HB 358 — Continuing Budget Operations Part II.

Section 4.2 of S.L.

2020-4, as amended by Section 1.6 of S.L.

2020-97, Section 20.11 of S.L.

2022-6, Section 11.12 of S.L.

2022-74, Section 11.5A of S.L.

2023-134, and Section 10.6 of S.L.

2024-51, reads as rewritten:

"… "SECTION 4.2.(b) Definitions.

– For purposes of this section, the following definitions apply:

… (4) Net loan funds.

– The total loan fund allocation authorized in subdivision (45) of Section 3.3 of this act less (i) the amount used in accordance with subdivision (a)(3a) of this section, (ii) the maximum amount allowed under applicablefederallaworguidanceforthecostofadministeringtheloansmade under the program, (iii) the State's loan funds that are not recaptured, and (iv) expenses incurred to recapture loan funds, and (v) an amount equal to the amount of non-State funds provided as matching funds pursuant to subsection (c) of this section.funds.

…." Page 2 House Bill 358-Second Edition General Assembly Of North Carolina Session 2025 2 SUBPART I-D.

REVERSION, LIMITATIONS ON USE OF FUNDS, AUDIT, AND REPORTING OF FUNDS SECTION 1D.1.(a) Reversion.

– Funds appropriated under Subpart I-B of this Part shall revert to the Savings Reserve if not expended or encumbered by June 30, 2031.

SECTION 1D.1.(b) Receipt of Allocations.

– A recipient of State funds under this Part shall use best efforts and take all reasonable steps to obtain alternative funds that cover the losses or needs for which the State funds are provided, including funds from insurance policies in effect and available federal aid.

State funds paid under this Part are declared to be excess over funds received bya recipient from the settlement of a claim for loss or damage covered under the recipient's applicable insurance policy in effect or federal aid.

Where a recipient is an institution of higher education or a non-State entity, the requirement regarding alternative funds and the calculation of alternative funds received under this subsection includes seeking private donations to help cover the losses or needs for which State funds are provided.

An agency awarding State funds for disaster relief shall include a notice to the recipient of the requirements of this subsection.

SECTION 1D.1.(c) Remittance of Funds.

– If a recipient obtains alternative funds pursuant to subsection (b) of this section, the recipient shall remit the funds to the State agency from which the State funds were received.

A recipient is not required to remit any amount in excess of the State funds provided to the recipient under this Part.

The State agencyshall transfer these funds to the Savings Reserve.

SECTION 1D.1.(d) Contract Requirements.

– Any contract or other instrument entered into by a recipient for receipt of funds under this Part shall include the requirements set forth in subsections (b) and (c) of this section.

SECTION 1D.1.(e) Limitation on Powers of Governor.

– The Governor may not use the funds described in this Part to make budget adjustments under G.S.

143C-6-4 or to make reallocations under G.S.

166A-19.40(c).

Nothing in this Part shall be construed to prohibit the Governor from exercising the Governor's authority under these statutes with respect to funds other than those described in this Part.

SECTION 1D.1.(f) Directive.

– The Governor shall ensure that funds allocated in thisPartareexpended in amannerthatdoesnot adverselyaffect anyperson'sorentity's eligibility for federal funds that are made available, or that are anticipated to be made available, as a result of natural disasters.

The Governor shall also, to the extent practicable, avoid using State funds to cover costs that will be, or likely will be, covered by federal funds.

SECTION 1D.1.(g) Continuation of Allocation Reporting Requirements.

– The Office of State Budget and Management shall add the appropriations and allocations provided for in this Part to the reporting requirements set forth in Section 4.1(g) of S.L.

2025-2.

SECTION 1D.1.(h) Continuation of State Auditor Oversight.

– The Office of the Governor of North Carolina shall continue the reporting requirements set forth in Section 4.2 of S.L.

2025-2 for the funds appropriated and allocated in this Part.

The State Auditor shall include all funds appropriated and allocated under this Part in their report to the Joint Legislative Commission on Governmental Operations and include the expenditure of these funds in the public dashboard as set forth in Section 4.2 of S.L.

2025-2.

SUBPART I-E.

EFFECTIVE DATE SECTION 1E.1.

This Part is effective when it becomes law.

PART II.

EDUCATION CARRYFORWARD FOR WILSON CC BIOLOGICS FUNDING SECTION 2.1.

Section 2A.5A of S.L.

2025-89 reads as rewritten:

House Bill 358-Second Edition Page 3 General Assembly Of North Carolina Session 2025 "SECTION 2A.5A.

There is appropriated from the General Fund to the Community Colleges System Office the sum of ten million dollars ($10,000,000) in nonrecurring funds for the 2025-2026 fiscal year to provide funds to Wilson Community College to support the operation of the biologics training center.

Funds appropriated pursuant to this section shall not revert at the end of the 2025-2026 fiscal year but shall remain available until June 30, 2027." 7 EDUCATION TECHNICAL CORRECTIONS SECTION 2.2.

G.S.

115C-366(a9), as amended by S.L.

2025-72, reads as rewritten:

"(a9) A student who is not a domiciliary of a local school administrative unit shall be permitted to register to enroll in the public schools of that unit by remote means, including electronic means, prior to commencement of the student's residency in the local school administrative unit if all of the following apply:

… (4) A parent or legal guardian submits proof of residency and documentation related to the disciplinary actions pursuant to G.S.

115C-366(a4) upon the child commencing attendance.

If the proof of residency has not yet become available because the parent or legal guardian and child are residing in temporaryhousing, the local school administrative unit shall do the following:

a.

Allow the child to enroll and begin attending school in that unit of anticipated domicile (i) for a period of up to one year (i) from the parent or legal guardian's reporting-for-dutydate, separation date from activemilitaryduty,or anticipatedseparationdate fromactivemilitary duty or (ii) through the end of the school year before being considered a resident of another local school administrative unit.

AllowThe ainsurance childholding whocompany system's non-United States group-wide supervisor is not in a highreciprocal schooljurisdiction juniorbut ornonetheless seniorrecognizes tothe enrollgroup andcapital begincalculation attendingas schoolthe inworldwide thatgroup unitcapital ofassessment anticipatedfor domicileUnited throughStates highinsurance schoolgroups graduation.who operate in that jurisdiction.

A(c) localRecognition schoolof administrativeGroup unitCapital shallCalculation. make available to a student who registers to enroll pursuant to this subsection the same opportunities available to a student enrolled contemporaneously with domicilia, such as requesting or applying for school assignment, registering for courses, and applying for any other programs that require additional request or application.

Nothing– inFor thispurposes subsectionof shallsubdivision be(b)(4) construedof tothis curtailsection, a localnon-United schoolStates administrativejurisdiction unit'srecognizes authoritythe pursuantgroup tocapital G.S.calculationifit satisfies any of the following criteria:

115C-366(a5)."(1) SECTIONA 2.3.(a)competent G.S.regulatory authority in the jurisdiction affirms that insurers and insurance groups whose lead state is accredited by the NAIC under the NAIC accreditation program shall be subject onlyto worldwide prudential insurance group supervision, including worldwide group governance, solvency and capital, and reporting, as applicable, by that jurisdiction's lead state commissioner and will not be subject to group supervision, including worldwide group governance, solvency and capital, and reporting, at the level of the worldwide parent undertaking of the insurance or reinsurance group by the non-United States jurisdiction.

115D-39.5(a)(2),(2) asA enactedcompetent byregulatory S.L.authority in the jurisdiction affirms that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, shall be provided to the lead state commissioner in accordance with an information sharing agreement in the form of a memorandum of understanding or similar document.

2025-56,Acceptable readsinformation assharing rewritten:agreements include the International Association of Insurance Supervisors Multilateral Memorandum of Understanding or other multilateral memoranda of understanding coordinated by the NAIC.

"(2)The Coursesjurisdiction requesteddoes bynot satisfy this criteria if the followinglead entitiesstate commissioner determines, in consultation with the NAIC, that supportthe requirements of the organizations'information trainingneedsandareonaspecializedcourselistapprovedbytheStateBoard:sharing agreements are no longer in force.

…(3) j.If no United States insurance groups operate in the non-United States jurisdiction, that non-United States jurisdiction notifies the lead state commissioner and the International Association of Insurance Supervisors in writing that the jurisdiction considers the group capital calculation an acceptable international capital standard.

The(d) EasternLimitation Band of CherokeeExemptions. Indians and the Catawba Indian Nation law enforcement, fire, or EMS or rescue and lifesaving tribal government departments or programs.

…."– SECTIONNotwithstanding 2.3.(b)subsection Section(b) 5of this section, the lead state commissioner shall require filing of S.L.the group capital calculation for United States operations of any non-United States based insurance holding company system if the lead state commissioner determines that the filing is required for (i) prudential oversight and solvency monitoring purposes or (ii) ensuring the competitiveness of the insurance marketplace.

2025-57Page is2 repealed.House Bill 358-First Edition General Assembly Of North Carolina Session 2025 (e) Consideration and Correction ofNAIC Materials.

SECTION– 2.4.(a)Theleadstatecommissionershall G.S.consider any relevant lists, reports, and recommendations published by the NAIC in determining whether the exceptions of subdivision (b)(4) of this section apply to an insurer.

116-143(d1),If asthe amendedlead state commissioner's determination differs from relevant materials published by S.L.the NAIC, the lead state commissioner shall provide the NAIC with written justification for the difference supported by documentation.

2025-17,If readspublished asNAIC rewritten:materials indicate that a non-United States jurisdiction recognizes the group capital calculation and the lead state commissioner determines that the jurisdiction no longer meets the requirements of subsection (c) of this section, the lead state commissioner may recommend a correction of the materials to the NAIC.

"(d1)(f) NotwithstandingDiscretionary subsectionExemptions. (c) of this section, the Board of Governors of The University of North Carolina may do any of the following:

(1)– Personnel.The lead state commissioner may either (i) exempt the ultimate controlling person of an insurance holding company system from the filing requirement of subsection (a) of this section or (ii) authorize the ultimate controlling person of an insurance holding company to file a limited group capital filing in lieu of the filing requirement of subsection (a) of this section if all of the following apply:

–(1) Provide regulations under which personnel may enroll in The Universityinsurance ofholding Northcompany Carolinasystem freehas ofannual chargedirect forwritten tuition and feesunaffiliated duringassumed thepremium, periodincluding ofinternational normaldirect employmentand ifassumed thepremium, (i)but enrollmentexcluding doespremiums notreinsured interfere with normal employment obligations and (ii) enrollments are not counted for the PageFederal 4Crop HouseInsurance BillCorporation 358-Secondand EditionFederal GeneralFlood AssemblyProgram, Ofof Northless Carolinathan Sessionone 2025billion purposedollars of($1,000,000,000). receiving General Fund appropriations.

Personnel(2) mayThe enrollinsurance freeholding company system does not include insurers within its holding company structure that are domiciled outside of chargethe forUnited tuitionStates andor feesone asof follows:its territories.

(3) The insurance holding company system does not include banking, depository, or other financial entity that is subject to an identified regulatory capital framework within its holding company structure.

(4) The insurance holding company system attests that there are no material changes in transactions between insurers and non-insurers in the group that haveoccurred sincethelast filingof anannual groupcalculation report,ifany.

(5) The non-insurers within the insurance holding company system do not pose a material financial risk to the insurer's ability to honor policyholder obligations.

(g) Resumption of Filings.

– If the lead state commissioner determines that an insurance holding company system exempted from the filing requirements of subsection (a) of this section no longer meets the requirements for an exemption, the insurance holding company system shall file the group capital calculation at the next annual filing date unless given an extension by the lead state commissioner based on reasonable grounds shown.

If the lead state commissioner, pursuant to subsection (f) of this section, either grants a discretionary exemption or authorizes a limited group capital filing, the lead state commissioner may require the ultimate controlling person of that insurance holding company system to file an annual group calculation at any time if any of the following apply:

(1) Any insurer within the insurance holding company system is in a risk-based capital action level event as set forth in Article 12 of this Chapter or a similar standard for a non-United States insurer.

(2) Any insurer within the insurance holding company system meets one or more of the standards of an insurer deemed to be in hazardous financial condition pursuant to the criteria provided in G.S.

58-30-60.

(3) Any insurer within the insurance holding company system otherwise exhibits qualities of a troubled insurer as determined by the lead state commissioner based on unique circumstances, including the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests.

House Bill 358-First Edition Page 3 General Assembly Of North Carolina Session 2025 "§ 58-19-27.

Liquidity stress test.

(a) Participation and Reporting Requirement.

– The ultimate controlling person of every insurer subject to registration pursuant to G.S.

58-19-25 shall be included in the NAIC liquidity stress test framework and file a report with the lead state commissioner detailing the results of a specific year's liquidity stress test if either of the following applies:

(1) The insurer meets the scope criteria of that data year's NAIC liquidity stress test framework.

(2) The insurer did not meet the scope criteria of that data year's liquidity stress test framework, but the lead state commissioner, in consultation with the NAIC Financial Stability Task Force or its successor, nonetheless determines the insurer should be included in the NAIC liquidity stress test framework for that data year.

In making this determination, the lead state commissioner shall attempt to avoid the frequent inclusion or exclusion of insurers.

(b) The performance of, and filing of the results from, a specific year's liquidity stress test shall comply with (i) the NAIC liquidity stress test framework's instructions and reporting templates for that year and (ii) all lead state commissioners' directives issued in consultation with the NAIC Financial Stability Task Force or its successor.

(c) Exemptions.

– The lead state commissioner may, in consultation with the NAIC Financial Stability Task Force or its successor, exempt an ultimate controlling person from the reporting requirements of subsection (a) of this section.

The lead state commissioner shall consider the intent of regulators to avoid having insurers scoped in and out of the NAIC liquidity stress test framework on a frequent basis when making this determination.

"§ 58-19-28.

Dissemination prohibited.

(a) Unless otherwiseprovidedbylaw,the making,publishing,disseminating, circulating, orplacingbeforethepublic, orcausingdirectlyorindirectlyto bemade, published,disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station or any electronic means of communication available to the public, or in any other way as an advertisement, announcement, or statement containing a representation or statement with regard to the group capital calculation, group capital ratio, the liquidity stress test results, or supporting disclosures for the liquidity stress test of any insurer or any insurer group, or of any component derived in the calculation by any insurer, broker, or other person engaged in any manner in the insurance business is prohibited.

(b) Notwithstanding subsection (a) of this section, if any materially false statement with respect to the groupcapital calculation,resulting groupcapital ratio, an inappropriatecomparison of any amount to an insurer's or insurance group's group capital calculation or resulting group capital ratio, liquidity stress test result, supporting disclosures for the liquidity stress test, or an inappropriate comparison of any amount to an insurer's or insurance group's liquidity stress test result, or supporting disclosures is published in any written publication and the insurer is able to demonstrate to the Commissioner with substantial proof the falsity or inappropriateness of the statement, then the insurer may publish announcements in a written publication if the sole purpose of the announcement is to rebut the materially false or inappropriate statement." PART II.

CONFORMING CHANGES SECTION 2.(a) G.S.

58-19-5 reads as rewritten:

"§ 58-19-5.

Definitions.

As used in this Article, unless the context requires otherwise, the following terms have the following meanings:

… (10a) Group capital calculation.

– A report, completed in accordance with the group capital calculation instructions as adopted and amended by the NAIC, used to Page 4 House Bill 358-First Edition General Assembly Of North Carolina Session 2025 evaluate the capital adequacy of insurance holding company systems that includes information on the sources of capital within the system, where that capital is located, and sources of risk.

(10a)(10b) Group-wide supervisor.

– The regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the Commissioner under G.S.

58-19-38 to have sufficient significant contacts with the internationally active insurance group.

… (12b) Lead state commissioner.

– The person responsible for regulating the insurance holding company system as determined by the Commissioner in accordance with the procedures within the Financial Analysis Handbook adopted by the NAIC.

(12c) Limited group capital filing.

– A simplified version of the group capital calculation, completed in accordance with procedures adopted by the NAIC, where an insurance holding company system only provides a limited amount of data, allowing them to avoid the filing of a full group capital calculation.

(12d) Liquidity stress test.

– A process simulating extreme market conditions to assess an entity's ability to maintain sufficient liquidity in response to adverse events.

(12e) NAIC.

– The National Association of Insurance Commissioners.

(12f) NAIC liquidity stress test framework.

– A publication, adopted and amended by the NAIC in accordance with procedures adopted by the NAIC, which includes a history of the NAIC's development of regulatory liquidity stress testing, the scope criteria applicable for a specific data year, and the liquidity stress test instructions and reporting templates for a specific data year.

… (13a) Reciprocal jurisdiction.

– As defined in G.S.

58-7-21(b)(4b).

(13b) Scope criteria.

– Designated exposure bases, detailed in the NAIC liquidity stress test framework along with minimum magnitudes thereof for the specified data year, used to establish a preliminary list of insurers included in the NAIC liquidity stress test framework for that data year.

…." SECTION 2.(b) G.S.

58-19-15 reads as rewritten:

"§ 58-19-15.

Acquisition of control of or merger with domestic insurer.

… (b) The statement to be filed with the Commissioner under subsection (a) of this section shall be furnished on a Form A as prescribed by the Commissioner, made under oath or affirmation, and shall contain the following information:

… (11a) An agreement by the person required to file the statement referred to in subsection (a) of this section that it will provide the annual report, as specified in G.S.

58-19-25, G.S.

58-19-25(l), for so long as control exists.

…." SECTION 2.(c) G.S.

58-19-25 reads as rewritten:

"§ 58-19-25.

Registration of insurers.insurers;

disclaimer of affiliation;

enterprise risk filings.

… (c) No information need be disclosed on the registration statement filed pursuant to subsection (b) of this section if such information is not material for the purposes of this section.

Unless the Commissioner by rule or order provides otherwise, all material.

For purposes of this House Bill 358-First Edition Page 5 General Assembly Of North Carolina Session 2025 section, all sales, purchases, exchanges, loans or extensions of credit, investments, or guarantees involving one-half of one percent ( 1//s2%) (0.5%) or less of an insurer's admitted assets as of the preceding December 31 are not material for the purposes of this section.material, unless the Commissioner by rule or order provides otherwise.

This subsection does not apply to the reporting requirements of G.S.

58-19-26 and G.S.

58-19-27.

… (l) Effective January 1, 2016, the ultimate controlling person of every insurer subject to registration shall also file an annual enterprise risk report on Form F as prescribed by the Commissioner.

The report shall, to the best of the ultimate controlling person's knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer.

The report shall be filed with the lead state commissioner of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the NAIC.commissioner." SECTION 2.(d) G.S.

58-19-40 reads as rewritten:

"§ 58-19-40.

Confidential treatment.

(a) Documents, materials, or other information in the possession or control of the Department that are obtained by or disclosed to the Commissioner or any other person in the course of an examination or investigation made pursuant to G.S.

58-19-35, and all information reported or provided to the Department pursuant to subdivisions (11a) and (11b) of G.S.

58-19-15(b), G.S.

58-19-25, G.S.

58-19-30 and G.S.

58-19-38 are recognized by this State as being proprietary and to contain trade secrets, and shall be confidential by law and privileged, shall not be considered a public record under either G.S.

58-2-100 or Chapter 132 of the General Statutes, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.

However, the Commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioner's official duties.

The Commissioner shall not otherwise make the documents, materials, or other information public without the prior written consent of the insurer to which it pertains unless the Commissioner, after giving the insurer and its affiliates who would be affected thereby notice and opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by the publication thereof, in which event the Commissioner may publish all or any part of the information in such manner as may be deemed appropriate.

(a1) With respect to information provided to the Department pursuant to G.S.

58-19-26 and G.S.

58-19-27, the Commissioner shall:

(1) Maintain the confidentiality of the group capital calculation and group capital ratio produced within the calculation and any group capital information received from an insurance holding company system supervised by the Federal Reserve Board or any United States group-wide supervisor.

(2) Maintain the confidentiality of the liquidity stress test results and supporting disclosures and any liquidity stress test information received from an insurance holding company system supervised by the Federal Reserve Board and non-United States group-wide supervisors.

… (c) In order to assist in the performance of the duties imposed by this Article, the Commissioner:

(1) May share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection(a)ofthissection,includingproprietaryandtradesecretdocuments and materials, with other all of the following:

AOther full-timestate, facultymemberfederal, ofand theinternational rankregulatory ofagencies, full-timewith instructorthe orNAIC aboveand ofits Theaffiliates Universityand ofsubsidiaries, Northand Carolinawith maystate, shallagencies. not enroll in not more than three courses per year.

Page 6 House Bill 358-First Edition General Assembly Of North Carolina Session 2025 b.

A full-time staff member of The UniversityNAIC. of North Carolina may shall not enroll in more than three courses per year.

AAny full-timethird-party orconsultants part-timedesignated campusby law enforcement officer mayenroll in the numberCommissioner. of courses per year determined by regulation.

…." SECTION 2.4.(b) This section is effective June 26, 2025, and applies beginning with the 2025-2026 academic year.

SECTION 2.5.

Part 4 of S.L.

2025-46 is repealed.

SECTION 2.6.

Part 3 of S.L.

2025-56 is repealed.

SECTION 2.7.

Except as otherwise provided, Sections 2.2 through 2.7 of this act are effective when they become law.

CLARIFICATIONOFREDUCTIONSFORVIRTUALCIHSANDSMALLSPECIALTY SCHOOL FUNDING SECTION 2.8.(a) Section 2A.6(b) of S.L.

2025-89 reads as rewritten:

"SECTION 2A.6.(b) The funds appropriated to the Department of Public Instruction are reduced for the 2025-2026 fiscal year by the sum of nine million one hundred twenty-two thousand one hundred eighty-four dollars ($9,122,184) and for the 2026-2027 fiscal year by the sum of nine million one hundred twenty-two thousand one hundred eighty-four dollars ($9,122,184), as follows:

(1) Reduced-Price Meal Copays (Budget Code 13510, Budget Fund 101180).

– For each year of the 2025-2027 fiscal biennium, three million dollars ($3,000,000) in recurring funds to offset copays for reduced-price school meals to match actual expenditures.

(2) Small Specialty High Schools (Budget Code 13510, Budget Fund 101180).

– For each year of the 2025-2027 fiscal biennium, one million eight hundred seventeen thousand nine hundred sixty-eight dollars ($1,817,968) in recurring funds to eliminate funds for small specialty high schools, an initiative that previously supported a school-within-a-school model.

Any small specialty high school authorizedtooperate pursuant to Section7.52(a)ofS.L.

2005-276 that received funding for that purpose during the 2024-2025 fiscal year shall continue to receive funding for a single additional principal and clerical position hired pursuant to that section.

(3) Learn and Earn (Budget Code 13510, Budget Fund 101180).

– For each year of the 2025-2027 fiscal biennium, one million dollars ($1,000,000) in recurring funds to eliminate funds for virtual cooperative innovative high schools, which existed under a previous version of the State's dual enrollment program but are now part of the Career and College Promise program.

Any cooperative innovative high school originally approved as a virtual cooperative innovative high school shall continue to receive funding pursuant to Section 7.22(c)(1) of S.L.

2017-57.

…." SECTION 2.8.(b) This section is effective when it becomes law.

AUTHORIZE NEW COOPERATIVE INNOVATIVE HIGH SCHOOLS AND CODIFY SUPPLEMENTAL FUNDING House Bill 358-Second Edition Page 5 General Assembly Of North Carolina Session 2025 SECTION 2.9.(a) Of the funds appropriated to the Department of Public Instruction by this act for cooperative innovative high schools, the Department shall allocate to local school administrative units the sum of six hundred thirty-five thousand dollars ($635,000) in recurring funds for each year of the 2025-2027 fiscal biennium in amounts consistent with those set forth in G.S.

115C-238.54A, as enacted by this section, as supplemental funding for the following cooperative innovative high schools for the 2025-2026 school year:

(1) Hawthorne Academy of Health Sciences.

(2) Martin Innovative Early College of Health Sciences.

(3) Moore Innovative High School.

SECTION 2.9.(b) Beginning with the 2025-2026 school year and for subsequent school years thereafter, notwithstanding G.S.

115C-238.51A(c), G.S.

115C-238.54, and any other provision of law to the contrary, Hawthorne Academy of Health Sciences, Martin Innovative Early College of Health Sciences, and Moore Innovative High School shall be permitted to operate in accordance with G.S.

115C-238.53 and G.S.

115C-238.54 as cooperative innovative high schools approved under G.S.

115C-238.51A(c) and shall be subject to the evaluation requirements of G.S.

115C-238.55.

SECTION 2.9.(c) There is appropriated from the General Fund to the Department of Public Instruction the sum of one million one hundred ten thousand dollars ($1,110,000) in recurring funds for each year of the 2025-2027 fiscal biennium to provide supplemental funding in accordance with G.S.

115C-238.54A, as enacted by this act, to (i) Dare Early College High School, (ii) Rockingham County CTE Innovation High School, and (iii) each school named in subsection (a) of this section.

SECTION 2.9.(d) Part 9 of Article 16 of Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C-238.54A.

Cooperative innovative high schools – supplemental allotment funding based on county development tier designation.

(a) Allocation of Funding.

– The Department shall allocate cooperative innovative high school supplemental allotment funds to local school administrative units with a cooperative innovative high school approved pursuant to G.S.

115C-238.51A(c) based on developmental tier area, as defined in G.S.

143B-437.08, as follows:

(1) Local school administrative units located in a development tier one area shall be allocated funding as follows:

a.

The sum of two hundred seventy-five thousand dollars ($275,000) in recurringfundsforeachcooperativeinnovativehighschool intheunit.

b.

For the Northeast Regional School of Biotechnology and Agriscience, the Department shall allocate the sum of three hundred ten thousand dollars ($310,000) in recurring funds from the regional school supplemental allotment for the school for each fiscal year.

(2) Local school administrative units located in a development tier two area shall be allocated the sum of two hundred thousand dollars ($200,000) in recurring funds for each cooperative innovative high school in the unit.

(3) Local school administrativeunits locatedin adevelopmenttierthreearea shall be allocated the sum of one hundred eighty thousand dollars ($180,000) in recurring funds for each cooperative innovative high school in the unit.

(b) Applicability of Funds.

– The allotment of funds to local school administrative units pursuant to subsection (a) of this section shall include cooperative innovative high schools approved pursuant to G.S.

115C-238.51A(c) operated by a local school administrative unit regardless of not receiving allotments in a prior fiscal year.

Funds shall not be allocated to local school administrative units for cooperative innovative high schools approved by the State Board pursuant to G.S.

115C-238.51A(b)." Page 6 House Bill 358-Second Edition General Assembly Of North Carolina Session 2025 TUITION GRANT SCALE-UP FUNDS FOR THE NORTH CAROLINA SCHOOL OF SCIENCE AND MATHEMATICS AND THE UNIVERSITY OF NORTH CAROLINA SCHOOL OF THE ARTS SECTION 2.10.

There is appropriated from the General Fund to the Board of Governors of The University of North Carolina for each year of the 2025-2027 fiscal biennium the sum of two million eight hundred thousand dollars ($2,800,000) in recurring funds to support tuitiongrantsforincreasedeligiblehighschool graduatesoftheNorthCarolinaSchoolofScience and Mathematics and the University of North Carolina School of the Arts under Part 6 of Article 23 of Chapter 116 of the General Statutes.

REVISE HIGHER EDUCATION ACCREDITATION REQUIREMENTS SECTION 2.11.(a) G.S.

116-11.4 reads as rewritten:

"§ 116-11.4.

Accreditation.

(a) Definitions.

– The following definitions apply in this section:

(1) Accreditation cycle.

– The period of time during which a constituent institution of The University of North Carolina is accredited.

(2) Accrediting agency.

– An agency or association that accredits institutions of higher education.

(2a) Institutional accrediting agency.

– An accrediting agencythat is recognized as an institutional accrediting agency by the United States Department of Education pursuant to 20 U.S.C.

§ 1099b.

(3) Regional Preferred accrediting agency.

– One of the following accrediting agencies:An accrediting agency that meets all of the following criteria:

a.

Is an institutional accrediting agency.

b.

Is one of the following accrediting agencies:

1.

Commission for Public Higher Education.

a.2.

Higher Learning Commission.

b.3.

Middle States Commission on Higher Education.

c.4.

New England Commission on Higher Education.

d.5.

Northwest Commission on Colleges and Universities.

e.6.

Southern Association of Colleges and Schools Commission on Colleges.

f.7.

Western Association of Schools and Colleges Senior College and University Commission.

(b) Prohibit Consecutive Accreditation by an Accrediting Agency.

– A constituent institution of The University of North Carolina shall not receive accreditation by an accrediting agency for consecutive accreditation cycles except as provided in subsection (c) of this section.

(b1) Approved Accreditation Required.

– A postsecondary constituent institution of The University of North Carolina shall maintain accreditation from a preferred accrediting agency.

A postsecondary constituent institution of The University of North Carolina may also receive accreditation from an accrediting agency that is not a preferred accrediting agency as long as the postsecondary constituent institution continues to maintain its accreditation from a preferred accrediting agency.

(c) Accreditation Transfer Procedure.

– A constituent institution that pursues accreditation with a different accrediting agency in accordance with this section shall pursue accreditation with a regionalaccrediting agency.

If the constituent institution is not granted candidacy status by any regional accrediting agency that is different from its current accrediting agency at least three years prior to the expiration of its current accreditation, the constituent institution may remain with its current accrediting agency for an additional accreditation cycle.

…." House Bill 358-Second Edition Page 7 General Assembly Of North Carolina Session 2025 SECTION 2.11.(b) G.S.

115D-21.2, as enacted by subsection (c) of Section 1 of S.L.

2025-56, reads as rewritten:

"§ 115D-21.2.

Accreditation.

(a) Definitions.

– The following definitions apply in this section:

(1) Accreditation cycle.

– The period of time during which a community college is accredited.

(2) Accrediting agency.

– An agency or association that accredits institutions of higher education.

(2a) Institutional accrediting agency.

– An accrediting agencythat is recognized as an institutional accrediting agency by the United States Department of Education pursuant to 20 U.S.C.

§ 1099b.

(3) Regional Preferred accrediting agency.

– One of the following accrediting agencies:An accrediting agency that meets all of the following criteria:

a.

Is an institutional accrediting agency.

b.

Is one of the following accrediting agencies:

1.

Commission for Public Higher Education.

a.2.

Higher Learning Commission.

b.3.

Middle States Commission on Higher Education.

c.4.

New England Commission on Higher Education.

d.5.

Northwest Commission on Colleges and Universities.

e.6.

Southern Association of Colleges and Schools Commission on Colleges.

f.7.

Western Association of Schools and Colleges Accrediting Commission for Community and Junior Colleges.

(b) Prohibit Consecutive Accreditation by an Accrediting Agency.

– A community college shall not receive accreditation by an accrediting agency for consecutive accreditation cycles except as provided in subsection (c) of this section.

(b1) Approved Accreditation Required.

– A community college shall maintain accreditation from a preferred accrediting agency.

A community college may also receive accreditation from an accrediting agency that is not a preferred accrediting agency as long as the community college continues to maintain its accreditation from a preferred accrediting agency.

(c) Accreditation Transfer Procedure.

– A community college that pursues accreditation with adifferent accrediting agencyin accordance with this section shall pursueaccreditationwith a regionalaccrediting agency.

If the community college is not granted candidacy status by any regional accrediting agency that is different from its current accrediting agency at least three years prior to the expiration of its current accreditation,the community college may remain with its current accrediting agency for an additional accreditation cycle.

…." SECTION 2.11.(c) G.S.

90-354(a) reads as rewritten:

"§ 90-354.

Appointments and removal of Board members, terms and compensation.

(a) The members of the Board shall be appointed as follows:

(1) The Governor shall appoint the following members:

a.

One licensed dietitian/nutritionist as described in G.S.

90-353(a1)(1), who shall be an educator on the faculty of a college or university accredited at the time from the appropriate regional institutional accrediting agency recognized by the Council on Higher Education Accreditation and the United States Department of Education, specializing in the field of dietetics or nutrition.

b.

The licensed physician as described in G.S.

90-353(a1)(3).

c.

The public member as described in G.S.

90-353(a1)(4).

Page 8 House Bill 358-Second Edition General Assembly Of North Carolina Session 2025 (2) The General Assemblyupon the recommendation of the Speaker of the House ofRepresentativesshallappointonelicenseddietitian/nutritionistasdescribed in G.S.

90-353(a1)(1) and one licensed nutritionist as described in G.S.

90-353(a1)(2), both in accordance with G.S.

120-121.

One of these appointees shall be a dietician/nutritionist or a nutritionist whose primary practice is clinical dietetics or nutrition in a hospital or long-term care institution regulated under Article 5 or Part 1 of Article 6 of Chapter 131E of the General Statutes.

(3) The General Assembly upon the recommendation of the President Pro Tempore of the Senate shall appoint one licensed dietitian/nutritionist as described in G.S.

90-353(a1)(1) and one licensed nutritionist as described in G.S.

90-353(a1)(2), both in accordance with G.S.

120-121.

One of these appointees shall be a dietician/nutritionist or a nutritionist whose primary practice is consulting in, or the private practice of, dietetics or nutrition." SECTION 2.11.(d) G.S.

90-357.5 reads as rewritten:

"§ 90-357.5.

License requirements.

(a) Each applicant for a license as a licensed dietitian/nutritionist shall submit a completed application as required by the Board, submit any fees as required by the Board, and meet one of the following criteria:

(1) The applicant shall submit proof of completion for the following educational, supervised practice experience and examination requirements:

a.

The applicant has received a baccalaureate degree, master's, or doctoral degree or validated foreign equivalent with a major in human nutrition, foods and nutrition, dietetics, food systems management, community nutrition, public health nutrition, nutrition education, nutrition,nutritionscience,clinicalnutrition,appliedclinicalnutrition, nutrition counseling, nutrition and functional medicine, nutritional biochemistry, nutrition and integrative health, or an equivalent course of study, from a college or university accredited at the time of graduation from the appropriate regional institutional accrediting agency recognized by the Council on Higher Education Accreditation and the United States Department of Education and that, as approved by the Board, meets the competency requirements of an ACEND accredited didactic program in dietetics that shall, at a minimum, include the following courses:

… (c) Each applicant for a license as a licensed nutritionist shall submit a completed application as required by the Board, submit any fees as required by the Board, and shall submit proof of the completion of all of the following educational, supervised practice experience, and examination requirements:

(1) The applicant has received any of the following from a college or university accredited at the time of graduation from the appropriate regional institutional accrediting agency recognized by the Council on Higher Education or a validated foreign equivalent:

a master's or doctoral nutrition degree with a major in human nutrition, foods and nutrition, dietetics, community nutrition, public health nutrition, nutrition education, nutrition, nutrition science, clinical nutrition, applied clinical nutrition, nutrition counseling, nutrition and functional medicine, nutritional biochemistry, nutrition and integrative health, or an equivalent course of study or a master's or doctoral degree in a field of clinical health care.

Regardless of the course of study, an applicant shall have House Bill 358-Second Edition Page 9 General Assembly Of North Carolina Session 2025 completed coursework from a regionally accredited college or university in medical nutrition therapy that shall consist of the following courses:

…." SECTION 2.11.(e) G.S.

90-359 reads as rewritten:

"§ 90-359.

Examinations.

Competency examinations shall be administered at least twice each year to qualified applicants for licensing.

Theexaminations maybe administeredbyanational testingservice.The examinations shall include the RDN Examination given by the Commission on Dietetic Registration, the CNS Examination given by the Board for Certification of Nutrition Specialists and the DACBN Examination given by the American Clinical Board of Nutrition.

The Board may include other nutrition therapy-focused examinations accredited by the National Commission for Certifying Agencies for graduates with a baccalaureate degree or higher from a college or universityaccredited at the time from the appropriate regional institutional accrediting agency recognized by the Council on Health Education Accreditation and the United States Department of Education that are approved by two-thirds vote of the entire Board." SECTION 2.11.(f) G.S.

90-631(b), as amended by subsection (c) of Section 2 of S.L.

2025-56, reads as rewritten:

"(b) A massage and bodywork therapy program operated by a North Carolina community college that is accredited by a regional preferred accrediting agency, as defined in G.S.

115D-21.2, is exempt from the approval process, licensure process, or both, established by the Board.

The college shall certify annually to the Board that the program meets or exceeds the minimum standards for curriculum, faculty, and learning resources established by the Board.

Students who complete the program shall qualify for licenses from the Board as if the program were approved, licensed, or both, by the Board." SECTION 2.11.(g) G.S.

93A-4(a2), as amended by subsection (d) of Section 2 of S.L.

2025-56, reads as rewritten:

"(a2) A certified real estate education provider shall pay a fee of ten dollars ($10.00) per licensee to the Commission for each licensee completing a postlicensing education course conducted by the school, provided that these fees shall not be charged to a community college, junior college, college, or university located in this State and accredited by a regional preferred accrediting agency, as defined in G.S.

115D-21.2 and G.S.

116-11.4, respectively." SECTION 2.11.(h) G.S.

93A-38.5(e), as amended by subsection (e) of Section 2 of S.L.

2025-56, reads as rewritten:

"(e) The Commission may establish a nonrefundable course application fee to be charged to private real estate education providers for the review and approval of a proposed continuing education course.

The fee shall not exceed one hundred twenty-five dollars ($125.00) per course.

The Commission may charge the private real estate education providers of an approved course a nonrefundable fee not to exceed seventy-five dollars ($75.00) for the annual renewal of course approval.

A private real estate education provider shall pay a fee of ten dollars ($10.00) per licensee to the Commission for each licensee completing an approved continuing education course conducted by the sponsor.

The Commission shall not charge a course application fee, a course renewal fee, or any other fee for a continuing education course sponsored by a community college, junior college, college, or university located in this State and accredited by a regional preferred accrediting agency, as defined in G.S.

115D-21.2 and G.S.

116-11.4, respectively." SECTION 2.11.(i) G.S.

93E-1-7(b2), as amended by subsection (f) of Section 2 of S.L.

2025-56, reads as rewritten:

"(b2) The Board shall not charge a course application fee, a course renewal fee, or anyother fee for a continuing education course offered by a North Carolina college, university, junior college, or communityor technical college accredited bya regional preferred accrediting agency, Page 10 House Bill 358-Second Edition General Assembly Of North Carolina Session 2025 as defined in G.S.

115D-21.2 and G.S.

116-11.4, respectively, or an agency of the federal, State, or local government." SECTION 2.11.(j) G.S.

93E-1-8, as amended by subsection (g) of Section 2 of S.L.

2025-56, reads as rewritten:

"§ 93E-1-8.

Education program approval and fees.

… (b) The Board may by rule set nonrefundable fees chargeable to private real estate appraisal schools or course sponsors, including appraisal trade organizations, for the approval and annual renewal of approval of their qualifying courses required by G.S.

93E-1-6(a), or equivalent courses.

The fees shall be one hundred dollars ($100.00) per course for approval and fiftydollars($50.00)percourseforrenewalofapproval.Nofeesshallbechargedfortheapproval or renewal of approval to conduct appraiser qualifying courses where such courses are offered by a North Carolina college, university, junior college, or community or technical college accredited by a regional preferred accrediting agency, as defined in G.S.

115D-21.2 and G.S.

116-11.4, respectively, or an agency of the federal, State, or local government.

… (d) Nonrefundable fees of one hundred dollars ($100.00) per course may be charged to schools and course sponsors for the approval to conduct appraiser continuing education courses and fifty dollars ($50.00) per course for renewal of approval.

However, no fees shall be charged for the approval or renewal of approval to conduct appraiser continuing education courses where such courses are offered by a North Carolina college, university, junior college, or community or technical college accredited by a regional preferred accrediting agency, as defined in G.S.

115D-21.2 and G.S.

116-11.4, respectively, or by an agency of the federal, State, or local government.

A nonrefundable fee of fifty dollars ($50.00) per course may be charged to current or former licensees or certificate holders requesting approval by the Board of a course for continuing education credit when approval of such course has not been previously obtained by the offering school or course sponsor." SECTION 2.11.(k) G.S.

115C-238.85 reads as rewritten:

"§ 115C-238.85.

Other virtual education providers.

Local school administrative units may partner with eligible providers other than NCVPS for e-learning opportunities.

Eligible providers shall meet all of the following:

(1) Be accredited by a regional accrediting agency such as, but not limited to, AdvancEd or the Southern Association of Colleges and Schools (SACS).an accrediting agency, such as Cognia or an institutional accrediting agency.

(2) Employ teachers who hold teaching licenses from states that participate in the NASDTEC Educator Identification Clearinghouse.

(3) Ensurethat courses offeredto North Carolinastudents are alignedtotheNorth Carolina Standard Course of Study." SECTION 2.11.(l) G.S.

115C-555 reads as rewritten:

"§ 115C-555.

Qualification of nonpublic schools.

The provisions of this Part shall apply to any nonpublic school which has one or more of the following characteristics:

(1) It is accredited by the State Board of Education.

(2) It is accredited by a national or regional an institutional accrediting agency.

(3) It is an active member of the North Carolina Association of Independent Schools.

(4) It receives no funding from the State of North Carolina.

For the purposes of this Article, scholarship funds awarded pursuant to Part 2A of this Article or Article 41 of this Chapter to eligible students attending a nonpublic school shall not be considered funding from the State of North Carolina." House Bill 358-Second Edition Page 11 General Assembly Of North Carolina Session 2025 SECTION 2.11.(m) G.S.

116-201(b), as amended by subsection (o) of Section 2 of S.L.

2025-56, reads as rewritten:

"(b) As used in this Article, the following terms shall have the following meanings unless the context indicates a contrary intent:

(1) "Article" or "this Article" means Article.

– Article 23 of Chapter 116 of the General Statutes of North Carolina;Carolina.

(2) "Authority" means the Authority.

– The State Education Assistance Authority created by this Article or, if the Authority is abolished, the board, body, commission or agency succeeding to its principal functions, or on whom the powers given by this Article to the Authority shall be conferred by law;law.

(3) "Bond resolution"or"resolution"when Bondresolutionorresolution.

–When used in relation to the issuance of bonds is deemed to mean bonds, either any resolution authorizing the issuance of bonds or any trust agreement or other instrument securing any bonds;bonds.

(4) "Bonds" or "revenue bonds" means the Bonds or revenue bonds.

– The obligations authorized to be issued by the Authority under this Article, which may consist of revenue bonds, revenue refunding bonds, bond anticipation notes and other notes and obligations, evidencingthe Authority's obligation to repay borrowed money from revenues, funds and other money pledged or made available therefor by the Authority under this Article;Article.

(5) "Eligibleinstitution,"with Eligibleinstitution.

– With respect to student loans, has the same meaning as the term has as is defined in section 1085 of Title 20 of the United States Code;Code.

(6) "Eligible institution," with Eligible institution.

– With respect to grants and work-study programs, includes the constituent institutions of The University of North Carolina, all state-supported State-supported institutions organized and administered pursuant to Chapter 115A of the General Statutes Statutes, and all private institutions as defined in subdivision (8) of this subsection;subsection.

(7) "Student obligations" means student Student obligations.

– Student loan notes and other debt obligations evidencing loans to students which the Authority may make, take, acquire, buy, sell, endorse or guarantee under the provisions of this Article, and Article.

This term may include any direct or indirect interest in the whole or any part of any such notes or obligations;obligations.

(8) "Private institution" means an Private institution.

– An institution other than that meets all of the following requirements:

a.

Is not a seminary, Bible school, Bible college college, or similar religious institution in this State that is State.

b.

Is not owned or operated by the State or any agency or political subdivision thereof, or byanycombination thereof, that offers thereof.

c.

Offers post-high school education and is education.

IsState, accreditedfederal, byand ainternational regionallaw oneenforcement authorities, including members of theany following:supervisory college described in G.S.

1.58-19-37, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material, or other information and has verified in writing the legal authority to maintain confidentiality.

A(2) preferredNotwithstanding accreditingsubdivision agency,(1) asof definedthis insubsection, may only share confidential and privileged documents, material, or information reported pursuant to G.S.

115D-21.258-19-25 and G.S.

116-11.4,58-19-25(l) with Commissioners of states having statutes or theregulations G.S.substantially similar to subsection (a) of this section and who have agreed in writing not to disclose such information.

116-11.4.(3) May receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information information, including proprietary and trade-secret information, from the NAIC and its affiliates and subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information.

2.(4) Shall enter into written agreements with the NAIC and any third-party consultant designated by the Commissioner governing sharing and use of information provided pursuant to this Article consistent with this subsection that shall:shall do all of the following:

The Transnational Association of Christian Colleges and Schools, or, in the case of institutions that are not eligible to be considered for accreditation, accredited in those categories and by those nationally recognized accrediting agencies that the Authority may designate;Schools.

Page 12 House Bill 358-Second Edition General Assembly Of North Carolina Session 2025 3.

In the case of institutions that are not eligible to be considered for accreditation, a nationally recognized accrediting agency that is designated by the Authority.

(9) "Reserve Trust Fund" means the Reserve Trust Fund.

– The trust fund authorized under G.S.

116-209 of this Article;Article.

(10) "State Education Assistance Authority Loan Fund" means the State Education Assistance Authority Loan Fund.

– The trust fund so designated and authorized by G.S.

116-209.3 of this Article;Article.

(11) "Student," with Student.

– With respect to scholarships, grants, and work-study programs, means a person who meets all of the following requirements:

IsRequire a residentrecipient ofto maintain the Stateconfidentiality forand tuitionprivileged purposesstatus underofanydocuments, thematerials, criteriaorinformation. set forth in G.S.

116-143.1Specifyprocedures and inprotocols accordanceregardingthe withconfidentialityand anysecurityof definitionsinformation ofshared residencywith thattheNAIC mayandits fromaffiliates timeandsubsidiaries toor timea bethird-party prescribedconsultant designated by the BoardCommissioner ofpursuant Governorsto ofthis TheArticle, Universityincludingprocedures ofand Northprotocols Carolina,forsharingbytheNAIC who,with underother Carolina.state, federal, or international regulators;regulators.