It was a whirlwind of a week at the General Assembly. Following a legislative break last week for the Memorial Day holiday, lawmakers returned Tuesday ready to start moving bills. While certain high-level priorities remain outstanding, particularly the budget, lawmakers in both chambers wasted little time this week advancing other comprehensive, and often controversial, legislation.
On Tuesday, the House Regulatory Reform Committee moved forward with the annual Regulatory Reform bill. We have closely monitored this bill since it was introduced and worked closely with bill sponsors to secure several land use policy amendments to the bill that were passed by the committee. Regulatory Reform passed the House on Wednesday and now heads to the Senate. Meanwhile, the Senate released its own version of a Regulatory Reform bill on Wednesday morning. There are several provisions in the Senate version that are of great concern, removing local government authority, and we are working with bill sponsors to find compromise language. Regulatory Reform is expected to end up in a conference committee once the Senate passes its version, where final changes will be negotiated, then combined into a single bill that will go back to both chambers for a thumbs up or thumbs down vote.
Other bills of note that made progress this week include an involuntary commitment bill that comes as a recommendation from the House Select Committee on Involuntary Commitment and Public Safety, which met multiple times in the interim. We have also been tracking a bill that would eliminate counties’ ability to incentivize the recruitment of data centers, as well as another bill related to how county occupancy tax revenue may be used. You will find a more detailed summary of these bills below.
In the meantime, we are continuing to track additional funding for Helene recovery, as well as additional progress on budget negotiations between the House and Senate.
Bills on the Move
House Bill 206 – DPS/Other Changes
Bill Summary: This bill was a gut-and-amend proposed committee substitute and modifies various provisions related to public safety, emergency management, and disaster recovery. Among the various changes in the new language, the bill allocates any remaining funds left over from Tropical Storm Fred recovery to ongoing Hurricane Helene recovery efforts. While the original amount allocated was roughly $200 million, it has not yet been determined how much of the remaining funding will go toward Helene recovery.
Changes of Note: As this bill was a gut-and-amend proposed committee substitute, the new language bears no resemblance to the original bill language.
Bill Next Steps: The bill was approved by the Senate Judiciary Committee and sent to the Senate Rules Committee for consideration.
House Bill 301 – Social Media & AI Safety
Bill Summary: Like other bills we’ve seen this session, this bill prohibits children younger than 16 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 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 Judiciary Committee on Tuesday, June 2 and will now head to the Senate Rules Committee.
House Bill 369 – Parking Lot Reform/Stormwater Control
Bill Summary: The bill prohibits local governments from requiring a minimum number of off-street parking spaces per development or structure 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 area 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 bill was amended to prohibit local governments from requiring a minimum number of off-street parking spaces regardless of building occupancy or use, change the calculation requirements for stormwater control measures for new development on already developed lots, and require local governments to update their stormwater management programs to match the bill’s requirements within 12 months.
Bill Next Steps: The proposed committee substitute was approved by the Senate Committee on State and Local Government and sent to the Senate Committee on Agriculture, Energy, and Environment.
House Bill 376 – Various On-Site Wastewater & Well Provisions
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.
- Section 4 eliminates the authority for local health boards to operate a local well program and instead requires that they implement the private drinking water well program established by the Environmental Management Commission (EMC). This section also outlines requirements for local health boards to process private drinking water well permit applications within 10 business days.
- Section 4 also repeals all local rules around permitting private drinking wells (other than testing and fees) that are effective when the bill becomes law.
Changes of Note: None this week.
Bill Next Steps: The bill was passed by the House in May 2025 and has now been referred to the Senate Agriculture, Energy, and Environment Committee.
House Bill 1026 – Remote Instruction for Excess Emergencies
Bill Summary: In the case of bad weather, natural disasters, or other emergencies that keep students out of school longer than expected, any school districts that have already used all of their remote instruction days could receive three extra remote learning days. School districts would be required to complete a report detailing how many remote learning days were used and if any extra days were utilized. The bill also includes a $5,000 appropriation for the North Carolina Department of Public Instruction to oversee the program.
Changes of Note: None this week.
Bill Next Steps: The bill passed the House Education K-12 Committee on Tuesday and now heads to the House Appropriations Committee.
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: The Joint Resolution passed the House Education K-12 Committee and will now head to the House Rules Committee.
House Bill 1104 – Improve IVC Process and Enhance Public Safety
Bill Summary: House Bill 1104 is a comprehensive mental health and involuntary commitment (IVC) reform measure that primarily directs state agencies and stakeholders to study and develop improvements to North Carolina’s behavioral health and IVC systems. The bill requires multiple reports and implementation plans addressing issues such as telehealth-based IVC evaluations in jails, expanded use of mobile crisis units, enhanced training for IVC examiners, behavioral health bed shortages, outpatient commitment practices, access to behavioral health data through BH SCAN, and the recurring cycle of arrest, detention, and involuntary commitment. It also proposes significant changes to outpatient commitment laws by expanding eligibility criteria, requiring individualized treatment plans and provider consent, increasing commitment periods from 90 to 180 days, strengthening monitoring and enforcement mechanisms through LME/MCOs, and allowing courts greater authority to order inpatient commitment when outpatient treatment fails. Additionally, the bill authorizes studies on legal standards related to IVC and incapacity proceedings, county jail behavioral health care, and potential improvements to services at the state’s psychiatric hospitals, while also updating health information exchange laws to allow certain substance use treatment data to be shared in accordance with federal law.
Changes of Note: None this week.
Bill Next Steps: The bill passed the House on a 100–10 vote and has been sent to the Senate for consideration.
House Bill 1124 – Interstate Compact for School Psychologists
Bill Summary: This bill would allow the state to enter a compact which would allow school psychologists from other states to practice virtually in North Carolina schools.
Changes of Note: None this week.
Bill Next Steps: The bill passed the House Education K-12 Committee and will now head to House Appropriations.
Senate Bill 445 – Regulatory Reform Act of 2026
Bill Summary: This bill is the House’s version of the annual compilation of miscellaneous regulatory reforms that legislators produce, modifying laws governing such topics as environment, business, and local governments. Some of the bill provisions impacting counties include:
- Section 9 – Needs-Based School Capital Fund
- Changes grant prioritization for school construction funding:
- Tier 1 (economically distressed) counties remain a priority
- Counties with limited revenue capacity
- Counties with high debt burdens
- Projects addressing critical facility needs
- Projects that will merge two or more schools into one
- Priority toward projects for school districts that have not received funding from the program within the previous three years
- Changes grant prioritization for school construction funding:
- Section 10 – Lengthens vesting periods on properties from two to five years and limits the application of new regulations on vested properties
- Section 13 – Requires local governments to allow residential development in nonagricultural commercial, business, or industrial areas
- Section 14 – Requires local governments to permit accessory dwelling units (ADUs) on single-family and multifamily lots and limits what local restrictions can be placed on ADUs
- Section 16 – Prohibits local governments from denying or withholding licenses, permits, incentives, or zoning approvals based on an employer’s utilization of union workers unless stipulated by state or federal law
- Section 20 – Enables local governments to contract with third-party vendors for criminal history checks for a limited period
Changes of Note: The following changes were made to the bill:
- Section 2 was removed from the bill. The provision would have extended the moratorium on large Interbasin Transfers (IBT) until August 1, 2028.
- Section 10 of the bill was amended, providing that the establishment of a vested right precludes the application of overlay zoning or other development regulations that impose additional requirements but do not affect the allowable type or intensity of use, or any ordinances or regulations, such as building, fire, plumbing, electrical, and mechanical codes.
- Section 13 of the bill was amended to clarify that the provision applies only to the redevelopment of property in cities with a population of 50,000 or more in counties with a population of 275,000 or more.
- Section 14 was also amended to clarify that accessory dwelling units (ADUs) cannot be subdivided, and the provision only applies to cities with a population of 50,000 or more.
Bill Next Steps: The proposed committee substitute was passed favorably by the House and was sent to the Senate for consideration. It passed in the House and will advance to the Senate.
Senate Bill 484 – Clarify Tourism-Related Expenditures
Bill Summary: This bill prohibits the use of occupancy taxes to fund “usual” local government services typically paid by county general fund budgets such as solid waste management, law enforcement, emergency services, affordable housing, and education. The bill also prohibits using occupancy taxes to develop or construct hotels or other lodging.
This bill comes after a recent Supreme Court of North Carolina decision to allow Currituck County to use occupancy taxes to fund public safety services, as long as such services are considered to be tourism-related in the judgment of the county board of commissioners. In order for a county to utilize occupancy taxes for other purposes such as public safety and waste management, a local act must be passed specifying how those taxes can be allocated.
Changes of Note: None this week.
Bill Next Steps: The bill passed the House and has been sent to the Senate for consideration.
Senate Bill 587 – Wake Surfing Safely
Bill Summary: The bill is now a gut-and-amend, proposed committee substitute that affects wake-surfing safety. Importantly, this bill was originally intended to clarify and restore downzoning authority for local governments that have struggled with land-use decision-making since those rights were removed in late 2024. This bill, in its original form, passed through the Senate unanimously and was awaiting consideration in the House. Now that the bill has been modified, there is no a clear path forward for downzoning authority to be reinstated statewide. NCACC continues to advocate for this as a priority for counties.
Changes of Note: The bill is a gut-and-amend proposed committee substitute and does not reflect the original intent of the bill when filed.
Bill Next Steps: The proposed committee substitute was approved by the House Committee on State and Local Government and sent to the House Rules Committee for consideration.
Senate Bill 730 – Ratepayer Protection Act
Bill Summary: The bill creates new rules for the development of large data centers (100+ MW of power demand). Developers must study impacts on nearby communities, limit water use through efficient cooling systems, and report water usage annually. Foreign adversaries such as China, Russia, Iran, and North Korea are prohibited from owning significant interests in North Carolina data centers or the land they occupy. It also prevents local governments from offering new economic incentives for data centers, bars the use of eminent domain to acquire data center sites, and requires utility contracts with data centers to protect other customers from paying higher electric rates.
The bill changes North Carolina’s clean energy requirements by capping costs and requiring utilities to use lower-cost options when possible. It orders a study of how the state’s 2050 carbon-neutrality goal could affect electricity rates. Additionally, it speeds up permitting for energy projects, prevents existing baseload power plants from being retired until a new nuclear plant is approved, and creates a six-month waiting period before Utilities Commission employees can work for regulated utilities.
Changes of Note: None this week.
Bill Next Steps: This bill passed the House Committee on Commerce and Economic Development and will head to the House Rules, Calendar, and Operations Committee.
Senate Bill 889 – Property Tax Reappraisal Moratorium
Bill Summary: The bill freezes property valuations in counties that completed revaluations in 2026. Under the bill, counties would be required to use their existing property valuations (completed prior to January 1, 2026) when adopting their 2026-2027 fiscal year budgets and then use the schedule of values adopted for the January 1, 2026, reappraisal for the 2027-2028 fiscal year. An amendment exempts counties with populations under 15,000 from these requirements. As a result, the provisions of the bill no longer apply to Chowan, Clay, and Pamlico counties. The remaining affected counties are Anson, Bladen, Buncombe, Davidson, Guilford, Harnett, Onslow, Pender, and Scotland.
Changes of Note: None this week.
Bill Next Steps: The bill did not see legislative action this week but was withdrawn from the House Rules Committee and assigned to the House Committee on State and Local Government. NCACC expects this bill to begin moving in the House soon.
Senate Bill 1047 – Regulatory Reform Act of 2026
Bill Summary: The bill 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 to 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 government 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 was heard in the Senate Regulatory Reform Committee this week for discussion only. It will likely be heard on Wednesday, June 10 in the Senate Regulatory Reform Committee for a vote, then sent in order to the Senate Judiciary Committee, Senate Finance Committee, and Senate Rules.