GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 3
HOUSE BILL 40
Committee Substitute Favorable 2/11/25
Third Edition Engrossed 2/26/25
Short Title: GSC Technical Corrections 2025 Part 1. (Public)
Sponsors:
Referred to:
February 5, 2025
*H40-v-3*
A BILL TO BE ENTITLED 1
AN ACT TO MAKE TECHN ICAL CORRECTIONS TO THE GENERAL STATUTES AND 2
SESSION LAWS, AS REC OMMENDED BY THE GENE RAL STATUTES 3
COMMISSION. 4
The General Assembly of North Carolina enacts: 5
SECTION 1.(a) G.S. 1-18 is repealed. 6
SECTION 1.(b) G.S. 29-30 reads as rewritten: 7
"§ 29-30. Election of surviving spouse to take life interest in lieu of intestate share provided. 8
(a) Except as provided in this subsection, in lieu of the intestate share provided in 9
G.S. 29-14 or G.S. 29-21, or of the elective share provided in G.S. 30-3.1, the surviving spouse 10
of an intestate or the surviving spouse who has petitioned for an elective share is entitled to take 11
as the surviving spouse's intestate share or elective share a life estate in one third in value of all 12
the real estate of which the deceased spouse was seised and possessed of an estate of inheritance 13
at any time during coverture. the marriage. The surviving spouse is not entitled to take a life 14
estate in any of the following circumstances: 15
… 16
(b) The surviving spouse may elect to take a life estate in the usual dwelling house 17
occupied by the surviving spouse at the time of the death of the deceased spouse if the dwelling 18
house was owned by the deceased spouse at the time of the deceased spouse's death, together 19
with the outbuildings, improvements improvements, and easements thereunto belonging or 20
appertaining, easements, and lands land upon which the dwelling house is situated and that is 21
reasonably necessary to the its use and enjoyment thereof, as well as enjoyment. The surviving 22
spouse may also elect to take a fee simple ownership in the household furnishings therein, despite 23
the fact that a life estate therein in the dwelling house might exceed the fractional limitation 24
provided for in subsection (a) of this section. If the value of a life estate in the dwelling house is 25
less than the value of a life estate in one-third in value of all the real estate, the surviving spouse 26
may elect to take a life estate in the dwelling and a life estate in such other real estate as to make 27
the aggregate life estate of the surviving spouse equal to a life estate in one-third in value of all 28
the real estate. 29
(c) The election provided for in subsection (a) of this section shall be is made by the filing 30
of a petition in accordance with Article 2 of Chapter 28A of the General Statutes (i) with the 31
clerk of the superior court of the county in which the administration of the estate is pending or 32
(ii) if no administration is pending, then with the clerk of the superior court of any county in 33
which the administration of the estate could be commenced, together with the recording of a 34
notice indicating the county and file number of the clerk's filing with the register of deeds in 35 General Assembly Of North Carolina Session 2025
Page 2 House Bill 40-Third Edition
every county where real property to be claimed under the filing is located. The election shall be 1
made prior to the following applicable periods: 2
(1) In case of testacy, the shorter of (i) within 12 months of the date of death of 3
the deceased spouse if letters testamentary are not issued within that period, 4
or (ii) within one month after the expiration of the time limit for filing a claim 5
for elective share if letters have been issued. 6
(2) In case of intestacy, the shorter of (i) within 12 months after the date of death 7
of the deceased spouse if letters of administration are not issued within that 8
period, or (ii) within one month after the expiration of the time limit for filing 9
claims against the estate, if letters have been issued. 10
(3) Repealed by Session Laws 2011-344, s. 5, effective January 1, 2012. 11
(4) If litigation that affects the share of the surviving spouse in the estate is 12
pending, including a pending petition for determination of an elective share, 13
then within such a reasonable time as may be allowed by written order of the 14
clerk of the superior court. 15
Nothing in this subsection extends the period of time for a surviving spouse to petition for an 16
elective share under Article 1A of Chapter 30 of the General Statutes. 17
(c1) The petition described in subsection (c) of this section shall do all of the following: 18
(1) Be directed to the clerk with whom it is filed. 19
(2) State that the surviving spouse making the petition elects to take under this 20
section rather than under the provisions of G.S. 29-14, 29-21, or 30-3.1, as 21
applicable. 22
(3) Set forth the names of all heirs, devisees, personal representatives 23
representatives, and all other persons in possession of or claiming an estate or 24
an interest in the property described in subsection (a) of this section. 25
(4) Request the allotment of the life estate provided for in subsection (a) of this 26
section. 27
(c2) The petition described in subsection (c) of this section may be filed in person, person 28
or by attorney authorized in a writing executed and duly acknowledged by the surviving spouse 29
and attested by at least one witness. If the surviving spouse is a minor or an incompetent, the 30
petition may be executed and filed by a general guardian or by the guardian of the person or 31
estate of the minor or incompetent spouse. If the minor or incompetent spouse has no guardian, 32
the petition may be executed and filed by a guardian ad litem appointed by the clerk. The petition, 33
whether in person or by attorney, shall be filed as a record of the court, and a summons together 34
with a copy of the petition shall be served upon each of the interested persons named in the 35
petition, in accordance with G.S. 1A-1, Rule 4. 36
(d) In case of election to take a life estate in lieu of an intestate share or elective share, as 37
provided in either G.S. 29-14, 29-21, or 30-3.1, the clerk of superior court, with whom the 38
petition has been filed, shall summon and appoint a jury of three disinterested persons who being 39
first duly sworn shall promptly allot and set apart to the surviving spouse the life estate provided 40
for in subsection (a) of this section and make a final report of this action to the clerk. 41
(e) The final report shall be filed by the jury not more than 60 days after the their 42
summoning and appointment thereof, appointment, shall be signed by all jurors, and shall 43
describe by metes and bounds the real estate in which the surviving spouse shall have has been 44
allotted and set aside a life estate. It shall be filed as a record of court and a certified copy thereof 45
of it shall be filed and recorded in the office of the register of deeds of each county in which any 46
part of the real property of the deceased spouse, affected by the allotment, is located. 47
(f) In the election and procedure to have the life estate allotted and set apart provided for 48
in this section, the rules of procedure relating to partition proceedings apply except insofar as the 49
rules would be inconsistent with the provisions of this section. A determination of the life estate 50
under this section may be appealed in accordance with G.S. 1-301.3. 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 3
(g) Neither the household furnishings in the dwelling house nor the life estates estate 1
taken by election under this section are subject to the payment of debts due from the estate of the 2
deceased spouse, except those debts secured by such the property as follows: 3
(1) By a mortgage or deed of trust in which the surviving spouse has waived the 4
surviving spouse's rights by joining with the other spouse in the making 5
thereof.spouse. 6
(2) By a mortgage or deed of trust given by the deceased spouse to secure a loan, 7
the proceeds of which were used to pay all or a portion of the purchase price 8
of the encumbered real property, regardless of whether the secured party is the 9
seller of the real property or a third-party lender, or bylender. 10
(2a) By a conditional sales contract of personal property in which title is retained 11
by the vendor, made prior to or during the marriage. 12
(3) By a mortgage or deed of trust made prior to the marriage. 13
(4) By a mortgage or deed of trust constituting a lien on the property at the time 14
of its acquisition by the deceased spouse either before or during the marriage. 15
(5) By a mortgage or deed of trust on property with respect to which the elective 16
life estate provided for in this section does not apply as provided in subsection 17
(a) of this section. 18
(h) If no election is made in the manner and within the time provided for in subsection 19
(c) of this section, the surviving spouse shall be is conclusively deemed to have waived the 20
surviving spouse's right to elect to take under the provisions of this section, and any interest 21
which that the surviving spouse may have had in the real estate of the deceased spouse by virtue 22
of this section shall terminate.is terminated." 23
SECTION 1.(c) G.S. 50-11 reads as rewritten: 24
"§ 50-11. Effects of absolute divorce. 25
(a) After a judgment of divorce from the bonds of matrimony, all rights arising out of the 26
marriage shall cease and determine except as hereinafter set out, cease, except as otherwise 27
provided by this section, and either party may marry again without restriction arising from the 28
dissolved marriage. 29
(b) No judgment of divorce shall cause any child in esse or begotten of the body of the 30
wife during coverture the marriage to be treated as a child born out of wedlock. 31
(c) A divorce obtained pursuant to G.S. 50-5.1 or G.S. 50-6 shall does not affect the 32
rights of either spouse with respect to any action for alimony or postseparation support pending 33
at the time the judgment for divorce is granted. Furthermore, a judgment of absolute divorce shall 34
does not impair or destroy the right of a spouse to receive alimony or postseparation support or 35
affect any other rights provided for such the spouse under any judgment or decree of a court 36
rendered before or at the time of the judgment of absolute divorce. 37
(d) A divorce obtained outside the State in an action in which jurisdiction over the person 38
of the dependent spouse was not obtained shall does not impair or destroy the right of the 39
dependent spouse to alimony as provided by the laws of this State. 40
(e) An absolute divorce obtained within in this State shall destroy destroys the right of a 41
spouse to equitable distribution under G.S. 50-20 unless the right is asserted prior to judgment of 42
absolute divorce; except, however, the defendant may bring an action or file a motion in the cause 43
for equitable distribution within six months from the date of the judgment in such a the case if 44
service of process upon the defendant was by publication pursuant to G.S. 1A-1, Rule 4 Rule 4, 45
and the defendant failed to appear in the action for divorce. 46
(f) An absolute divorce by a court that lacked personal jurisdiction over the absent spouse 47
or lacked jurisdiction to dispose of the property shall does not destroy the right of a spouse to 48
equitable distribution under G.S. 50-20 if an action or motion in the cause is filed within six 49
months after the judgment of divorce is entered. The validity of such the divorce may be attacked 50
in the action for equitable distribution." 51 General Assembly Of North Carolina Session 2025
Page 4 House Bill 40-Third Edition
SECTION 1.(d) G.S. 52-10 reads as rewritten: 1
"§ 52-10. Contracts between husband and wife generally; releases. 2
(a) Contracts between husband and wife not inconsistent with public policy are valid, and 3
any persons of full age about to be married and married persons may, with or without a valuable 4
consideration, release and quitclaim such rights which they might respectively acquire or may 5
have acquired by marriage in the property of each other; and such other. These releases may be 6
pleaded in bar of any action or proceeding for the recovery of the rights and estate so released. 7
No contract or release between husband and wife made during their coverture shall be valid to 8
affect or change any part of the real estate of either spouse, or the accruing income thereof for a 9
longer time than three years next ensuing the making of such contract or release, marriage affects 10
either of the following, unless it is in writing and is acknowledged by both parties before a 11
certifying officer.officer: 12
(1) Either spouse's real property. 13
(2) Income from either spouse's real property accruing more than three years after 14
the execution of the contract or release. 15
(a1) A contract between a husband and wife made, with or without a valuable 16
consideration, during a period of separation to waive, release, or establish rights and obligations 17
to post separation postseparation support, alimony, or spousal support is valid and not 18
inconsistent with public policy. A provision waiving, releasing, or establishing rights and 19
obligations to post separation postseparation support, alimony, or spousal support shall remain 20
remains valid following a period of reconciliation and subsequent separation, if the contract 21
satisfies all of the following requirements: 22
(1) The contract is in writing. 23
(2) The provision waiving the rights or obligations is clearly stated in the contract. 24
(3) The contract was acknowledged by both parties before a certifying officer. 25
A release made pursuant to this subsection may be pleaded in bar of any action or proceeding for 26
the recovery of the rights released. 27
(b) Such A certifying officer under this section shall be a notary public, or a justice, judge, 28
magistrate, clerk, assistant clerk clerk, or deputy clerk of the General Court of Justice, or the 29
equivalent or corresponding officers of the state, territory territory, or foreign country where the 30
acknowledgment is made. Such The officer must shall not be a party to the contract. 31
(c) This section shall does not apply to any judgment of the superior court or other State 32
court of competent jurisdiction, which, jurisdiction that, by reason of its being consented to by a 33
husband and wife, or their attorneys, may be construed to constitute a contract or release between 34
such the husband and wife." 35
SECTION 2. G.S. 1-569.17 reads as rewritten: 36
"§ 1-569.17. Witnesses; subpoenas; depositions; discovery. 37
(a) An arbitrator may issue a subpoena for the attendance of a witness and for the 38
production of records and other evidence at any hearing and may administer oaths. A subpoena 39
shall be served in the manner for service of subpoenas in a civil action and, upon motion to the 40
court by a party to the arbitration proceeding or the arbitrator, enforced in the manner for 41
enforcement of subpoenas in a civil action. 42
… 43
(d) If an arbitrator permits discovery under subsection (c) of this section, the arbitrator 44
may order a party to the arbitration proceeding to comply with the arbitrator's discovery-related 45
orders, issue subpoenas for the attendance of a witness and for the production of records and 46
other evidence at a discovery proceeding, and take action against a noncomplying party to the 47
extent a court could if the controversy were the subject of a civil action in this State. 48
… 49
(g) The court may enforce a subpoena or discovery-related order for the attendance of a 50
witness within this State and for the protection production of records and other evidence issued 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 5
by an arbitrator in connection with an arbitration proceeding in another state upon conditions 1
determined by the court so as to make the arbitration proceeding fair, expeditious, and 2
cost-effective. A subpoena or discovery-related order issued by an arbitrator in another state shall 3
be served in the manner provided by law for service of subpoenas in a civil action in this State 4
and, upon motion to the court by a party to the arbitration proceeding or the arbitrator, enforced 5
in the manner provided by law for enforcement of subpoenas in a civil action in this State. 6
(h) An arbitrator shall does not have the authority to hold a party in contempt of any order 7
the arbitrator makes under this section. A court may hold parties in contempt for failure to obey 8
an arbitrator's order, or an order made by the court, pursuant to this section, among other 9
sanctions imposed by the arbitrator or the court." 10
SECTION 3. G.S. 7B-2204(d) reads as rewritten: 11
"(d) Should the juvenile be found guilty, or enter a plea of guilty or no contest to a criminal 12
offense in superior court and receive an active sentence, then immediate transfer to the Division 13
of Prisons of the Department of Adult Correction shall be ordered. Until such time as the juvenile 14
is transferred to the Division of Prisons of the Department of Adult Correction, the juvenile may 15
be detained in a holdover facility or detention facility approved by the Section.or approved by 16
the Division of Juvenile Justice of the Department of Public Safety." 17
SECTION 4. G.S. 14-113.7A reads as rewritten: 18
"§ 14-113.7A. Application of Article to credit financial transaction cards. 19
This Article shall not be construed as being applicable does not apply to any credit a financial 20
transaction card as the term is defined in G.S. 14-113.8." 21
SECTION 5. Article 15A of Chapter 15 of the General Statutes is repealed. 22
SECTION 6. G.S. 58-6-25 reads as rewritten: 23
"§ 58-6-25. Insurance regulatory charge. 24
… 25
(b) Rates. – The rate of the charge for each taxable year shall be is six and one-half 26
percent (6.5%). When the Department prepares its budget request for each upcoming fiscal year, 27
the Department shall propose a percentage rate of the charge levied in this section. The Governor 28
shall submit that proposed rate to the General Assembly each fiscal year. It is the intent of the 29
General Assembly that the percentage rate not exceed the rate necessary to generate funds 30
sufficient to defray the estimated cost of the operations of the Department for each upcoming 31
fiscal year, including a reasonable margin for a reserve that shall be used to provide for 32
unanticipated expenditures requiring a budget adjustment as authorized by G.S. 143C-6-4. In 33
calculating the amount of the reserve, the General Assembly shall consider all relevant factors 34
that may affect the cost of operating the Department or a possible unanticipated increase or 35
decrease in North Carolina premiums or other charge revenue. 36
… 37
(d) Use of Proceeds. – The Insurance Regulatory Fund is created as an interest-bearing 38
special fund to which the proceeds of the charge levied in this section and all fees collected under 39
Articles 69 through 71 of this Chapter and under Articles 9 and 9C of Chapter 143 of the General 40
Statutes shall be credited. Moneys in the Fund may be spent only pursuant to appropriation by 41
the General Assembly, and the Fund is subject to the provisions of the State Budget Act. All 42
money credited to the Fund shall be used to reimburse the General Fund for the following: 43
… 44
(9) Money appropriated to the Department of Insurance for the regulation of the 45
professional employer organization industry pursuant to Article 89A of 46
Chapter 58 of the General Statutes.this Chapter. 47
…." 48
SECTION 7.(a) The last sentence of Section 5 of S.L. 2013-357 is codified as the 49
last sentence of G.S. 58-50-130(a)(5)b. 50 General Assembly Of North Carolina Session 2025
Page 6 House Bill 40-Third Edition
SECTION 7.(b) G.S. 58-50-130, as amended by subsection (a) of this section, reads 1
as rewritten: 2
"§ 58-50-130. Required health care plan provisions. 3
(a) Health benefit plans covering small employers are subject to the following provisions: 4
… 5
(5) No small employer carrier, insurer, subsidiary of an insurer, or controlled 6
individual of an insurance holding company shall provide stop loss, 7
catastrophic, or reinsurance coverage that does not comply with the applicable 8
standards in this Article, including underwriting and rating standards, to small 9
employers who employ employing fewer than 12 eligible employees that does 10
not comply with the underwriting, rating, and other applicable standards in 11
this Act. employees. An insurer shall not issue a stop loss health insurance 12
policy to any person, firm, corporation, partnership, or association defined as 13
a small employer that does any of the following: 14
a. Provides direct coverage of health expenses payable to an individual. 15
b. Has an annual attachment point for claims incurred per individual that 16
is lower than twenty thousand dollars ($20,000) for plan years 17
beginning in 2013. For subsequent policy years, the amount shall be 18
indexed using the Consumer Price Index for Medical Services for All 19
Urban Consumers for the South Region and shall be rounded to the 20
nearest whole thousand dollars. The index factor shall be is the index 21
as of July of the year preceding the change divided by the index as of 22
July 2012. The Department of Insurance shall make the amount of the 23
attachment points in Section 3 of this act the indexed amount available 24
to the public annually. 25
c. Has an annual aggregate attachment point lower than the greater of 26
one of the following: 27
1. One hundred twenty percent (120%) of expected claims. 28
2. Twenty thousand dollars ($20,000) for plan years beginning in 29
2013. For subsequent policy years, the amount shall be indexed 30
using the Consumer Price Index for Medical Services for All 31
Urban Consumers for the South Region and shall be rounded 32
to the nearest whole thousand dollars. The index factor shall be 33
is the index as of July of the year preceding the change divided 34
by the index as of July 2012. 35
Nothing in this subsection prohibits an insurer from providing additional 36
incentives to small employers with benefits promoting a medical home or 37
benefits that provide health care screenings, are focused on outcomes and key 38
performance indicators, or are reimbursed on an outcomes basis rather than a 39
fee-for-service basis. 40
(6) If a small employer carrier offers coverage to a small employer, the small 41
employer carrier shall offer coverage to all eligible employees of a small 42
employer and their dependents. A small employer carrier shall not offer 43
coverage to only certain individuals in a small employer group except in the 44
case of late enrollees as provided in G.S. 58-50-130(a)(4).subdivision (a)(4) 45
of this section. 46
(7), (8) Repealed by Session Laws 1997-259, s. 5. 47
(9) The health benefit plan must shall meet the applicable requirements of Article 48
68 of this Chapter. 49 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 7
(b) For all small employer health benefit plans that are grandfathered health benefit plans 1
and that are subject to this section, the premium rates are subject to all of the following 2
provisions: 3
(1) Small employer carriers shall use an adjusted-community rating methodology 4
in which the premium for each small employer can vary only on the basis of 5
the eligible employee's or dependent's age as determined under subdivision 6
(6) of this subsection, the gender of the eligible employee or dependent, 7
number of family members covered, or geographic area as determined under 8
subdivision (7) of this subsection, or industry as determined under subdivision 9
(9) of this subsection. Premium rates charged during a rating period to small 10
employers with similar case characteristics for the same coverage shall not 11
vary from the adjusted community rate by more than twenty-five percent 12
(25%) for any reason, including differences in administrative costs and claims 13
experience. 14
(2) Rating factors related to age, gender, number of family members covered, 15
geographic location, or industry may be developed by each carrier to reflect 16
the carrier's experience. The factors used by carriers are subject to the 17
Commissioner's review. 18
(3) A small employer carrier shall not modify the premium rate charged to a small 19
employer or a small employer group member, including changes in rates 20
related to the increasing age of a group member, for 12 months from the initial 21
issue date or renewal date, unless the group is composite rated 22
composite-rated and composition of the group changed by twenty percent 23
(20%) or more or benefits are changed. The percentage increase in the 24
premium rate charged to a small employer for a new rating period shall not 25
exceed the sum of all of the following: 26
… 27
(4), (5) Repealed by Session Laws 1995, c. 238, s. 1. 28
(6) Unless the small employer carrier uses composite rating, the small employer 29
carrier shall use the following age brackets: 30
a. Younger than 15 years;years. 31
b. 15 to 19 years;years. 32
c. 20 to 24 years;years. 33
d. 25 to 29 years;years. 34
e. 30 to 34 years;years. 35
f. 35 to 39 years;years. 36
g. 40 to 44 years;years. 37
h. 45 to 49 years;years. 38
i. 50 to 54 years;years. 39
j. 55 to 59 years;years. 40
k. 60 to 64 years;years. 41
l. 65 years. 42
Carriers may combine, but shall not split, complete age brackets for the 43
purposes of determining rates under this subsection. Small employer carriers 44
shall be permitted to develop separate rates for individuals aged 65 years and 45
older for coverage for which Medicare is the primary payor and coverage for 46
which Medicare is not the primary payor. 47
(7) A carrier shall define geographic area to mean medical care system. Medical 48
care system factors shall reflect the relative differences in expected costs, shall 49
produce rates that are not excessive, inadequate, or unfairly discriminatory in 50 General Assembly Of North Carolina Session 2025
Page 8 House Bill 40-Third Edition
the medical care system areas, and shall be revenue neutral revenue-neutral to 1
the small employer carrier. 2
(8) The Department may adopt rules to administer this subsection and to assure 3
that rating practices used by small employer carriers are consistent with the 4
purposes of this subsection. Those rules shall include consideration of 5
differences based on all of the following: 6
a. Health benefit plans that use different provider network arrangements 7
may be considered separate plans for the purposes of determining the 8
rating in subdivision (1) of this subsection, provided that subsection so 9
long as the different arrangements are expected to result in substantial 10
differences in claims costs. 11
b. Except as provided for in sub-subdivision a. of this subdivision, 12
differences in rates charged for different health benefit plans shall be 13
reasonable and reflect objective differences in plan design, design but 14
shall not permit differences in premium rates because of the case 15
characteristics of groups assumed to select particular health benefit 16
plans. 17
c. Small employer carriers shall apply allowable rating factors 18
consistently with respect to all small employers. 19
(9) In any case where the small employer carrier uses industry as a case 20
characteristic in establishing premium rates, the rate factor associated with 21
any industry classification divided by the lowest rate factor associated with 22
any other industry classification shall not exceed 1.2. 23
(b1) For all small employer health benefit plans that are not grandfathered health benefit 24
plans and that are subject to this section, the premium rates are subject to all of the following 25
provisions: 26
(1) A small employer carrier shall use a method to develop premiums for small 27
employer group health benefit plans that are not grandfathered health plans 28
which that spreads financial risk across a large population and allows 29
adjustments for only the following factors: 30
a. Age, except that the rate shall not vary by more than the ratio of three 31
to one (3:1) for adults. 32
b. Whether the plan or coverage covers individual or family. 33
c. Geographic rating areas. 34
d. Tobacco use, except that the rate shall not vary by more than the ratio 35
of one and two-tenths to one (1.2:1) due to tobacco use. 36
With respect to family coverage under a health benefit plan, the rating 37
variations for age and tobacco use shall be applied based on the portion of 38
premium that is attributable to each family member covered under the plan. 39
… 40
(f) Each small employer carrier shall file with the Commissioner annually on or before 41
March 15 an actuarial certification certifying that it is in compliance with this Act Article and 42
that its rating methods are actuarially sound. The small employer carrier shall retain a copy of 43
the certification at its principal place of business. 44
(g) A small employer carrier shall make the information and documentation described in 45
subsection (e) of this section available to the Commissioner upon request. Except in cases of 46
violations of this Act, Article, the information is proprietary and trade secret information and is 47
not subject to disclosure by the Commissioner to persons outside of the Department except as 48
agreed to by the small employer carrier or as ordered by a court of competent jurisdiction. 49
Nothing in this section affects the Commissioner's authority to approve rates before their use 50
under G.S. 58-65-60(e) or G.S. 58-67-50(c). 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 9
(h) The provisions of subdivisions (a)(1), (3), and (5) and subsections (b) through (g) of 1
this section apply to health benefit plans delivered, issued for delivery, renewed, or continued in 2
this State or covering persons residing in this State on or after January 1, 1992. The provisions 3
of subdivisions (a)(2) and (4) of this section apply to health benefit plans delivered, issued for 4
delivery, renewed, or continued in this State or covering persons residing in this State on or after 5
the date the plan becomes operational, as designated by the Commissioner. For purposes of this 6
subsection, the date a health benefit plan is continued is the anniversary date of the issuance of 7
the health benefit plan. 8
…." 9
SECTION 7.(c) The introductory language of Section 12 of S.L. 2015-281 reads as 10
rewritten: 11
"SECTION 12. Section 4(b) of S.L. 2013-357 reads as rewritten: 12
"SECTION 4.(b) G.S. 58-50-110 reads as rewritten:" 13
SECTION 7.(d) Subsection (c) of this section is retroactively effective January 1, 14
2016. The remainder of this section is effective when it becomes law. 15
SECTION 9.(a) G.S. 89E-3 reads as rewritten: 16
"§ 89E-3. Definitions. 17
When used in this Chapter, unless the context otherwise requires: 18
(1) "Board" means the North Carolina Board for Licensing of Geologists. 19
(2) "Geologist". The term "geologist", within the intent of this Chapter, shall 20
mean a person who is trained and educated in the science of geology. 21
(3) The term "geologist-in-training" means a person who has taken and 22
successfully passed the portion of professional examination covering 23
fundamental or academic geologic subjects, prior to his completion of the 24
requisite years of experience in geologic work as provided for in required for 25
licensure under this Chapter. 26
… 27
(5) The term "good moral character" means such character as tends to ensure the 28
faithful discharge of the fiduciary duties of the licensed geologist to his a 29
licensed geologist's fiduciary duties to a client. 30
… 31
(8) "Public practice of geology" means the performance for others of geological 32
service or work in the nature of work or consultation, investigation, surveys, 33
evaluations, planning, mapping and inspection of geological work, in which 34
the performance is related to the public welfare of safeguarding of life, health, 35
property and the environment, except as specifically exempted by this 36
Chapter. The definition shall not include or allow the practice of engineering 37
as defined in Chapter 89C of the North Carolina General Statutes. 38
(9) The term "qualified geologist" means a person who possesses all of the 39
qualifications specified in this Chapter for licensing except that he or she but 40
is not licensed. 41
(10) The term "responsible charge of work" means the independent control and 42
direction by the use of initiative, skill and independent judgment of geological 43
work or the supervision of such work. 44
(11) The term "subordinate" means either of the following who does not assume 45
the responsible charge of work: 46
a. any A person who assists a licensed geologist in the practice of 47
geology without assuming the responsible charge of work.geology. 48
b. A geologist-in-training working under the supervision of a licensed 49
geologist." 50
SECTION 9.(b) G.S. 89E-4 reads as rewritten: 51 General Assembly Of North Carolina Session 2025
Page 10 House Bill 40-Third Edition
"§ 89E-4. North Carolina Board for Licensing of Geologists; appointments; terms; 1
composition. 2
… 3
(c) Each member of the Board shall be a citizen of the United States and shall have been 4
a resident of this State for at least six months immediately preceding his or her 5
appointment.appointment to the Board. 6
…." 7
SECTION 9.(c) G.S. 89E-6 reads as rewritten: 8
"§ 89E-6. Exemptions. 9
Any person except as specifically exempted below who shall publicly practice or offer to 10
publicly practice geology in this State is subject to the provisions of this Chapter. The following 11
persons are exempt: 12
(1) Persons engaged solely in teaching the science of geology or engaged solely 13
in geologic research in this State may pursue their teaching and/or research 14
without licensing. State. A teacher or researcher must, however, be a licensed 15
geologist if he or she performs to perform geologic work and services for 16
which a licensed geologist license is required by this Chapter. 17
(2) Officers and employees of the United States of America and the State of North 18
Carolina practicing solely as such officers or employees. 19
(3) Officers and employees of petroleum companies practicing solely as such 20
officers and employees and not offering their professional services to the 21
public for hire. 22
(4) A subordinate to a licensed geologist or a geologist-in-training licensed under 23
this Chapter insofar as he or she acts solely in such when acting solely in that 24
capacity. This exemption does not permit any such a subordinate to practice 25
geology for others in his the subordinate's own right or use the term "licensed 26
geologist"." 27
SECTION 9.(d) G.S. 89E-7 reads as rewritten: 28
"§ 89E-7. Limitations. 29
… 30
(b) This Chapter shall not be construed to prevent or to affect: 31
… 32
(2) The public practice of geology by a person not a resident of and having no 33
established place of business in this State, when such the practice does not 34
exceed in the aggregate more than 90 days in any calendar year, and provided 35
such person the nonresident is duly licensed to practice such profession 36
geology in another state where the requirements for a license are not lower 37
than those specified in this Chapter for obtaining the license required for such 38
work; and provided further that such Chapter, the nonresident shall file files 39
with the Board Board, within 10 days of entering this State for commencing 40
of such work, a statement giving his the nonresident's name, residence, 41
residence address, the number of his license, and by what authority issued, 42
and nonresident license number and issuing state, and, upon the completion 43
of the work, files with the Board a statement of the time engaged in such the 44
work within in the State; or 45
(3) The public practice of geology by a person who is not a resident of and having 46
has no established place of business in this State, or who State or has recently 47
become a resident hereof, practicing or offering of this State and who practices 48
or offers to practice herein in this State for more than 90 days in any calendar 49
year the profession of geology, if he if the person is licensed in another state 50
or qualified as defined herein, if he shall have state, has filed with the Board 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 11
an application for a license license, and shall have has paid the fee required 1
by this Chapter. Such A practice shall be under this exemption is deemed a 2
provisional practice and shall continue only for such the time as the Board 3
requires reasonably for the consideration of the applicant for licensing under 4
this Chapter as a geologist." 5
SECTION 9.(e) G.S. 89E-8 reads as rewritten: 6
"§ 89E-8. Applications. 7
An application for licensing as a geologist shall be made under oath, shall show the applicant's 8
education and a summary of his the applicant's geological work, plus and shall set out any other 9
relevant criteria to be determined by the Board. The Board shall have the power to determine a 10
reasonable application fee which that shall accompany each application." 11
SECTION 9.(f) G.S. 89E-9 reads as rewritten: 12
"§ 89E-9. Minimum qualifications. 13
An applicant shall be eligible for a license as a geologist in North Carolina provided that each 14
applicant meets the following minimum qualifications: 15
(1) Be of good moral and ethical character. 16
(2) Have graduated from an accredited college or university, and have a degree 17
with a major in geology, engineering geology or geological engineering or 18
related geologic science; or have completed 30 semester hours or the 19
equivalent in geological science courses leading to a major in geology, of 20
which at least 24 hours of the equivalent were upper level undergraduate 21
courses or graduate courses. The Board shall waive the academic requirements 22
for a person already practicing geology at the time this Chapter is enacted, 23
provided application for license is made not later than one year after 24
appointment of the initial Board and provided further that the applicant can 25
provide evidence to satisfy the Board that he or she is competent to engage in 26
the public practice of geology. 27
(3) Successfully pass such examination established by the Board which shall be 28
designed to demonstrate that the applicant has the necessary knowledge and 29
requisite skill to exercise the responsibilities of the public practice of geology. 30
The Board shall waive the examination for licensing as a geologist of an 31
applicant who makes written application to the Board not later than one year 32
after appointment of the initial Board, and who otherwise meets the 33
qualification of this Chapter. 34
(4) Have at least five years of professional geological work which shall include a 35
minimum of three years of professional geological work under the supervision 36
of a licensed geologist; or a minimum of three cumulative years work in 37
responsible charge of geological work satisfactory to the Board. The following 38
criteria of education and experience qualify as specified toward accumulation 39
of the required five years of professional geological work: 40
… 41
d. The ability of the applicant shall have been demonstrated by his having 42
performed the work in a responsible position as determined by the 43
Board. The adequacy of the required supervision and the experience 44
shall be determined by the Board in accordance with the standards set 45
forth in regulations rules adopted by it." 46
SECTION 9.(g) G.S. 89E-11 reads as rewritten: 47
"§ 89E-11. Comity. 48
A person holding a license to engage in the practice of geology, on the basis of comparable 49
licensing requirements issued to him by a proper authority by the State, territory, or possession 50
of the United States or the District of Columbia, and who, in the opinion of the Board otherwise 51 General Assembly Of North Carolina Session 2025
Page 12 House Bill 40-Third Edition
meets the requirements of this Chapter based upon verified evidence may, upon application, be 1
licensed without further examination." 2
SECTION 9.(h) G.S. 89E-13 reads as rewritten: 3
"§ 89E-13. Seals; requirements. 4
Each geologist licensed hereunder, under this Chapter, upon the issuance of a license, shall 5
obtain from the secretary at a cost prescribed by the Board, a seal of the design authorized by the 6
Board bearing the licensee's name and the legend "Licensed Geologist – State of North Carolina". 7
All drawings, reports reports, or other geologic papers or documents involving geologic work as 8
defined in this Chapter which shall have been that are prepared or approved by a licensed 9
geologist or a subordinate employee under his direction for the use of or geologist, or a 10
nonresident geologist who has been exempted under this Chapter, for delivery to any person or 11
for public record within in this State shall be signed by him or her and impressed with the said 12
seal or the seal of a nonresident practicing under the provisions of this Chapter, either of which 13
shall indicate his or her responsibility therefor.the geologist. The signature and seal each indicate 14
the geologist's responsibility for the papers or documents." 15
SECTION 9.(i) G.S. 89E-14 reads as rewritten: 16
"§ 89E-14. Records. 17
(a) The Board shall keep a public record of its proceedings and a register of all 18
applications for licensing. 19
(b) The register shall show: 20
… 21
(4) His or her The applicant's education and other qualifications; 22
…." 23
SECTION 9.(j) G.S. 89E-18 reads as rewritten: 24
"§ 89E-18. Prohibitions; unlawful acts. 25
After the effective date of this Chapter:All of the following are unlawful: 26
(1) It shall be unlawful for any For a person other than a licensed geologist or a 27
subordinate under his direction to prepare any geologic plans, reports reports, 28
or documents in which the performance is related to the public welfare or 29
safeguarding of life, health, property property, or the environment. 30
(2) It shall be unlawful for any For a person to publicly practice, or offer to 31
publicly practice, geology in this State as defined in the provisions of this 32
Chapter, State, or to use in connection with his or her the person's name or 33
otherwise assume, assume or advertise any title or description tending to 34
convey the impression that he or she the person is a licensed geologist, unless 35
such the person has been duly licensed or exempted under the provisions of 36
this Chapter. 37
(3) After one year following the effective date of this act, it shall be unlawful for 38
For anyone other than a geologist licensed under this Chapter to stamp or seal 39
any plans, plats, reports reports, or other documents with the seal or stamp of 40
a licensed geologist, or to use in any manner the title "Licensed Geologist" 41
unless that person is licensed hereunder.under this Chapter. 42
(4) It shall be unlawful for any For a person to affix his or her signature to or to 43
stamp a licensed geologist's signature, stamp, or seal to any plans, plats, 44
reports, or other documents after the licensing of the person named thereon if 45
the geologist's license has expired or has been suspended or revoked revoked, 46
unless the license has since been renewed or reissued." 47
SECTION 9.(k) G.S. 89E-19 reads as rewritten: 48
"§ 89E-19. Disciplinary procedures. 49
… 50 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 13
(b) If the Board finds that a licensee is professionally incompetent, the Board may require 1
the licensee to take an oral or written examination or to meet other requirements to demonstrate 2
the licensee's fitness to practice geology, and the Board may suspend the licensee's license until 3
he or she the licensee establishes professional competence to the satisfaction of the Board. 4
…." 5
SECTION 9.(l) G.S. 89E-22 reads as rewritten: 6
"§ 89E-22. Misdemeanor. 7
Any person who shall willfully practice publicly, or offer to practice publicly, geology for 8
other natural or corporate persons in this State without being licensed in accordance with the 9
provisions of this Chapter, or any person presenting or attempting to use as his own the license 10
or the seal of another, another as the person's own, or any person who shall give any false or 11
forged evidence of any kind in obtaining a license, or any person who shall falsely impersonate 12
any other licensee of like or different name, or any person who shall attempt to use an expired or 13
revoked license or practice at any time during a period the Board has suspended or revoked the 14
license, or any person who shall violate the provisions of this Chapter shall be guilty of a Class 15
2 misdemeanor." 16
SECTION 9.(m) G.S. 89E-24 reads as rewritten: 17
"§ 89E-24. Attorney General as legal advisor. 18
The Attorney General or any assistant or associate in the Department of Justice selected by 19
him the Attorney General shall act as legal advisor to the Board." 20
SECTION 10. G.S. 90A-53 reads as rewritten: 21
"§ 90A-53. Qualifications and examination for registration as an environmental health 22
specialist or environmental health specialist intern. 23
(a) The Board shall issue a certificate to a qualified person as a registered environmental 24
health specialist or a registered environmental health specialist intern. A certificate as a registered 25
environmental health specialist or a registered environmental health specialist intern shall be 26
issued to any person upon the Board's determination that the person meets satisfies all of the 27
following criteria: 28
(1) Has made application to the Board on a form prescribed by the Board and paid 29
a fee not to exceed one hundred dollars ($100.00);($100.00). 30
(2) Is of good moral and ethical character and has signed an agreement to adhere 31
to the Code of Ethics adopted by the Board;Board. 32
(3) Meets any of the following education and practice experience standards: 33
a. Graduated with a bachelor's degree or a or postgraduate degree from a 34
program that is accredited by the National Environmental Health 35
Science and Protection Accreditation Council (EHAC). 36
b. Graduated with a bachelor's degree or a or postgraduate degree in 37
public health and earned a minimum of 30 semester hours or 45 quarter 38
hours in the physical, biological, natural, life, or health sciences and 39
has one or more years of experience in the field of environmental 40
health practice. degree, has earned 45 quarter hours physical, 41
biological, natural, life, or health sciences and has one 42
c. Graduated with a bachelor's degree or or postgraduate degree in public 43
health and has one or more years of experience in the field of 44
environmental health practice. degree, has earned or 45 quarter hours 45
physical, biological, natural, life, or health sciences and has one 46
d. Has worked five or more continuous years as a registered 47
environmental health associate. 48
(4) Has satisfactorily completed a course in specialized instruction and training 49
approved by the Board in the practice of environmental health. 50
(5) Repealed by Session Laws 2009-443, s. 4, effective August 7, 2009. 51 General Assembly Of North Carolina Session 2025
Page 14 House Bill 40-Third Edition
(6) Has passed an examination administered by the Board designed to test for 1
competence in the subject matters of environmental health sanitation. The 2
examination shall be in a form prescribed by the Board and may be oral, 3
written, or both. The examination for applicants shall be held annually or more 4
frequently as the Board may by rule prescribe, at a time and place to be 5
determined by the Board. A person shall not be registered if such the person 6
fails to meet the minimum grade requirements for examination specified by 7
the Board. Failure to pass an examination shall does not prohibit such the 8
person from being examined at subsequent times and places as specified by 9
the Board. 10
(7) Has paid a fee set by the Board not to exceed the cost of purchasing the 11
examination and an administrative fee not to exceed one hundred fifty dollars 12
($150.00). 13
(b) The Board may issue a certificate to a person serving as a registered environmental 14
health specialist intern without the person meeting the full requirements for experience of a 15
registered environmental health specialist for a period not to exceed two years from the date of 16
initial registration as a registered environmental health specialist intern, provided, intern so long 17
as the person meets the educational requirements in G.S. 90A-53 of this section and is in the field 18
of environmental health practice." 19
SECTION 11. Article 3 of Chapter 110 of the General Statutes is repealed. 20
SECTION 12. G.S. 110-130 reads as rewritten: 21
"§ 110-130. Action by the designated representatives of the county commissioners. 22
(a) Any A county interested in the paternity and/or or support of a dependent child may 23
institute civil or criminal proceedings commence a civil or criminal action against the responsible 24
parent of the child, child or may take up and pursue intervene in any paternity and/or or support 25
action commenced by the mother, custodian or guardian of the child. Such action shall be 26
undertaken by the concerning the child. The designated representative of the county 27
commissioners in the county where the mother of the child resides or is found, in the county 28
where the father resides or is found, or in the county where the child resides or is found. Any 29
legal proceeding instituted under this section found may commence or intervene in an action 30
under this section. An action commenced under this section may be based upon information or 31
belief. 32
(b) The A parent of the child may be subpoenaed for testimony at the trial of the action 33
to establish the paternity of and/or to obtain support for the child either instituted or taken up by 34
the designated representative of the county commissioners. an action commenced or intervened 35
in by a county under this section. The husband-wife privilege shall not be grounds is not a ground 36
for excusing the mother or father from testifying at the trial nor shall said privilege be grounds is 37
the privilege a ground for the exclusion of confidential communications between husband and 38
wife. If a parent called for examination declines to answer upon the grounds that his ground that 39
his or her testimony may tend to incriminate him, him or her, the court may require him to answer 40
in which event he the parent to answer. The parent shall not thereafter be prosecuted for any 41
criminal act involved in the conception of the child whose paternity is in issue and/or or for whom 42
support is sought, except for perjury committed in this testimony." 43
SECTION 13.(a) G.S. 115C-284 reads as rewritten: 44
"§ 115C-284. Method of selection and requirements. 45
(a) Principals and supervisors shall be elected by the local boards of education upon the 46
recommendation of the superintendent, in accordance with the provisions of 47
G.S. 115C-276(j).superintendent. 48
(b) In the city administrative units, principals shall be elected by the board of education 49
of such administrative unit upon the recommendation of the superintendent of city schools. 50
(b1) Repealed by Session Laws 2023-125, s. 1(d), effective September 28, 2023. 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 15
(c) Repealed by Session Laws 2023-125, s. 1(d), effective September 28, 2023. 1
(c1) Repealed by Session Laws 2023-125, s. 1(d), effective September 28, 2023. 2
(c2) Repealed by Session Laws 2023-125, s. 1(d), effective September 28, 2023. 3
(c3) Repealed by Session Laws 2023-125, s. 1(d), effective September 28, 2023. 4
(d) Repealed by Session Laws 1989, c. 385, s. 1. 5
(d1) Repealed by Session Laws 2023-125, s. 1(d), effective September 28, 2023. 6
(e) The State Board shall not issue provisional licenses for principals. It shall be All 7
principals and supervisors employed in the public schools of the State or in schools receiving 8
public funds are required either to hold or be qualified to hold a license issued by the State Board 9
of Education. It is unlawful for any a local board of education to employ or keep in service any 10
a principal or supervisor who neither holds nor is qualified to hold a license in compliance with 11
the provision of the law or in accordance with the regulations of the State Board of Education. 12
license. However, a local board of education may select a retired principal or retired assistant 13
principal to serve as an interim principal for the remainder of any school year, regardless of 14
licensure status. 15
(f) The allotment of classified principals shall be is one principal for each duly 16
constituted school with seven or more state-allotted teachers. 17
(g) Local boards of education shall have authority to employ supervisors in addition to 18
those that may be furnished by the State when, in the discretion of the board of education, the 19
schools of the local school administrative unit can thereby be more efficiently and more 20
economically operated and when funds for the same them are provided in the current expense 21
fund budget. The duties of such these supervisors shall be assigned by the superintendent with 22
the approval of the board of education. 23
(h) All principals and supervisors employed in the public schools of the State or in 24
schools receiving public funds, shall be required either to hold or be qualified to hold a license 25
in compliance with the provision of the law or in accordance with the regulations of the State 26
Board of Education." 27
SECTION 13.(b) G.S. 115C-299 reads as rewritten: 28
"§ 115C-299. Hiring of teachers. 29
(a) In the city administrative units, teachers shall be elected by the board of education of 30
such administrative unit upon the recommendation of the superintendent of city schools. 31
Teachers shall be elected by the county and city local boards of education upon the 32
recommendation of the superintendent, in accordance with the provisions of G.S. 33
115C-276(j).superintendent. 34
(b) No person otherwise qualified shall be denied the right to receive credentials from the 35
State Board of Education, to receive training for the purpose of becoming a teacher, or to engage 36
in practice teaching in any school on the grounds that such the person is totally or partially blind; 37
nor shall any local board of education refuse to employ such a the person on such these grounds." 38
SECTION 13.(c) G.S. 115C-315(a) is repealed. 39
SECTION 13.(d) G.S. 115C-315(b) reads as rewritten: 40
"(b) Election by Local Boards. – School personnel shall be elected by the local board of 41
education upon the recommendation of the superintendent, in accordance with the provisions of 42
G.S. 115C-276(j).superintendent. 43
It is the policy of the State of North Carolina to encourage and provide for the most efficient 44
and cost-effective method of meeting the needs of local school administrative units for 45
noncertified support personnel. To this end, the State Board of Education shall recommend to the 46
General Assembly by November 1, 1984, a system using factors and formulas to determine the 47
total number of noncertified support personnel allotted to local school administrative units. The 48
recommended system for allotting noncertified support personnel shall include the proposed 49
State's funding obligation for these positions and shall be developed in consultation with 50
school-based support personnel or their representatives." 51 General Assembly Of North Carolina Session 2025
Page 16 House Bill 40-Third Edition
SECTION 14.(a) G.S. 116-30.2 reads as rewritten: 1
"§ 116-30.2. Appropriations to special responsibility constituent institutions. 2
(a) All General Fund appropriations made by the General Assembly for continuing 3
operations of a special responsibility constituent institution of The University of North Carolina 4
shall be made in the form of a single sum to each budget code of the institution for each year of 5
the fiscal period for which the appropriations are being made. Notwithstanding G.S. 143C-6-4 6
and G.S. 120-76(8), G.S. 120-76.1, each special responsibility constituent institution may expend 7
monies from the overhead receipts special fund budget code and the General Fund monies so 8
appropriated to it in the manner deemed by the Chancellor to be calculated to maintain and 9
advance the programs and services of the institutions, consistent with the directives and policies 10
of the Board of Governors. Special responsibility constituent institutions may transfer 11
appropriations between budget codes. These transfers shall be are considered certified even if as 12
a result of agreements between special responsibility constituent institutions. The preparation, 13
presentation, and review of General Fund budget requests of special responsibility constituent 14
institutions shall be conducted in the same manner as are requests of other constituent institutions. 15
The quarterly allotment procedure established pursuant to G.S. 143C-6-3 shall apply applies to 16
the General Fund appropriations made for the current operations of each special responsibility 17
constituent institution. All General Fund monies so appropriated to each special responsibility 18
constituent institution shall be recorded, reported, and audited in the same manner as are General 19
Fund appropriations to other constituent institutions. 20
(b) Repealed by Session Laws 2006-66, s. 9.11(f), effective July 1, 2007." 21
SECTION 14.(b) G.S. 126-85 reads as rewritten: 22
"§ 126-85. Protection from retaliation. 23
(a) No head of any State department, agency agency, or institution or other State 24
employee exercising supervisory authority shall discharge, threaten threaten, or otherwise 25
discriminate against a State employee regarding the State employee's compensation, terms, 26
conditions, location, or privileges of employment because the State employee, or a person acting 27
on behalf of the employee, reports or is about to report, verbally or in writing, any activity 28
described in G.S. 126-84, unless the State employee knows or has reason to believe that the report 29
is inaccurate. 30
(a1) No State employee shall retaliate against another State employee because the 31
employee, or a person acting on behalf of the employee, reports or is about to report, verbally or 32
in writing, any activity described in G.S. 126-84. 33
(b) No head of any State department, agency agency, or institution or other State 34
employee exercising supervisory authority shall discharge, threaten threaten, or otherwise 35
discriminate against a State employee regarding the employee's compensation, terms, conditions, 36
location location, or privileges of employment because the State employee has refused to carry 37
out a directive which that in fact constitutes a violation of State or federal law, rule rule, or 38
regulation or poses a substantial and specific danger to the public health and safety. 39
(b1) No State employee shall retaliate against another State employee because the 40
employee has refused to carry out a directive which that may constitute a violation of State or 41
federal law, rule or regulation, rule, or regulation or poses a substantial and specific danger to the 42
public health and safety. 43
(c) The protections of this Article shall include include State employees who report any 44
activity described in G.S. 126-84 to the State Auditor as authorized by G.S. 147-64.6B, to the 45
Joint Legislative Commission on Governmental Operations as authorized by G.S. 120-76, 46
G.S. 120-75.1, or to a legislative committee as required by G.S. 120-19." 47
SECTION 15. G.S. 116-209.28 reads as rewritten: 48
"§ 116-209.28. Administration of scholarships previously awarded by the Principal Fellows 49
Program. 50 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 17
(a) The Authority shall, as of July 1, 2021, shall administer all outstanding scholarship 1
loans previously awarded by the former North Carolina Principal Fellows Commission and 2
subject to repayment under the former Principal Fellows Program administered pursuant to 3
Article 5C of this Chapter. 4
(b) All funds received by the Authority in association with its administration of the 5
Principal Fellows Program, including all funds received as repayment of scholarship loans and 6
all interest earned on these funds, shall be deposited into the North Carolina Principal Fellows 7
and TP3 Trust Fund established in G.S. 116-74.41B." 8
SECTION 16. G.S. 121-42 is repealed. 9
SECTION 17.(a) The Revisor of Statutes may recodify the definitions in 10
G.S. 126-81 so that they appear in alphabetical order and shall make any necessary conforming 11
changes. 12
SECTION 17.(b) Subdivision (2a) of G.S. 135-48.1 is recodified as subdivision (2c) 13
of that section. 14
SECTION 18.(a) G.S. 128-28 reads as rewritten: 15
"§ 128-28. Administration and responsibility for operation of System. 16
(a) Vested in Board of Trustees. – The general administration and responsibility for the 17
proper operation of the Retirement System and for making effective the provisions of this Article 18
are hereby vested in the Board of Trustees: Provided, that all Trustees. All expenses in connection 19
with the administration of the North Carolina Local Governmental Employees' Retirement 20
System shall be charged against and paid from the expense fund as provided in subsection (f) of 21
G.S. 128-30. 22
(b) Board of Trustees a Body Politic and Corporate; Powers and Authority; Exemption 23
from Taxation. – The Board of Trustees shall be is a body politic and corporate under the name 24
Board of Trustees of the North Carolina Local Governmental Employees' Retirement System, 25
and as System. As a body politic and corporate shall have corporate, it has the right to sue and 26
be sued, shall have perpetual succession and has perpetual succession, shall have a common seal, 27
and in said in its corporate name shall be able and capable in law to may take, demand, receive 28
receive, and possess all kinds of real and personal property necessary and proper for its corporate 29
purposes, and to may bargain, sell, grant, alien, transfer, or dispose of all such real and personal 30
property as it may lawfully acquire. lawfully acquired by it. All such property owned or acquired 31
by said body politic and corporate shall be it is exempt from all taxes imposed by the State or 32
any political subdivision thereof, and shall not be thereof and is not subject to income taxes. 33
(c) Members of Board. – The Board shall consist of (i) five members of the Board of 34
Trustees of the Teachers' and State Employees' Retirement System appointed under 35
G.S. 135-6(b): the State Treasurer; the Superintendent of Public Instruction; the two members 36
appointed by the General Assembly; and one of the two members appointed by the Governor 37
who are not members of the teaching profession or State employees; and (ii) eight members 38
designated by the Governor: 39
(1) One member shall be a mayor or a member of the governing body of a city or 40
town participating in the Retirement System;System. 41
(2) One member shall be a county commissioner of a county participating in the 42
Retirement System;System. 43
(3) One member shall be a law-enforcement officer employed by an employer 44
participating in the Retirement System;System. 45
(4) One member shall be a county manager of a county participating in the 46
Retirement System;System. 47
(5) One member shall be a city or town manager of a city or town participating in 48
the Retirement System;System. 49
(6) One member shall be an active, Fair Labor Standards Act nonexempt, local 50
governmental employee of an employer;employer. 51 General Assembly Of North Carolina Session 2025
Page 18 House Bill 40-Third Edition
(7) One member shall be a retired, Fair Labor Standards Act nonexempt, local 1
governmental employee of an employer; andemployer. 2
(8) One member shall be an active or retired member of the Firemen's and Rescue 3
Squad Workers' Pension Fund.North Carolina Firefighters' and Rescue Squad 4
Workers' Pension Fund. 5
The Governor shall designate eight members on April 1 of years in which an election is held 6
for the office of Governor, or as soon thereafter as possible, and each of the eight members 7
designated by the Governor shall serve on the Board in addition to the regular duties of their the 8
member's city, town, or county office: Provided, that if office. If for any reason any member 9
appointed pursuant to subdivisions (1) through (6) of this subsection vacates the city, town, or 10
county office or employment which that the member held at the time of this designation, the 11
Governor shall designate another member to serve until the next regular date for the designation 12
of members to serve on the Board. 13
(d) Compensation of Trustees. – The trustees shall be paid during sessions of the Board 14
at the prevailing rate established for members of State boards and commissions, and they shall 15
be reimbursed for all necessary expenses that they incur through service on the Board. 16
(e) Oath. – Each trustee other than the ex officio members shall, within 10 days after his 17
appointment, take an oath of office, that, to, so far as it devolves upon him, he will the trustee, 18
diligently and honestly administer the affairs of the said Board, and that he will Board and to not 19
knowingly violate or willingly permit to be violated any of the provisions of law applicable to 20
the Retirement System. Such The oath shall be subscribed to by the member trustee making it, 21
and certified by the officer before whom it is taken, and immediately filed in the office of the 22
Secretary of State: Provided, that where State. However, if a local governmental official 23
designated by the Governor has taken an oath of office in connection with the local governmental 24
office that he the official holds, the oath for his local governmental office shall be is deemed to 25
be sufficient, and he shall not be the official is not required to take the oath hereinabove 26
provided.provided in this subsection. 27
(f) Voting Rights. – Each trustee shall be is entitled to one vote in the Board. A majority 28
of affirmative votes in attendance shall be is necessary for a decision by the trustees at any 29
meeting of said the Board. A vote may only be taken if at least seven members of the Board are 30
in attendance, in person or by telephone, for the meeting at which a vote on a decision is taken. 31
(f1) Effect of Vote Related to Contributory Death Benefit. – No decision of the Board 32
related to the Contributory Death Benefit provided for under this Article shall take takes effect 33
unless and until this same decision has been made and voted on by the Board of Trustees of the 34
Teachers' and State Employees' Retirement System. 35
(g) Rules and Regulations. Rules. – Subject to the limitations of this Article, the Board 36
of Trustees shall, from time to time, establish rules and regulations shall adopt rules for the 37
administration of the funds created by this Article and for the transaction of its business. The 38
Board of Trustees shall also, from time to time, shall, in its discretion, adopt rules and regulations 39
to prevent injustices and inequalities which that might otherwise arise in the administration of 40
this Article. 41
(h) Officers and Other Employees, Salaries Salaries, and Expenses. – The State Treasurer 42
shall be ex officio chair of the Board of Trustees and shall appoint a director. The Board of 43
Trustees shall engage such actuarial and other service as shall be actuarial and other services 44
required to transact the business of the Retirement System. The compensation of all persons 45
engaged by the Board of Trustees, Board, and all other expenses of the Board necessary for the 46
operation of the Retirement System, shall be paid at such rates and in such amounts as the Board 47
of Trustees shall approve.rates and in amounts approved by the Board. 48
(i) Actuarial Data. – The Board of Trustees shall keep in convenient form such data as 49
shall be necessary for actuarial valuation of the various funds of the Retirement System, System 50
and for checking the experience of the System. 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 19
(j) Record of Proceedings; Annual Report. – The Board of Trustees shall keep a record 1
of all of its proceedings which that shall be open to public inspection. It shall publish annually a 2
report showing the fiscal transactions of the Retirement System for the preceding year, the 3
amount of the accumulated cash and securities of the System, and the last balance sheet showing 4
the financial condition of the System by means of an actuarial valuation of the assets and 5
liabilities of the Retirement System. It shall also publish annually a report on supplemental 6
insurance offerings that are made available to retirees and the extent to which retirees participate 7
in those offerings. 8
(k) Legal Adviser. – The Attorney General shall be is the legal adviser of the Board of 9
Trustees. 10
(l) Medical Board. – The Board of Trustees shall designate a Medical Board to be 11
composed of not less than three nor more than five physicians not eligible to participate in the 12
Retirement System. The Board of Trustees may structure appointment requirements and term 13
durations for those medical board Medical Board members. If required, other physicians may be 14
employed to report on special cases. The Medical Board shall arrange for and pass upon all 15
medical examinations required under the provisions of this Chapter, and shall investigate all 16
essential statements and certificates by or on behalf of a member in connection with an 17
application for disability retirement, and shall report in writing to the Board of Trustees its 18
conclusion and recommendations upon all the matters referred to it. A person serving on the 19
medical board shall be Medical Board is immune individually from civil liability for monetary 20
damages, except to the extent covered by insurance, for any act or failure to act arising out of 21
that service, except where unless any of the following apply:applies: 22
(1) The person was not acting within the scope of that person's official duties. 23
(2) The person was not acting in good faith. 24
(3) The person committed gross negligence or willful or wanton misconduct that 25
resulted in the damages or injury. 26
(4) The person derived an improper financial benefit, either directly or indirectly, 27
from the transaction. 28
(5) The person incurred the liability from the operation of a motor vehicle. 29
(m) Duties of Actuary. – The Board of Trustees shall designate an actuary who shall to be 30
the technical adviser of the Board of Trustees on matters regarding the operation of the funds 31
created by the provisions of this Chapter and shall perform such other duties as are required in 32
connection therewith. this Chapter. The experience studies and all other actuarial calculations 33
required by this Chapter, and all the assumptions used by the System's actuary, including 34
mortality tables, interest rates, annuity factors, the contribution-based benefit cap factor, and 35
employer contribution rates, shall be set out in the actuary's periodic reports, annual valuations 36
of System assets, or other materials provided to the Board of Trustees. Board. Notwithstanding 37
Article 2A of Chapter 150B of the General Statutes, these materials, once accepted by the Board, 38
shall be are considered part of the Plan documentation governing this the Retirement System and 39
shall be are effective the first day of the month following adoption unless a different date is 40
specified in the adopting resolution. The effective date shall does not retroactively affect a 41
contribution rate. The Board's minutes relative to all actuarial assumptions used by the System 42
shall also be are also considered part of the Plan documentation governing this the Retirement 43
System, with the result of precluding any employer discretion in the determination of benefits 44
payable hereunder, under this section, consistent with Section 401(a)(25) of the Internal Revenue 45
Code. 46
(n) Immediately after the establishment of the Retirement System the actuary shall make 47
such investigation of the mortality, service and compensation experience of the members of the 48
System as he shall recommend and the Board of Trustees shall authorize, and on the basis of such 49
investigation he shall recommend for adoption by the Board of Trustees such tables and such 50
rates as are required in subsection (o), paragraphs (1) and (2), of this section. The Board of 51 General Assembly Of North Carolina Session 2025
Page 20 House Bill 40-Third Edition
Trustees shall adopt tables and certify rates, and as soon as practicable thereafter the actuary shall 1
make a valuation based on such tables and rates of the assets and liabilities of the funds created 2
by this Chapter. 3
(o) In the year 1945, and at least once in each five-year period thereafter, At least once 4
every five years, the actuary shall make an actuarial investigation into the mortality, service 5
service, and compensation experience of the members and beneficiaries of the Retirement System 6
and shall make a valuation of the assets and liabilities of the funds of the System. Taking into 7
account the result of such the investigation and valuation, the Board of Trustees shall do all both 8
of the following: 9
(1) Adopt any necessary mortality, service, or other tables and any necessary 10
contribution-based benefit cap factors for the Retirement System. 11
(2) Certify the rates of contributions payable by the participating units on account 12
of new entrants at various ages. 13
In order to pay for the administration of this section, the Retirement Systems Division of the 14
Department of State Treasurer may increase receipts from the retirement assets of the Retirement 15
System or may pay the costs directly from the retirement assets. 16
(p) On the basis of the tables and interest assumption rate as adopted by the Board of 17
Trustees, the actuary shall make an annual valuation of the assets and liabilities of the funds of 18
the System created by this Chapter. The annual valuation shall include a supplementary section 19
that provides an analysis of assets on a market basis using the 30-year treasury rate as of 20
December 31 of the year of the valuation as the discount rate. In order to pay for the 21
administration of this section, the Retirement Systems Division of the Department of State 22
Treasurer may increase receipts from the retirement assets of the Retirement System or may pay 23
the costs directly from the retirement assets. 24
(q) Notwithstanding any law, rule, regulation or policy law to the contrary, any board, 25
agency, department, institution institution, or subdivision of the State maintaining lists of names 26
and addresses in the administration of their its programs may upon request provide to the 27
Retirement System information limited to social security numbers, current name and addresses 28
of persons identified by the System as members, beneficiaries, and beneficiaries of members of 29
the System. The System shall use such this information for the sole purpose of notifying 30
members, beneficiaries, and beneficiaries of members of their the person's rights to and accruals 31
of benefits in the Retirement System. Any social security number, current name name, and 32
address so obtained and obtained, any other information concluded therefrom and the source 33
thereof shall be treated as from this information, and the source of this information are 34
confidential and shall not be divulged by any employee of the Retirement System or of the 35
Department of State Treasurer except as may be necessary to notify the member, beneficiary, or 36
beneficiary of the member of their the person's rights to and accruals of benefits in the Retirement 37
System. Any person, officer, employee employee, or former employee violating this provision 38
shall be is guilty of a Class 1 misdemeanor; and if such the offending person be is a public official 39
or employee, he the person shall be dismissed from office or employment and shall not hold any 40
public office or employment in this State for a period of five years thereafter. 41
(r) Fraud Investigations and Compliance Investigations. – Access to Persons and 42
Records. – In the course of conducting a fraud investigation or compliance investigation, the 43
Retirement Systems Division, or authorized representatives who are assisting the Retirement 44
Systems Division staff, shall:has all of the following powers: 45
(1) Have ready To have access to persons and may to examine and copy all books, 46
records, reports, vouchers, correspondence, files, personnel files, investments, 47
and any other documentation of any employer. The review of State tax returns 48
shall be limited to matters of official business, and the Division's report shall 49
not violate the confidentiality provisions of tax laws. 50 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 21
(2) Have such access To have access to persons, records, papers, reports, 1
vouchers, correspondence, books, and any other documentation that is in the 2
possession of any individual, private corporation, institution, association, 3
board, or other organization which pertain pertaining to the following: 4
a. Amounts received pursuant to a grant or contract from the federal 5
government, the State, or its political subdivisions. 6
b. Amounts received, disbursed, or otherwise handled on behalf of the 7
federal government or the State. 8
(3) Have the authority, and shall be provided with ready access, to examine To 9
access, examine, and inspect all property, equipment, and facilities in the 10
possession of any employer agency or any individual, private corporation, 11
institution, association, board, or other organization that were furnished or 12
otherwise provided through grant, contract, or any other type of funding by 13
the employer agency. 14
With respect to the requirements of sub-subdivision (2)b. of this subsection, providers of 15
social and medical services to a beneficiary shall make copies of records they maintain for 16
services provided to a beneficiary available to the Retirement Systems Division, or to the 17
authorized representatives who are assisting the Retirement Systems Division staff. Copies of the 18
records of social and medical services provided to a beneficiary will permit verification of the 19
health or other status of a beneficiary as required for the payment of benefits under Article 3 of 20
this Chapter. The Retirement Systems Division, or authorized representatives who are assisting 21
the Retirement Systems Division staff, shall request records in writing by providing the name of 22
each beneficiary for whom records are sought, the purpose of the request, the statutory authority 23
for the request, and a reasonable period of time for the production of record copies by the 24
provider. A provider may charge, and the Retirement Systems Division, or authorized 25
representatives who are assisting the Retirement Systems Division staff, shall, in accordance with 26
G.S. 90-411, pay a reasonable fee to the provider for copies of the records provided in accordance 27
with this subsection. 28
(s) Fraud Investigative Reports and Work Papers or Compliance Investigative Reports 29
and Work Papers. – The Executive Director of the Retirement Systems Division shall maintain 30
for 10 years a complete file of all fraud investigative reports, compliance investigative reports, 31
and reports of other examinations, investigations, surveys, and reviews issued under the 32
Executive Director's authority. Fraud investigation work papers, compliance investigation work 33
papers, and other evidence or related supportive material directly pertaining to the work of the 34
Retirement Systems Division of the Department of State Treasurer shall be retained according to 35
an agreement between the Executive Director of the Retirement Systems Division and State 36
Archives. To promote intergovernmental cooperation and avoid unnecessary duplication of fraud 37
or compliance investigative effort, and notwithstanding local unit personnel policies to the 38
contrary, pertinent work papers and other supportive material relating to issued fraud 39
investigation reports or compliance investigative reports may be, at the discretion of the 40
Executive Director of the Retirement Systems Division and, and unless otherwise prohibited by 41
law, made available for inspection by duly authorized representatives of the State and federal 42
government who desire access to and inspection of such the records in connection with some 43
matter officially before them, including criminal investigations. Except as provided in this 44
section, or upon an order issued in Wake County Superior Court upon 10 days' notice and hearing 45
finding that access is necessary to a proper administration of justice, fraud or compliance 46
investigation work papers and related supportive material shall be kept confidential, including 47
any information developed as a part of the investigation. 48
(t) Fraud Reports May Be Anonymous. – The identity of any person reporting fraud, 49
waste, and abuse to the Retirement Systems Division shall be kept confidential and shall not be 50
maintained as a public record within the meaning of G.S. 132-1. 51 General Assembly Of North Carolina Session 2025
Page 22 House Bill 40-Third Edition
(u) Immunity. – A person serving on the Local Governmental Employees' Retirement 1
System Board of Trustees shall be is immune individually from civil liability for monetary 2
damages, except to the extent covered by insurance, for any act or failure to act arising out of 3
that service, except where unless any of the following apply:applies: 4
(1) The person was not acting within the scope of that person's official duties. 5
(2) The person was not acting in good faith. 6
(3) The person committed gross negligence or willful or wanton misconduct that 7
resulted in the damages or injury. 8
(4) The person derived an improper personal financial benefit, either directly or 9
indirectly, from the transaction. 10
(5) The person incurred the liability from the operation of a motor vehicle." 11
SECTION 18.(b) G.S. 135-6, as amended by Section 3D.1(l) of S.L. 2024-57, reads 12
as rewritten: 13
"§ 135-6. Administration. 14
(a) Administration by Board of Trustees; Corporate Name; Rights and Powers; Tax 15
Exemption. – The general administration and responsibility for the proper operation of the 16
Retirement System and for making effective the provisions of the Chapter are hereby vested in a 17
Board of Trustees which shall be organized immediately after a majority of the trustees provided 18
for in this section shall have qualified and taken the oath of office.Trustees. 19
The Board of Trustees shall be is a body politic and corporate under the name "Board Board 20
of Trustees Teachers' and State Employees' Retirement System"; and as System. As a body politic 21
and corporate shall have corporate, it has the right to sue and be sued, shall have perpetual 22
succession and has perpetual succession, shall have a common seal, and in said in its corporate 23
name shall be able and capable in law to may take, demand, receive receive, and possess all kinds 24
of real and personal property necessary and proper for its corporate purposes, and to may bargain, 25
sell, grant, alien, transfer, or dispose of all such real and personal property as it may lawfully 26
acquire. lawfully acquired by it. All such property owned or acquired by said body politic and 27
corporate shall be it is exempt from all taxes imposed by the State or any political subdivision 28
thereof, and shall not be thereof and is not subject to income taxes. 29
(b) Membership of Board; Terms. – The Board shall consist of the following 13 30
members: 31
… 32
(4) Two members appointed by the General Assembly, one appointed upon the 33
recommendation of the Speaker of the House of Representatives, and one 34
appointed upon the recommendation of the President Pro Tempore of the 35
Senate in accordance with G.S. 120-121. Neither of these members may shall 36
be an active or retired teacher or State employee or an employee of a unit of 37
local government. The initial members appointed by the General Assembly 38
shall serve for terms expiring June 30, 1983. Thereafter, their successors shall 39
serve for two-year terms beginning July 1 of odd-numbered years. Vacancies 40
in appointments made by the General Assembly shall be filled in accordance 41
with G.S. 120-122. 42
(c) Compensation of Trustees. – The trustees shall be paid during sessions of the Board 43
at the prevailing rate established for members of State boards and commissions, and they shall 44
be reimbursed for all necessary expenses that they incur through service on the Board. 45
(d) Oath. – Each trustee other than the ex officio members shall, within 10 days after his 46
appointment, take an oath of office, that, to, so far as it devolves upon him, he will the trustee, 47
diligently and honestly administer the affairs of the said Board, and that he will Board and to not 48
knowingly violate or willingly permit to be violated any of the provisions of law applicable to 49
the Retirement System. Such The oath shall be subscribed to by the member trustee making it, 50 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 23
and certified by the officer before whom it is taken, and immediately filed in the office of the 1
Secretary of State. 2
(e) Voting Rights. – Each trustee shall be is entitled to one vote in the Board. A majority 3
of affirmative votes by trustees in attendance shall be is necessary for a decision by the trustees 4
at any meeting of the Board. A vote may only be taken if at least seven members of the Board 5
are in attendance, in person or by telephone, for the meeting at which a vote on a decision is 6
taken. 7
(e1) Effect of Vote Related to Contributory Death Benefit. – No decision of the Board 8
related to the Contributory Death Benefit provided for under this Chapter, Chapter 120, or 9
Chapter 127A of the General Statutes, shall take takes effect unless and until this same decision 10
has been made and voted on by the Board of Trustees of the Local Governmental Employees 11
Retirement System. 12
(f) Rules and Regulations. –Rules. – Subject to the limitations of this Chapter, the Board 13
of Trustees shall, from time to time, establish rules and regulations shall adopt rules for the 14
administration of the funds created by this Chapter and for the transaction of its business. The 15
Board of Trustees shall also, from time to time, shall, in its discretion, adopt rules and regulations 16
to prevent injustices and inequalities which that might otherwise arise in the administration of 17
this Chapter. 18
(g) Officers and Other Employees; Salaries and Expenses. – The State Treasurer shall be 19
ex officio chair of the Board of Trustees and shall appoint a director. The Board of Trustees shall 20
engage such actuarial and other service as shall be actuarial and other services required to transact 21
the business of the Retirement System. The compensation of all persons, other than the director, 22
engaged by the Board of Trustees, Board, and all other expenses of the Board necessary for the 23
operation of the Retirement System, shall be paid at such rates and in such amounts as the Board 24
of Trustees shall approve, rates and in amounts approved by the Board, subject to the approval 25
of the Director of the Budget. 26
(h) Actuarial Data. – The Board of Trustees shall keep in convenient form such data as 27
shall be necessary for actuarial valuation of the various funds of the Retirement System, System 28
and for checking the experience of the System. 29
(i) Record of Proceedings; Annual Report. – The Board of Trustees shall keep a record 30
of all of its proceedings which that shall be open to public inspection. It shall publish annually a 31
report showing the fiscal transactions of the Retirement System for the preceding year, the 32
amount of the accumulated cash and securities of the System, and the last balance sheet showing 33
the financial condition of the System by means of an actuarial valuation of the assets and 34
liabilities of the Retirement System. It shall also publish annually a report on supplemental 35
insurance offerings that are made available to retirees and the extent to which retirees participate 36
in those offerings. 37
(j) Legal Adviser. – The Attorney General shall be is the legal adviser of the Board of 38
Trustees. 39
(k) Medical Board. – The Board of Trustees shall designate a medical board Medical 40
Board to be composed of not less than three nor more than five physicians not eligible to 41
participate in the Retirement System. The Board of Trustees may structure appointment 42
requirements and term durations for those medical board Medical Board members. If required, 43
other physicians may be employed to report on special cases. The medical board Medical Board 44
shall arrange for and pass upon all medical examinations required under the provisions of this 45
Chapter, and shall investigate all essential statements and certificates by or on behalf of a member 46
in connection with an application for disability retirement, and shall report in writing to the Board 47
of Trustees its conclusion and recommendations upon all the matters referred to it, except as 48
otherwise provided in this Chapter. A person serving on the medical board shall be Medical 49
Board is immune individually from civil liability for monetary damages, except to the extent 50 General Assembly Of North Carolina Session 2025
Page 24 House Bill 40-Third Edition
covered by insurance, for any act or failure to act arising out of that service, except where unless 1
any of the following apply:applies: 2
(1) The person was not acting within the scope of that person's official duties. 3
(2) The person was not acting in good faith. 4
(3) The person committed gross negligence or willful or wanton misconduct that 5
resulted in the damages or injury. 6
(4) The person derived an improper financial benefit, either directly or indirectly, 7
from the transaction. 8
(5) The person incurred the liability from the operation of a motor vehicle. 9
(l) Duties of Actuary. – The Board of Trustees shall designate an actuary who shall to be 10
the technical adviser of the Board of Trustees on matters regarding the operation of the funds 11
created by the provisions of this Chapter and shall perform such other duties as are required in 12
connection therewith. this Chapter. The experience studies and all other actuarial calculations 13
required by this Chapter, and all the assumptions used by the System's actuary, including 14
mortality tables, interest rates, annuity factors, the contribution-based benefit cap factor, and 15
employer contribution rates, shall be set out in the actuary's periodic reports, annual valuations 16
of System assets, or other materials provided to the Board of Trustees. Board. Notwithstanding 17
Article 2A of Chapter 150B of the General Statutes, these materials, once accepted by the Board, 18
shall be are considered part of the Plan documentation governing this the Retirement System and 19
shall be are effective the first day of the month following adoption unless a different date is 20
specified in the adopting resolution. The effective date shall does not retroactively affect a 21
contribution rate. The Board's minutes relative to all actuarial assumptions used by the System 22
shall also be are also considered part of the Plan documentation governing this the Retirement 23
System, with the result of precluding any employer discretion in the determination of benefits 24
payable hereunder, under this section, consistent with Section 401(a)(25) of the Internal Revenue 25
Code. 26
(m) Immediately after the establishment of the Retirement System the actuary shall make 27
such investigation of the mortality, service and compensation experience of the members of the 28
System as he shall recommend and the Board of Trustees shall authorize, and on the basis of such 29
investigation he shall recommend for adoption by the Board of Trustees such tables and such 30
rates as are required in subsection (n), subdivisions (1) and (2), of this section. The Board of 31
Trustees shall adopt tables and certify rates, and as soon as practicable thereafter the actuary shall 32
make a valuation based on such tables and rates of the assets and liabilities of the funds created 33
by this Chapter. 34
(n) In 1943, and at least once in each five-year period thereafter, At least once every five 35
years, the actuary shall complete an actuarial experience review of the mortality, service service, 36
and compensation experience of the members and beneficiaries of the Retirement System and 37
shall make a valuation of the assets and liabilities of the funds of the System. Taking into account 38
the result of the actuarial investigation and valuation, the Board of Trustees shall do all both of 39
the following: 40
(1) Adopt any necessary mortality, service, or other tables and any necessary 41
contribution-based benefit cap factors for the Retirement System. 42
(2) Certify the rates of contributions payable by the State of North Carolina on 43
account of new entrants at various ages. 44
In order to pay for the administration of this section, the Retirement Systems Division of the 45
Department of State Treasurer may increase receipts from the retirement assets of the Retirement 46
System or may pay the costs directly from the retirement assets. 47
… 48
(o) On the basis of the tables and interest assumption rate as adopted by the Board of 49
Trustees, the actuary shall make an annual valuation of the assets and liabilities of the funds of 50
the System created by this Chapter. The annual valuation shall include a supplementary section 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 25
that provides an analysis of assets on a market basis using the 30-year treasury rate as of 1
December 31 of the year of the valuation as the discount rate. In order to pay for the 2
administration of this section, the Retirement Systems Division of the Department of State 3
Treasurer may increase receipts from the retirement assets of the Retirement System or may pay 4
the costs directly from the retirement assets. 5
(p) Notwithstanding any law, rule, regulation or policy law to the contrary, any board, 6
agency, department, institution institution, or subdivision of the State maintaining lists of names 7
and addresses in the administration of their its programs may upon request provide to the 8
Retirement System information limited to social security numbers, current name and addresses 9
of persons identified by the System as members, beneficiaries, and beneficiaries of members of 10
the System. The System shall use such this information for the sole purpose of notifying 11
members, beneficiaries, and beneficiaries of members of their the person's rights to and accruals 12
of benefits in the Retirement System. Any social security number, current name name, and 13
address so obtained and obtained, any other information concluded therefrom and the source 14
thereof shall be treated as from this information, and the source of this information are 15
confidential and shall not be divulged by any employee of the Retirement System or of the 16
Department of State Treasurer except as may be necessary to notify the member, beneficiary, or 17
beneficiary of the member of their the person's rights to and accruals of benefits in the Retirement 18
System. Any person, officer, employee employee, or former employee violating this provision 19
shall be is guilty of a Class 1 misdemeanor; and if such the offending person be is a public official 20
or employee, he the person shall be dismissed from office or employment and shall not hold any 21
public office or employment in this State for a period of five years thereafter. 22
(q) Compliance Investigations and Fraud Investigations – Access to Persons and Records. 23
– In the course of conducting a compliance investigation or a fraud investigation, the Retirement 24
Systems Division, or authorized representatives who are assisting the Retirement Systems 25
Division staff, shall:has all of the following powers: 26
(1) Have ready To have access to persons and may to examine and copy all books, 27
records, reports, vouchers, correspondence, files, personnel files, investments, 28
and any other documentation of any employer. The review of State tax returns 29
shall be limited to matters of official business, and the Division's report shall 30
not violate the confidentiality provisions of tax laws. 31
(2) Have such To have access to persons, records, papers, reports, vouchers, 32
correspondence, books, and any other documentation that is in the possession 33
of any individual, private corporation, institution, association, board, or other 34
organization that pertain pertaining to the following: 35
a. Amounts received pursuant to a grant or contract from the federal 36
government, the State, or its political subdivisions. 37
b. Amounts received, disbursed, or otherwise handled on behalf of the 38
federal government or the State. 39
(3) Have the authority, and shall be provided with ready access, to examine To 40
access, examine, and inspect all property, equipment, and facilities in the 41
possession of any employer agency or any individual, private corporation, 42
institution, association, board, or other organization that were furnished or 43
otherwise provided through grant, contract, or any other type of funding by 44
the employer agency. 45
With respect to the requirements of sub-subdivision (2)b. of this subsection, providers of 46
social and medical services to a beneficiary shall make copies of records they maintain for 47
services provided to a beneficiary available to the Retirement Systems Division, or to the 48
authorized representatives who are assisting the Retirement Systems Division staff. Copies of the 49
records of social and medical services provided to a beneficiary will permit verification of the 50
health or other status of a beneficiary as required for the payment of benefits under Article 1, 51 General Assembly Of North Carolina Session 2025
Page 26 House Bill 40-Third Edition
Article 4, or Article 6 of this Chapter. The Retirement Systems Division, or authorized 1
representatives who are assisting the Retirement Systems Division staff, shall request records in 2
writing by providing the name of each beneficiary for whom records are sought, the purpose of 3
the request, the statutory authority for the request, and a reasonable period of time for the 4
production of record copies by the provider. A provider may charge, and the Retirement Systems 5
Division, or authorized representatives who are assisting the Retirement Systems Division staff, 6
shall, in accordance with G.S. 90-411, pay a reasonable fee to the provider for copies of the 7
records provided in accordance with this subsection. 8
(r) Compliance or Fraud Investigative Reports and Work Papers. – The Executive 9
Director of the Retirement Systems Division shall maintain for 10 years a complete file of all 10
compliance investigative reports, fraud investigative reports and reports of other examinations, 11
investigations, surveys, and reviews issued under the Executive Director's authority. Fraud or 12
compliance investigation work papers and other evidence or related supportive material directly 13
pertaining to the work of the Retirement Systems Division of the Department of State Treasurer 14
shall be retained according to an agreement between the Executive Director of the Retirement 15
Systems Division and State Archives. To promote intergovernmental cooperation and avoid 16
unnecessary duplication of fraud and compliance investigative efforts, and notwithstanding local 17
unit personnel policies to the contrary, pertinent work papers and other supportive material 18
relating to issued fraud or compliance investigation reports may be, at the discretion of the 19
Executive Director of the Retirement Systems Division and, and unless otherwise prohibited by 20
law, made available for inspection by duly authorized representatives of the State and federal 21
government who desire access to and inspection of such the records in connection with some 22
matter officially before them, including criminal investigations. Except as provided in this 23
section, or upon an order issued in Wake County Superior Court upon 10 days' notice and hearing 24
finding that access is necessary to a proper administration of justice, fraud and compliance 25
investigation work papers and related supportive material shall be kept confidential, including 26
any information developed as a part of the investigation. 27
(s) Fraud Reports May Be Anonymous. – The identity of any person reporting fraud, 28
waste, and abuse to the Retirement Systems Division shall be kept confidential and shall not be 29
maintained as a public record within the meaning of G.S. 132-1. 30
(t) Immunity. – A person serving on the Teachers' and State Employees' Retirement 31
System Board of Trustees shall be is immune individually from civil liability for monetary 32
damages, except to the extent covered by insurance, for any act or failure to act arising out of 33
that service, except where unless any of the following apply:applies: 34
(1) The person was not acting within the scope of that person's official duties. 35
(2) The person was not acting in good faith. 36
(3) The person committed gross negligence or willful or wanton misconduct that 37
resulted in the damages or injury. 38
(4) The person derived an improper personal financial benefit, either directly or 39
indirectly, from the transaction. 40
(5) The person incurred the liability from the operation of a motor vehicle. 41
(u) The Treasurer may designate legal counsel, including private counsel, to represent the 42
interests of the administration of benefit programs under this Chapter." 43
SECTION 18.(c) G.S. 153A-93 reads as rewritten: 44
"§ 153A-93. Retirement benefits. 45
(a) The board of commissioners may provide for enrolling county officers and employees 46
in the Local Governmental Employees' Retirement System, the Law-Enforcement Officers' 47
Benefit and Relief Fund, the Firemen's Pension Fund, North Carolina Firefighters' and Rescue 48
Squad Workers' Pension Fund, or a retirement plan certified to be actuarially sound by a qualified 49
actuary as defined in subsection (c) of this section and may make payments into such a the 50
retirement system or plan on behalf of its employees. 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 27
(b) No county may shall make payments into a retirement system or plan established or 1
authorized by a local act unless the system or plan is certified to be actuarially sound by a 2
qualified actuary as defined in subsection (c) of this section. 3
(c) A qualified actuary means a member of the American Academy of Actuaries or an 4
individual certified as qualified by the Commissioner of Insurance. 5
(d) A county which that is providing health insurance under G.S. 153A-92(d) may 6
provide health insurance for all or any class of former officers and employees of the county. Such 7
The health insurance may be paid entirely by the county, partly by the county and former officer 8
or employee, or entirely by the former officer or employee, at the option of the county. 9
(d1) On and after October 1, 2009, a A county which that is providing health insurance 10
under G.S. 153A-92(d) may provide health insurance for all or any class of former officers and 11
employees of the county who have obtained at least 10 years of service with the county prior to 12
separation from the county and who are not receiving benefits under subsection (a) of this section. 13
Such The health insurance may be paid entirely by the county, partly by the county and former 14
officer or employee, or entirely by the former officer or employee, at the option of the county. 15
(d2) Notwithstanding subsection (d) of this section, any county that has elected to and is 16
covering its active employees only, or its active and retired employees, under the State Health 17
Plan, or elects such coverage under the Plan, may shall not provide health insurance through the 18
State Health Plan to all or any class of former officers and employees who are not receiving 19
benefits under subsection (a) of this section. The county may, however, provide health insurance 20
to such the former officers and employees by any other means authorized by G.S. 153A-92(d). 21
The health insurance premium may be paid entirely by the county, partly by the county and 22
former officer or employee, or entirely by the former officer or employee, at the option of the 23
county. 24
(e) The board of commissioners may provide a deferred compensation plan. Where If the 25
board of commissioners provides a deferred compensation plan, the investment of funds for the 26
plan shall be is exempt from the provisions of G.S. 159-30 and G.S. 159-31. Counties may invest 27
deferred compensation plan funds in life insurance, fixed or variable annuities and retirement 28
income contracts, regulated investment trusts, or other forms of investments approved by the 29
Board of Trustees of the North Carolina Public Employee Deferred Compensation Plan." 30
SECTION 18.(d) G.S. 160A-163 reads as rewritten: 31
"§ 160A-163. Retirement benefits. 32
(a) The council may provide for enrolling city employees in the Local Governmental 33
Employees' Retirement System, the Law-Enforcement Officers' Benefit and Relief Fund, the 34
Firemen's Pension Fund, North Carolina Firefighters' and Rescue Squad Workers' Pension Fund, 35
or a retirement plan certified to be actuarially sound by a qualified actuary as defined in 36
subsection (d) of this section, section and may make payments into any such the retirement 37
system or plan on behalf of its employees. The city may also supplement from local funds 38
benefits provided by the Local Governmental Employees' Retirement System, the 39
Law-Enforcement Officers' Benefit and Relief Fund, or the Firemen's Pension Fund.North 40
Carolina Firefighters' and Rescue Squad Workers' Pension Fund. 41
(b) The council may create and administer a special fund for the relief of members of the 42
police and fire departments who have been retired for age, or for disability or injury incurred in 43
the line of duty, but any such of these funds established on or after January 1, 1972, shall be are 44
subject to the provisions of subsection (c) of this section. The council may receive donations and 45
devises in aid of any such the fund, shall provide for its permanence and increase, and shall 46
prescribe and regulate the conditions under which benefits may be paid. 47
(c) No city shall make payments into any retirement system or plan established or 48
authorized by local act of the General Assembly unless the plan is certified to be actuarially 49
sound by a qualified actuary as defined in subsection (d) of this section. 50 General Assembly Of North Carolina Session 2025
Page 28 House Bill 40-Third Edition
(d) A qualified actuary means an individual certified as qualified by the Commissioner 1
of Insurance, or any member of the American Academy of Actuaries. 2
(e) A city which that is providing health insurance under G.S. 160A-162(b) may provide 3
health insurance for all or any class of former employees of the city who are receiving benefits 4
under subsection (a) of this section or who are 65 years of age or older. Such The health insurance 5
may be paid entirely by the city, partly by the city and former employee, or entirely by the former 6
employee, at the option of the city. 7
(f) The council may provide a deferred compensation plan. Where If the council provides 8
a deferred compensation plan, the investment of funds for the plan shall be is exempt from the 9
provisions of G.S. 159-30 and G.S. 159-31. Cities may invest deferred compensation plan funds 10
in life insurance, fixed or variable annuities and retirement income contracts, regulated 11
investment trusts, or other forms of investments approved by the Board of Trustees of the North 12
Carolina Public Employee Deferred Compensation Plan. 13
(g) Should If the council provide provides for a retirement plan, a plan which that 14
supplements a State-administered plan, or a special fund, any benefits payable from such the plan 15
or fund on account of the disability of city employees may be restricted with regard to the amount 16
which that may be earned by the disabled former employee in any other employment, but only 17
to the extent that the earnings of disability beneficiaries in the Local Governmental Employees' 18
Retirement System are restricted in accordance with G.S. 128-27(e)(1)." 19
SECTION 19.(a) The title of Chapter 140A of the General Statutes reads as 20
rewritten: 21
"State Awards System.Awards." 22
SECTION 19.(b) Chapter 140A of the General Statutes is amended by designating 23
G.S. 140A-1 through G.S. 140A-6 as Article 1 with the heading "North Carolina Awards." 24
SECTION 19.(c) G.S. 140A-2 reads as rewritten: 25
"§ 140A-2. Fields of recognition; periods covered. 26
These recognitions shall be known as the North Carolina Awards for Literature, Science, the 27
Fine Arts Arts, and Public Service, and shall be conferred upon citizens of North Carolina for the 28
most notable attainments in these respective fields during the current year, terminating four 29
months before the date of award, though such distinctions can be exceptionally conferred, with 30
the approval of the Governor and the Council of State, year or for eminence achieved during 31
years prior to the award." 32
SECTION 19.(d) G.S. 140A-5 reads as rewritten: 33
"§ 140A-5. Selection of recipients for awards. 34
The recipients of the awards shall be chosen by a committee named by the North Carolina 35
Awards Committee, for each category of achievement, but no award shall be made in any field 36
unless the committee of awards Committee deems the recognized accomplishment to be 37
outstanding in merit, value, and distinction." 38
SECTION 19.(e) G.S. 140A-6 reads as rewritten: 39
"§ 140A-6. Administration expense. 40
The expense of administering this Chapter shall Article may be paid out of the Contingency 41
and Emergency Fund subject to the approval of the Governor and Council of State." 42
SECTION 19.(f) Chapter 140A of the General Statutes is amended by adding a new 43
Article to read: 44
"Article 2. 45
"Medal of Valor Award." 46
SECTION 19.(g) G.S. 147-12(a)(15) is recodified as G.S. 140A-15 in Article 2 of 47
Chapter 140A of the General Statutes, as enacted by subsection (f) of this section, and reads as 48
rewritten: 49
"§ 140A-15. Medal of Valor Award. 50 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 29
To The Governor and Lieutenant Governor may each award the "Medal of Valor Award" to 1
a first responder upon recommendation from the highest-ranking official or member of a first 2
responder unit. The Governor and Lieutenant Governor may each award no more than two Medal 3
of Valor Awards to first responders each calendar year, except that a third may be awarded under 4
special circumstances as determined by the Governor. that, if the Governor or Lieutenant 5
Governor finds there are special circumstances, each may award a third. The Governor and 6
Lieutenant Governor may also annually each award one Medal of Valor Award to one first 7
responder unit, once each calendar year. unit. A Medal of Valor Award shall be for a first 8
responder or first responder unit that has performed great acts of heroism while under threat of 9
personal risk to safety, beyond the call of duty in the field. For the purposes of this subdivision, 10
section, a "first responder" includes any firefighter, paramedic, law enforcement officer, 11
emergency medical services personnel, or rescue squad member. The Governor and Lieutenant 12
Governor shall each maintain an internet accessible link and application form on a State website 13
where nominations can be put forward, and each shall contain information on the Medal of Valor 14
Award.The websites for the offices of Governor and Lieutenant Governor shall include 15
information about the Medal of Valor Award and a form for submitting a nomination for the 16
award." 17
SECTION 19.(h) G.S. 143A-13 reads as rewritten: 18
"§ 143A-13. Office of the Lieutenant Governor; creation; awards.Governor created. 19
(a) Creation. – There is hereby created an office of the Lieutenant Governor. 20
(b) Medal of Valor Award. – The Lieutenant Governor may award the "Medal of Valor 21
Award" to a first responder upon recommendation from the highest-ranking official or member 22
of a first responder unit. The Lieutenant Governor may award no more than two Medal of Valor 23
Awards to first responders each calendar year, except that a third may be awarded under special 24
circumstances as determined by the Lieutenant Governor. The Lieutenant Governor may also 25
award one Medal of Valor Award to one first responder unit, once each calendar year. A Medal 26
of Valor Award shall be for a first responder or first responder unit that has performed great acts 27
of heroism while under threat of personal risk to safety, beyond the call of duty in the field. For 28
the purposes of this subsection, a "first responder" includes any firefighter, paramedic, law 29
enforcement officer, emergency medical services personnel, or rescue squad member." 30
SECTION 19.(i) G.S. 143B-84 reads as rewritten: 31
"§ 143B-84. North Carolina Awards Committee – members; selection; quorum; 32
compensation. 33
The North Carolina Awards Committee shall consist of five members appointed by the 34
Governor to serve at the Governor's pleasure. 35
The Governor shall designate a member of the Committee as chairman chair to serve in such 36
capacity at the pleasure of the Governor. 37
Members of the Committee shall serve without compensation or travel or per diem. 38
A majority of the Committee shall constitute constitutes a quorum for the transaction of 39
business. 40
The Secretary of Natural and Cultural Resources is hereby authorized to request contingency 41
and emergency funds for the administration of the North Carolina Awards Committee, for the 42
period between July 1, 1973, and ratification of the next general appropriations bill for the 43
Department. 44
All clerical and other services required by the Committee shall be supplied by the Secretary 45
of Natural and Cultural Resources." 46
SECTION 20. G.S. 143-63.1 reads as rewritten: 47
"§ 143-63.1. Sale, disposal disposal, and destruction of firearms. 48
(a) Except as hereinafter provided, it shall be provided in this section, it is unlawful for 49
any employee, officer officer, or official of the State in the exercise of his or her official duty to 50
sell or otherwise dispose of any pistol, revolver, shotgun shotgun, or rifle to any person, firm, 51 General Assembly Of North Carolina Session 2025
Page 30 House Bill 40-Third Edition
corporation, county or local governmental unit, law-enforcement law enforcement agency, or 1
other legal entity. 2
(b) It shall be is lawful for the Department of Administration, in the exercise of its official 3
duty, to sell any weapon described in subsection (a) hereof, to any of this section to a law 4
enforcement agency of a county or local governmental unit, law-enforcement agency in the State; 5
provided, however, that such law-enforcement unit in the State, so long as the agency files a 6
written statement, duly notarized, with the seller of said weapon the weapon, certifying that such 7
the weapon is needed in law enforcement by such law-enforcement the agency. 8
(c) All weapons described in subsection (a) hereof which of this section that are not sold 9
as herein provided by this section within one year of being declared surplus property shall be 10
destroyed by the Department of Administration. 11
(d) Notwithstanding the provisions of this section, but subject to the provisions of 12
G.S. 20-187.2, G.S. 17F-20, (i) each department, agency, institution, commission, and bureau of 13
the Executive, Judicial, or Legislative branch of North Carolina and (ii) campus law enforcement 14
agencies and campus police agencies of the constituent institutions of The University of North 15
Carolina may sell, trade, or otherwise dispose of any or all surplus weapons they possess to any 16
federally licensed firearm dealers. The sale, trade, or disposal of these weapons shall be in a 17
manner prescribed by the Department of Administration. Surplus weapons shall be offered for 18
public sale to federally licensed firearm dealers. Public sale is through sealed competitive bids, 19
electronic bids, negative bids, auction, and retail sales. Any moneys or property money obtained 20
from the sale or disposal shall go be credited to the general fund.General Fund." 21
SECTION 21.(a) All of the following provisions are repealed: 22
(1) Subdivision (5) of G.S. 143-215.94A. 23
(2) Subdivisions (b)(6) and (b)(12) of G.S. 143-215.94B. 24
(3) G.S. 143-215.94F. 25
(4) G.S. 143-215.94P. 26
SECTION 21.(b) G.S. 143-215.94A(2), (2a), and (7) read as rewritten: 27
"(2) "Commercial underground storage tank" means any one or combination of 28
tanks (including underground pipes connected thereto) used to contain an 29
accumulation of petroleum products, the volume of which (including the 30
volume of the underground pipes connected thereto) is ten percent (10%) or 31
more beneath the surface of the ground. The term "commercial underground 32
storage tank" does not include any:any of the following: 33
a. Farm or residential underground storage tank of 1,100 gallons or less 34
capacity used for storing motor fuel for noncommercial purposes; 35
b. Underground storage tank of 1,100 gallons or less capacity used for 36
storing heating oil for consumptive use on the premises where stored; 37
c. Underground storage tank of more than 1,100 gallon capacity used for 38
storing heating oil for consumptive use on the premises where stored 39
by four or fewer households; 40
c1. Noncommercial underground storage tank. 41
d. Septic tank;tank. 42
e. Pipeline facility (including gathering lines) regulated under:under any 43
of the following: 44
1. The Natural Gas Pipeline Safety Act of 1968 (49 U.S.C. § 1671 45
et seq.);seq.). 46
2. The Hazardous Liquid Pipeline Safety Act of 1979 (49 U.S.C. 47
§ 2001 et seq.); orseq.). 48
3. Any intrastate pipeline facility regulated under State laws 49
comparable to the provisions of the Natural Gas Pipeline 50 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 31
Safety Act of 1968 or the Hazardous Liquid Pipeline Safety 1
Act of 1979;1979. 2
f. Surface impoundment, pit, pond, or lagoon;lagoon. 3
g. Storm water or waste water collection system;system. 4
h. Flow-through process tank;tank. 5
i. Liquid trap or associated gathering lines directly related to oil or gas 6
production and gathering operations; oroperations. 7
j. Storage tank situated in an underground area (such as a basement, 8
cellar, mineworking, drift, shaft, or tunnel) if the storage tank is 9
situated upon or above the surface of the floor. 10
(2a) "Cost-effective cleanup" means the cleanup method that meets all of the 11
following criteria: 12
a. Addresses imminent threats to human health or the environment. 13
b. Provides for the cleanup or removal of all contaminated soil except in 14
circumstances where it is impractical to remove contaminated soil. 15
c. Is approved by the Commission for remediation of the site. 16
d. Is the least expensive cleanup based on total cost, including costs not 17
eligible for reimbursement from the Commercial Fund or the 18
Noncommercial Fund. 19
… 20
(7) "Noncommercial underground storage tank" means any one or combination 21
of the following tanks (including underground pipes connected thereto) used 22
to contain an accumulation of petroleum products, the volume of which 23
(including the volume of the underground pipes connected thereto) is ten 24
percent (10%) or more beneath the surface of the ground. The term 25
"noncommercial storage tank" does not include any:ground: 26
a. Commercial underground storage tanks; 27
b. Septic tank; 28
c. Pipeline facility (including gathering lines) regulated under: 29
1. The Natural Gas Pipeline Safety Act of 1968 (49 U.S.C. § 1671 30
et seq.); 31
2. The Hazardous Liquid Pipeline Safety Act of 1979 (49 U.S.C. 32
§ 2001 et seq.); or 33
3. Any intrastate pipeline facility regulated under State laws 34
comparable to the provisions of the Natural Gas Pipeline 35
Safety Act of 1968 or the Hazardous Liquid Pipeline Safety 36
Act of 1979; 37
d. Surface impoundment, pit, pond, or lagoon; 38
e. Storm water or waste water collection system; 39
f. Flow-through process tank; 40
g. Liquid trap or associated gathering lines directly related to oil or gas 41
production and gathering operations; or 42
h. Storage tank situated in an underground area (such as a basement, 43
cellar, mineworking, drift, shaft, or tunnel) if the storage tank is 44
situated upon or above the surface of the floor. 45
a. Farm or residential underground storage tank of 1,100 gallons or less 46
capacity used for storing motor fuel for noncommercial purposes. 47
b. Underground storage tank of 1,100 gallons or less capacity used for 48
storing heating oil for consumptive use on the premises where stored. 49 General Assembly Of North Carolina Session 2025
Page 32 House Bill 40-Third Edition
c. Underground storage tank of more than 1,100 gallon capacity used for 1
storing heating oil for consumptive use on the premises where stored 2
by four or fewer households." 3
SECTION 21.(c) G.S. 143-215.94E reads as rewritten: 4
"§ 143-215.94E. Rights and obligations of the owner or operator. 5
… 6
(b1) In the case of a discharge or release from a commercial underground storage tank 7
where the owner and operator cannot be identified or located, or where the owner and operator 8
fail to proceed as required by subsection (a) of this section, the following requirements apply: 9
(1) If the current landowner of the land in which the commercial underground 10
storage tank is located notifies the Department in accordance with 11
G.S. 143-215.85 and undertakes to collect and remove the discharge or release 12
and to restore the area affected in accordance with the requirements of this 13
Article and applicable federal and State laws, regulations, and rules, the 14
current landowner may elect to have the Commercial Fund pay or reimburse 15
the current landowner for any costs described in subdivisions (1), (2), (2a), 16
(3), and (4) of G.S. 143-215.94B(b) or G.S. 143-215.94B(b1) that exceed the 17
amounts for which the owner or operator is responsible under that subsection. 18
[The following also apply:]The following provisions also apply: 19
a. The current landowner is not eligible for payment or reimbursement 20
until the current landowner has paid the costs described in subdivisions 21
(1), (2), (2a), (3), and (4) of G.S. 143-215.94B(b) or 22
G.S. 143-215.94B(b1) for which the owner or operator is responsible. 23
b. Eligibility for reimbursement under this subsection may be transferred 24
from a current landowner who has paid the costs described in 25
subdivisions (1), (2), (2a), (3), and (4) of G.S. 143-215.94B(b) or 26
G.S. 143-215.94B(b1) to a subsequent landowner. 27
The current landowner shall submit documentation of all expenditures as 28
required by G.S. 143-215.94G(b). 29
… 30
(e) When an An owner, operator, or landowner that pays the costs described in 31
G.S. 143-215.94B(b), 143-215.94B(b1), or 143-215.94D(b1) subsection (b) or (b1) of 32
G.S. 143-215.94B resulting from a discharge or release of petroleum from an a commercial 33
underground storage tank, the owner, operator, or landowner tank may seek reimbursement from 34
the appropriate fund for any costs that the owner, operator, or landowner may elect to have either 35
the Commercial Fund or the Noncommercial Fund pay in accordance with the applicable 36
subsections of this section. 37
(e1) The Department may contract for any services necessary to evaluate any claim for 38
reimbursement or compensation from the Commercial Fund, Fund and may contract for any 39
expert witness or consultant services necessary to defend any decision to pay or deny any claim 40
for reimbursement, and reimbursement. The Department may pay the cost of these services from 41
the fund against which the claim is made; provided that in fund. In any fiscal year year, however, 42
the Department shall not expend from either fund more than one percent (1%) of the unobligated 43
balance of the fund on 30 June of the previous fiscal year. The cost of contractual services to 44
evaluate a claim or for expert witness or consultant services to defend a decision with respect to 45
a claim shall be included as costs under G.S. 143-215.94B(b) and 143-215.94B(b1).authorized 46
by this subsection are considered costs under subsections (b) and (b1) of G.S. 143-215.94B. 47
… 48
(e5) (1) As used in this subsection: 49
… 50
b. "Preapproval" means a determination by the Department that: 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 33
1. The nature and scope of a task is reasonable and necessary to 1
be performed under G.S. 143-215.94B(b), 143-215.94B(b1), 2
or 143-215.94D(b1) subsection (b) or (b1) of 3
G.S. 143-215.94B in order to achieve the purposes of this Part. 4
2. The amount estimated for the cost of a task does not exceed the 5
amount or rate that is reasonable for that task. 6
(2) The Department may require an owner, operator, or landowner to obtain 7
preapproval before proceeding with any task. The Department shall specify 8
those tasks for which preapproval is required. The Department shall deny any 9
request for payment or reimbursement of the cost of any task for which 10
preapproval is required if the owner, operator, or landowner failed to obtain 11
preapproval of the task. Preapproval of a task by the Department does not 12
guarantee payment or reimbursement in the amount estimated for the cost of 13
the task at the time preapproval is requested. The Department shall pay or 14
reimburse the cost of a task only if all of the following apply: 15
a. The cost is eligible to be paid under G.S. 143-215.94B(b), 16
143-215.94B(b1), or 143-215.94D(b1).subsection (b) or (b1) of 17
G.S. 143-215.94B. 18
b. Payment is in accordance with G.S. 143-215.94B(d) or 19
G.S. 143-215.94D(d).G.S. 143-215.94B(d). 20
c. The Department determines that the cost is reasonable and necessary. 21
(3) The Commission may adopt rules governing payment or reimbursement of 22
reasonable and necessary costs and, consistent with any rules adopted by the 23
Commission, the Department shall develop, implement, and periodically 24
revise a schedule of costs that the Department determines to be reasonable and 25
necessary costs for specific tasks. Statements that specify tasks for which 26
preapproval is required and schedules of reasonable and necessary costs for 27
specific tasks are statements within the meaning of G.S. 150B-2(8a)g. This 28
subsection shall not be construed to does not invalidate any rule of the 29
Commission related to preapproval of tasks that will result in a cost that is 30
eligible to be paid or reimbursed under G.S. 143-215.94B(b), 31
143-215.94B(b1), or 143-215.94D(b1), provided, however, that the 32
subsection (b) or (b1) of G.S. 143-215.94B. The Department may specify 33
additional tasks for which preapproval is required.required in addition to any 34
specified by the Commission. 35
(4) In all cases, the Department shall require an owner, operator, or landowner to 36
submit documentation sufficient to establish that a claim is eligible to be paid 37
or reimbursed under this Part before the Department pays or reimburses the 38
claim. 39
(5) The Department shall authorize a task the cost of which is to be paid or 40
reimbursed from the Commercial Fund or the Noncommercial Fund only 41
when the task is scheduled to be performed on the basis of a priority 42
determination pursuant to subsection (e4) of this section. The Department 43
shall not pay or reimburse the cost of any task for which authorization is 44
required under this subsection until the Department has preapproved and 45
authorized the task. 46
(6) Except as provided in subdivisions (8) and (9) of this subsection, the 47
Department shall not authorize any task the cost of which is to be paid or 48
reimbursed from the Commercial Fund or the Noncommercial Fund unless 49
the Department determines, based on the scope of the work to be performed 50
and the schedule of reasonable and necessary costs, that sufficient funds will 51 General Assembly Of North Carolina Session 2025
Page 34 House Bill 40-Third Edition
be available in the Commercial Fund or the Noncommercial Fund, whichever 1
applies, to pay or reimburse the cost of that task within 90 days after the 2
Department determines that the owner, operator, or landowner has submitted 3
a claim with documentation sufficient to establish that the claim is eligible to 4
be paid under this Part. 5
… 6
(8) The Department may preapprove and authorize a task the cost of which is to 7
be paid or reimbursed for payment or reimbursement from the Commercial 8
Fund or the Noncommercial Fund a task that has not been authorized pursuant 9
to subdivisions (5) and (6) of this subsection if the owner, operator, or 10
landowner specifically requests that the task be authorized and agrees that the 11
claim for payment or reimbursement of the task's cost will not be paid until 12
after the Department has paid all claims for payment or reimbursement of 13
costs for tasks that the Department has authorized pursuant to subdivisions (5) 14
and (6) of this subsection. 15
(9) The Department may preapprove and authorize a task the cost of which is to 16
be paid or reimbursed for payment or reimbursement from the Commercial 17
Fund or the Noncommercial Fund a task that has not been authorized pursuant 18
to subdivisions (5) and (6) of this subsection if the discharge or release creates 19
an emergency situation. An emergency situation exists when a discharge or 20
release of petroleum results in an imminent threat to human health or the 21
environment. A claim for payment or reimbursement of costs for tasks that are 22
authorized under this subdivision shall be paid or reimbursed on the same 23
basis as tasks that are authorized under subdivisions (5) and (6) of this 24
subsection. 25
… 26
(g) No owner or operator shall be reimbursed pursuant to this section, and the Department 27
shall seek reimbursement of the appropriate fund Commercial Fund or of the Department for any 28
monies disbursed from the appropriate fund Commercial Fund or expended by the Department 29
if any of the following apply: 30
(1) The owner or operator has willfully violated any substantive law, rule, or 31
regulation applicable to underground storage tanks and intended to prevent or 32
mitigate discharges or releases or to facilitate the early detection of discharges 33
or releases. 34
(2) The discharge or release is the result of the owner's or operator's willful or 35
wanton misconduct. 36
(3) The owner or operator has failed to pay any annual tank operating fee due 37
pursuant to G.S. 143-215.94C. 38
… 39
(j) An owner, operator, or landowner shall request that the Department determine 40
whether any of the costs of assessment and cleanup of a discharge or release from a petroleum 41
underground storage tank are eligible to be paid or reimbursed from either the Commercial Fund 42
within one year after completion of any task that is eligible to be paid or reimbursed under 43
G.S. 143-215.94B(b) or 143-215.94B(b1). 44
…." 45
SECTION 21.(d) G.S. 143-215.94G, as amended by Section 24(l) of this act, reads 46
as rewritten: 47
"§ 143-215.94G. Authority of the Department to engage in cleanups; actions for fund 48
reimbursement. 49
(a) If there is a discharge or release of petroleum from any of the following, the 50
Department may use staff, equipment, or materials under its control or provided by other 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 35
cooperating federal, State, or local agencies and may contract with any agent or contractor it 1
deems appropriate to investigate a release, to develop and implement a cleanup plan, to provide 2
interim alternative sources of drinking water to third parties, and to pay the initial costs for 3
providing permanent alternative sources of drinking water to third parties: 4
(1) A noncommercial underground storage tank. 5
(2) An underground storage tank whose owner or operator cannot be identified or 6
located. 7
(3) An underground storage tank whose owner or operator fails to proceed as 8
required by G.S. 143-215.94E(a). 9
(4) A commercial underground storage tank taken out of operation prior to 1 10
January 1974 if, when the discharge or release is discovered, neither the owner 11
nor operator owns or leases the land on which the underground storage tank 12
is located. 13
… 14
(d) The Secretary shall seek reimbursement through any legal means available for the 15
following: 16
… 17
(6) The amounts provided for in G.S. 143-215.94B(b5) and 18
G.S. 143-215.94D(b2).G.S. 143-215.94B(b5). 19
(e) In the event that a civil action is commenced to secure reimbursement pursuant to 20
subdivisions (1) through (4) of subsection (d) of this section, the Secretary may recover, in 21
addition to any amount due, the costs of the action, including but not limited to reasonable 22
attorneys' fees and investigation expenses. Any monies received or recovered as reimbursement 23
shall be paid into the appropriate fund Commercial Fund or other source from which the 24
expenditures were made. 25
(f) Repealed by Session Laws 2015-241, s. 14.16A(f), effective December 31, 2016. 26
(g) If the Department paid or reimbursed costs that are not authorized to be paid or 27
reimbursed under G.S. 143-215.94B or G.S. 143-215.94D as a result of a misrepresentation by 28
an agent that acted on behalf of an owner, operator, or landowner, the Department shall first seek 29
reimbursement, pursuant to subdivision (1) of subsection (d) of this section, from the agent of 30
monies paid to or retained by the agent. 31
…." 32
SECTION 21.(e) G.S. 143-215.94V reads as rewritten: 33
"§ 143-215.94V. Standards for petroleum underground storage tank cleanup. 34
(a) Legislative findings and intent. 35
(1) The General Assembly finds that: 36
a. The goals of the underground storage tank program are to protect 37
human health and the environment. Maintaining the solvency of the 38
Commercial Fund and the Noncommercial Fund is essential to these 39
goals. 40
… 41
(2) The General Assembly intends: 42
… 43
e. That neither the Commercial Fund nor the Noncommercial Fund not 44
be used to clean up sites where the Commission has determined that a 45
discharge or release poses a degree of risk to human health or the 46
environment that is no greater than the acceptable level of risk 47
established by the Commission. 48
f. Repealed by Session Laws 1998-161, s. 11(c), effective retroactively 49
to January 1, 1998. 50 General Assembly Of North Carolina Session 2025
Page 36 House Bill 40-Third Edition
g. That the Commercial Fund and the Noncommercial Fund be used to 1
perform the most cost-effective cleanup that addresses imminent 2
threats to human health and the environment. 3
… 4
(c) The Commission may require an owner or operator or a landowner eligible for 5
payment or reimbursement under subsections (b), (b1), (c), and (c1) subsections (b) and (b1) of 6
G.S. 143-215.94E to provide information necessary to determine the degree of risk to human 7
health and the environment that is posed by a discharge or release from a petroleum underground 8
storage and to identify the most cost-effective cleanup that addresses imminent threats to human 9
health and the environment. 10
… 11
(e) If the Commission concludes under subsection (d) of this section that no cleanup, no 12
further cleanup, or no further action will be required, the Department shall not pay or reimburse 13
any costs otherwise payable or reimbursable under this Article from either the Commercial or 14
Noncommercial Fund, other than reasonable and necessary to conduct the risk assessment 15
required by this section, unless: 16
(1) Cleanup is ordered or damages are awarded in a finally adjudicated judgment 17
in an action against the owner or landowner. To be eligible for reimbursement 18
of damages arising from a third-party claim for bodily injury or property 19
damage awarded in a finally adjudicated judgment, however, an owner or 20
operator shall (i) notify the Department of any such claim; (ii) provide the 21
Department with all pleadings and other related documents if a lawsuit has 22
been filed; and (iii) provide the Department copies of any medical reports, 23
statements, investigative reports, or certifications from licensed professionals 24
necessary to determine that a claim for bodily injury or property damage is 25
reasonable and necessary. Reimbursement of claims for damages arising from 26
a third-party claim for bodily injury or property damage awarded in a finally 27
adjudicated judgment shall be subject to the limitations set forth in G.S. 28
143-215.94B(b)(5) and G.S. 143-215.94D(b1)(2), as applicable, 29
G.S. 143-215.94B(b)(5) and any other provision governing third-party claims 30
set forth in this Article. 31
… 32
(e1) If the Commission concludes under subsection (d) of this section that further cleanup 33
is required and notifies the owner, operator, or landowner of the cleanup method approved by the 34
Commission as the most cost-effective cleanup method for the site, the Department shall not pay 35
or reimburse any costs otherwise payable or reimbursable under this Article from either the 36
Commercial Fund or Noncommercial Fund, other than those costs that are reasonable and 37
necessary to conduct the risk assessment and to implement the cost-effective cleanup method 38
approved by the Commission. If the owner, operator, or landowner selects a cleanup method 39
other than the one identified by the Commission as the most cost-effective cleanup, the 40
Department shall not pay or reimburse for costs in excess of the cost of implementing the 41
approved cost-effective cleanup. 42
… 43
(h) If a discharge or release of petroleum from an underground storage tank results in 44
contamination in soil or groundwater that becomes commingled with contamination that is the 45
result of a discharge or release of petroleum from a source of contamination other than an 46
underground storage tank, the cleanup of petroleum may proceed under rules adopted pursuant 47
to this section. The Department shall not pay or reimburse from the Commercial Fund any costs 48
associated with the assessment or remediation of that portion of contamination that results from 49
a release or discharge of petroleum from a source other than an underground storage tank from 50
either the Commercial Fund or the Noncommercial Fund.tank." 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 37
SECTION 21.(f) G.S. 143B-426.40A(l) reads as rewritten: 1
"(l) Assignment of Payments From the Underground Storage Tank Cleanup Funds. – 2
Payments from Commercial Fund. – This section does not apply to an assignment of any claim 3
for payment or reimbursement from the Commercial Leaking Petroleum Underground Storage 4
Tank Cleanup Fund established by G.S. 143-215.94B or the Noncommercial Leaking Petroleum 5
Underground Storage Tank Cleanup Fund established by G.S. 143-215.94D.G.S. 143-215.94B." 6
SECTION 22. Article 29A of Chapter 143 of the General Statutes is repealed. 7
SECTION 23. G.S. 144-9(b) reads as rewritten: 8
"(b) The Department of Military and Veterans Affairs shall accept, at no charge, a worn, 9
tattered, or otherwise damaged flag of the United States of America or the State of North Carolina 10
from a citizen of the State and shall make arrangements for its respectful disposal. The 11
Department shall establish a flag retirement program to encourage citizens to send in or drop off 12
worn, tattered, or otherwise damaged flags at the Department's office in Raleigh and at any 13
Veterans Home or Veterans Cemetery in the State and may establish other locations for flag 14
drop-off as it deems appropriate. The Department shall advertise the flag retirement program on 15
its website and by printed posters placed at all flag drop-off locations. 16
Department" 17
SECTION 24.(a) G.S. 150B-37(c) is recodified as the last sentence of 18
G.S. 150B-34(a). 19
SECTION 24.(b) G.S. 150B-34, as amended by subsection (a) of this section, reads 20
as rewritten: 21
"§ 150B-34. Final decision or order. 22
(a) In each contested case the administrative law judge shall make a final decision or 23
order that contains findings of fact and conclusions of law. The administrative law judge shall 24
decide the case based upon the preponderance of the evidence, giving due regard to the 25
demonstrated knowledge and expertise of the agency with respect to facts and inferences within 26
the specialized knowledge of the agency. The Office of Administrative Hearings shall forward a 27
copy of the administrative law judge's final decision or order to each party. 28
(b) Repealed by Session Laws 1991, c. 35, s. 6. 29
(c) Repealed by Session Laws 2011-398, s. 18. For effective date and applicability, see 30
editor's note. 31
(d) Except for the exemptions contained in G.S. 150B-1, the provisions of this section 32
regarding the decision of the administrative law judge shall apply only to agencies subject to 33
Article 3 of this Chapter, notwithstanding any other provisions to the contrary relating to 34
recommended decisions by administrative law judges. 35
…." 36
SECTION 24.(c) G.S. 90A-30 reads as rewritten: 37
"§ 90A-30. Penalties; remedies; contested cases. 38
(a) Upon the recommendation of the Board of Certification, the Secretary of 39
Environmental Quality or a delegated representative may impose an administrative, civil penalty 40
on any person, corporation, company, association, partnership, unit of local government, State 41
agency, federal agency, or other legal entity who that violates G.S. 90A-29(a). Each day of a 42
continued violation shall constitute constitutes a separate violation. The penalty shall not exceed 43
one hundred dollars ($100.00) for each day such the violation continues. No penalty shall be 44
assessed until the person alleged to be in violation has been notified of the violation. 45
The clear proceeds of penalties imposed pursuant to this section shall be remitted to the Civil 46
Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2. 47
(b) Any person wishing to contest a penalty issued under this section shall be is entitled 48
to an administrative hearing and judicial review conducted according to the procedures outlined 49
in Articles 3 and 4 of Chapter 150B of the General Statutes. 50 General Assembly Of North Carolina Session 2025
Page 38 House Bill 40-Third Edition
(c) The Secretary may bring a civil action in the superior court of the county in which the 1
violation is alleged to have occurred to recover the amount of the administrative penalty 2
whenever if either of the following applies to an owner or person in control of a water treatment 3
facilityfacility: 4
(1) Who The owner or person has not requested an administrative hearing and 5
fails to pay the penalty within 60 days after being notified of such penalty, 6
orthe penalty. 7
(2) Who The owner or person has requested an administrative hearing and fails 8
to pay the penalty within 60 days after service of the Office of Administrative 9
Hearings forwards a written copy of the decision as provided in G.S. 10
150B-36.G.S. 150B-34. 11
(d) Notwithstanding any other provision of law, this section imposes the only penalty or 12
sanction, civil or criminal, for violations of G.S. 90A-29(a) or for the failure to meet any other 13
legal requirement for a water system to have a certified operator in responsible charge." 14
SECTION 24.(d) G.S. 104E-24 reads as rewritten: 15
"§ 104E-24. Administrative penalties. 16
(a) The Department may impose an administrative penalty on any person:a person that 17
does either of the following: 18
(1) Who fails Fails to comply with this Chapter, any order issued hereunder, under 19
it, or any rules adopted pursuant to this Chapter;it. 20
(2) Who refuses Refuses to allow an authorized representative of the Radiation 21
Protection Commission or the Department of Health and Human Services a 22
right of entry as provided for in G.S. 104E-11 or impounding materials as 23
provided for in G.S. 104E-14. 24
(b) Each day of a continuing violation shall constitute constitutes a separate violation. 25
Such The penalty shall not exceed ten thousand dollars ($10,000) per day. In determining the 26
amount of the penalty, the Department shall consider the degree and extent of the harm caused 27
by the violation. Any person assessed a penalty shall be notified of the assessment by registered 28
or certified mail, and the notice shall specify the reasons for the assessment. 29
(c) Any person wishing to contest a penalty or order issued under this section shall be is 30
entitled to an administrative hearing and judicial review in accordance with the procedures 31
outlined in Articles 3, 3A, 3 and 4 of Chapter 150B of the General Statutes. 32
(d) The Secretary may bring a civil action in the superior court of the county in which 33
such the violation is alleged to have occurred to recover the amount of the administrative penalty 34
whenever a person:if either of the following applies: 35
(1) Who The person has not requested an administrative hearing and fails to pay 36
the penalty within 60 days after being notified of such penalty, orthe penalty. 37
(2) Who The person has requested an administrative hearing and fails to pay the 38
penalty within 60 days after service of the Office of Administrative Hearings 39
forwards a written copy of the decision as provided in G.S. 40
150B-36.G.S. 150B-34. 41
(e) The clear proceeds of penalties imposed pursuant to this section shall be remitted to 42
the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2." 43
SECTION 24.(e) G.S. 108A-70.9A(f) reads as rewritten: 44
"(f) Final Decision. – After a hearing before an administrative law judge, the judge OAH 45
shall return forward a written copy of the administrative law judge's decision to the Department 46
and the recipient in accordance with G.S. 150B-37. G.S. 150B-34. The Department decision shall 47
notify the Department and the recipient of the final decision and of the right to judicial review of 48
the decision pursuant to Article 4 of Chapter 150B of the General Statutes." 49
SECTION 24.(f) G.S. 108A-70.9B(g) reads as rewritten: 50 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 39
"(g) Decision. – The administrative law judge assigned to a contested Medicaid case shall 1
hear and decide the case without unnecessary delay. The judge shall prepare a written decision 2
and send shall forward a copy of it to the parties in accordance with 3
G.S. 150B-37.G.S. 150B-34." 4
SECTION 24.(g) G.S. 108D-16 reads as rewritten: 5
"§ 108D-16. Notice of final decision and right to seek judicial review. 6
The administrative law judge assigned to conduct a contested case hearing under 7
G.S. 108D-15 shall hear and decide the case without unnecessary delay. The judge shall prepare 8
a written decision that includes findings of fact and conclusions of law and send shall forward a 9
copy of it to the parties in accordance with G.S. 150B-37. G.S. 150B-34. The written decision 10
shall notify the parties of the final decision and of the right of the enrollee and the managed care 11
entity to seek judicial review of the decision under Article 4 of Chapter 150B of the General 12
Statutes." 13
SECTION 24.(h) G.S. 122C-24 reads as rewritten: 14
"§ 122C-24. Adverse action on a license. 15
(a) The Secretary may deny, suspend, amend, or revoke a license in any case in which 16
the Secretary finds that there has been a substantial failure to comply with any provision of this 17
Article or other applicable statutes or any applicable rule adopted pursuant to these statutes. 18
Action[s] Actions under this section and appeals of those actions shall be in accordance with 19
rules of the Commission and Chapter 150B of the General Statutes. 20
(b) When an appeal is filed concerning the denial, suspension, amendment, or revocation 21
of a license, a copy of the proposal for decision shall be sent to the Chairman of the Commission 22
in addition to the parties specified in G.S. 150B-34. The Chairman or members of the 23
Commission designated by the Chairman may submit for the Secretary's consideration written or 24
oral comments concerning the proposal prior to the issuance of a final agency decision in 25
accordance with G.S. 150B-36." 26
SECTION 24.(i) G.S. 122C-24.1 reads as rewritten: 27
"§ 122C-24.1. Penalties; remedies. 28
… 29
(h) The Secretary may bring a civil action in the superior court of the county wherein 30
where the violation occurred to recover the amount of the administrative penalty whenever if 31
either of the following applies to a facility: 32
(1) Which The facility has not requested an administrative hearing and fails to 33
pay the penalty within 60 days after being notified of the penalty, orpenalty. 34
(2) Which The facility has requested an administrative hearing and fails to pay 35
the penalty within 60 days after receipt of the Office of Administrative 36
Hearings forwards a written copy of the decision as provided in 37
G.S. 150B-37.G.S. 150B-34. 38
… 39
(j) The clear proceeds of civil penalties provided for in this section shall be remitted to 40
the State Treasurer for deposit Civil Penalty and Forfeiture Fund in accordance with State 41
law.G.S. 115C-457.2. 42
…." 43
SECTION 24.(j) G.S. 131D-34 reads as rewritten: 44
"§ 131D-34. Penalties; remedies. 45
… 46
(g) The Secretary may bring a civil action in the superior court of the county wherein 47
where the violation occurred to recover the amount of the administrative penalty whenever if 48
either of the following applies to a facility: 49
(1) Which The facility has not requested an administrative hearing and fails to 50
pay the penalty within 60 days after being notified of the penalty, orpenalty. 51 General Assembly Of North Carolina Session 2025
Page 40 House Bill 40-Third Edition
(2) Which The facility has requested an administrative hearing and fails to pay 1
the penalty within 60 days after receipt of the Office of Administrative 2
Hearings forwards a written copy of the decision as provided in 3
G.S. 150B-36.G.S. 150B-34. 4
… 5
(i) The clear proceeds of civil penalties provided for in this section shall be remitted to 6
the State Treasurer for deposit Civil Penalty and Forfeiture Fund in accordance with State 7
law.G.S. 115C-457.2." 8
SECTION 24.(k) G.S. 131E-129(f) reads as rewritten: 9
"(f) The Secretary may bring a civil action in the superior court of the county wherein 10
where the violation occurred to recover the amount of the administrative penalty whenever if 11
either of the following applies to a facility: 12
(1) Which The facility has not requested an administrative hearing and fails to 13
pay the penalty within 60 days after being notified of the penalty; orpenalty. 14
(2) Which The facility has requested an administrative hearing and fails to pay 15
the penalty within 60 days after receipt of the Office of Administrative 16
Hearings forwards a written copy of the decision as provided in 17
G.S. 150B-36.G.S. 150B-34." 18
SECTION 24.(l) G.S. 143-215.94G reads as rewritten: 19
"§ 143-215.94G. Authority of the Department to engage in cleanups; actions for fund 20
reimbursement. 21
(a) The If there is a discharge or release of petroleum from any of the following, the 22
Department may use staff, equipment, or materials under its control or provided by other 23
cooperating federal, State, or local agencies and may contract with any agent or contractor it 24
deems appropriate to investigate a release, to develop and implement a cleanup plan, to provide 25
interim alternative sources of drinking water to third parties, and to pay the initial costs for 26
providing permanent alternative sources of drinking water to third parties, and shall pay the costs 27
resulting from the Commercial Fund whenever there is a discharge or release of petroleum from 28
any of the following:parties: 29
(1) A noncommercial underground storage tank. 30
(2) An underground storage tank whose owner or operator cannot be identified or 31
located. 32
(3) An underground storage tank whose owner or operator fails to proceed as 33
required by G.S. 143-215.94E(a). 34
(4) A commercial underground storage tank taken out of operation prior to 1 35
January 1974 if, when the discharge or release is discovered, neither the owner 36
nor operator owns or leases the land on which the underground storage tank 37
is located. 38
(a1) Every State agency shall provide to the Department to the maximum extent feasible 39
such any staff, equipment, and materials as may be that are available and useful to the 40
development and implementation of a cleanup program. 41
(a2) The cost of any action authorized under subsection (a) of this section shall be paid, to 42
the extent funds are available, from the following sources in the order listed: 43
(1) Any funds to which the State is entitled under any federal program providing 44
for the cleanup of petroleum discharges or releases from underground storage 45
tanks, including, but not limited to, the Leaking Underground Storage Tank 46
Trust Fund established pursuant to 26 U.S.C. § 4081 and 42 U.S.C. § 47
6991b(h). 48
(2) The Commercial Fund. 49
(a3) Expired October 1, 2011, pursuant to Session Laws 2001-442, s. 8, as amended by 50
Session Laws 2008-195, s. 11. 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 41
(b) Whenever the discharge or release of a petroleum product is from a commercial 1
underground storage tank, the Department may supervise the cleanup of environmental damage 2
required by G.S. 143-215.94E(a). If the owner or operator elects to have the Commercial Fund 3
reimburse or pay for any costs allowed under subsection (b) or (b1) of G.S. 143-215.94B, the 4
Department shall require the owner or operator to submit documentation of all expenditures 5
claimed for the purposes of establishing that the owner or operator has spent the amounts required 6
to be paid by the owner or operator pursuant to and in accordance with G.S. 143-215.94E(b). The 7
Department shall allow credit for all expenditures that the Department determines to be 8
reasonable and necessary. The Department may shall not pay for any costs for which the 9
Commercial Fund was established until the owner or operator has paid the amounts specified in 10
G.S. 143-215.94E(b). 11
(c) The Secretary shall keep a record of all expenses incurred for the services of State 12
personnel and for the use of the State's equipment and material. 13
(d) The Secretary shall seek reimbursement through any legal means available, 14
for:available for the following: 15
(1) Any costs not authorized to be paid from the Commercial Fund;Fund. 16
(2) The amounts provided for in G.S. 143-215.94B(b) or G.S. 143-215.94B(b1) 17
required to be paid for by the owner or operator pursuant to 18
G.S. 143-215.94E(b) where if the owner or operator of a commercial 19
underground storage tank is later identified or located;located. 20
(3) The amounts provided for in G.S. 143-215.94B(b) or G.S. 143-215.94B(b1) 21
required to be paid for by the owner or operator pursuant to 22
G.S. 143-215.94E(b) where if the owner or operator of a commercial 23
underground storage tank failed to proceed as required by G.S. 24
143-215.94E(a);G.S. 143-215.94E(a). 25
(3a) The amounts provided for by G.S. 143-215.94B(b)(5) required to be paid by 26
the owner or operator to third parties for the cost of providing interim 27
alternative sources of drinking water to third parties and the initial cost of 28
providing permanent alternative sources of drinking water to third 29
parties;parties. 30
(4) Any funds due under G.S. 143-215.94E(g); andG.S. 143-215.94E(g). 31
(5) Any funds to which the State is entitled under any federal program providing 32
for the cleanup of petroleum discharges or releases from underground storage 33
tanks; [and]tanks. 34
(6) The amounts provided for in G.S. 143-215.94B(b5) and 35
G.S. 143-215.94D(b2). 36
(e) In the event that a civil action is commenced to secure reimbursement pursuant to 37
subdivisions (1) through (4) of subsection (d) of this section, the Secretary may recover, in 38
addition to any amount due, the costs of the action, including but not limited to reasonable 39
attorney's attorneys' fees and investigation expenses. Any monies received or recovered as 40
reimbursement shall be paid into the appropriate fund or other source from which the 41
expenditures were made. 42
(f) Repealed by Session Laws 2015-241, s. 14.16A(f), effective December 31, 2016. 43
(g) If the Department paid or reimbursed costs that are not authorized to be paid or 44
reimbursed under G.S. 143-215.94B or G.S. 143-215.94D as a result of a misrepresentation by 45
an agent who that acted on behalf of an owner, operator, or landowner, the Department shall first 46
seek reimbursement, pursuant to subdivision (1) of subsection (d) of this section, from the agent 47
of monies paid to or retained by the agent. 48
(h) The Department shall take administrative action to recover costs or bring a civil action 49
pursuant to subdivision (1) of subsection (d) of this section to seek reimbursement of costs in 50
accordance with the time limits set out in this subsection.following time limits: 51 General Assembly Of North Carolina Session 2025
Page 42 House Bill 40-Third Edition
(1) The Department shall take administrative action to recover costs or bring a 1
civil action to seek reimbursement of costs that are not authorized to be paid 2
from the Commercial Fund under subdivision (1), (2), or (3) of 3
G.S. 143-215.94B(d) within five years after payment. 4
(2) The Department shall take administrative action to recover costs or bring a 5
civil action to seek reimbursement of costs other than those described in 6
subdivision (1) of this subsection within three years after payment. 7
(3) Notwithstanding the time limits set out in subdivisions (1) and (2) of this 8
subsection, the Department may take administrative action to recover costs or 9
bring a civil action to seek reimbursement of costs paid as a result of fraud or 10
misrepresentation at any time. 11
(i) An administrative action or civil action that is not commenced within the time allowed 12
by subsection (h) of this section is barred. 13
(j) Except with the consent of the claimant, the Department may shall not withhold 14
payment or reimbursement of costs that are authorized to be paid from the Commercial Fund in 15
order to recover any other costs that are in dispute unless the Department is authorized to 16
withhold payment by a final decision of the Commission pursuant to G.S. 150B-36 in a contested 17
case under Article 3 of Chapter 150B of the General Statutes or by an order or final decision of 18
a court." 19
SECTION 25. G.S. 160D-1311 reads as rewritten: 20
"§ 160D-1311. Community development programs and activities. 21
(a) A local government is authorized to may engage in, to accept federal and State grants 22
and loans for, and to appropriate and expend funds for community development programs and 23
activities. In undertaking community development programs and activities, in addition to other 24
authority granted by law, a local government may engage in the following activities: 25
(1) Programs of assistance and financing of rehabilitation of private buildings 26
principally for the benefit of low- and moderate-income persons, or for the 27
restoration or preservation of older neighborhoods or properties, including 28
direct repair, the making of grants or loans, the subsidization of interest 29
payments on loans, and the guaranty of loans. 30
(2) Programs concerned with employment, economic development, crime 31
prevention, child care, health, drug abuse, education, and welfare needs of 32
persons of low and moderate income. 33
(b) A governing board may exercise directly those powers granted by law to local 34
government redevelopment commissions and those powers granted by law to local government 35
housing authorities and may do so whether or not a redevelopment commission or housing 36
authority is in existence in such the local government. Any governing board desiring to do so 37
may delegate to any redevelopment commission, created under Article 22 of Chapter 160A of 38
the General Statutes, or to any housing authority, created under Article 1 of Chapter 157 of the 39
General Statutes, the responsibility of undertaking or carrying out any specified community 40
development activities. Any governing board may by agreement undertake or carry out for 41
another any specified community development activities. Any governing board may contract 42
with any person, association, or corporation in undertaking any specified community 43
development activities. Any county or city board of health, county board of social services, or 44
county or city board of education may by agreement undertake or carry out for any other 45
governing board any specified community development activities. 46
(c) A local government undertaking community development programs or activities may 47
create one or more advisory committees to advise it and to make recommendations concerning 48
such the programs or activities. 49
(d) A governing board proposing to undertake any loan guaranty or similar program for 50
rehabilitation of private buildings is authorized to may submit to its voters the question whether 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 43
such the program shall be undertaken, such undertaken. The referendum to shall be conducted 1
pursuant to the general and local laws applicable to special elections in such the local 2
government. No State or local taxes shall be appropriated or expended by a county pursuant to 3
this section for any purpose not expressly authorized by G.S. 153A-149, unless the same is first 4
submitted to a vote of the people as therein provided. 5
(e) A government may receive and dispense funds from the Community Development 6
Block Grant (CDBG) Section 108 Loan Guarantee program, Subpart M, 24 C.F.R. § 570.700, et 7
seq., either through application to the North Carolina Department of Commerce or directly from 8
the federal government, in accordance with State and federal laws governing these funds. Any 9
local government that receives these funds directly from the federal government may pledge 10
current and future CDBG funds for use as loan guarantees in accordance with State and federal 11
laws governing these funds. A local government may implement the receipt, dispensing, and 12
pledging of CDBG funds under this subsection by borrowing CDBG funds and lending all or a 13
portion of those funds to a third party in accordance with applicable laws governing the CDBG 14
program. 15
A government that has pledged current or future CDBG funds for use as loan guarantees prior 16
to the enactment of this subsection is authorized to have taken such the action. A pledge of future 17
CDBG funds under this subsection is not a debt or liability of the State or any political 18
subdivision of the State or a pledge of the faith and credit of the State or any political subdivision 19
of the State. The pledging of future CDBG funds under this subsection does not directly, 20
indirectly, or contingently obligate the State or any political subdivision of the State to levy or to 21
pledge any taxes. 22
(f) All program income from Economic Development Grants from the Small Cities 23
Community Development Block Grant Program may be retained by recipient cities and counties 24
in "economically distressed counties," as defined in G.S. 143B-437.01, for the purposes of 25
creating local economic development revolving loan funds. Such The program income derived 26
through the use by cities of Small Cities Community Development Block Grant money includes, 27
but is not limited to, (i) payment of principal and interest on loans made by the county using 28
CDBG funds, (ii) proceeds from the lease or disposition of real property acquired with CDBG 29
funds, and (iii) any late fees associated with loan or lease payments in (i) and (ii) above. The 30
local economic development revolving loan fund set up by the city shall fund only those activities 31
eligible under Title I of the federal Housing and Community Development Act of 1974, as 32
amended (P.L. 93-383), and shall meet at least one of the three national objectives of the Housing 33
and Community Development Act. Any expiration of G.S. 143B-437.01 or G.S. 105-129.3 shall 34
does not affect this subsection as to designations of economically distressed counties made prior 35
to its expiration. 36
(g) No State or local taxes shall be appropriated or expended by a county pursuant to this 37
section for any purpose not expressly authorized by G.S. 153A-149, unless the purpose is first 38
submitted to a vote of the people as provided by that section." 39
SECTION 26. G.S. 168-11 reads as rewritten: 40
"§ 168-11. Reporting by Protection and Advocacy Agency for persons with disabilities. 41
The designated Protection and Advocacy Agency (Agency) for this State shall report to the 42
General Assembly as provided in this section. twice per year on actions the Agency has taken in 43
its efforts to advocate for persons with disabilities. The Agency shall submit its reports to the 44
chairs of the House and Senate Appropriations Committees on Health and Human Services 45
during session and to the Joint Legislative Oversight Committee on Medicaid and the Joint 46
Legislative Oversight Committee on Health and Human Services during the interim. 47
Upon review, the General Assembly is encouraged to examine the activities of the Agency 48
to determine the impact on current and future State budgets. The Agency is encouraged to 49
annually hold six meetings with the public throughout the State to share the Agency's findings in 50
the reports required by this section. Nothing in this section shall be construed as impacting 51 General Assembly Of North Carolina Session 2025
Page 44 House Bill 40-Third Edition
impacts the Agency's ability to perform work within its governing laws. The reports shall be 1
submitted as follows: 2
A report submitted twice a year of actions the Agency has taken in its efforts to advocate for 3
persons with disabilities. The Agency shall submit its reports to the chairs of the House and 4
Senate Appropriations Committees on Health and Human Services during session and to the Joint 5
Legislative Oversight Committee on Medicaid and NC Health Choice and the Joint Legislative 6
Oversight Committee on Health and Human Services during the interim." 7
SECTION 27.(a) Subsection (a) of Section 9A.1 of S.L. 2022-74 is repealed. 8
SECTION 27.(b) G.S. 108A-42.1, as amended by subsection (a) of this section, 9
reads as rewritten: 10
"§ 108A-42.1. State-County Special Assistance Program payment rates. 11
(a) Basic Rate. – The maximum monthly rate for State-County Special Assistance 12
recipients residing in adult care homes or in-home living arrangements without a diagnosis of 13
Alzheimer's disease or dementia shall be one thousand one hundred eighty-two dollars ($1,182) 14
is one thousand two hundred eighty-five dollars ($1,285) per month per resident. This rate shall 15
be adjusted on January 1, 2024, and each January 1 thereafter, using the federally approved Social 16
Security cost-of-living adjustment effective for the applicable year. 17
(b) Enhanced Rate. – The maximum monthly rate for State-County Special Assistance 18
recipients residing in special care units or in-home living arrangements with a diagnosis of 19
Alzheimer's disease or dementia shall be one thousand five hundred fifteen dollars ($1,515) is 20
one thousand six hundred forty-seven dollars ($1,647) per month per resident. This rate shall be 21
adjusted on January 1, 2024, and each January 1 thereafter, using the federally approved Social 22
Security cost-of-living adjustment effective for the applicable year." 23
SECTION 27.(c) This section is retroactively effective January 1, 2023. 24
SECTION 28.(a) Section 9A.3A(a) of S.L. 2021-180 reads as rewritten: 25
"SECTION 9A.3A.(a) It is the intent of the General Assembly to provide greater parity 26
among individuals receiving benefits under the State-County Special Assistance Program 27
authorized under G.S. 108A-40 regardless if they elect to reside in an adult care home, a special 28
care unit, or an in-home living arrangement. To that end, no later than 30 days after the effective 29
date of this subsection, the Department of Health and Human Services, Division of Aging and 30
Adult Services, shall apply to the federal Social Security Administration (SSA) for approval to 31
allow eligible individuals residing in in-home living arrangements to qualify for State-County 32
Special Assistance under the Social Security Optional State Supplement Program in the same 33
manner as individuals residing in adult care homes or special care units. Additionally, no later 34
than 30 days after the effective date of this subsection, the Department of Health and Human 35
Services, Division of Health Benefits, shall submit a State Plan amendment to the Centers for 36
Medicare and Medicaid Services (CMS) for approval to add Medicaid coverage for individuals 37
residing in in-home living arrangements who qualify for State-County Special Assistance under 38
the Social Security Optional State Supplement Program. It is the further intent of the General 39
Assembly to appropriate sufficient funds in future fiscal years to support annual adjustment of 40
the State-County Special Assistance Program payment rates using the federally approved Social 41
Security cost-of-living adjustment. This subsection is effective when it becomes law." 42
SECTION 28.(b) Section 9A.3A(d) of S.L. 2021-180, as amended by Section 43
9A.1(b) of S.L. 2022-74, reads as rewritten: 44
"SECTION 9A.3A.(d) Subsections (b), (c), and (e) of this section become effective on the 45
date the Current Operations Appropriations Act of 2022 becomes law, or 30 days after the date 46
that both the SSA and CMS have approved the applications the date the CMS approves the 47
application submitted by the Department of Health and Human Services pursuant to subsection 48
(a) of this section, whichever is later.section. The Secretary of Health and Human Services 49
reported to the Revisor of Statutes that the CMS approved the application effective January 1, 50
2023. 51 General Assembly Of North Carolina Session 2025
House Bill 40-Third Edition Page 45
The Secretary of the Department of Health and Human Services shall report to the Revisor 1
of Statutes when both the SSA and CMS approvals are obtained and the date of the approval. 2
Subsections (b), (c), and (e) of this section shall not become effective if either the SSA or CMS 3
disapproves the applications submitted by the Department of Health and Human Services 4
pursuant to subsection (a) of this section. If, by June 30, 2023, the Department of Health and 5
Human Services has not received notification of application approval from both the SSA and 6
CMS pursuant to subsection (a) of this section, then subsections (b), (c), and (e) of this section 7
shall expire. This subsection is effective when it becomes law." 8
SECTION 28.(c) Section 9A.1(d) of S.L. 2022-74 reads as rewritten: 9
"SECTION 9A.1.(d) Subsections (a) and (c) of this section become Subsection (c) of this 10
section becomes effective on the date the Current Operations Appropriations Act of 2022 11
becomes law, or 30 days after the date that both the SSA and CMS have approved the applications 12
submitted by the Department of Health and Human Services pursuant to subsection (a) of Section 13
9A.3A of S.L. 2021-180, whichever is later. that subsection (e) of Section 9A.3A of S.L. 14
2021-180 becomes effective. The remainder of this section is effective when it becomes law." 15
SECTION 28.(d) This section is retroactively effective January 1, 2023. 16
SECTION 29. Except as otherwise provided, this act is effective when it becomes 17
law. 18