North Carolina 2025-2026 Regular Session

North Carolina House Bill H549 Compare Versions

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Version 2 (New)

Old	New		Differences
1	1		GENERAL ASSEMBLY OF NORTH CAROLINA
2	2		SESSION 2025
3		-	H 2
	3	+	H 1
4	4		HOUSE BILL 549
5		-	~~Committee Substitute Favorable 4/8/25~~
	5	+
6	6
7	7		Short Title: Clarify Powers of State Auditor. (Public)
8		-	Sponsors:
9		-	Referred to:
	8	+	Sponsors: Representatives B. Jones, Setzer, Torbett, and Kidwell (Primary Sponsors).
	9	+	For a complete list of sponsors, refer to the North Carolina General Assembly web site.
	10	+	Referred to: Judiciary 1, if favorable, State and Local Government, if favorable, Rules,
	11	+	Calendar, and Operations of the House
10	12		March 31, 2025
11		-	H549 -v-2
	13	+	H549 -v-1
12	14		A BILL TO BE ENTITLED 1
13	15		AN ACT TO CLARIFY THE POWERS OF THE STATE AUDITOR AND TO MAKE OTHER 2
14	16		CHANGES RELATED TO THE STATE AUDITOR. 3
15	17		The General Assembly of North Carolina enacts: 4
16	18		5
17	19		PART I. CLARIFY POWERS OF STATE AUDITOR 6
18	20		SECTION 1. G.S. 143-64.24 reads as rewritten: 7
19	21		"§ 143-64.24. Applicability of Article. 8
20	22		This Article shall does not apply to the following agencies: 9
21	23		… 10
22	24		(10) The Office of the State Auditor." 11
23	25		SECTION 2. G.S. 143B-1320(b) reads as rewritten: 12
24	26		"(b) Exemptions. – Except as otherwise specifically provided by law, the provisions of 13
25	27		this Chapter do this Article does not apply to the following entities: the General Assembly, the 14
26	28		Judicial Department, and The University of North Carolina and its constituent institutions. 15
27	29		institutions, and the Office of the State Auditor. These entities may elect to participate in the 16
28	30		information technology programs, services, or contracts offered by the Department, including 17
29	31		information technology procurement, in accordance with the statutes, policies, and rules of the 18
30	32		Department. The election must be made in writing, as follows: 19
31	33		(1) For the General Assembly, by the Legislative Services Commission. 20
32	34		(2) For the Judicial Department, by the Chief Justice. 21
33	35		(3) For The University of North Carolina, by the Board of Governors. 22
34	36		(4) For the constituent institutions of The University of North Carolina, by the 23
35	37		respective boards of trustees. 24
36	38		(5) For the Office of the State Auditor, by the State Auditor." 25
37	39		SECTION 3. G.S. 143B-1350 reads as rewritten: 26
38	40		"§ 143B-1350. Procurement of information technology. 27
39	41		(a) The State CIO is responsible for establishing policies and procedures for information 28
40	42		technology procurement for State agencies. 29
41	43		Notwithstanding Except as otherwise provided by subsection (l) of this section, 30
42	44		notwithstanding any other provision of law, the Department shall procure all information 31
43	45		technology goods and services for participating agencies and shall approve information 32
44	46		technology procurements for separate agencies. The State CIO may cancel or suspend any agency 33
45		-	information technology procurement that occurs without State CIO approval. 34
46		-	… 35 General Assembly Of North Carolina Session 2025
47		-	Page 2 House Bill 549-Second Edition
48		-	(l) The Office of the State Auditor is exempt from this Part and may procure information 1
49		-	technology services pursuant to G.S. 147-64.7(b)(1)." 2
50		-	SECTION 4. G.S. 147-64.4 reads as rewritten: 3
51		-	"§ 147-64.4. Definitions. 4
52		-	The following definitions apply in this Article: 5
53		-	… 6
54		-	(3) Federal agency. – Any department, agency, or instrumentality of the federal 7
55		-	government and government, any federally owned or controlled 8
56		-	corporation.corporation, or entity that receives federal funds. 9
57		-	… 10
58		-	(4) State agency. – Any department, political subdivision, institution, board, 11
59		-	commission, committee, division, bureau, officer, official or any other entity 12
60		-	for which the State has oversight responsibility, including but not limited to, 13
61		-	any university, mental or specialty hospital, community college, or clerk of 14
62		-	court. The term also includes any entity that receives State funds." 15
63		-	SECTION 5. G.S. 147-64.6B(b) reads as rewritten: 16
64		-	"(b) The Auditor shall investigate reports of allegations of improper governmental 17
65		-	activities of State agencies and State employees agencies, employees of those agencies, and 18
66		-	individuals who receive public funds within the scope of authority set forth in G.S. 147-64.6, 19
67		-	including misappropriation, mismanagement, or waste of State resources, fraud, violations of 20
68		-	State or federal law, rule or regulation by State agencies or State employees administering State 21
69		-	or federal programs, and substantial and specific danger to the public health and safety. When 22
70		-	the allegation involves issues of substantial and specific danger to the public health and safety, 23
71		-	the Auditor shall notify the appropriate State agency immediately. When the Auditor believes 24
72		-	that an allegation of improper governmental activity is outside the authority set forth in 25
73		-	G.S. 147-64.6, the Auditor shall refer the allegation to the appropriate State agency responsible 26
74		-	for the enforcement or administration of the matter for investigation. When the Auditor believes 27
75		-	that an allegation of improper governmental activity involves matters set forth in subdivisions 28
76		-	(1), (2), or (3) of this subsection, those matters shall be referred as follows: 29
77		-	(1) Allegations of criminal misconduct to either the State Bureau of Investigation 30
78		-	or the District Attorney for the county where the alleged misconduct occurred. 31
79		-	(2) Allegations of violations of Chapter 138A, Chapter 120C and Article 14 of 32
80		-	Chapter 120 of the General Statutes to the State Ethics Commission. 33
81		-	(3) Allegations of violations of Chapter 163 of the General Statutes to the State 34
82		-	Board of Elections." 35
83		-	SECTION 6. G.S. 147-64.7 reads as rewritten: 36
84		-	"§ 147-64.7. Authority. 37
85		-	(a) Access to Persons and Records. – 38
86		-	(1) The Auditor and the Auditor's authorized representatives shall have ready 39
87		-	access to persons and may examine and copy all books, records, reports, 40
88		-	vouchers, correspondence, files, personnel files, investments, and any other 41
89		-	documentation of any State agency. Upon demand of the Auditor, access shall 42
90		-	extend to continuous and unrestricted view of databases, datasets, and digital 43
91		-	records necessary for any purpose within the authority of the Auditor, 44
92		-	including performing audits of any type, assessing government efficiency, risk 45
93		-	assessment, fraud detection, audit planning, and evidence gathering. The 46
94		-	review of State tax returns shall be limited to matters of official business and 47
95		-	the Auditor's report shall not violate the confidentiality provisions of tax laws. 48
96		-	Notwithstanding confidentiality provisions of tax laws, the Auditor may use 49
97		-	and disclose information related to overdue tax debts in support of the 50
98		-	Auditor's statutory mission. 51 General Assembly Of North Carolina Session 2025
99		-	House Bill 549-Second Edition Page 3
100		-	(2) The Auditor and the Auditor's duly authorized representatives shall have such 1
101		-	access to persons, records, papers, reports, vouchers, correspondence, books, 2
102		-	and any other documentation which that is in the possession of any individual, 3
103		-	private corporation, institution, association, board, or other organization 4
104		-	which that pertain to:to either of the following: 5
105		-	a. Amounts received pursuant to a grant or contract from the federal 6
106		-	government, the State, or its political subdivisions. 7
107		-	b. Amounts received, disbursed, or otherwise handled on behalf of the 8
108		-	federal government or the State. In order to determine that payments 9
109		-	to providers of social and medical services are legal and proper, the 10
110		-	providers of such these services will shall give the Auditor, or the 11
111		-	Auditor's authorized representatives, access to the records of recipients 12
112		-	who that receive such these services. 13
113		-	(3) The Auditor shall, has, for the purpose of examination and audit authorized 14
114		-	by this act, have the authority, and will shall be provided ready access, to 15
115		-	examine and inspect all property, equipment, and facilities in the possession 16
116		-	of any State agency or any individual, private corporation, institution, 17
117		-	association, board, or other organization which that were furnished or 18
118		-	otherwise provided through grant, contract, or any other type of funding by 19
119		-	the State of North Carolina, Carolina or the federal government. 20
120		-	(4) All contracts or grants entered into by State agencies or political subdivisions 21
121		-	shall include, as a necessary part, a clause providing access as intended by this 22
122		-	section. 23
123		-	(5) The Auditor and his the Auditor's authorized agents are authorized to 24
124		-	representatives may examine all books and accounts of any individual, firm, 25
125		-	or corporation only insofar as they relate to transactions with any agency of 26
126		-	the State. 27
127		-	(a1) Hearing. – If a person fails or refuses to provide to the Auditor or the Auditor's 28
128		-	authorized representatives the access described in subsection (a) of this section, the Auditor may 29
129		-	commence an action in superior court for a show cause hearing. The person shall appear at the 30
130		-	hearing and show cause why the person failed or refused to comply with subsection (a) of this 31
131		-	section. The court may issue an injunction to the person to comply with subsection (a) of this 32
132		-	section. 33
133		-	…." 34
134		-	35
135		-	PART II. OTHER STATE AUDITOR AMENDMENTS 36
136		-	SECTION 7. G.S. 126-5 reads as rewritten: 37
137		-	"§ 126-5. Employees subject to Chapter; exemptions. 38
138		-	… 39
139		-	(c1) Except as to Articles 6 and 7 of this Chapter, this Chapter does not apply to any of the 40
140		-	following: 41
141		-	… 42
142		-	(41) Officers and employees of the Office of the State Auditor. 43
	47	+	information technology procurement that occurs without State CIO approval. 34 General Assembly Of North Carolina Session 2025
	48	+	Page 2 House Bill 549-First Edition
	49	+	… 1
	50	+	(l) The Office of the State Auditor is exempt from this Part and may procure information 2
	51	+	technology services pursuant to G.S. 147-64.7(b)(1)." 3
	52	+	SECTION 4. G.S. 147-64.4 reads as rewritten: 4
	53	+	"§ 147-64.4. Definitions. 5
	54	+	The following definitions apply in this Article: 6
	55	+	… 7
	56	+	(3) Federal agency. – Any department, agency, or instrumentality of the federal 8
	57	+	government and government, any federally owned or controlled 9
	58	+	corporation.corporation, or entity that receives federal funds. 10
	59	+	… 11
	60	+	(4) State agency. – Any department, political subdivision, institution, board, 12
	61	+	commission, committee, division, bureau, officer, official or any other entity 13
	62	+	for which the State has oversight responsibility, including but not limited to, 14
	63	+	any university, mental or specialty hospital, community college, or clerk of 15
	64	+	court. The term also includes any entity that receives State funds." 16
	65	+	SECTION 5. G.S. 147-64.6B(b) reads as rewritten: 17
	66	+	"(b) The Auditor shall investigate reports of allegations of improper governmental 18
	67	+	activities of State agencies and State employees agencies, employees of those agencies, and 19
	68	+	individuals who receive public funds within the scope of authority set forth in G.S. 147-64.6, 20
	69	+	including misappropriation, mismanagement, or waste of State resources, fraud, violations of 21
	70	+	State or federal law, rule or regulation by State agencies or State employees administering State 22
	71	+	or federal programs, and substantial and specific danger to the public health and safety. When 23
	72	+	the allegation involves issues of substantial and specific danger to the public health and safety, 24
	73	+	the Auditor shall notify the appropriate State agency immediately. When the Auditor believes 25
	74	+	that an allegation of improper governmental activity is outside the authority set forth in 26
	75	+	G.S. 147-64.6, the Auditor shall refer the allegation to the appropriate State agency responsible 27
	76	+	for the enforcement or administration of the matter for investigation. When the Auditor believes 28
	77	+	that an allegation of improper governmental activity involves matters set forth in subdivisions 29
	78	+	(1), (2), or (3) of this subsection, those matters shall be referred as follows: 30
	79	+	(1) Allegations of criminal misconduct to either the State Bureau of Investigation 31
	80	+	or the District Attorney for the county where the alleged misconduct occurred. 32
	81	+	(2) Allegations of violations of Chapter 138A, Chapter 120C and Article 14 of 33
	82	+	Chapter 120 of the General Statutes to the State Ethics Commission. 34
	83	+	(3) Allegations of violations of Chapter 163 of the General Statutes to the State 35
	84	+	Board of Elections." 36
	85	+	SECTION 6. G.S. 147-64.7 reads as rewritten: 37
	86	+	"§ 147-64.7. Authority. 38
	87	+	(a) Access to Persons and Records. – 39
	88	+	(1) The Auditor and the Auditor's authorized representatives shall have ready 40
	89	+	access to persons and may examine and copy all books, records, reports, 41
	90	+	vouchers, correspondence, files, personnel files, investments, and any other 42
	91	+	documentation of any State agency. Upon demand of the Auditor, access shall 43
	92	+	extend to continuous and unrestricted view of databases, datasets, and digital 44
	93	+	records necessary for any purpose within the authority of the Auditor, 45
	94	+	including performing audits of any type, assessing government efficiency, risk 46
	95	+	assessment, fraud detection, audit planning, and evidence gathering. The 47
	96	+	review of State tax returns shall be limited to matters of official business and 48
	97	+	the Auditor's report shall not violate the confidentiality provisions of tax laws. 49
	98	+	Notwithstanding confidentiality provisions of tax laws, the Auditor may use 50 General Assembly Of North Carolina Session 2025
	99	+	House Bill 549-First Edition Page 3
	100	+	and disclose information related to overdue tax debts in support of the 1
	101	+	Auditor's statutory mission. 2
	102	+	(2) The Auditor and the Auditor's duly authorized representatives shall have such 3
	103	+	access to persons, records, papers, reports, vouchers, correspondence, books, 4
	104	+	and any other documentation which that is in the possession of any individual, 5
	105	+	private corporation, institution, association, board, or other organization 6
	106	+	which that pertain to:to either of the following: 7
	107	+	a. Amounts received pursuant to a grant or contract from the federal 8
	108	+	government, the State, or its political subdivisions. 9
	109	+	b. Amounts received, disbursed, or otherwise handled on behalf of the 10
	110	+	federal government or the State. In order to determine that payments 11
	111	+	to providers of social and medical services are legal and proper, the 12
	112	+	providers of such these services will shall give the Auditor, or the 13
	113	+	Auditor's authorized representatives, access to the records of recipients 14
	114	+	who that receive such these services. 15
	115	+	(3) The Auditor shall, has, for the purpose of examination and audit authorized 16
	116	+	by this act, have the authority, and will shall be provided ready access, to 17
	117	+	examine and inspect all property, equipment, and facilities in the possession 18
	118	+	of any State agency or any individual, private corporation, institution, 19
	119	+	association, board, or other organization which that were furnished or 20
	120	+	otherwise provided through grant, contract, or any other type of funding by 21
	121	+	the State of North Carolina, Carolina or the federal government. 22
	122	+	(4) All contracts or grants entered into by State agencies or political subdivisions 23
	123	+	shall include, as a necessary part, a clause providing access as intended by this 24
	124	+	section. 25
	125	+	(5) The Auditor and his the Auditor's authorized agents are authorized to 26
	126	+	representatives may examine all books and accounts of any individual, firm, 27
	127	+	or corporation only insofar as they relate to transactions with any agency of 28
	128	+	the State. 29
	129	+	(a1) Hearing. – If a person fails or refuses to provide to the Auditor or the Auditor's 30
	130	+	authorized representatives the access described in subsection (a) of this section, the Auditor may 31
	131	+	commence an action in superior court for a show cause hearing. The person shall appear at the 32
	132	+	hearing and show cause why the person failed or refused to comply with subsection (a) of this 33
	133	+	section. The court may issue an injunction to the person to comply with subsection (a) of this 34
	134	+	section. 35
	135	+	…." 36
	136	+	37
	137	+	PART II. OTHER STATE AUDITOR AMENDMENTS 38
	138	+	SECTION 7. G.S. 126-5 reads as rewritten: 39
	139	+	"§ 126-5. Employees subject to Chapter; exemptions. 40
	140	+	… 41
	141	+	(c1) Except as to Articles 6 and 7 of this Chapter, this Chapter does not apply to any of the 42
	142	+	following: 43
143	143		… 44
144		-	(~~c14~~) ~~Notwithstanding any provision~~ of ~~this Chapter to~~ the ~~contrary, each Council of State~~ 45
145		-	~~agency not exempted under subsection (c1) of this section and the Office of the State Controller~~ 46
146		-	~~has~~ the ~~sole authority to set the salary~~ of ~~its exempt policymaking and exempt managerial~~ 47
147		-	~~positions within the minimum rates,~~ and the ~~maximum rates plus ten percent (10%), established~~ 48
148		-	by the ~~State Human Resources Commission under G.S. 126-4(2).~~ 49
149		-	~~…."~~ 50
150		-	~~SECTION 8.~~ G.S. ~~143B-168.12~~(b) ~~is repealed~~. 51 General Assembly Of North Carolina Session 2025
151		-	Page 4 House Bill 549-~~Second~~ Edition
152		-	~~SECTION 9~~. ~~Section 62(b) of S.L. 2014-115 is repealed.~~ 1
153		-	SECTION 10. G.S. 143B-~~1410~~ is repealed. 2
154		-	SECTION 11. G.S. ~~147-64~~.~~6(c) reads as rewritten:~~ 3
155		-	~~"(c) Responsibilities~~. ~~– The Auditor~~ is ~~responsible for the following acts and activities:~~ 4
156		-	… 5
157		-	(24) ~~If an audit or investigation reveals that money~~ is ~~owed to a State agency by a~~ 6
158		-	~~person pursuant to a contract, transaction, or other arrangement authorized by~~ 7
159		-	~~law, the Auditor shall notify the Department of Revenue so~~ that ~~the~~ owed 8
160		-	~~amount may be collected."~~ 9
161		-	10
162		-	~~PART III~~. ~~EFFECTIVE DATE~~ 11
163		-	~~SECTION 12. Sections 1, 2, and 3 of this act become effective July 1, 2025, and~~ 12
164		-	~~apply to contracts entered into or renewed on or after that~~ date~~. The remainder of this act is~~ 13
165		-	effective when it becomes law. 14
	144	+	(41) Officers and employees of the Office of the State Auditor. 45
	145	+	… 46
	146	+	(c14) Notwithstanding any provision of this Chapter to the contrary, each Council of State 47
	147	+	agency not exempted under subsection (c1) of this section and the Office of the State Controller 48
	148	+	has the sole authority to set the salary of its exempt policymaking and exempt managerial 49
	149	+	positions within the minimum rates, and the maximum rates plus ten percent (10%), established 50
	150	+	by the State Human Resources Commission under G.S. 126-4(2). 51 General Assembly Of North Carolina Session 2025
	151	+	Page 4 House Bill 549-First Edition
	152	+	…." 1
	153	+	SECTION 8. G.S. 143B-168.12(b) is repealed. 2
	154	+	SECTION 9. Section 62(b) of S.L. 2014-115 is repealed. 3
	155	+	SECTION 10. G.S. 143B-1410 is repealed. 4
	156	+	SECTION 11. G.S. 147-64.6(c) reads as rewritten: 5
	157	+	"(c) Responsibilities. – The Auditor is responsible for the following acts and activities: 6
	158	+	… 7
	159	+	(24) If an audit or investigation reveals that money is owed to a State agency by a 8
	160	+	person pursuant to a contract, transaction, or other arrangement authorized by 9
	161	+	law, the Auditor shall notify the Department of Revenue so that the owed 10
	162	+	amount may be collected." 11
	163	+	12
	164	+	PART III. EFFECTIVE DATE 13
	165	+	SECTION 12. This act is effective when it becomes law. 14