Though the General Assembly is in recess until July 27, there was still considerable legislative activity this week as Governor Stein took the opportunity to sign 12 bills and veto one. The most prominent of the signed bills was the 2026 state budget, full of numerous policy and fiscal priorities. The other signed bills ranged from property tax revaluation moratoriums to parking minimums. The one vetoed bill would have required extensive local government work to remove anyone found camping in public and would have established significant liability for communities that did not enforce those rules.
With the latest raft of bill signings or vetoes over, state policy work will likely quiet down as legislators manage their reelection campaigns in their home districts. Some policy discussions will likely continue among General Assembly leadership, but at a much slower pace than before.
Bills on the Move
Governor Stein Signs 12 Bills, Vetoes 1
Signed Bills That Impact Counties:
House Bill 56 – 2026 Budget Technical Corrections
This bill is primarily a technical corrections bill that adjusts implementation details in the state’s 2026 budget and related legislation, rather than creating major new local government mandates. It revises disaster recovery funding allocations tied to Hurricane Helene, including adjustments to transfers for specific recovery projects, and makes several education-related changes, including reinvesting savings associated with Opportunity Scholarships into school support programs, updating principal compensation provisions, and correcting funding calculations within the public school budget
House Bill 133 – NC Farmland and Military Protection Act
This bill is designed to prevent certain foreign adversaries from owning agricultural land near North Carolina military bases while establishing disclosure requirements, enforcement mechanisms, penalties, and procedures for divestment of prohibited holdings. Foreign parties that already own covered land when the law takes effect must register their holdings with the Secretary of State or face civil penalties. Further, foreign owners who acquire covered land through inheritance, foreclosure, debt collection, or similar means after the effective date must sell or transfer the property within one year. The attorney general is authorized to investigate violations, issue subpoenas, seek court-ordered sales of improperly held property, and ensure proceeds are forfeited to the state rather than returned to the prohibited owner.
Senate Bill 257 – 2026 Appropriations Act (2026 State Budget)
The $34 billion budget spans over 1,300 pages and covers a variety of monetary and policy decisions, some newly inserted and some legacies from the previous two legislative sessions. The bill emerged as a conference report, negotiated between House and Senate leadership behind closed doors, then presented to the senators and representatives for a simple yes-or-no vote. No amendments were made.
Senate Bill 474 – Adjust Counties/Reappraisal Moratorium
Senate Bill 474 revises the property tax reappraisal moratorium established in Senate Bill 889 by narrowing its application to counties with January 1, 2026, reappraisals that do not meet specified exclusion criteria, including certain population thresholds, high property tax rates, or designation as Hurricane Helene-affected areas. As amended, the moratorium would apply to Anson, Bladen, Chowan, Davidson, Guilford, Onslow, Pamlico, and Pender counties, while Clay, Harnett, and Scotland counties would be excluded from the freeze due to the bill’s revised eligibility criteria. Buncombe County was offered a conditional exemption, predicated on the adoption of a revenue-neutral tax rate.
House Bill 162 – Parking Lot Reform/Stormwater Control
The bill prohibits local governments, except for those in 20 coastal counties, from requiring a minimum number of off-street parking spaces and amends the current restriction on regulating parking space dimensions to apply only to off-street parking spaces. It also stipulates that private property owners cannot be required to install new or increased stormwater controls for existing built-upon areas or redevelopment. It also stipulates that there can be no retroactive application of stormwater control requirements unless allowed by federal law. Additionally, the bill would hold stormwater rules only to new development. Local governments would be required to update their regulations and would be permitted to provide incentives if they deem them necessary.
House Bill 1104 – Improve IVC Process and Enhance Public Safety
House Bill 1104 is a comprehensive behavioral health and involuntary commitment (IVC) reform bill that directs the North Carolina Collaboratory, the North Carolina Department of Health and Human Services (NCDHHS), the North Carolina Sheriffs’ Association, and other stakeholders to study and improve multiple aspects of the state’s mental health and IVC system. The bill requires studies and implementation plans addressing the IVC process, telehealth evaluations in county jails, mobile crisis units, examiner training, behavioral health bed capacity, outpatient commitment, county jail health care, state psychiatric hospitals, and the intersection of IVC and criminal competency proceedings, while also expanding the functionality of the BH SCAN system to provide law enforcement with access to real-time mental health bed availability and reservation capabilities. The bill directs a study of medical and mental health care in county jails, including intake, crisis response, staffing, provider coverage, and the Safekeeper Program. Further, the Sheriffs’ Association is tasked with creating a proposal for a pilot program to conduct evaluations in jails willing to participate. Additionally, the bill significantly revises North Carolina’s outpatient commitment laws by expanding eligibility criteria, extending the maximum commitment period from 90 to 180 days, requiring individualized treatment plans and enhanced oversight by providers and LME/MCOs, strengthening enforcement mechanisms for noncompliance, and improving coordination among courts, providers, and NCDHHS. The bill also updates state law to allow substance use treatment information to be shared through the North Carolina Health Information Exchange when permitted under federal law and adds the deputy secretary for Medicaid to the Health Information Exchange Advisory Board.
Vetoed Bill That Impacts Counties:
House Bill 437 – Drug-Free Zones/Unauthorized Public Camping
The bill would have increased penalties for anyone operating homeless service centers that knowingly allowed the distribution or sale of banned substances. The bill also prohibits local governments from allowing public camping or sleeping on public property, except at designated locations that meet state requirements for security, sanitation, behavioral health coordination, and prohibitions on illegal drugs and alcohol. The bill also authorizes residents, business owners, or the attorney general to bring civil actions against local governments for noncompliance after providing 15 days’ notice and an opportunity to cure the alleged violation.
In vetoing the bill, Governor Stein said, “We all want people experiencing homelessness to get back on their feet and live in safe, affordable housing. Yet, this poorly constructed bill makes that goal harder and creates another significant unfunded mandate for local governments.” Read the full veto statement here.
State & Federal Updates
OMB Releases Proposed Rewrite of Federal Rules Under 2 CFR Part 200
Deadline: July 13
The Office of Management and Budget (OMB) has published a proposed rule rewriting 2 CFR Part 200 — the Uniform Guidance — the largest overhaul of federal grant rules since 2013. This rule governs every federal grant your county receives, covering public safety, transportation, housing, public health, emergency management, and more. The public comment period closes July 13, 2026. To assist counties, the National Association of Counties (NACo) has developed an online resource hub and comprehensive analysis.