On behalf of the NCACC team, we want to thank the hundreds of county commissioners and county staff who made the trip to Raleigh to meet with your delegations and voice your thoughts on many of the issues we have been monitoring all session. Your dedication and time spent at the General Assembly go a long way to remind legislators that counties work in partnership with the state to serve the people.
As we approach mid-June and the potential for the session to be adjourned at the end of the month, there has been rapid movement on several contentious measures this week impacting local government authority. In the area of property taxes, we regrettably saw the passage of Senate Bill 889, Property Tax Reappraisal Moratorium. Under the amended bill, the nine counties that conducted reappraisals in 2026 would be blocked from using their newest property appraisals to assess taxes on local property owners for one year. Because all counties are required to pass a budget by July 1 each year, and because SB 889 has technically not yet become state law, the nine affected counties are facing much more uncertainty due to the bill casting doubt about what tax rates they should use in their budgets and whether they should proceed with passing their budgets as planned or wait until the bill actually becomes law.
Unsatisfied with the impacts of SB 889, the House introduced a proposed committee substitute to Senate Bill 474, Adjust Counties/Reappraisal Moratorium. SB 474 added back two counties that had been excluded from SB 889’s impact and then exempted three new ones instead. This topic is complex and very time-sensitive. As such, the NCACC is opposed to these bills becoming law so late in the fiscal year.
Additionally, we saw movement on bills such as newly amended House Bill 437, Drug-Free Zones/Unauthorized Public Camping. This bill was amended late Wednesday afternoon in Senate Judiciary and would place a substantial burden on local governments as it pertains to how homeless populations are managed. There was also movement on a bill impacting parking guidelines for local governments, as well as the Senate’s version of a regulatory reform bill. More details on these bills can be found below.
Bills on the Move
House Bill 301 – Social Media & AI Safety
Bill Summary: Like other bills in this session, this bill prohibits children younger than 14 from creating social media accounts, unless with parental consent. Users under 18 can also seek legal damages should there be violations. Additionally, all K-12 computer science curriculum will include artificial intelligence (AI) literacy, use, and safety. Should this bill pass, teachers would be required to complete at least 10 hours of AI–related professional development.
Changes of Note: None this week.
Bill Next Steps: The bill passed the Senate Wednesday, June 10 and now heads to the House for a concurrence vote.
House Bill 369 – Parking Lot/Stormwater Control
Bill Summary: The bill prohibits local governments 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 for redevelopment. It also stipulates that there can be no retroactive application of stormwater control requirements unless allowed by federal law.
Changes of Note: The rule no longer applies to certain historic properties, including:
- Properties in a National Register or local historic district
- Properties individually listed on the National Register or designated as a local landmark
- Properties in areas being studied for historic designation (the Study List) or recognized as state or national landmarks
- Local governments in coastal areas (as defined by state law)
Bill Next Steps: The proposed committee substitute was approved by the Senate Committee on Agriculture, Energy, and Environment and will now head to the Senate Rules Committee.
House Bill 376 – Water/Wastewater Affordability & Capacity Act
Bill Summary: This bill makes various changes to provisions related to water and wastewater systems:
- Section 2 requires local government service providers to hold a public hearing and prepare a public statement before selling a public water or sewer system to a private company. This section also places restrictions on the use of sale proceeds.
- Section 3 requires local governments to hold public hearings when implementing water and sewer increases that exceed 25% for customers outside of the local government’s jurisdiction.
Changes of Note: Removes Section 4 which would have:
- Eliminated the authority for local health boards to operate a local well program and instead required that they implement the private drinking water well program established by the Environmental Management Commission (EMC). This section also outlined requirements for local health boards to process private drinking water well permit applications within 10 business days.
- Repealed all local rules around permitting private drinking wells (other than testing and fees) that were effective when the bill became law.
Bill Next Steps: The proposed committee substitute was approved by the Senate Agriculture, Energy, and Environment and sent to the Senate Committee on Rules for consideration.
House Bill 437 – Drug-Free Zones/Unauthorized Public Camping
Bill Summary: The bill has two primary sections:
- Section 1 establishes increased penalties for anyone possessing or distributing banned substances in a drug-free homeless service zone and creates penalties for operators of homeless service zones who knowingly permit such activity.
- Section 2 bans local governments from authorizing or permitting public camping or sleeping in any public property. Local governments would be permitted to establish locations for persons to publicly camp, but those locations would be subject to a list of requirements, including security, restroom facilities with running water, coordination with health departments for behavioral health services, and a prohibition on illegal substances and alcohol. The bill also includes a provision allowing residents, business owners, or the attorney general to file a civil action against a local government found to be in violation of this law.
HB437 raises a lot of concerns about potential civil liability for counties. A provision in the bill would require that if a homeless individual is outside of someone’s business or personal property, and the owner informs the local government of the individual, the local government would have five days to remove the individual or face civil liability. The local government in question would also be responsible for attorney fees.
Changes of Note: The original bill only related to drug-free homeless service centers and facilities. An amendment in committee added language from a separate bill, House Bill 781, banning unauthorized public camping and sleeping, and requiring local governments to establish designated sites for authorized camping, along with requirements for the designated sites.
Bill Next Steps: The bill passed favorably from the Senate Health Committee and has been referred to the Senate Rules Committee.
House Bill 1144 – Dominique Moody Safety Act
Bill Summary: The bill establishes a specialized escalation team within the North Carolina Division of Social Services (DSS) to conduct in-depth assessments of children with lengthy histories with county child protective services and assist county departments of social services with complex cases. This team will support county DSS officers and provide oversight of their interactions with identified high-risk children and are granted authority to help determine case decisions and implement interventions with families. The bill also establishes mandatory escalation notifications from counties to the new state escalation team, sets reporting and response deadlines, and requires county compliance and coordination with escalation team oversight. The bill also directs the North Carolina Department of Justice to provide recommendations on limiting the state’s liability when a county DSS fails to follow statutory requirements or policies and procedures.
Changes of Note: None this week.
Bill Next Steps: The bill was heard for discussion only in the House Judiciary 2 Committee this week and is expected to be heard for a vote by the committee next week.
Senate Bill 394 – Prohibit Foreign Ownership of NC Land
Bill Summary: This bill prohibits an adversarial foreign government from owning agricultural land or property within a 50-mile radius of a military installation.
- When acquiring land regulated by this law, buyers would be required to submit an affidavit, attesting that they are not a prohibited foreign party.
- The register of deeds would then be required to attach the buyer’s affidavit to the property deed.
Changes of Note: The proposed committee substitute includes added provisions requiring the Secretary of State to maintain a public database of prohibited foreign party property interests. The attorney general will enforce the payment of civil penalties against prohibited foreign parties that do not register their property interests with the Secretary of State.
Bill Next Steps: The proposed committee substitute was passed in the House Committee on Homeland Security and Military and Veterans Affairs. The bill has moved forward to the House Rules Committee.
Senate Bill 401 – NC Farm Act of 2025
Bill Summary: This bill is the biennial omnibus that makes various changes to the agricultural laws of this state.
Changes of Note: A conference report was adopted this week by both the House and Senate. The following provisions pertain to counties:
- Section 10 adds New Hanover and Pender to the list of counties classified as High Hazard Counties for open burning.
- Section 19 adds composting facilities (Types 1-3) to the definition of “agriculture,” and as such, these facilities will now be exempt from county zoning and building code requirements.
Bill Next Steps: This bill has been ratified and sent to the governor.
Senate Bill 474 – Adjust Counties/Reappraisal Moratorium
Bill Summary: This bill is a “sidecar bill” to SB 889, Property Tax Reappraisal – meaning that if SB 889 becomes law, this bill would make modifications to it. As written, the following changes apply under this bill:
- Reduces the population threshold exempted from the moratorium from 15,000 to 12,000.
- This change would impact Chowan and Pamlico counties which were previously exempt from the moratorium under SB 889 since both counties have populations lower than 15,000.
- With the population threshold lowered to 12,000, this bill would make Chowan and Pamlico counties subject to the moratorium.
- Exempts from the moratorium any county with a population of less than 150,000 that is in the third year following its notice of mandatory reappraisal due to its sales assessment ratio falling below 0.85 or going above 1.15.
- Harnett county would be exempt from the property tax moratorium under this change
- Exempts any county that had a property tax rate greater than 95 cents at any point during the last four years from being subject to the moratorium.
- Scotland County would be exempt from the property tax moratorium under this change.
Changes of Note: This bill first appeared this week as a proposed committee substitute in Rules, replacing the underlying bill. The bill received an amendment on the House Floor that would hold harmless affected counties from public utility equalization valuations during the moratorium period.
Bill Next Steps: The bill will be on the House calendar on Tuesday, June 16.
Senate Bill 695 – Incent Development Finance District Funding
Bill Summary: The bill authorizes local governments to create incentive districts, which would allow developers to apply for a property to see 90% of its value excluded from taxation. These exclusions end either 10 years after the property receives the benefit, or when the property is sold.
Changes of Note: The bill was modified to prevent counties from including land within a municipality in an incentive district without the municipality’s approval and also required any municipality to request county assent before creating their own incentive district.
Bill Next Steps: The bill passed the House and has been sent to the Senate for consideration.
Senate Bill 889 – Property Tax Reappraisal Moratorium
Bill Summary: This bill, as amended in the Senate, freezes property valuations in the nine counties (Anson, Bladen, Buncombe, Davidson, Guilford, Harnett, Onslow, Pender, and Scotland) with populations greater than 15,000 that completed revaluations in 2026. The bill would require those counties to use their existing property valuations (completed prior to January 1, 2026) in their 2026-2027 fiscal year budgets. Then, for the 2027-2028 fiscal year, the counties would use their schedule of values adopted for the January 1, 2026 reappraisal.
Changes of Note: None this week.
Bill Next Steps: The bill passed the House Wednesday, June 10 and is now on the governor’s desk.
Senate Bill 992 – Truth in Taxation
Bill Summary: The bill contains numerous provisions for how local governments handle the tax process:
- Requires that, in years when a general reappraisal of real property is conducted, a local governing board must follow new procedures to adopt a property tax rate higher than the revenue-neutral rate
- Prohibits adoption of a tax rate above the revenue-neutral rate unless a resolution or ordinance is approved after specific notice and hearing requirements
- Mandates publication of the local government’s interest in exceeding the revenue-neutral rate
- Requires the county clerk of court to send notice of intent to exceed the revenue-neutral rate to each taxpayer, even if the county does not usually provide tax notices on behalf of its municipalities. The notice must include detailed information on the revenue needed, tax rate, estimated amount of tax, and information on the public hearing.
- Requires a public hearing dedicated to the issue of exceeding the revenue-neutral rate, with a majority vote of the governing body needed to approve the higher rate before adopting the budget ordinance
Changes of Note: None this week.
Bill Next Steps: The bill has been placed on the Senate Finance Committee agenda for Tuesday June 16.
Senate Bill 1001 – Coastal Regulatory Reform
Bill Summary: The bill expands eligible uses of the Coastal Storm Damage Mitigation Fund to include costs associated with permitting, construction, or repair of terminal groins under certain conditions, in addition to existing uses for beach nourishment and dune projects. The bill also appropriates $800,000 in non-recurring funds to the Coastal Storm Damage Mitigation Fund.
Changes of Note: None this week.
Bill Next Steps: The bill has been referred to the Senate Agriculture, Energy, and Environment Committee.
Senate Bill 1008 – Pilot Shoreline Stabilization Projects
Bill Summary: Senate Bill 1008 establishes a statewide pilot program to allow shoreline stabilization projects, including permanent erosion-control structures such as sheet pile walls and wave attenuation systems, at locations where oceanfront homes face imminent risk from erosion despite existing statutory restrictions. The bill directs the North Carolina Collaboratory to identify and recommend pilot sites based on factors such as erosion severity, scientific value, potential impacts on adjacent properties, local support, and economic consequences. It also requires the North Carolina Division of Coastal Management and the Collaboratory to develop monitoring protocols and report findings to the General Assembly. Local governments or homeowners associations sponsoring projects must fully fund construction, obtain all necessary permits, and provide financial assurance for the potential removal of the structures. The legislation also appropriates $850,000 to the Collaboratory to conduct the pilot study and update the state’s Beach and Inlet Management Plan, directs the North Carolina Department of Environmental Quality to amend the state’s coastal management program to conform with the new pilot authority, and aims to evaluate whether expanded shoreline stabilization measures can effectively protect threatened coastal properties while informing future coastal management policy.
Changes of Note: None this week.
Bill Next Steps: This bill was heard for discussion only in the Senate Agriculture, Energy, and Environment Committee.
Senate Bill 1009 – Repeal Hardened Structure Ban
Bill Summary: The bill removes the statewide ban on hardened structures along waterways and empowers the Coastal Resources Commission to adopt rules to regulate placement, construction, and permitting erosion control structures.
Changes of Note: None this week.
Bill Next Steps: The bill was heard for discussion only this week and has been referred to the Senate Agriculture, Energy, and Environment Committee.
Senate Bill 1047 – Regulatory Reform Act of 2026
Bill Summary: This is the Senate’s annual regulatory reform bill, a group of various reform initiatives all bundled into the same bill. Since the House has their own regulatory reform legislation, these bills will likely pass independently in their respective chambers, then negotiated into a single “conference report” which both chambers will then decide to vote up or down. Sections of the bill that impact counties include:
- Section 13 – This section adds conditional zoning, rezoning, and stormwater permits to the list of permits and land development regulations that can be appealed through judicial court decisions, instead of through current local governing boards.
- Section 14 – This section adds shot clocks for local governments to respond to the filing of applications, permit reviews, and reviews of any required changes. Additionally, it requires the local government to approve or deny an application within 90 days of receiving any final changes to an application. If the local government fails to meet the 90-day shot clock, the application is automatically approved.
- Section 16 – This section states local governments shall classify residential zoning districts based only on the number of dwelling units per acre, not by lot size. Additionally, it sets limits on how local governments determine allowable density, for example, by not allowing the subtraction of setbacks, opens spaces, or nondevelopable areas based on local government requirements. The section also establishes a definition of “dwelling unit” which is unique to the definition of “dwelling” in General Statute 160D which enumerates local planning and development regulation.
- Section 17 – This section requires local governments to display their fee schedules on their websites and update them within 30 days of any changes. It also requires local governments to provide fee schedules and estimates within 10 days of a completed application and to provide an updated fee estimate after receiving any updated project information. It also requires a final binding fee statement when a development approval is issued. Lastly, it also enables applicants to file suit against the local government in superior court if the local government does not comply with the bill.
Changes of Note: The bill is largely changed from its original language and should be considered almost new compared to its original inception.
Bill Next Steps: This bill passed the Senate Regulatory Reform Committee this week and was given a serial referral to the Senate Judiciary Committee for further consideration.