The North Carolina General Assembly reconvened this week for its 2026 short session, the second year of the biennial legislative cycle, and one primarily focused on budget adjustments and unfinished business from 2025. Lawmakers returned without having passed a full state budget last year, making fiscal negotiations the dominant task as they begin work.
Major unresolved issues include breaking a prolonged budget stalemate — particularly disagreements between the House and Senate over income tax cuts, state employee and teacher pay, and major capital projects like a new children’s hospital. Lawmakers also face funding gaps in Medicaid, broader health care policy decisions, and debates over local land control and property tax limits.
Legislation Filed This Week
H696 – Medicaid & HHS Adjust./Other Critical Needs
Bill Summary: The bill includes numerous changes, some of which impact counties:
- The bill establishes a study of centralizing all federal and state social services at the state level, to be delivered by July 2027. Counties and departments of social services (DSS) offices are to be included in those conversations.
- It funds Medicaid through the remainder of the fiscal year, totaling $319 million.
- It modifies Medicaid eligibility requirements, the look-back period to qualify for services, reporting requirements, and eligibility review frequency.
- The bill does not fund the counties’ increased Supplemental Nutrition Assistance Program (SNAP) administrative expenses as a result of House Resolution 1, something originally thought to be included in the bill.
- It is now expected that those funds will need to proceed through the normal state budget process.
- It makes various changes to local grants, some of which impact counties. For a full list, refer to page 31 of the bill.
Changes of Note: This bill is a conference report, and, in this case, bears no resemblance to the original bill language. Refer to the bill summary for all relevant information.
Bill Next Steps: Both the House and Senate passed the bill on second reading and are expected to complete third reading next week, then send it to the governor for signature.
House Bill 1026 Remote Instruction for Excess Emergencies
Bill Summary: Should a school district expend all of its remote learning days, it would be able to petition for three additional days, with the stipulation that another emergency arises. The public school district would have to submit a report including how many remote instruction days were used and what would require additional remote learning days. Further, House Bill 1026 has a $5,000 recurring appropriation to cover administrative and technical costs.
Changes of Note: None this week
Bill Next Steps: This bill passed its first reading and was sent to the House Education K-12 Committee Wednesday, April 22.
House Joint Resolution 1030, US Department of Education
Bill Summary: The bill conveys support for the U.S. Congress to eliminate the U.S. Department of Education and grant authority to the state.
Changes of Note: None this week
Bill Next Steps: This bill passed its first reading on Wednesday, April 22, and will now head to the House Education K-12 Committee for further review.
House Bill 1032 – Repeal Two Percent Local Grocery Tax
Bill Summary: Eliminates the sales tax on groceries, effective October 1, if enacted. Currently, there is a 2% local sales tax on groceries. Sales tax on groceries provided approximately $578 million to counties, and a portion of these funds is required to be set aside for school capital.
Changes of Note: None this week
Bill Next Steps: The bill was filed this week and referred to the House Committee on Commerce and Economic Development and, if passed, will move to the House Finance Committee, then the House Committee on Rules, Calendar, and Operations.
House Bill 1042 – Affordable Housing Exemption Mods
Bill Summary: The bill closes a property tax loophole created by a lawsuit in 2013 that allowed for-profit companies to use nonprofits with extremely small ownership shares in housing developments to receive a property tax break, despite not adhering to the intent of state law. The bill closes that loophole and ensures that only charitable organizations designed to provide below-market-rate housing can receive the tax breaks as intended. This bill was a recommendation of the House Select Committee on Property Tax Reduction and Reform, and NCACC is in support.
Changes of Note: None this week
Bill Next Steps: The bill was filed this week and is waiting for committee assignment.
Senate Bill 214 – Various Local Provisions VII
Bill Summary: The bill makes various land use changes for a number of local governments. However, over the legislative break, language was added to enable Franklin County to acquire property in Halifax, Vance, or Warren counties without the consent of those counties’ bsoard of commissioners. As a result of pushback from the legislative delegation of the affected counties, the bill was withdrawn from House debate, and changes are anticipated prior to the bill being reintroduced for consideration. See bill next steps for further information.
Changes of Note: The conference report now includes the Franklin County land acquisition provision, along with new municipal land use provisions and local elections changes.
Bill Next Steps: The Senate passed the bill on second reading and planned to take a third and final vote next week. However, the House withdrew the bill after debate on the provision permitting Franklin County’s acquisition of property outside its territorial boundary. No members of those affected county delegations were involved in crafting that provision, and questions were raised about the precedent it sets for other counties seeking similar authority. Because conference reports cannot be amended during debate and must be voted up or down, the bill was pulled in the House for further review and may see revisions before it is heard again in the House. The bill’s future in the Senate is uncertain, as it was already approved in a formal vote but requires a third for final approval in that chamber.
Senate Bill 798 – Elderly Prop. Tax Appreciation Exclusion
Bill Summary: The bill allows homeowners who are 65 years or older and North Carolina residents to defer any increases in property tax value over the value of their home when they enroll in the program. Should the property be sold or change hands to anyone other than the homeowner’s spouse, the previous three years of property taxes would be owed.
Changes of Note: None this week
Bill Next Steps: The bill was filed this week and was referred to the Senate Committee on Rules and Operations.