SB 257 — 2026 Appropriations Act.

Receipts 172,006,912 172,356,352 Net Appropriation 240,121,524 250,027,088 Child and Family Well-Being Requirements 587,633,116 587,926,022 Less:

Receipts 529,771,915 529,771,915 Net Appropriation 57,861,201 58,154,107 Page 4 Senate Bill 257-Second Edition General Assembly Of North Carolina Session 2025 Child Development and Early Education Requirements 990,933,974 981,756,397 Less:

Receipts 663,936,608 654,236,609 Net Appropriation 326,997,366 327,519,788 6 Emp.

& Indep.

For People with Disabilities Requirements 192,301,284 191,621,377 Less:

Receipts 148,446,353 147,558,152 Net Appropriation 43,854,931 44,063,225 Health Benefits Requirements 32,538,608,621 33,500,012,200 Less:

Receipts 26,083,787,689 26,693,039,769 Net Appropriation 6,454,820,932 6,806,972,431 Health Service Regulation Requirements 81,712,464 80,480,845 Less:

Receipts 57,846,866 57,854,112 Net Appropriation 23,865,598 22,626,733 Mental Hlth/Dev.

Disabl./Subs.

Use Serv.

Requirements 1,763,591,519 1,770,189,290 Less:

Receipts 1,004,406,871 1,020,145,036 Net Appropriation 759,184,648 750,044,254 Public Health Requirements 508,520,689 508,811,732 Less:

Receipts 375,415,934 375,388,628 Net Appropriation 133,104,755 133,423,104 Services for the Blind/Deaf/Hard of Hearing Requirements 47,580,652 47,633,300 Less:

Receipts 38,277,639 38,286,064 Net Appropriation 9,303,013 9,347,236 Social Services Requirements 2,234,496,236 2,247,290,611 Less:

Receipts 2,012,293,694 2,016,966,010 Net Appropriation 222,202,542 230,324,601 AGRIC., NATURAL, AND ECON.

RES.

Agriculture and Consumer Services Requirements 525,545,847 296,580,098 Less:

Receipts 343,305,058 93,169,654 Net Appropriation 182,240,789 203,410,444 Commerce Requirements 289,341,642 284,250,285 Less:

Receipts 82,602,791 77,352,791 Net Appropriation 206,738,851 206,897,494 Senate Bill 257-Second Edition Page 5 General Assembly Of North Carolina Session 2025 Environmental Quality Requirements 243,160,102 273,198,525 Less:

Receipts 138,827,684 138,830,789 Net Appropriation 104,332,418 134,367,736 6 Labor Requirements 45,703,742 45,920,338 Less:

Receipts 19,106,870 19,106,870 Net Appropriation 26,596,872 26,813,468 Natural and Cultural Resources Requirements 359,359,497 359,371,744 Less:

Receipts 50,443,601 50,443,601 Net Appropriation 308,915,896 308,928,143 Wildlife Resources Commission Requirements 110,965,764 111,103,998 Less:

Receipts 86,200,340 86,200,340 Net Appropriation 24,765,424 24,903,658 JUSTICE AND PUBLIC SAFETY Administrative Office of the Courts Requirements 840,035,759 844,119,300 Less:

Receipts 7,209,807 1,209,807 Net Appropriation 832,825,952 842,909,493 Indigent Defense Services Requirements 194,782,744 190,741,412 Less:

Receipts 13,994,851 13,994,851 Net Appropriation 180,787,893 176,746,561 Adult Correction Requirements 2,150,041,042 2,165,757,470 Less:

Receipts 21,455,170 21,455,170 Net Appropriation 2,128,585,872 2,144,302,300 Justice Requirements 118,187,493 118,723,609 Less:

Receipts 50,114,998 50,114,998 Net Appropriation 68,072,495 68,608,611 Public Safety Requirements 897,114,592 887,268,176 Less:

Receipts 205,113,467 199,369,487 Net Appropriation 692,001,125 687,898,689 State Bureau of Investigation Requirements 190,854,950 188,623,418 Less:

Receipts 61,047,030 58,596,352 Net Appropriation 129,807,920 130,027,066 Page 6 Senate Bill 257-Second Edition General Assembly Of North Carolina Session 2025 GENERAL GOVERNMENT Administration Requirements 88,167,193 87,838,417 Less:

Receipts 15,562,661 15,446,340 Net Appropriation 72,604,532 72,392,077 7 Administrative Hearings Requirements 11,173,220 10,336,590 Less:

Receipts 4,021,520 1,521,520 Net Appropriation 7,151,700 8,815,070 Auditor Requirements 52,895,549 58,027,963 Less:

Receipts 12,365,869 12,365,869 Net Appropriation 40,529,680 45,662,094 Budget and Management Requirements 12,820,660 12,897,248 Less:

Receipts 1,001,597 1,001,597 Net Appropriation 11,819,063 11,895,651 Budget and Management - Special Approp.

Requirements 19,300,000 16,850,000 Less:

Receipts 1,500,000 1,500,000 Net Appropriation 17,800,000 15,350,000 Controller Requirements 38,051,149 38,256,937 Less:

Receipts 1,723,209 1,723,209 Net Appropriation 36,327,940 36,533,728 Elections Requirements 22,552,422 9,616,261 Less:

Receipts 13,102,000 102,000 Net Appropriation 9,450,422 9,514,261 General Assembly Requirements 103,524,571 104,137,558 Less:

Receipts 767,526 561,000 Net Appropriation 102,757,045 103,576,558 Governor Requirements 13,011,177 13,058,659 Less:

Receipts 6,140,294 6,140,294 Net Appropriation 6,870,883 6,918,365 Housing Finance Agency Requirements 10,660,327 10,660,327 Less:

Receipts 0 0 Net Appropriation 10,660,327 10,660,327 Senate Bill 257-Second Edition Page 7 General Assembly Of North Carolina Session 2025 Human Resources Requirements 13,188,953 14,798,429 Less:

Receipts 1,273,415 798,888 Net Appropriation 11,915,538 13,999,541 6 Industrial Commission Requirements 20,132,947 19,029,196 Less:

Receipts 9,989,699 8,789,699 Net Appropriation 10,143,248 10,239,497 Insurance Requirements 52,604,785 53,043,086 Less:

Receipts 9,252,247 9,358,231 Net Appropriation 43,352,538 43,684,855 Insurance - Fire Marshal Requirements 52,019,251 46,000,277 Less:

Receipts 12,118,899 14,023,004 Net Appropriation 39,900,352 31,977,273 Lieutenant Governor Requirements 1,477,791 1,393,177 Less:

Receipts 0 0 Net Appropriation 1,477,791 1,393,177 Military and Veterans Affairs Requirements 9,226,613 9,363,639 Less:

Receipts 0 0 Net Appropriation 9,226,613 9,363,639 Revenue Requirements 210,260,575 210,049,000 Less:

Receipts 78,596,148 75,777,870 Net Appropriation 131,664,427 134,271,130 Secretary of State Requirements 20,510,492 22,626,170 Less:

Receipts 862,750 2,563,750 Net Appropriation 19,647,742 20,062,420 Treasurer Requirements 133,169,485 124,912,660 Less:

Receipts 107,960,411 96,853,586 Net Appropriation 25,209,074 28,059,074 Treasurer - Other Retirement Plans/Benefits Requirements 25,655,407 26,005,407 Less:

Receipts 0 0 Net Appropriation 25,655,407 26,005,407 INFORMATION TECHNOLOGY Page 8 Senate Bill 257-Second Edition General Assembly Of North Carolina Session 2025 Department of Information Technology Requirements 91,107,354 91,281,100 Less:

Receipts 957,692 957,692 Net Appropriation 90,149,662 90,323,408 6 RESERVES AND LOTTERY General Fund Reserve Requirements 16,915,374 27,979,289 Less:

Receipts 0 0 Net Appropriation 16,915,374 27,979,289 Total Requirements 71,672,439,622 71,794,798,774 Less:

Total Receipts 39,084,630,721 38,473,836,769 Total Net Appropriation 32,587,808,901 33,320,962,005 SECTION 2.1.(b) For purposes of this act and the Committee Report described in Section 45.2 of this act, the requirements set forth in this section represent the total amount of funds, including agency receipts, appropriated to an agency, department, or institution.

GENERAL FUND AVAILABILITY SECTION 2.2.(a) General Fund Availability.

– The General Fund availability derived from State tax revenue, nontax revenue, and other adjustments used in developing the budget for each year of the 2025-2027 fiscal biennium is as follows:

FY 2025-2026 FY 2026-2027 Unappropriated Balance Remaining FY 2024-25 48,073,341 988,429,749 Anticipated Reversions 500,000,000 500,000,000 Anticipated FY 2024-25 Overcollections 543,900,000 - Total, Prior Year-End Fund Balance 1,091,973,341 1,488,429,749 Consensus Revenue Forecast Tax Revenue 33,388,800,000 32,657,100,000 Non-Tax Revenue 1,500,900,000 1,410,000,000 Total, Tax & Non-Tax Revenue 34,889,700,000 34,067,100,000 Revenue Changes Adjustments to Tax Revenue (119,235,000) (99,493,000) Adjustments to Non-Tax Revenue 14,825,376 28,648,801 Total, Revenue Changes (104,409,624) (70,844,199) Statutorily Required Reservations of Revenue Savings Reserve (44,799,750) - State Capital and Infrastructure Fund (SCIF) (1,120,000,000) (1,159,200,000) Total, Statutorily Required Reservations of Rev.

(1,164,799,750) (1,159,200,000) Discretionary Reservations of Revenue Additional Transfer to Savings Reserve (1,095,349,136) - Economic Development Reserve (40,876,181) (4,523,545) Total, Discretionary Reservations of Rev.

(1,136,225,317) (4,523,545) Revised Total General Fund Availability 33,576,238,650 34,320,962,005 Senate Bill 257-Second Edition Page 9 General Assembly Of North Carolina Session 2025 2 Total, Net General Fund Appropriations 32,587,808,901 33,320,962,005 4 Unappropriated Balance 988,429,749 1,000,000,000 6 SECTION 2.2.(b) Savings Reserve.

– Notwithstanding G.S.

143C-4-2, the State Controller shall transfer to the Savings Reserve the sum of one billion one hundred forty million one hundred forty-eight thousand eight hundred eighty-six dollars ($1,140,148,886) in nonrecurring funds in the 2025-2026 fiscal year.

SECTION2.2.(c) ITReserve.

– The StateControllershall reserveto the Information Technology Reserve established in Section 2.2(h) of S.L.

2021-180 from the Stabilization and Inflation Reserve established in Section 2.2(q) of S.L.

2022-74 the sum of one million dollars ($1,000,000) in nonrecurring funds for the 2025-2026 fiscal year.

The State Controller shall transfer funds available in the Information Technology Reserve to State agencies and departments for information technology projects in accordance with the following schedule:

State Agency or Department 2025-2026 2026-2027 (1) Department of Environmental Quality (Budget Code:

24317) $10,510,000 $0 (2) Department of Public Instruction (Budget Code:

23515) 45,000,000 0 (3) Department of Administration (Budget Code:

74100) 6,000,000 0 (4) Department of Revenue (Budget Code:

13410) 4,367,667 1,443,333 (5) Department of State Treasurer (Budget Code:

14700) 5,560,000 0 (6) Office of Administrative Hearings (Budget Code:

18210) 2,500,000 0 (7) Office of State Human Resources (Budget Code:

14111) 1,172,527 698,000 (8) State Board of Elections (Budget Code:

18025) 13,000,000 0 (9) Office of State Budget and Management (Budget Code:

23017) 20,850,000 850,000 (10) Office of State Auditor (Budget Code:

13300) 5,000,000 5,000,000 (11) Division of Central Management and Support (Budget Code:

14410) 15,118,177 0 (12) Division of Health Benefits (Budget Code:

14445) 4,560,000 9,100,000 (13) Department of Public Safety (Budget Code:

14550) 5,743,980 0 (14) State Bureau of Investigation (Budget Code:

15020) 2,555,250 0 (15) Department of Information Technology (Budget Code:

14460) 481,770 481,770 (16) Administrative Office of the Courts (Budget Code 12000) 6,000,000 0 Page 10 Senate Bill 257-Second Edition General Assembly Of North Carolina Session 2025 SECTION 2.2.(d) Federal Infrastructure Match Reserve.

–The State Controller shall transfer fundsavailablein theFederal InfrastructureMatchReserveestablished in Section2.2(m) of S.L.

2022-74 to State agencies and departments in accordance with the following schedule:

5 State Agency or Department 2025-2026 2026-2027 7 (1) Department of Environmental Quality (Budget Code:

64311) $8,892,000 $8,892,000 (2) Department of Environmental Quality (Budget Code:

64320) 13,722,200 0 (3) Department of Environmental Quality (Budget Code:

24300) 1,388,921 0 (4) Department of Environmental Quality Budget Code:

14300) 850,000 850,000 (5) Department of Commerce (Budget Code:

14600) 250,000 0 SECTION 2.2.(e) Stabilization and Inflation Reserve.

– The State Controller shall transfer funds available in the Stabilization and Inflation Reserve established in Section 2.2(q) of S.L.

2022-74 to State agencies and departments in accordance with the following schedule:

State Agency or Department 2025-2026 2026-2027 (1) State Bureau of Investigation (Budget Code:

15020) $35,000,000 $35,000,000 (2) Department of Agriculture (Budget Code:

13700) 250,000,000 0 (3) Department of Environmental Quality (Budget Code:

24327) 55,000,000 55,000,000 (4) UNC at Chapel Hill – Academic Affairs Budget Code:

16020) 3,000,000 3,000,000 (5) Department of Public Instruction (Budget Code:

13510) 152,303,525 152,303,525 SECTION 2.2.(f) Economic Development Project Reserve.

– The State Controller shall reserve from funds available in the General Fund to the Economic Development Project Reserve established in Section 2.2 of S.L.

2021-180 the sum of forty million eight hundred seventy-six thousand one hundred eighty-onedollars($40,876,181) for the2025-2026 fiscal year and the sum of four million five hundred twenty-three thousand five hundred forty-five dollars ($4,523,545) for the 2026-2027 fiscal year.

Additionally, the Controller shall reserve the sum of two hundred fifty-eight million three hundred ninety-two thousand nine hundred fifty dollars ($258,392,950) in the 2025-2026 fiscal year from the Stabilization and Inflation Reserve established in Section 2.2.(q) S.L.

2022-74 and the sum of fifteen million three hundred sixty- onethousandtwenty-onedollars($15,361,021)inthe2025-2026fiscal yearfromtheInformation Technology Reserve established in Section 2.2(h) of S.L.

2021-180.

SECTION 2.2.(g) Helene Reserve.

– The State Controller shall reserve to the HurricaneHeleneDisasterRecoveryFund (Helene Fund)establishedin Section 4.1 in S.L.2024- 51 funds transferred from the following for the 2025-2026 fiscal year:

Source 2025-2026 Senate Bill 257-Second Edition Page 11 General Assembly Of North Carolina Session 2025 (1) State Emergency Response and Disaster Relief Fund $116,716,887 4 (2) Federal Infrastructure Match Reserve 45,469,983 6 (3) Medicaid Contingency Reserve 476,512,736 8 (4) Information Technology Reserve 61,300,394 The State Controller shall transfer funds available in the Helene Fund to State agencies and departments in accordance with the following schedule:

State Agency or Department 2025-2026 2026-2027 (1) NC Community College System (Budget Code:

16800) $2,473,971 $0 (2) Department of Commerce (Budget Code:

14600) 5,000,000 0 (3) Office of the Governor (Budget Code:

13000) 5,000,000 5,000,000 (4) University of North Carolina – Board of Governors Institutional Programs (Budget Code:

16011) 8,000,000 0 SECTION 2.2.(h) Reservations Not Appropriation.

– Funds reserved pursuant to this section do not constitute an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution.

Appropriations from the State Highway Fund for the maintenance and operation of the Department of Transportation and for other purposes,purposes as enumerated,enumerated are made for each fiscal year of the 2025-2027 fiscal biennium, accordingin toaccordance with the followingprovisions schedule:of this act.

HighwayHIGHWAY FundTRUST FYFUND 2025-26APPROPRIATIONS FY*S257-v-1* 2026-27 Administration $125,175,472 $125,175,472 Division of Highways Administration 55,675,557 55,675,557 Construction 89,643,078 82,643,078 Maintenance 2,405,175,949 2,319,193,319 Governor's Highway Safety Program 351,695 351,695 OSHA 358,030 358,030 Aid to Municipalities Powell Bill 135,875,000 135,875,000 Intermodal Divisions Ferry 78,841,173 87,957,728 Public Transportation 69,570,554 71,570,554 Aviation 192,320,982 173,146,238 Rail 24,367,607 24,367,607 Division of Motor Vehicles 159,082,029 159,120,209 Page 12 Senate Bill 257-Second Edition General Assembly Of North Carolina Session 2025 Other State Agencies, Reserves, Transfers 51,226,553 60,772,240 Capital Improvements 10,797,739 47,793,273 Highway Fund Total $3,398,461,418 $3,344,000,000 5 HIGHWAY FUND AVAILABILITY SECTION 3.2.

TheAppropriations from the State Highway Trust Fund availabilityfor usedthe inmaintenance developingand operation of the budgetDepartment of Transportation and for other purposes as enumerated are made for each fiscal year of the 2025-2027 fiscal bienniumbiennium, isin asaccordance follows:with the provisions of this act.

96 FYPART 2025-2026IV. FY 2026-2027 Beginning Balance $0 $0 Consensus Revenue Forecast Motor Fuels Tax 1,866,100,000 1,891,500,000 Licenses and Fees 1,097,500,000 1,116,000,000 Sales Tax Transfer 171,500,000 176,900,000 Short-Term Lease 113,100,000 114,900,000 Investment Income 50,200,000 37,600,000 Transportation Commerce Tax 7,000,000 7,300,000 Adjustments to Availability DMV IT Modernization Carry Forward Cash Balance 65,000,000 0 Remaining Dorian Appropriation 28,161,418 0 Sales Tax Net of Trade (100,000) (200,000) Total Highway Fund Availability $3,398,461,418 $3,344,000,000 HIGHWAY TRUST FUND APPROPRIATIONS SECTION 3.3.

AppropriationsBLOCK fromGRANTS the8 StateDHHS HighwayTrustBLOCK FundGRANTS forSECTION construction,4.1. for operations of the Department of Transportation, and for other purposes as enumerated are made for each year of the 2025-2027 fiscal biennium according to the following schedule:

HighwayAppropriations Trustfrom Fundfederal FYblock 2025-26grant FYfunds 2026-27are Programmade Administration $66,117,311 $45,117,311 Bond 121,440,275 121,436,275 Turnpike Authority 49,000,000 49,000,000 State Ports Authority 45,000,000 45,000,000 FHWA State Match 6,048,440 6,048,440 Strategic Prioritization Funding Plan for Transportationeach Investmentsfiscal 2,200,053,974year 2,279,257,974of Transferthe to2025-2027 Visitorfiscal Centerbiennium, 640,000in 640,000accordance Highwaywith Trustthe Fundprovisions Totalof $2,488,300,000this $2,546,500,000act. HIGHWAY TRUST FUND AVAILABILITY SECTION 3.4.

TheNER HighwayBLOCK TrustGRANTS FundSECTION availability4.2. used in developing the budget for each year of the 2025-2027 fiscal biennial budget is as follows:

FYAppropriations 2025-2026from FYfederal 2026-2027block Beginninggrant Balancefunds $0are $0made Consensusfor Revenueeach Forecastfiscal Highwayyear Useof Taxthe 1,150,500,0002025-2027 1,179,800,000fiscal Senatebiennium, Billin 257-Secondaccordance Editionwith Pagethe 13provisions General Assembly Of North Carolina Session 2025 Motor Fuels Tax 619,500,000 627,900,000 Sales Tax Transfer 514,400,000 530,600,000 Fees 172,100,000 172,500,000 Investment Income 33,000,000 37,200,000 6 Adjustments to Availability Duplicate Registration Fees (900,000) (900,000) Sales Tax Net of Tradethis (300,000)act. (600,000) Total Highway Trust Fund Availability $2,488,300,000 $2,546,500,000 PART IV.

OTHER AVAILABILITY AND APPROPRIATIONS OTHER APPROPRIATIONS SECTION 4.1.(a) State funds, as defined in G.S.

143C-1-1(d)(25), are appropriated for each year of the 2025-2027 fiscal biennium, as follows:

(1) All budget codes listed in the Governor's Recommended Base Budget for the 2025-2027 fiscal biennium, submitted pursuant to G.S.

143C-3-5, are appropriated up to the amounts specified, as adjusted by the General Assembly in this act and as delineated in the Committee Report described in Section 45.2 of this act, or in another act of the General Assembly.

(2) Agency receipts up to the amounts needed to implement the legislatively mandated salaryincreases and employee benefit increases provided in this act for each year of the 2025-2027 fiscal biennium.

SECTION 4.1.(b) Receipts collected in a fiscal year in excess of the amounts appropriated by this section shall remain unexpended and unencumbered until appropriated by the General Assembly, unless the expenditure of overrealized receipts in the fiscal year in which the receipts were collected is authorized by G.S.

143C-6-4.

Overrealized receipts are appropriated in the amounts necessary to implement this subsection.

SECTION 4.1.(c) Funds may be expended only for the specified programs, purposes, objects, and line items or as otherwise authorized by the General Assembly.

OTHER RECEIPTS FROM PENDING AWARD GRANTS SECTION 4.2.(a) Notwithstanding G.S.

143C-6-4, State agencies may, with approval of the Director of the Budget, spend funds received from grants awarded after the enactment of this act for grant awards that are for less than two million five hundred thousand dollars ($2,500,000).

State agencies shall report to the Joint Legislative Commission on Governmental Operations, the chairs of the Senate Committee on Appropriations/Base Budget, the chairs of the House Appropriations Committee, and the Fiscal Research Division within 30 days of receipt of such funds.

State agencies may spend up to the greater of one percent (1%) or ten million dollars ($10,000,000) of the total amount of grants awarded after the enactment of this act to respond to an emergency, as defined in G.S.

166A-19.3, with the approval of the Director of the Budget.

State agencies shall report to the Joint Legislative Commission on Governmental Operations, the chairs of the Senate Committee on Appropriations/Base Budget, the chairs of the House Appropriations Committee, and the Fiscal Research Division within 30 days of receipt of such funds, including specifying the total amount of grants awarded to respond to the emergency.

State agencies may spend all other funds from grants awarded after the enactment of this act only with approval of the Director of the Budget and after consultation with the Joint Legislative Commission on Governmental Operations.

Page 14 Senate Bill 257-Second Edition General Assembly Of North Carolina Session 2025 SECTION 4.2.(b) The Office of State Budget and Management shall work with the recipient Stateagenciesto budget grant awardsaccordingto theannual program needs andwithin the parameters of the respective granting entities.

Depending on the nature of the award, additional State personnel may be employed on a time-limited basis.

Funds received from such grants are hereby appropriated up to the applicable amount set forth in subsection (a) of this section and shall be incorporated into the authorized budget of the recipient State agency.

SECTION 4.2.(c) Notwithstanding the provisions of this section, no State agency may accept a grant not anticipated in this act if (i) acceptance of the grant would obligate the State to make future expenditures relating to the program receiving the grant or would otherwise result in a financial obligation as a consequence of accepting the grant funds or (ii) the grant funds will be used for a capital project.

EDUCATION LOTTERY FUNDS SECTION 4.3.(a) The allocations made from the Education Lottery Fund for the 2025-2027 fiscal biennium are as follows:

FY 2025-2026 FY 2026-2027 Noninstructional Support Personnel $385,914,455 $385,914,455 Prekindergarten Program 78,252,110 78,252,110 Public School Building Capital Fund 100,000,000 100,000,000 Needs-Based Public School Capital Fund 280,120,000 282,680,000 Public School Repair & Renovation 70,000,000 70,000,000 Scholarship Reserve Fund for Public Colleges and Universities 28,819,733 28,819,733 School Transportation 182,193,702 186,033,702 TOTAL ALLOCATION $1,125,300,000 $1,131,700,000 SECTION 4.3.(b) Notwithstanding G.S.

18C-164(b3), the sum of one hundred one million forty thousand dollars ($101,040,000) in net revenues from the 2024-2025 fiscal year, after appropriation pursuant to G.S.

18C-164(b1) and transfer pursuant to G.S.

18C-164(b2), shall be allocated to and remain available for school transportation for the 2025-2026 fiscal year.

Funds remaining after the allocation described in this subsection shall be appropriated to the Needs-Based Public School Capital Fund.

SECTION 4.3.(c) Subsection (b) of this section becomes effective June 30, 2025.

The remainder of this section becomes effective July 1, 2025.

INDIAN GAMING EDUCATION REVENUE FUND APPROPRIATIONS SECTION 4.4.

The allocations made from the Indian Gaming Education Revenue Fund for the 2025-2027 fiscal biennium are as follows:

FY 2025-2026 FY 2026-2027 Instructional Materials Allotment $10,000,000 $10,000,000 Classroom Materials Allotment 25,500,000 3,500,000 Total Appropriation $35,500,000 $13,500,000 CIVIL PENALTY AND FORFEITURE FUND SECTION 4.5.

The allocations made from the Civil Penalty and Forfeiture Fund for the 2025-2027 fiscal biennium are as follows:

FY 2025-2026 FY 2026-2027 School Technology Fund $18,000,000 $18,000,000 Drivers Education 31,493,768 31,493,768 State Public School Fund 186,041,640 166,041,640 Total Appropriation $235,535,408 $215,535,408 Senate Bill 257-Second Edition Page 15 General Assembly Of North Carolina Session 2025 2 ARPA TEMPORARY SAVINGS FUND SECTION 4.6.(a) General.

– Funds appropriated in this act from the ARPA Temporary Savings Fund, established in Section 1.3(a) of S.L.

2023-7, to State agencies and departments shall be used for the purposes described in this act, or in the Committee Report described in Section 45.2 of this act, for the fiscal year in which they are appropriated.

Funds appropriated in this act from the ARPA Temporary Savings Fund shall not revert.

SECTION 4.6.(b) Availability of Funds and Timing of Disbursements.

– The funds appropriated in this act from the ARPA Temporary Savings Fund shall become available during the course of the 2025-2026 fiscal year as the funds are deposited into that Fund.

The Department of Health and Human Services (DHHS) shall not disburse allocations of the funds appropriated in this act from the ARPA Temporary Savings Fund until the funds are available within that Fund.

DHHS shall disbursefundson at least aquarterlybasis,or more frequently, providedfunds areavailablewithin theFund.

Funds allocatedas described in this act, orintheCommitteeReport described in Section 45.2 of this act, shall be disbursed as directed under subsection (c) of this section.

SECTION 4.6.(c) Priority of Disbursement of Funds in the 2025-2026 Fiscal Year.

– For the 2025-2026 fiscal year, funds appropriated in this act from the ARPA Temporary Savings Fund and allocated as described in this act, or in the Committee Report described in Section 45.2 of this act, shall be disbursed based upon the amount of funds being allocated, least to most.

GENERALMISCELLANEOUS PROVISIONSSTATE ESTABLISHINGBUDGET ORACT INCREASINGAPPLIES FEES SECTION 5.1.(a)5.1. Notwithstanding G.S.

12-3.1, an agency is not required to consult with the Joint Legislative Commission on Governmental Operations prior to establishing or increasing a fee to the level authorized or anticipated in this act.

SECTION 5.1.(b) Notwithstanding G.S.

150B-21.1A(a), an agency may adopt an emergency rule in accordance with G.S.

150B-21.1A to establish or increase a fee as authorized by this act if the adoption of a rule would otherwise be required under Article 2A of Chapter 150B of the General Statutes.

DIRECTED GRANTS TO NON-STATE ENTITIES SECTION 5.2.(a) Definitions.

– For purposes of this act and the Committee Report described in Section 45.2 of this act, the following definitions apply:

(1) Directed grant.

– Nonrecurring funds, specifically identified as "directed grants", that are allocated by a State agency to a non-State entity as directed by an act of the General Assembly.

(2) Non-State entity.

– As defined in G.S.

143C-1-1.

SECTION 5.2.(b) Requirements.

– Nonrecurring funds appropriated in this act as directed grants are subject to all of the following requirements:

(1) Directed grants are subject to the provisions of subsections (b) through (k) of G.S.

143C-6-23, with the exception that the deadline for expending, encumbering, or disbursing grant funds established by G.S.

143C-6-23(f1)(1) shall not apply unless the terms of the applicable appropriation specifically state otherwise.

(2) Directed grants of one hundred thousand dollars ($100,000) or less may be made in a single annual payment in the discretion of the Director of the Budget.

Directed grants of more than one hundred thousand dollars ($100,000) shall be made in quarterly or monthly payments in the discretion Page 16 Senate Bill 257-Second Edition General Assembly Of North Carolina Session 2025 of the Director of the Budget.

A State agency administering a directed grant shall begin disbursement of funds to a non-State entity that meets all applicable requirements as soon as practicable,but nolaterthan 100 days after the date this act becomes law.

Full disbursement of funds to a non-State entity that meets all applicable requirements shall be completed no later than nine months after the date this act becomes law.

(3) Beginning on the first day of a quarter following the deadline provided in subdivision (2) of this subsection and quarterly thereafter, State agencies administering directed grants shall report to the Fiscal Research Division on the status of funds disbursed for each directed grant until all funds are fully disbursed.

At a minimum, the report required under this subdivision shall include updates on (i) the date of the initial contact, (ii) the date the contract was sent to the entity receiving the funds, (iii) the date the disbursing agency received the fully executed contract back from the entity, (iv) the contract execution date, and (v) the payment date.

(4) Notwithstanding any provision of G.S.

143C-1-2(b) to the contrary, nonrecurring funds appropriated in this act for the 2025-2026 fiscal year as directed grants shall not revert until two years after this act becomes law, and nonrecurring funds appropriated in this act for the 2026-2027 fiscal year as directed grants shall not revert until June 30, 2028.

(5) Directed grants to nonprofit organizations are for nonsectarian, nonreligious purposes only.

SECTION 5.2.(c) This section expires on June 30, 2028.

CAP STATE-FUNDED PORTION OF NONPROFIT SALARIES SECTION 5.3.

No morethan one hundred fortythousand dollars ($140,000) in State funds, including any interest earnings accruing from those funds, may be used for the annual salary of any individual employee of a nonprofit organization.

VACANT POSITION FLEXIBILITY SECTION 5.4.

By October 1 of each year of the 2025-2027 fiscal biennium, State agencies with vacant position reductions identified in the Committee Report described in Section 45.2 of this act that are not identified by position number shall eliminate vacant positions to achieve the budgeted reduction in each of those years.

Each State agency with vacant position reductions shall report to the Fiscal Research Division by December 1 of each year of the 2025-2027 fiscal biennium on the actions taken to achieve the budgeted reduction for vacant position eliminations for that fiscal year.

The report shall include a list of each position eliminated, identified by position number, title, and the amount of salary and fringe benefits associated with the position.

CHILDREN'S HOSPITAL ANTITRUST/STATE ACTION IMMUNITY SECTION 5.5.(a) G.S.

116-350 is amended by adding a new subdivision to read:

"(3a) North Carolina Children's Health or NCC.

– A pediatric health facility and associated sites that (i) receive State funding and (ii) are developed by the System in partnership with Duke University Health System, Inc." SECTION 5.5.(b) Part 1 of Article 37A of Chapter 116 of the General Statutes is amended by adding a new section to read:

"§ 116-350.70.

State action.

Subject to the provisions and limitations of this Part and Part 2 of this Article, the Board may enter into cooperative agreements with Duke University Health System, Inc., Duke University, any component of The University of North Carolina, NCC, or any combination thereof for the Senate Bill 257-Second Edition Page 17 General Assembly Of North Carolina Session 2025 provision of pediatric research, health care, and discovery, including the development and joint operation of NCC, without regard to the effect on market competition.

In partnering with Duke UniversityHealth System, Inc., Duke University, The Universityof North Carolina, NCC, or any combination thereof for these purposes, the System is acting according to State policy by ensuring (i) pediatric health care is made available to all parts of North Carolina and (ii) North Carolina is at the forefront of pediatric research, health care delivery, and innovation.

The activities by the System pursuant to this section constitute "State action" for purposes of antitrust law.

The General Assembly intends that these agreements are immune from the application of federal and State antitrust law." NO CERTIFICATE OF NEED REQUIRED FOR ACTIVITIES PERTAINING TO NORTH CAROLINA CHILDREN'S HEALTH, INC.

SECTION 5.6.(a) G.S.

131E-176 is amended by adding a new subdivision to read:

"(16a) North Carolina Children's Health, Inc., or NCC.

– A pediatric-focused health system that includes a new children's hospital and associated sites developed and constructed on behalf of the State of North Carolina, established in whole or in part by State funds appropriated to the UNC Board of Governors and allocated to UNC Health System pursuant to the Committee Report described in Section 43.2 of S.L.

2023-134." SECTION 5.6.(b) Article 9 of Chapter 131E of the General Statutes is amended by adding a new section to read:

"§ 131E-178.1.

No certificate of need required for activities pertaining to North Carolina Children's Health, Inc.

(a) Notwithstanding G.S.

131E-178(a) or any other provision of this Article, a certificate of need is not required for any of the following activities pertaining to NCC:

(1) The construction, development, or other establishment of NCC.

(2) Any capital expenditure by or on behalf of NCC that exceeds the monetary threshold set forth in G.S.

131E-176(16)b.

(3) Thedevelopment orofferingof clinical patient services at NCC,includingany health services specified in G.S.

131E-176(16)f.

(4) The acquisition, improvement, expansion, replacement, or relocation of any equipment, including diagnostic equipment, major medical equipment, replacement equipment, and any equipment specified in G.S.

131E-176(16)f1., for use at NCC regardless of cost.

(5) Any change in bed capacity, as defined in G.S.

131E-176(5), at NCC.

(6) The construction, development, establishment, increase in the number, or relocation of an operating room or gastrointestinal endoscopy room at NCC.

(b) Nothing in this section shall be construed to affect the ability or obligation of NCC to comply with existing licensure laws and requirements that are applicable to any facilities or clinical patient services developed or offered at NCC." SECTION 5.6.(c) This section is effective when it becomes law.

NCINNOVATION SECTION5.7.(a) TransferofFunds.–NCInnovationshalltransferbackto theState, after consultation with, and in conformity with direction received from, the State Controller, the sum of one hundred million dollars ($100,000,000).

NCInnovation shall, after consultation with, and in conformity with direction received from, the State Controller, transfer to the Board of Governors of The University of North Carolina the sum of four hundred million dollars ($400,000,000) to be used for North Carolina Children's Health, Inc., as defined in G.S.

131E-176, as amended by this act.

Page 18 Senate Bill 257-Second Edition General Assembly Of North Carolina Session 2025 SECTION 5.7.(b) NCInnovation Reserve.

– The State Controller shall facilitate the transfers required by subsection (a) of this section.

The State Controller shall deposit the funds returned to the State into the NCInnovation Reserve established in Section 2.2(k) of S.L.

2023-134.

The transfer and deposit of funds into the reserve pursuant to this section does not constitute an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution, and such funds shall remain unappropriated unless the General Assembly appropriates the funds in this, or a subsequent, act.

In accordance with G.S.

147-69.1(d),fundsintheReserveshallbeinvestedbytheDepartment oftheStateTreasurer, with earnings and interest therefrom being transferred to and deposited in the General Fund.

SECTION 5.7.(c) Repeal.

– Upon the transfers of funds pursuant to subsection (a) of this section, Article 76A of Chapter 143 of the General Statutes is repealed.

The State Controller shall notify the Revisor of Statutes when the transfers have been completed.

SECTION 5.7.(d) Appropriation.

– There is appropriated from the NCInnovation Reserve to the Department of State Treasurer (i) the sum of twenty-five million dollars ($25,000,000) in nonrecurring funds for the 2025-2026 fiscal year, (ii) the sum of twenty-five million dollars ($25,000,000) in nonrecurring funds for the 2026-2027 fiscal year, (iii) the sum of twenty-five million dollars ($25,000,000) in nonrecurring funds for the 2027-2028 fiscal year, and (iv) the sum of twenty-five million dollars ($25,000,000) in nonrecurring funds for the 2028-2029 fiscal year.TheStateTreasurershall allocatethe fundsappropriatedin this subsection in the designated fiscal year to NCInnovation, Inc.

(NCInnovation), a North Carolina nonprofit corporation under section 501(c)(3) of the Internal Revenue Code, to be used for purposes consistent with this section.

SECTION 5.7.(e) Findings.

– The General Assembly of North Carolina finds North Carolina is competing with other states for the abilityto commercialize innovations sourced from the State's world-class university and community college systems.

By fully optimizing the commercialization of those innovations, the State has opportunities for creating new jobs and new companies and achieving greater economic prosperity, particularly in rural areas.

Other states have successfully harnessed innovation efforts from research universities to create jobs, to accelerate commercial opportunities, and to support the commercial growth and scale of emerging technologies.

North Carolina will benefit from similar efforts to accelerate commercialization of theoretical and applied science and inventions stemming from the efforts and activities of its higher education research institutions.

SECTION 5.7.(f) Purpose;

Use.

– The purpose of the appropriations made in this section is to promote the economic welfare and growth of the State by facilitating NCInnovation in establishing a network of regional innovation hubs, leveraging the high technology research and development capabilities of the State's higher education research institutions, bridging the gap between such research and development capabilities and the application and commercialization of the same, and supporting such commercialization, application, and resulting emerging technologies.

NCInnovation shall use funds appropriated to it for the following purposes:

(1) To establish and supporta regional network of at least four universityresearch hubs, each located in areas of the State where regional collaboration between academic, industrial, and capital formation networks are at or below average in comparison to the rest of the State.

NCInnovation shall provide full-time, collocated educational liaisons, business consultants, and technology transfer consultants in each hub to improve relationships and engagement between senior educational and regional industryleaders and among regional networks and to analyzehigher educationresearch activities, capacities,andcapabilities in light of commercial innovation needs in the hub to align strengths, to fill gaps, to identify gap-filling patent and research and to create a strategic plan Senate Bill 257-Second Edition Page 19 General Assembly Of North Carolina Session 2025 to guide future investments and identify resources or infrastructure required to implement and apply patents and research into commercialized innovation.

(2) To award grants, funds, and other resources, including solicited funds, (i) to higher education research institutions under programs designed to advance research and development to proof of commercial viability and (ii) to otherwise undertake actions designed to accelerate the commercialization of applied research projects to and beyond the point of proof of concept.

In distributing awards made pursuant to this subdivision, NCInnovation mayuse the North Carolina Collaboratory, established under G.S.

116-255.

SECTION 5.7.(g) Duties;

Limitations.

– In receiving and using State funds pursuant to this section, NCInnovation shall adhere to all of the following:

(1) NCInnovation shall protect the use of State funds by requiring, as a condition of awarding funds or providing support, that the recipient, for a minimum of five years, (i) has its headquarters and principal place of business in the State and (ii) be organized under the laws of this State for any commercialization resulting from or furthered by, in whole or part, such funds or support.

State fundsmaynot beusedto awarddilutive grants contingent upon futurerevenue or equity or ownership interests of any kind.

(2) To the extent NCInnovation uses State funds for annual salaries and severance, NCInnovation shall limit the use only for personnel located at a regional hub established by NCInnovation.

The annual salary for such personnel shall not exceed the amount most recently set by the General Assembly in a Current Operations Appropriations Act.

(3) NCInnovation shall maintain its status as a North Carolina nonprofit corporation and shall adopt, publish, and maintain policies for conflicts of interest and gifts.

In addition, NCInnovation shall report to the Department of the State Treasurer and the Office of the State Auditor on each incidence where a person, including a related member of a person, has made a reported contribution and has received funds or support from NCInnovation.

(4) NCInnovation shall report on its programs and activities to the Joint Legislative Economic Development and Global Engagement Oversight Committee and the Fiscal Research Division on or before September 15 of each fiscal year and more frequently as requested by anyof these entities.

The report shall include all of the following:

a.

Expenditures for establishing and supporting a network of regional innovation hubs, including salaries, and awards of grants, funds, or other support by NCInnovation in the prior fiscal year.

This information shall include, at a minimum, the recipient, amount, term, andpurposeoftheawardandshallbeitemizedbyprogramandcounty.

b.

Outcome data collected by NCInnovation, including the number of jobs created.

c.

Developed performance metrics for recipients of funding and support by NCInnovation.

(5) NCInnovation shall be subject to oversight from the Office of the State Auditor, which shall include a performance audit of NCInnovation programs not less than everythree years.

NCInnovation shall submit to the Office of the State Auditor a copy of its audited financial statements within 30 days of receipt of the audit, and the State Auditor mayelect to relyupon the submitted audit or conduct its own inquiry or audit of NCInnovation.

(6) NCInnovation shall maintain separate accounting records for and separate accounts for State funds and shall not commingle State funds with other Page 20 Senate Bill 257-Second Edition General Assembly Of North Carolina Session 2025 amounts.

NCInnovation shall maintain records and accounts according to generally accepted accounting principles.

(7) NCInnovation shall not use State funds (i) to hire a lobbyist, (ii) in excess of one and one-half percent (1.5%) of the annual amount of State funds received for overhead and administrative costs, (iii) for costs for alcohol, first-class airfare, charter flights, or holiday parties or similar social gatherings, or (iv) for any formal or informal meeting or gathering located outside of the State unless directly related to NCInnovation's programs or advancing State interests in innovation commercialization.

SECTION 5.7.(h) This section is effective when it becomes law.

STATE BUDGET ACT TECHNICAL CHANGES SECTION 5.8.(a) G.S.

143C-1-1 reads as rewritten:

"§ 143C-1-1.

Purpose and definitions.

… (d) Definitions.

– The following definitions apply in this Chapter:

… (20) Object or line item.

– An expenditure or receipt in a recommended or enacted budget that is designated in the Budget Code Structure of the North Carolina Accounting Financial System Uniform Chart of Accounts prescribed by the Office of the State Controller.

… (23) Purposeorprogram.

–Agroupofobjects orlineitems forsupportofaspecific activity for a State agency outlined in a recommended or enacted budget that is designated bya nine-digit six-digit fundcodein accordancewith the Budget Code Structure of the North Carolina Accounting Financial System Uniform Chart of Accounts prescribed by the Office of the State Controller.

…." SECTION 5.8.(b) G.S.

143C-3-5 reads as rewritten:

"§ 143C-3-5.

Budget recommendations and budget message.

… (b) Odd-Numbered Years.

– In odd-numbered years the budget recommendations shall include the following components:

… (2) A Recommended Base Budget showing, for each budget code and purpose or program in State government, accounting detail corresponding to the Recommended State Budget.

a.

The Recommended Base Budget shall employ the North Carolina Accounting Financial System Uniform Chart of Accounts adopted by the State Controller to show both uses and sources of funds and shall display in separate parallel columns all of the following:

(i) actual expenditures and receipts for the most recent fiscal year for which actual information is available, (ii) the certified budget for the preceding fiscal year, (iii) the currently authorized budget for the preceding fiscal year, (iv) program base budget requirements for each fiscal year of the biennium, (v) proposed expenditures and receipts for each fiscal year of the biennium, and (vi) proposed increases and decreases.

… (7) The Governor's Recommended State Budget shall include a transfer to the State Capital and Infrastructure Fund of four percent (4%) of the estimated net Senate Bill 257-Second Edition Page 21 General Assembly Of North Carolina Session 2025 State tax revenues that are deposited in the General Fund for each fiscal year of the upcoming biennium.in accordance with G.S.

143C-4-3.1(b)(1).

…." SECTION 5.8.(c) G.S.

143C-6-11 reads as rewritten:

"Part 2.

Highway Appropriations.

"§ 143C-6-11.

Highway appropriation.

… (l) It is the intent of the General Assemblyto (i) prevent the inclusion of duplicative fund codes in the Highway Fund certified budget and (ii) correctly align authorized positions and associated operating costs with the appropriate purposes and definitions as defined in G.S.

143C-1-1.

To that end, the Office of State Budget and Management, in consultation with the Department of Transportation, the Office of the State Controller, and the Fiscal Research Division of the General Assembly, shall include, as an appendix to the Highway Fund certified budget, object detail using the North Carolina Accounting Financial System Uniform Chart of Accounts prescribed by the Office of the State Controller to provide a more detailed accounting of the proposed budgets and receipts and actual expenditures and revenue collections.

This requirement includes applying object detail at the four-digit level for all accounts to full-time and part-time positions, to operating expenditures and receipts, and to intrafund transfers.

Additionally, work order positions shall be budgeted within existing fund codes.

…." SECTION 5.8.(d) G.S.

143C-6-13 is repealed.

LAND USE CLARIFICATIONS AND CHANGES SCHOOLS PERMITTED USE IN COMMERCIAL ZONES SECTION 5.9.

Part 1 of Article 9 of Chapter 160D of the General Statutes is amended by adding a new section to read:

"§ 160D-917.

Public school sites in commercial zones.

In areas zoned for commercial use, zoning regulations shall permit, byright or byspecial use, the siting of a school building that is primarily used for the instruction of students and is under the control of a public school unit as defined in G.S.

115C-5." CLARIFY EXISTING USE RIGHTS ON PROPERTY SECTION 5.10.(a) G.S.

160D-108 reads as rewritten:

"§ 160D-108.

Permit choice and vested rights.

… (c) Vested Rights.

– Amendments in land development regulations are not applicable or enforceable without the written consent of the owner with regard to any of the following:

(1) Buildings or uses of buildings or land for which a development permit application has been submitted and subsequently issued in accordance with G.S.

143-755.

(2) Subdivisions of land for which a development permit application authorizing the subdivision has been submitted and subsequently issued in accordance with G.S.

143-755.

(3) A site-specific vesting plan pursuant to G.S.

160D-108.1.

(4) A multi-phased development pursuant to subsection (f) of this section.

(5) A vested right established by the terms of a development agreement authorized by Article 10 of this Chapter.

Theestablishment ofavestedright underanysubdivisionofthis subsectiondoes not preclude vesting under one or more other subdivisions of this subsection or vesting by application of common law principles.

A vested right, once established as provided for in this section or by Page 22 Senate Bill 257-Second Edition General Assembly Of North Carolina Session 2025 common law, precludes any action by a local government that would change, alter, impair, prevent, diminish, or otherwise delay the development or use of the property allowed by the applicable land development regulation or regulations, except where a change in State or federal law mandating local government enforcement occurs after the development application is submitted that has a fundamental and retroactive effect on the development or use.

A vested right obtained by permit or other local government approval shall not preclude the use or extinguish the existence of any other vested right or use by right attached to the property.

…." SECTION 5.10.(b) G.S.

160D-705 reads as rewritten:

"§ 160D-705.

Quasi-judicial zoning decisions.

… (c) Special Use Permits.

– The regulations may provide that the board of adjustment, planning board, or governing board hear and decide special use permits in accordance with principles, conditions, safeguards, and procedures specified in the regulations.

Reasonable and appropriate conditions and safeguards may be imposed upon these permits.

Where appropriate, such conditions mayinclude requirements that street and utilityrights-of-way be dedicated to the public and that provision be made for recreational space and facilities.

Conditions and safeguards imposed under this subsection shall not include requirements for which the local government does not have authority under statute to regulate nor requirements for which the courts have held to be unenforceable if imposed directly by the local government, including, without limitation, taxes, impact fees, building design elements within the scope of G.S.

160D-702(b), driveway-related improvements in excess of those allowed in G.S.

136-18(29) and G.S.

160A-307, or other unauthorized limitations on the development or use of land.

The regulations may provide that defined minor modifications to special use permits that do not involve a change in uses permitted or the density of overall development permitted may be reviewed and approved administratively.

Any other modification or revocation of a special use permit shall follow the same process for approval as is applicable to the approval of a special use permit.

If multiple parcels of land are subject to a special use permit, the owners of individual parcels may apply for permit modification so long as the modification would not result in other properties failing to meet the terms of the special use permit or regulations.

Any modifications approved applyonlyto those properties whose owners apply for the modification.

The regulation may require that special use permits be recorded with the register of deeds.

If a special use permit expires and does not vest, the current zoning classification or regulation for the property applies.

…." SECTION 5.10.(c) G.S.

160D-203 reads as rewritten:

"§ 160D-203.

Split jurisdiction.

(a) If a parcel of land lies within the planning and development regulation jurisdiction of more than one local government, for the purposes of this Chapter, the local governments may, by mutual agreement pursuant to Article 20 of Chapter 160A of the General Statutes and with the written consent of the landowner, assign exclusive planning and development regulation jurisdiction under this Chapter for the entire parcel land, including all development phases on the land, to any one of those local governments.

(b) In the event no mutual agreement or written consent under subsection (a) of this section exists, the landowner of land lying within the planning and development regulation jurisdiction of more than one local government may elect the planning and development regulations of the local government where the majority of the total acreage of the parcel of land is situated.

(c) Such a mutual agreement This section shall only be applicable to planning and development regulations and shall not affect taxation or other nonregulatory matters.

The mutual agreement under subsection (a) of this section shall be evidenced by a resolution formally Senate Bill 257-Second Edition Page 23 General Assembly Of North Carolina Session 2025 adopted by each governing board and recorded with the register of deeds in the every county where the property land is located within 14 days of the adoption of the last required resolution.

(d) For the purposes of this section, "landowner" means all titleholders of record owning an interest in the land." SECTION 5.10.(d) This section is effective when it becomes law.

7 REMOVE EXTRATERRITORIAL JURISDICTION AUTHORITY SECTION 5.11.(a) G.S.

160D-201 reads as rewritten:

"§ 160D-201.

Planning and development regulation jurisdiction.

(a) Cities.–AllofthepowersgrantedbythisChaptermaybeexercisedbyanycitywithin its corporate limits and within any extraterritorial area established pursuant to G.S.

160D-202.limits.

…." SECTION 5.11.(b) G.S.

160D-202 reads as rewritten:

"§ 160D-202.

Municipal extraterritorial Transfer or relinquishment of jurisdiction.

(a) Geographic Scope.

– Any city may exercise the powers granted to cities under this Chapter within a defined area extending not more than one mile beyond its contiguous corporate limits.

In addition, a city of 10,000 or more population but less than 25,000 may exercise these powers over an area extending not more than two miles beyond its limits and a city of 25,000 or more population may exercise these powers over an area extending not more than three miles beyond its limits.

In determining the population of a city for the purposes of this Chapter, the city council and the board of county commissioners may use the most recent annual estimate of population as certified by the Secretary of the North Carolina Department of Administration.

Pursuant to G.S.

160A-58.4, extraterritorial municipal planning and development regulation may be extended only from the primary corporate boundary of a city and not from the boundary of satellite areas of the city.

(b) Authority in the Extraterritorial Area.

– A city may not exercise any power conferred bythisChapterinitsextraterritorialjurisdictionthatitisnotexercisingwithinitscorporatelimits.

A city may exercise in its extraterritorial area all powers conferred by this Chapter that it is exercising within its corporate limits.

If a city fails to extend a particular type of development regulation to the extraterritorial area, the county may elect to exercise that particular type of regulation in the extraterritorial area.

(c) County Approval of City Jurisdiction.

– Notwithstanding subsection (a) of this section, no city may extend its extraterritorial powers into any area for which the county has adopted and is enforcing county zoning and subdivision regulations.

However, the city may do so where the county is not exercising both of these powers, or when the city and the county have agreed upon the area within which each will exercise the powers conferred by this Chapter.

No city may extend its extraterritorial powers beyond one mile from its corporate limits without the approval of the board or boards of county commissioners with jurisdiction over the area.

(d) Notice of Proposed Jurisdiction Change.

– Any municipality proposing to exercise extraterritorial jurisdiction under this Chapter shall notify the owners of all parcels of land proposed for addition to the area of extraterritorial jurisdiction, as shown on the county tax records.

The notice shall be sent by first-class mail to the last addresses listed for affected property owners in the county tax records.

The notice shall inform the landowner of the effect of the extension of extraterritorial jurisdiction, of the landowner's right to participate in a legislative hearing prior to adoption of any ordinance extending the area of extraterritorial jurisdiction, as provided in G.S.

160D-601, and of the right of all residents of the area to apply to the board of county commissioners to serve as a representative on the planning board and the board of adjustment, as provided in G.S.

160D-303.

The notice shall be mailed at least 30 days prior to the date of the hearing.

The person or persons mailing the notices shall certify to the city council Page 24 Senate Bill 257-Second Edition General Assembly Of North Carolina Session 2025 that the notices were sent byfirst-class mail, and the certificate shall be deemed conclusive in the absence of fraud.

(e) Boundaries.

– Any council exercising extraterritorial jurisdiction under this Chapter shall adopt an ordinance specifying the areas to be included based upon existing or projected urban development and areas of critical concern to the city, as evidenced by officially adopted plans for its development.

A single jurisdictional boundary shall be applicable for all powers conferred in this Chapter.

Boundaries shall be defined, to the extent feasible, in terms of geographical features identifiable on the ground.

Boundaries may follow parcel ownership boundaries.

A council may, in its discretion, exclude from its extraterritorial jurisdiction areas lying in another county, areas separated from the cityby barriers to urban growth, or areas whose projected development will have minimal impact on the city.

The boundaries specified in the ordinance shall at all times be drawn on a map, set forth in a written description, or shown by a combination of these techniques.

This delineation shall be maintained in the manner provided in G.S.

160A-22 for the delineation of the corporate limits and shall be recorded in the office of the register of deeds of each county in which any portion of the area lies.

Where the extraterritorial jurisdiction of two or more cities overlaps, the jurisdictional boundary between them shall be a line connecting the midway points of the overlapping area unless the city councils agree to another boundary line within the overlapping area based upon existing or projected patterns of development.

(f) County Authority Within City Jurisdiction.

– The county may, on request of the city council, exercise any or all of these the powers granted in this Chapter in any or all areas lying within the city's corporate limits or within the city's specified area of extraterritorial jurisdiction.limits.

(g) Transfer of Jurisdiction.

– When a city annexes, annexes or a new cityis incorporated in, or a city extends its jurisdiction to include, in an area that is currently being regulated by the county, the county development regulations and powers of enforcement shall remain in effect until (i) the city has adopted such development regulations or (ii) a period of 60 days has elapsed following the annexation, extension, annexation or incorporation, whichever is sooner.

Prior to the transfer of jurisdiction, the city may hold hearings and take any other measures consistent with G.S.

160D-204 that maybe required in order to adopt and applyits development regulations for the area at the same time it assumes jurisdiction.

(h) Relinquishment of Jurisdiction.

– When a city relinquishes jurisdiction over an area that it is regulating under this Chapter to a county, the city development regulations and powers of enforcement shall remain in effect until (i) the county has adopted such development regulation or (ii) a period of 60 days has elapsed following the action by which the city relinquished jurisdiction, whichever is sooner.

Prior to the transfer of jurisdiction, the county may hold hearings and take other measures consistent with G.S.

160D-204 that may be required in order to adopt and apply its development regulations for the area at the same time it assumes jurisdiction.

(i) Process for Local Government Approval.

– When a local government is granted powersbythis sectionsubjecttotherequest,approval,oragreementofanotherlocal government, the request, approval, or agreement shall be evidenced by a formally adopted resolution of the governing board of the local government.

Any such request, approval, or agreement can be rescinded upon two years' written notice to the other governing boards concerned by repealing the resolution.

The resolution maybe modified at anytime bymutual agreement of the governing boards concerned.

(j) Local Acts.

– Nothing in this section shall repeal, modify, or amend any local act that defines the boundaries of a city's extraterritorial jurisdiction by metes and bounds or courses and distances.

(k) Effect on Vested Rights.

– Whenever a city or county, pursuant to this section, acquiresjurisdictionoveraterritorythattheretoforehasbeensubjecttothejurisdictionofanother Senate Bill 257-Second Edition Page 25 General Assembly Of North Carolina Session 2025 local government, anypersonwhohas acquired vestedrights in the surrenderingjurisdiction may exercise those rights as if no change of jurisdiction had occurred.

The city or county acquiring jurisdiction may take any action regarding such a development approval, certificate, or other evidence of compliance that could have been taken by the local government surrendering jurisdiction pursuant to its development regulations.

Except as provided in this subsection, any building, structure, or other land use in a territory over which a city or county has acquired jurisdiction is subject to the development regulations of the city or county." SECTION 5.11.(c) G.S.

160D-307 is repealed.

SECTION 5.11.(d) G.S.

160D-602 reads as rewritten:

"§ 160D-602.

Notice of hearing on proposed zoning map amendments.

(a) Mailed Notice.

– Subject to the limitations of this Chapter, an ordinance shall provide for the manner in which zoning regulations and the boundaries of zoning districts are to be determined, established, and enforced, and from time to time amended, supplemented, or changed, in accordance with the provisions of this Chapter.

The owners of affected parcels of land and the owners of all parcels of land abutting that parcel of land shall be mailed a notice of the hearing on a proposed zoning map amendment by first-class mail at the last addresses listed for such owners on the county tax abstracts.

For the purpose of this section, properties are "abutting"even ifseparated byastreet, railroad,or othertransportation corridor.This noticemust be deposited in the mail at least 10 but not more than 25 days prior to the date of the hearing.

If the zoning map amendment is being proposed in conjunction with an expansion of municipal extraterritorial planning and development regulation jurisdiction under G.S.

160D-202, a single hearing on the zoning map amendment and the boundary amendment may be held.

In this instance, the initial notice of the zoning map amendment hearing may be combined with the boundary hearing notice and the combined hearing notice mailed at least 30 days prior to the hearing.

…." SECTION 5.11.(e) G.S.

160D-903(c) is repealed.

SECTION 5.11.(f) G.S.

160D-912 reads as rewritten:

"§ 160D-912.

Outdoor advertising.

… (m) This section does not apply to any ordinance in effect on July 1, 2004.

A local government may amend an ordinance in effect on July 1, 2004, to extend application of the ordinance to off-premises outdoor advertising located in territory acquired by annexation or located in the extraterritorial jurisdiction of the city.

annexation.

A local government may repeal or amend an ordinance in effect on July 1, 2004, so long as the amendment to the existing ordinance does not reduce the period of amortization in effect on June 19, 2020.

…." SECTION 5.11.(g) G.S.

160D-925(e) is repealed.

SECTION 5.11.(h) G.S.

160D-1102(a) reads as rewritten:

"(a) A local government may create an inspection department and may appoint inspectors who may be given appropriate titles, such as building inspector, electrical inspector, plumbing inspector, housing inspector, zoning inspector, heating and air-conditioning inspector, fire prevention inspector, or deputy or assistant inspector, or another title generallydescriptive of the duties assigned.

Every local government shall perform the duties and responsibilities set forth in G.S.

160D-1104 either by (i) creating its own inspection department, (ii) creating a joint inspection department in cooperation with one or more other units of local government, pursuant to Part 1 of Article 20 of Chapter 160A of the General Statutes, (iii) contracting with another unit of local government for the provision of inspection services pursuant to Part 1 of Article 20 of Chapter 160A of the General Statutes, or (iv) arranging for the county in which a city is located to perform inspection services within the city's jurisdiction as authorized byG.S.

160D-1104 and G.S.

160D-202.

G.S.

160D-1104.

Every local government shall designate a person responsible Page 26 Senate Bill 257-Second Edition General Assembly Of North Carolina Session 2025 for the daily oversight of the local government's duties and responsibilities under G.S.

160D-1104." SECTION 5.11.(i) G.S.