remain available for the purposes the funds were appropriated until June 30, 2027. Amends Section 7.36(l) by changing the date the nonrecurring funds appropriated to DPI in the 2022-23 fiscal year for the 2021-23 School Safety Grants Program under Section 7.19 of SL 2021-180 and the nonrecurring funds appropriated by this act for the 2023-25 School Safety Grants Program must remain available for the purposes they were appropriated and not revert to the General Fund from June 30, 2025 to June 30, 2027.

Section 6.5 is effective June 30, 2025.

Section 6.6

Appropriates $1.4 million in recurring funds beginning 2025-26 from the General Fund to the State Bureau of Investigation (Bureau) to be used to create up to 10 nonsworn administrative support positions for the Bureau.

Section 6.7 Appropriates $3 million in recurring funds beginning 2025-26 from the General Fund to the State Highway Patrol to be used to hire 26 full-time nonsworn administrative positions.

Part VII.

Section 7.1

Appropriates $2.3 million from the General Fund to the Office of the State Fire Marshal in recurring funds for each fiscal year of the 2025-2027 fiscal biennium and $1 million in nonrecurring funds for the 2026-2027 fiscal year for the operating costs of the Emergency Training Center in Stanly County.

Section 7.2

Appropriates $30 million from the General Fund to the Office of the State Fire Marshal for the 2025-2026 fiscal year to cover increased expenditures related to the State's reinsurance policy.

Section 7.3

Appropriates from the Collections Assistance Fee Special Fund to the Department of Revenue $1,506,928 for the 2025-2026 fiscal year and $2,104,658 for the 2026-2027 fiscal year to provide funds for contract increases, software, and hardware, to maintain current operations of the Department, and to comply with Internal Revenue Service requirements.

Section 7.4

Appropriates from the Collections Assistance Fee Special Fund to the Department of Revenue $6,837,763 for the 2025-2026 fiscal year and $8,059,938 for the 2026-2027 fiscal year to provide funds to make critical software and hardware updates and to perform maintenance to keep the tax system operational.

Section 7.5

Allows the Retirement Systems Division of the Department of State Treasurer to increase receipts from the assets of the Retirement Systems, or pay costs associated with the transition of retirement system data directly from the Retirement Systems' assets. Caps receipts increased or costs paid directly from Retirement Systems' assets at $1,022,000 in recurring funds and $1,260,000 in nonrecurring funds for the 2025-2026 fiscal year and $1,022,000 in recurring funds for the 2026-2027 fiscal year.

Section 7.6

Allows the Financial Operations Division of the Department of State Treasurer to charge to the income or assets of the funds and programs using the banking operations of the Department of State Treasurer the costs of upgrading software for and supporting ongoing maintenance of the State banking system. Caps the authorized costs at $3 million in recurring funds and $4.3 million in nonrecurring funds for the 2025-2026 fiscal year and $3 million in recurring funds for the 2026-2027 fiscal year.

Section 7.7

Directs the State Auditor to establish the Division of Accountability, Value, and Efficiency (DAVE) within the Department of State Auditor. Requires every state agency to report to DAVE no later than October 1, 2025, on (1) how the state agency uses public monies to execute its powers and duties under state law, and (2) all positions within that state agency that have remained vacant for six months or more as of the effective date of the act, including the original position vacancy dates and any postings or repostings of the positions, and an explanation for the length of any applicable vacancies.

Requires DAVE to assess the continued need for each state agency and the vacant positions within each agency, based upon the reports and other information deemed relevant by DAVE. Allows DAVE to consult with the Joint Legislative Commission on Governmental Operations. Authorizes DAVE to utilize artificial intelligence and other appropriate tools to analyze: (1) amounts spent, including the entities receiving funds and the intended purpose of spending; (2) the effectiveness of any amount spent in achieving the intended purpose; (3) duplicative spending; and (4) any other factor demonstrating the fiscal soundness or effectiveness of the agency.

Requires DAVE to report the results of its assessment to the General Assembly, including any agencies, divisions or offices of agencies, or agency positions that should be dissolved or eliminated, no later than December 31, 2025.

Allows DAVE to annually require State agencies to report with the information required above and reassess the information on an annual basis and report those results to the NCGA.

The above provisions are effective then they become law and expire December 31, 2028, at which time DAVE terminates.

Appropriates $6 million from the General Fund to the Office of State Auditor in recurring funds for each year of the 2025-27 biennium to fund up to 45 positions within DAVE.

Section 7.8

Requires that $1,272,727 received from the HAVA election Security Grants for fiscal year 2024 to be deposited in the Election Fund to be used to continue funding for (1) equipment and software for critical information technology operations, and (2) information technology and regional support positions.

Section 7.9

Appropriates $1,193,979 in recurring funds from the General Fund to the State Board of Elections for each fiscal year of the 2025-2027 fiscal biennium to provide funds for the specified seven new exempt positions.

Amends GS 126-5 to also give the Executive Director of the State Board of Elections sole authority to set the salary of its exempt policy making and exempt managerial positions, within the specified range. Also allows the Executive Director to designate exempt positions. Limits the total number of exempt positions, policymaking and managerial, that are designated by the Executive Director to the seven listed positions. Provides the process for filing a vacancy in the Executive Director position.

Section 7.10

Appropriates $610,000 in recurring funds from the General Fund to the State Board of Elections for funds for the specified three positions that are currently funded as temporary.

Section 7.11

Appropriates $1.5 million for 2025-26 from the General Fund to the State Board of Elections for future litigation needs. Specifies that the funds remain available until expended.

Section 7.12

Amends GS 163-25 to allow the State Board of Elections to retain private counsel to provide legal assistance in executing its authority to assist county boards of election in matters in which litigation is contemplated or initiated and the county has petitioned for assistance. Removes provisions related to the Attorney General providing the State Board of Elections with legal assistance in executing this statute. Also allows the State Board of Elections to retain private counsel to provide legal services, including litigation services, to the State Board or the Executive Director in any action or matter arising in the scope and course of the Board's or the Director's official duties.

Section 7.13

Appropriates $1 million from the General Fund to the Office of State Fire Marshal in recurring funds for the 2025-27 biennium for the increased costs of leasing office space.

Section 7.14

Expands the powers and duties of the State Fire and Rescue Commission (Commission) under GS 58-78-5 to include conducting administrative hearings in accordance with Article 3A of GS Chapter 150B. Makes conforming change to GS 150B-38. Effective October 1, 2025, and applies to administrative hearings commenced on or after that date.

Section 7.15

Expands the powers of the NC Home Inspector Licensure Board (Home Board) under GS 143-151.49 to authorize the Home Board to adopt rules regarding course content, instructor qualifications, approved course offerings, and other criteria for compliance with the education program. Sets a $200 fee cap for an online examination to obtain a home inspector license and makes conforming change to GS 143-151.57 (Home Board fee schedule). Effective October 1, 2025.

Section 7.16

Exempts manufactured home dealers or manufactured home manufacturers (both as defined under State law) from the licensure requirements pertaining to the described motor vehicle manufacturers, factory branches, distributors, distributor branches, wholesalers, or dealers in GS 20-288.

Section 7.17

Clarifies in GS 143-143.2 that the electrical wiring of housing or buildings for lighting or other purposes must conform to the requirements of the NC State Electrical Code (was, Building Code) and other laws.

Section 7.18

Enacts GS 58-78A-18, authorizing the Marshal to charge State registration fees for advanced fire and rescue courses delivered by its office at the NC Emergency Training Center. Sets the fee at the tuition amount for equivalent community colleges. Authorizes the Marshal to grant fee waivers for the eight categories of persons described. Permits the Marshal to charge additional fees to cover the described expenses. Requires the Marshal to annually report to the specified NCGA committees on the number and types of waivers granted by February 1.

Provides funds to the Office of the State Fire Marshal (OSFM) based on the number of full-time equivalent (FTE) students enrolled in advanced fire and rescue courses delivered by OSFM at the North Carolina Emergency Training Center for whom State registration fees are waived. Directs OSFM to calculate FTE enrollment in the same manner as community colleges. Provides for how funds provided should be calculated. Clarifies that OSFM is not considered a community college, or subject to the requirements imposed on community colleges by GS Chapter 115D.

Effective September 1, 2025.

Section 7.19

Appropriates $300,000 in recurring funds from the General Fund to the Office of State Fire Marshal in recurring funds for each year of the 2025-27 biennium to fund three administrative positions.

Section 7.20

Requires the Office of State Budget and Management to establish a new budged code for the Office of State Fire Marshall and create new budget funds for each of the Office’s divisions.

Section 7.22

Reduces by $5 million in recurring funds the funds appropriated to the Future Building Reserves that have been transferred to GROW NC for each year of the 2025-27 biennium.

Section 7.23

Amends Section 14.10 of SL 2023-134, which created the America’s Semiquincentennial Committee, as follows. Increases membership of the Committee by two members, adding one appointed by the President Pro Tempore of the Senate from members of the Senate and one by the Speaker of the House from members of the House. Changes the Committee’s duties so that they are now: (1) establishing a website, social media, and distribution list to provide the specified information, (2) advising the North Carolina Symphony and other symphonies and choral groups, the UNC Center for Public Media, and interested nonprofits on historically relevant information to assist in the development of programming with semiquincentennial themes; (3) facilitating connections between State agencies, local governments, semiquincentennial committees at the federal, State, or local level, educational institutions, nonprofits, historical, cultural, and business entities, and hereditary organizations for the purpose of coordinating events and activities that recognize, celebrate, and commemorate the semiquincentennial; (4) identifying historians and other individuals with expertise on events related to the semiquincentennial who can serve as resources and speakers; and (5) identifying, encouraging, facilitating, and publicizing any other means of recognition, celebration, and commemoration of the semiquincentennial. Changes the due dates of the Committee’s reports. Terminates the Committee on December 31, 2027, instead of January 15, 2026.

Section 7.24

Appropriates $750,000 from the General Fund to the NC Military Affairs Commission for 2025-26 to support the Commission’s operations.

Section 7.25

Appropriates $42 million from the cash balance of the North Carolina Veterans Home Trust Fund, to the Department of Military and Veterans Affairs, for 2025-26 to renovate and repair the Fayetteville State Veterans Home.

Repeals Section 40.5(c) of SL 2021-180, which allowed the Department of Military and Veterans Affairs to use up to $29,995,000 in funds appropriated in that act from the North Carolina Veterans Home Trust Fund to provide the required State match for federal funding for the construction of a new State veterans nursing facility in Wake County.

Part VIII.

Section 8.1

Modifies the Broadband Pole Replacement Program (Program) established in Section 38.10 in SL 2021-180 as follows. Exempts poles owned by utilities from the Program’s obligations to provide estimates, invoices, make-ready work, and the option to invoke dispute procedures authorized under GS 62-350. Makes conforming and clarifying changes to the terms eligible pole replacement cost, unserved area, and pole. Adds term utility. Amends the term qualified project so that it now means a project undertaken by a communications service provider seeking to provide or, due to natural disaster or other force majeure event, restore, temporarily or permanently, qualifying internet access service on a retail basis to one or more households, businesses, agricultural operations, or community access points in an unserved or underserved area. Specifies that an unserved area also includes an area previously served but has become unserved due to damage or destruction by a natural disaster. Specifies that in cases of a damaged or destroyed facility, it will be deemed to be located in an unserved area if it was in such an area when the facility was originally constructed.

Directs that funds encumbered as of June 1, 2021, prior to the effective date of this Section, remain eligible for reimbursement.

Section 8.2

Amends Section 10.2 of SL 2024-55, concerning definitions relating to Broadband Equity, Access and Deployment (BEAD), by removing the term extremely high cost per location threshold. Amends the definition of low-cost broadband service option so that it is now as defined in IIJA (Infrastructure Investment and Jobs Act) as amended by any subsequent guidance issued by NTIA (National Telecommunications and Information Administration). Amends the definition of reliable broadband service, underserved, and unserved so that they are all now as defined in the IIJA as amended by any subsequent guidance issued by the NTIA. Removes the provision on breaking a tie in grant application scores.

Part IX.

Section 9.1

Appropriates $197,563,133 from the General Fund in recurring funds for 2025-26 for the costs associated with employee benefits for the 44 listed government agencies, divisions, and other offices, in the amounts specified.

Appropriates $ 8,477,027 in recurring funds from the Highway Fund to the Department of Transportation for 2025-26 for the costs associated with employee benefits.

Specifies that State funds (defined) are appropriated for each year of the 2025-27 biennium, as agency receipts up to the amounts needed to  implement the provisions of this Part for each year of the biennium.

Section 9.2

Transfers $ 394,259 from the Insurance Regulatory Fund to the General Fund in recurring funds for 2025-26.

Section 9.3

Specifies that the following six provisions pertaining to salaries, bonuses, and compensation apply during the period of continuing budget authority that begins July 1, 2025:

1. State employees subject to a statutory salary schedule, are authorized to move up on salary schedules and receive applicable automatic step increases.
2. State employees, including those exempt from the classification and compensation rules established by the State Human Resources Commission, are authorized to receive automatic step increases, annual, performance, merit, bonuses, and other applicable increments.
3. The salary schedules for State employees working as: (1) correctional officers in DACS, (2) DPS’s Division of Juvenile Justice and Delinquency Prevention, (3) State law enforcement, (4) State Highway Patrol law enforcement, and (5) probation and parole officers/juvenile court counselors, as set forth in Sections 39.15, 39.16, 39.17, and 39.18 of SL 2023-134, as amended, remain in effect, notwithstanding any limitation to the 2023-2025 fiscal biennium.
4. Public school employees paid on the teacher salary schedule, the principal salary schedule, or any other salary schedule established by State law are authorized to move up or down on applicable salary schedules and receive applicable automatic step increases.
5. Bonuses are authorized for teachers and principals pursuant to the requirements of Section 7A.3 of SL 2023-134 and Section 1.3 of SL 46 2024-39, notwithstanding any limitation to the 2023-2025 fiscal biennium.
6. Supplemental funds for teacher compensation are authorized pursuant to the requirements of Section 7A.4 of SL 2023-134, as amended, notwithstanding any limitation to the 2023-2025 fiscal biennium.

Section 9.4

Specifies three conditions that must be met if a State agency is to implement salary adjustments during the period of continuing budget authority that begins July 1, 2025, within its authorized personal services appropriations, including that the total personal services expenditures do not exceed the agency's authorized personal services appropriation for the most recent completed fiscal year.

Section 9.5

Tasks with OSMB with ensuring that the appropriations made by the act for employee benefits are only used for those purposes. Authorizes the Director of the Budget to reallocate any funds appropriated to State agencies for these purposes that exceed the amount required by the agency to other State agencies that received insufficient funds for employee benefits. Prohibits funds appropriated for employee benefit increases from being used to adjust the budgeted salaries of vacant positions, to provide salary increases in excess of those required by the General Assembly, or to increase the budgeted salary of filled positions to the minimum of the position's respective salary range. Prevents funds appropriated for employee benefits in excess of the amounts required to be credited to the Pay Plan Reserve. Directs OSBM to report to the specified NCGA division on the expenditure of funds for employee benefits under Part IX of the act, including at least the four matters specified matters.

Section 9.6

Effective for the 2025-2027 fiscal biennium, requires that required employer  salary-related contributions for employees whose salaries are paid from department, office, institution, or agency receipts must be paid from the same source as the source of the employee's salary. Provides for when an employee’s salary is in part from the General Fund or Highway Fund. Applies the section’s requirements to payments on behalf of the employee for hospital medical benefits, longevity pay, unemployment compensation, accumulated leave, workers' compensation, severance pay, separation allowances, and applicable disability income benefits.

Effective July 1, 2025, sets forth State employer contribution rates budgeted for retirement, health, and related benefits as a percentage of covered salaries for the 2025-2026 fiscal year for teachers and State employees(TSERS), State law enforcement officers (LEOs), the University and Community Colleges Optional Retirement Programs (ORPs), the Consolidated Judicial Retirement System (CJRS), and the Legislative Retirement System (LRS), in the specified amounts, and which include contributions for the Employee Health Benefit Fund and Retiree Health Benefit Fund. Effective July 1, 2025, caps annual employer monthly contributions for 2025-26 by the State to the North Carolina State Health Plan for Teachers and State Employees for each covered employee is a maximum $8,500. Amends GS 135-151 (pertaining to the Qualified Excess Benefit Arrangement (QEBA) under TSERS) so that benefit liability for the QEBA is determined each fiscal year, and assets cannot be accumulated to pay benefits in future fiscal years. Allows for a portion of the employer contribution rate to be deposited into a separate fund, not to exceed the amount specified. Makes clarifying change. Effective July 1, 2025, increases the State contribution to the NC Firefighters' and Rescue Squad Workers' Pension Fund by $350,000 in recurring funds for 2025-26 resulting in a total State contribution of $ 20,752,208 for 2025-26.

Part X.

Section 10.1

Appropriates $1,550,477,389 from the State Capital and Infrastructure Fund for 2025-26 for the 64 listed project codes in the amounts specified. Directs UNC’s Board of Governors to prioritize funds allocated for the specified project code for repairs and renovations and for the capital improvement projects listed in SL 2021-180. Caps the cost of any single repair or renovation at $15 million. Allows for reallocation of funds by the Board of Governors, as specified, so long as the funds are reallocated to the specific constituent institution for which it was originally allocated. Directs the Board of Governors to report the specified NCGA commission under GS 143-C-8-13.

Applies the provisions of Section 40.1(c) of SL 2021-180 (outlining repair and renovation caps, reporting requirement, and legal authority) to the funds allocated for project code R&R21 for the 2025-27 fiscal biennium. Allocates $11.3 million of the allocated funds from R&R21 to the LSO for renovations and upgrades to the downtown education complex chilled water system.

Assigns a project code to the funds allocated to NCSU for the purpose of rehabilitating or replacing Poe Hall in Section 2H.6 of SL 2024-57. Caps total authorization for the project at $185 million. Transfers $208.5 million from the ARPA Temporary Savings Fund to the State Capital and Infrastructure Fund for 2025-26.

Section 10.2

Authorizes the listed capital projects to be funded with receipts or from other non-General Fund and non-State Capital and Infrastructure Fund sources available to the appropriate department in the amounts specified, totaling $35,826,000 in 2025-26 and $21,374,000 in 2026-27. From funds deposited with the State Treasurer in a capital improvement account to the credit of DACS, transfers $75,000 for 2025-26 and $75,000 for 2026-27 to DACS to be used for its plant conservation program, as specified.

Section 10.3

Changes the names of the two listed project codes in Section 40.1 of SL 2023-134, as amended. Expands the allocation to the Department of Adult Correction (DAC) for the specified project code so that it can also be used for fire alarm and fire suppression systems replacements at eight facilities. Expands the allocation to DACS for the specified project code so that it can also be used for the acquisition of firefighting equipment and for critical infrastructure improvements to Claridge Nursery, as determined by the North Carolina Forest Service.

Part XI.

Section 11.1

Repeals Sections 41.1(b) and (c) for SL 2023-134 (authorizations and certifications for the two described funds). Authorizes and certifies anticipated revenues for the Highway Fund and the Highway Trust Fund from 2027-28 through 2031-32 in the specified amounts. Directs DOT in collaboration with OSBM, to develop a ten-year revenue forecast to be used for three specified purposes.

Section 11.2

Appropriates $1,202,408 from the Highway Fund to DOT in recurring funds  to create 40 additional FTE Driver License Examiner I and II positions in the 2025-26 fiscal year. Appropriates $2,990,367 from the Highway Fund to DOT in recurring funds to create 21 additional FTE Driver License Examiner I and II positions in 2026-27. Authorizes DOT to also use existing funds in Personal Services and Purchased Services to fund these positions. Permits DOT to reclassify temporary or vacant positions in line with the classification system established by the State Human Resources Commission to create the new positions.

Section 11.3

Appropriates $3,569,383 for 2025-26 and $29,252,105 for 2026-27 from the Highway fund to DOT for the Wake County Maintenance Yard Relocation and $3,143,356 for 2025-26 and $18,541,168 for 2026-27 for the Jones County Maintenance Yard Relocation.

Section 11.4

Appropriates $4 million from the Highway Fund to DOT for each year of the 2025-27 biennium to provide funds for M/V maintenance and repairs at external shipyards to meet U.S. Coast Guard dry dock requirements.

Section 11.5

Requires the Ferry Division to submit a progress report by no later than October 1, 2025, and quarterly thereafter to the specified NCGA committee and division on the use of funds appropriated by this act to the Ferry Division for marine vessel dry docking, including the three matters specified.

Part XII.

Section 12.1

Specifies that the act prevails if it is in conflict with GS 143C-5-4. Clarifies that the appropriations by the act remain in effect until the Current Operations Appropriations Act for the applicable fiscal year becomes law, at which time that act becomes effective and governs appropriations and expenditures. When the Current  Operations Appropriations Act for that fiscal year becomes law, requires the Director of the Budget to adjust allotments to give effect to that act from July 1 of the fiscal year.

Section 12.2

Contains a severability clause.

Section 12.3

Effective July 1, 2025, except as otherwise provided.