The Governor vetoed the act on July 2, 2025. The Governor's objections and veto message are available here: https://webservices.ncleg.gov/ViewBillDocument/2025/7261/0/H549-Bill-NBC-16787(link is external).
CLARIFY POWERS OF STATE AUDITOR.
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View NCGA Bill Details(link is external) | 2025-2026 Session |
AN ACT TO CLARIFY THE POWERS OF THE STATE AUDITOR, TO MAKE OTHER CHANGES RELATED TO THE STATE AUDITOR, AND TO ALLOW THE DEPARTMENT OF REVENUE TO FORCE COLLECT DEBTS OWED TO STATE AGENCIES THROUGH LEVY AND SALE AND ATTACHMENT AND GARNISHMENT.Intro. by B. Jones, Setzer, Torbett, Kidwell.
Bill History:
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Wed, 26 Mar 2025 House: Filed(link is external)
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Mon, 31 Mar 2025 House: Passed 1st Reading(link is external)
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Tue, 8 Apr 2025 House: Reptd Fav Com Substitute(link is external)
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Tue, 29 Apr 2025 House: Reptd Fav Com Sub 2(link is external)
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Thu, 1 May 2025 House: Reptd Fav(link is external)
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Thu, 1 May 2025 House: Cal Pursuant Rule 36(b)(link is external)
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Thu, 1 May 2025 House: Placed On Cal For 05/06/2025(link is external)
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Tue, 6 May 2025 House: Amend Adopted A1(link is external)
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Tue, 6 May 2025 House: Amend Failed A2(link is external)
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Tue, 6 May 2025 House: Passed 2nd Reading(link is external)
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Tue, 6 May 2025 House: Passed 3rd Reading(link is external)
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Tue, 6 May 2025 House: Ordered Engrossed(link is external)
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Wed, 7 May 2025 House: Regular Message Sent To Senate(link is external)
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Wed, 7 May 2025 Senate: Regular Message Received From House(link is external)
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Wed, 7 May 2025 Senate: Passed 1st Reading(link is external)
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Wed, 11 Jun 2025 Senate: Withdrawn From Com(link is external)
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Wed, 18 Jun 2025 Senate: Reptd Fav Com Substitute(link is external)
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Wed, 18 Jun 2025 Senate: Com Substitute Adopted(link is external)
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Wed, 18 Jun 2025 Senate: Reptd Fav(link is external)
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Thu, 19 Jun 2025 Senate: Passed 2nd Reading(link is external)
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Thu, 19 Jun 2025 Senate: Passed 3rd Reading(link is external)
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Thu, 19 Jun 2025 Senate: Special Message Sent To House(link is external)
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Thu, 19 Jun 2025 House: Cal Pursuant 36(b)(link is external)
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Mon, 23 Jun 2025 House: Placed On Cal For 06/24/2025(link is external)
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Tue, 24 Jun 2025 House: Concurred In S Com Sub(link is external)
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Tue, 24 Jun 2025 House: Ordered Enrolled(link is external)
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Wed, 25 Jun 2025 House: Ratified(link is external)
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Thu, 26 Jun 2025 House: Pres. To Gov. 6/26/2025(link is external)
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Wed, 2 Jul 2025 House: Vetoed 07/02/2025(link is external)
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Wed, 2 Jul 2025 House: Received from the Governor(link is external)
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Thu, 3 Jul 2025 House: Placed On Cal For 07/29/2025(link is external)
Bill Summaries:
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Bill H 549 (2025-2026)Summary date: Jul 3 2025 - View Summary
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Bill H 549 (2025-2026)Summary date: Jun 18 2025 - View Summary
Senate committee substitute to the 4th edition makes the following changes. Makes organizational changes. Makes conforming changes to act’s long title.
Part I.
Removes reference to “continuous and unrestricted view” in describing the Auditor’s access to those records under its authority in GS 147-64.7.
Part II.
Removes provisions: (1) exempting officers and employees of the Auditor from all of GS Chapter 126 (NC Human Resources Act), except for Articles 6 and 7 (Equal Employment and Compensation Opportunities and Privacy of State Personnel Records, respectively) and (2) amending GS 126-1.1(c) to provide procedures for the described employees of the Office of State Auditor to elect to waive that status and become exempt under GS 126-5(c1)(41), and for the described probationary employees to elect to continue to earn career status or become exempt under GS 126-5(c1)(41).
Removes subdivision (25) to the amendments of GS 147-64.6(c), which permitted the auditor to engage in audits or investigations of any publicly funded entity, limited to the state or federal funds received or otherwise handled by the entity. Requires the Auditor to also submit a detailed report of its findings concerning fraud or misrepresentation by private persons as detailed in GS 147-64.6(c)(21) to the Department of Revenue (Department) (currently, just to the appropriate official or State Purchasing Officer).
Adds the following new content.
Part III.
Amends the title of GS Chapter 105A so that it is now the Setoff Debt Collection and Forced Debt Collection Act (currently, Setoff Debt Collection Act-Act). Includes the Office of the State Auditor (Auditor) as one of the agencies that are subject to the policy under GS 105A-1 (purpose of the Act). Expands the scope of the procedures covered by the Act to include force collecting debts owed to State agencies. Adds forced collection to the Act’s definitions. Amends the definition of net proceeds collected so that, for forced collection actions, it means gross proceeds collected through forced collection minus the forced collection assistance fee provided in GS 105A-13(a1). Prevents a local agency from submitting a debt owed to it for forced collection under the Act in GS 105A-3. Makes conforming changes. Requires that every State agency must report the amount of setoff debts annually to the Controller (was, just debts). Makes conforming changes, including to the statute's title.
Applies the Act to a forced collection debt for which the Department determines the cost to the State in collecting the debt is less than the amount of the debt collectible in GS 105A-4. Clarifies that the $50 minimum applies to setoff collection debt. Makes conforming changes, including to the statute's title. Makes organizational changes. Replaces references to “collection” with “setoff collection” in GS 105A-5 (local agency notice, hearing, and decision).
Enacts GS 105A-6A establishing a procedure for forced collecting and the debts eligible for forced collection. Specifies that only those debts that are discovered through an audit or investigation undertaken by the Auditor are eligible for forced collection under the Act. First, requires the Auditor to notify the Department in writing of the debt and supply any information necessary to identify the debtor against whom forced collection may be sought. Then requires the Department to provide written notice to the debtor of its intention to collect the Debt, as specified. Authorizes the Department to force collection of a debt owed to a State agency that is not a collectible tax by levy and sale, as described, in new GS 105A-6B. Authorizes the Department, in new GS 105A-6C, to force collection by attachment and garnishment in the manner prescribed by State law for garnishment of intangible personal property for the nonpayment of tax if the debtor does not pay a debt or enter into an installment payment agreement (authorized in new GS 105A-6D) within 60 days of the notice of debt. Makes clarifying changes to GS 105A-8’s title so that it applies to setoff collections.
Enacts GS 105A-8A, preventing the Auditor from submitting notice of final determination of a debt to the Department for forced collection until the Auditor has finally determined the debt. Defines finally determined as a debt that (1) meets the requirements of GS 105A-6A(c), (2) for which the Auditor has given the specified notice, and (3) for which the debtor did not file a timely request for hearing, or, for which the debtor did file a timely request for hearing but a decision made after hearing determined that a debtor owed a debt, in a sum certain, to a State agency, and all appellate relief afforded the debtor for purposes of finally determining the debt under this section has been exhausted. Provides the contested case provisions of the APA apply to hearings on contested debt claims. Provides for filing deadlines. Requires that decisions made after a hearing at least determine: (1) whether a debt is owed to a State agency, (2) by whom and (3) the amount of the debt (if any).
Sets venue for appeals from hearing under the act for nonresident debtors in the Superior Court of Wake County in GS 105A-9.
Authorizes, in GS 105A-13, the Department to enforce a 3% collection assistance fee for each debt collected through forced collection. Specifies that the collection assistance fee must not be added to child support debts or collected as part of child support debts. Clarifies that the other provisions of GS 105A-13 pertain to setoff collections. Makes clarifying changes and specifies that GS 105A-14 (accountings to claimant agencies) applies to setoff collection. Makes conforming changes, including to the statute's title. Enacts GS 105A-14A, directing that the net proceeds collected through forced collection under the Act be credited to the General Fund by the Department within 60 days of collection.
Applies to collection of debts on or after December 1, 2025.
Expands the Department’s duties under GS 143B-218 to include performing other non-tax related functions as enacted by the General Assembly.
Part IV.
Specifies that GS 147-64.6(c)(21), as amended by the act, is effective December 1, 2025. Makes conforming changes to the act’s general effective date.
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Bill H 549 (2025-2026)Summary date: May 6 2025 - View Summary
House amendment to the 3rd edition removes the limitation under GS 126-1.1(c) that a State Auditor employee who attained career status before July 1, 2025, has to remain in the post the employee occupied on June 30, 2025, in order to continue employment with career State employee status.
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Bill H 549 (2025-2026)Summary date: Apr 29 2025 - View Summary
House committee substitute to the 2nd edition makes the following changes.
Discards the amendments to definitions of federal agency and state agency in Section 4 and adds a new definition of “publicly funded entity” in GS 147-64.4(5), which is any individual, corporation, institution, association, board, or other organization that receives, disburses, or otherwise handles state or federal funds.
Replaces the reference to individuals who receive public funds with publicly funded entities in Section 5’s proposed changes to GS 147-64.6B(b).
Amends GS 147-64.7 to also give the auditor access to databases, datasets, and digital records, and limits the access to all of the listed items to audits and investigations under GS 147-64.6 (c)(25), as described below. Adds the state government, the State, or its political subdivisions, to the proposed language in Section 6 for GS 147-64.7(a)(2)b. Includes publicly funded entity instead of individuals, corporations, or institutions under subdivision (3), and provides that audits and investigations of publicly funded entities are limited by GS 147-64.6(c).
Makes the previous Section 7 language the new Section 7.(a), and adds Section 7.(b), which amends GS 126-1.1(c) to provide procedures for employees of the Office of State Auditor that have attained career status before July 1, 2025, to elect to waive that status and become exempt under GS 126-5(c1)(41), and for probationary employees hired before July 1, 2025, to elect to continue to earn career status or become exempt under GS 126-5(c1)(41).
Adds subdivision (25) to the amendments of GS 147-64.6(c) in Section 11, which permits the auditor to engage in audits or investigations of any publicly funded entity, limited to the state or federal funds received or otherwise handled by the entity.
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Bill H 549 (2025-2026)Summary date: Apr 8 2025 - View Summary
House committee substitute to the 1st edition makes the following changes.
Changes the effective date of the following from when the act became law to July 1, 2025, applicable to contracts entered into or renewed on or after that date: (1) changes to GS 143-64.24, (2) changes to GS 143B-1320, and (3) changes to GS 143B-1350.
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Bill H 549 (2025-2026)Summary date: Mar 26 2025 - View Summary
Exempts the Office of the State Auditor (Auditor) from the following provisions of the General Statutes:
- Article 3C of GS Chapter 143 (contracts to obtain consultant services).
- Article 15 of GS Chapter 143B (the Department of Information Technology under the Executive Organization Act of 1973).
- Part 4 of Article 15 of GS Chapter 143B (procurement of information technology), but directs the Auditor to comply with GS 147-64.7(b)(1) instead (the auditor’s powers to contract with certain professional persons and experts).
- For officers and employees of the Auditor, all of GS Chapter 126 (NC Human Resources Act), except for Articles 6 and 7 (Equal Employment and Compensation Opportunities and Privacy of State Personnel Records, respectively).
Amends GS 143B-1320 (Scope of Article 15 of GS Chapter 143B) so that listed government entities are only exempt from Article 15 (was, all of GS Chapter 143B).
Broadens the definition of federal agency so that it includes any entity that receives federal funds and clarifies that State agency includes any entity that receives State funds in the definitions provisions pertaining to the Auditor, GS 147-64.4. Expands the Auditor’s investigative authority under GS 147-64.6B(b) to include investigations of employees of State agencies, and individuals who receive public funds. Requires entities receiving a demand for records from the Auditor under GS 147-64.7(a)(1) to, upon demand by the Auditor, also provide access to continuous and unrestricted view of databases, datasets, and digital records necessary for any purpose within the authority of the Auditor, including performing audits of any type, assessing government efficiency, risk assessment, fraud detection, audit planning, and evidence gathering. Now allows representatives of the Auditor (was, agents of the Auditor) to examine all books and accounts of those individuals as they relate to transactions with any State agency. Authorizes the Auditor to initiate an action in Superior Court for a show cause hearing upon a person's failure or refusal to comply with a request made under GS 147-64.7. Makes technical changes. Increases the Auditor’s responsibilities under GS 147-64.6(c) to include notifying the Department of Revenue if an audit or investigation reveals that money is owed to a State agency so that it may collect the funds owed.
Makes conforming changes to GS 143B-1350 and GS 126-5. Repeals 143B-168.12(b) which subjected the North Carolina Partnership to audit and review by the State Auditor and required the Auditor to conduct annual financial and compliance audits of the North Carolina Partnership. Repeals Section 62(b) of SL 2014-115, which required the State Auditor to verify and certify the required membership numbers need to qualify for payroll deduction for the employees' association. Repeals GS 143B-1410, which concerned the State Auditor's audits of the 911 Board.
Previous title was AN ACT TO CLARIFY THE POWERS OF THE STATE AUDITOR AND TO MAKE OTHER CHANGES RELATED TO THE STATE AUDITOR.