Contains whereas clauses.

Section 1.

Amends the disabled veteran property tax homestead exclusion (GS 105-277.1C) as follows, effective for taxable years beginning on or after July 1, 2025. Increases the amount of the exclusion to the first $75,000 of the appraised value of the veteran’s residence (was, the first $45,000 of the appraised value). Effective for taxable years beginning on or after July 1, 2026, increases the amount of the exclusion to the first $125,000 of the appraised value and to the lesser of $500,000 or 100% of the appraised value of the residence starting July 1, 2027. Specifies that a qualifying owner who receives an exclusion under GS 105-277.1C is not eligible for any other property tax relief.

Sets a holds harmless amount as the appraised value of the property excluded from taxation under the disabled veteran’s property tax homestead exclusion, multiplied by the applicable local tax rate. Sets a total hold harmless amount as the sum of the hold harmless amount for all property excluded from taxation under this statute in the county multiplied by 50% plus the hold harmless amount for all property excluded from taxation under this statute in the cities located in the county multiplied by 50%.

Requires counties and cities to notify the Secretary of Revenue (Secretary) of the total hold harmless amount and disallows reimbursement to the local government if it fails to notify the Secretary by the due date. Requires the Secretary to reimburse the city or county on or before December 31 of each year, provided however, that if the hold harmless amount for any city or county exceeds 1% of its total general fund revenue for the most recent fiscal year, the Secretary will also reimburse that city or county for all amounts exceeding that threshold. Requires county to disperse attributable reimbursement funds to cities within the county. Requires cities or counties that received funds because they were collecting taxes for another unit of government or special district to credit those funds to those units in accordance with regulations issued by the Local Government Commission. Pays for the reimbursement and the Secretary’s costs in administering the reimbursement by drawing those from the individual income tax revenues received under Part 2 of Article 4 in GS Chapter 105.

Allows for disabled veterans or their surviving spouses who have not remarried to apply for prequalification of the homestead exemption tax relief, even before purchasing a property, so long as a prequalified veteran/eligible spouse applies for the property tax relief when purchasing the property. Sets forth an application process and notice requirements. Makes conforming changes.

Effective for tax years beginning July 1, 2025, except as otherwise specified.

Section 2.

Amends GS 105-275 (Property classified and excluded from the tax base) to exclude from property tax any motor vehicles owned by a person who has a 100% disability rating certified by the US Department of Veterans Affairs and that are used by that person as their primary personal vehicle. Excludes vehicles used primarily for business or commercial purposes.

Amends GS 105-330.4 (concerning motor vehicle property taxes), as follows. Sets a holds harmless amount as the appraised value of the property excluded from taxation under the disabled veteran’s property tax motor vehicle exclusion, multiplied by the applicable local tax rate.  Sets a total hold harmless amount as the sum of the hold harmless amount for all property excluded from taxation under this statute in the county multiplied by 50% plus the hold harmless amount for all property excluded from taxation under this statute in the cities located in the county multiplied by 50%.

Requires counties and cities to notify the Secretary of Revenue (Secretary) of the total hold harmless amount and disallows reimbursement to the local government if it fails to notify the Secretary by the due date. Requires the Secretary to reimburse the city or county on or before December 31 of each year, provided however, that if the hold harmless amount for any city or county exceeds 1% of its total general fund revenue for the most recent fiscal year, the Secretary will also reimburse that city or county for all amounts exceeding that threshold. Requires county to disperse attributable reimbursement funds to cities within the county. Requires cities or counties that received funds because they were collecting taxes for another unit of government or special district to credit those funds to those units in accordance with regulations issued by the Local Government Commission. Pays for the reimbursement and the Secretary’s costs in administering the reimbursement by drawing those from the individual income tax revenues received under Part 2 of Article 4 in GS Chapter 105.

Applies to motor vehicles registered on or after the act becomes law and motor vehicle property tax exemptions occurring on or after that date.

Section 3.

Appropriates $10 million from the General Fund to the Department of Military and Veterans Affairs (Department) for 2025-26 to be used to establish the Veterans’ Economic Development Incentive Grant Program (Program), to provide financial assistance in the form of grants to eligible entities to promote affordable housing initiatives for veterans, infrastructure improvements for veterans, and veteran employment programs. Specifies that the funds do not revert but remain available until they are expended. Contains definitions. Provides for an application and awards on a first-come, first-served basis. Caps the grant amount at $100,000 per qualifying project. Allows the Department to retain up to 5% of the appropriated funds for administrative expenses.

Section 4.

By no later than September 1 of each year, requires the Department to provide a report to the specified NCGA committee and the Fiscal Research Division that contains the following:

1. An assessment of the financial impact on local governments of the provisions of this act.
2. Data on the number of veterans benefitting from the homestead exclusion and motor vehicle tax exemption, as modified by this act.
3. An evaluation of whether the Veterans' Economic Development Incentive Fund has contributed to workforce development for veterans, infrastructure improvements for veterans, and affordable housing initiatives.