North Carolina 2025-2026 Regular Session

North Carolina Senate Bill S659 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		GENERAL ASSEMBLY OF NORTH CAROLINA
2	2		SESSION 2025
3		-	S 1
4		-	SENATE BILL 659
	3	+	S D
	4	+	SENATE BILL DRS35204-MTfap-71C
	5	+
5	6
6	7
7	8		Short Title: Investing in North Carolina Act. (Public)
8	9		Sponsors: Senators Applewhite, Grafstein, and Bradley (Primary Sponsors).
9		-	Referred to: ~~Rules and Operations of the Senate~~
10		-	~~March 26, 2025~~
11		-	~~S659 -v-1~~
	10	+	Referred to:
	11	+
	12	+	DRS35204 -MTfap -71C
12	13		A BILL TO BE ENTITLED 1
13	14		AN ACT TO APPROPRIATE FUNDS TO RAISE SALARIES FOR TEACHERS, STATE 2
14	15		EMPLOYEES, COMMUNITY COLLEGE EMPLOYEES, AND EMPLOYEES OF THE 3
15	16		UNIVERSITY OF NORTH CAROLINA; TO PROVIDE A COST -OF-LIVING INCREASE 4
16	17		FOR RETIREES; TO EXPAND THE WAGE$ PROGRAM STATEWIDE; AND TO 5
17	18		CREATE A TAX CREDIT FOR QUALIFYING EMPLOYERS EQUAL TO THE LESSER 6
18	19		OF FIVE PERCENT OF WAGES PAID TO EMPLOYEES DURING THE TAXABLE 7
19	20		YEAR OR TEN THOUSAND DOLLARS. 8
20	21		The General Assembly of North Carolina enacts: 9
21	22		10
22	23		PART I. RAISE TEACHER SALARIES 11
23	24		SECTION 1.(a) The following monthly teacher salary schedule shall apply for the 12
24	25		2025-2026 fiscal year to licensed personnel of the public schools who are classified as teachers. 13
25	26		The salary schedule is based on years of teaching experience. 14
26	27		2025-2026 Teacher Monthly Salary Schedule 15
27	28		Years of Experience "A" Teachers 16
28	29		0 $4,600 17
29	30		1 $4,685 18
30	31		2 $4,770 19
31	32		3 $4,855 20
32	33		4 $4,940 21
33	34		5 $5,025 22
34	35		6 $5,110 23
35	36		7 $5,195 24
36	37		8 $5,280 25
37	38		9 $5,365 26
38	39		10 $5,450 27
39	40		11 $5,535 28
40	41		12 $5,620 29
41	42		13 $5,705 30
42	43		14 $5,790 31
43	44		15 $5,875 32
44	45		16 $5,950 33
45	46		17-19 $6,070 34
46	47		20-22 $6,135 35
47		-	23-25 $6,200 36 General Assembly Of North Carolina Session 2025
48		-	Page 2 Senate Bill 659-First Edition
	48	+	23-25 $6,200 36
	49	+	FILED SENATE
	50	+	Mar 25, 2025
	51	+	S.B. 659
	52	+	PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
	53	+	Page 2 DRS35204-MTfap-71C
49	54		26-28 $6,295 1
50	55		29+ $6,370 2
51	56		SECTION 1.(b) Salary Supplements for Teachers Paid on This Salary Schedule. – 3
52	57		(1) Licensed teachers who have NBPTS certification shall receive a salary 4
53	58		supplement each month of twelve percent (12%) of their monthly salary on 5
54	59		the "A" salary schedule. 6
55	60		(2) Licensed teachers who are classified as "M" teachers shall receive a salary 7
56	61		supplement each month of ten percent (10%) of their monthly salary on the 8
57	62		"A" salary schedule. 9
58	63		(3) Licensed teachers with licensure based on academic preparation at the 10
59	64		six-year degree level shall receive a salary supplement of one hundred 11
60	65		twenty-six dollars ($126.00) per month in addition to the supplement provided 12
61	66		to them as "M" teachers. 13
62	67		(4) Licensed teachers with licensure based on academic preparation at the 14
63	68		doctoral degree level shall receive a salary supplement of two hundred 15
64	69		fifty-three dollars ($253.00) per month in addition to the supplement provided 16
65	70		to them as "M" teachers. 17
66	71		(5) Certified school nurses shall receive a salary supplement each month of ten 18
67	72		percent (10%) of their monthly salary on the "A" salary schedule. 19
68	73		(6) School counselors who are licensed as counselors at the master's degree level 20
69	74		or higher shall receive a salary supplement of one hundred dollars ($100.00) 21
70	75		per month. 22
71	76		SECTION 1.(c) For school psychologists, school speech pathologists who are 23
72	77		licensed as speech pathologists at the master's degree level or higher, and school audiologists 24
73	78		who are licensed as audiologists at the master's degree level or higher, the following shall apply: 25
74	79		(1) The first step of the salary schedule shall be equivalent to the sixth step of the 26
75	80		"A" salary schedule. 27
76	81		(2) These employees shall receive the following salary supplements each month: 28
77	82		a. Ten percent (10%) of their monthly salary, excluding the supplement 29
78	83		provided pursuant to sub-subdivision b. of this subdivision. 30
79	84		b. Five hundred dollars ($500.00). 31
80	85		(3) These employees are eligible to receive salary supplements equivalent to those 32
81	86		of teachers for academic preparation at the six-year degree level or the 33
82	87		doctoral degree level. 34
83	88		(4) The twenty-sixth step of the salary schedule shall be seven and one-half 35
84	89		percent (7.5%) higher than the salary received by these same employees on 36
85	90		the twenty-fifth step of the salary schedule. 37
86	91		SECTION 1.(d) Beginning with the 2014-2015 fiscal year, in lieu of providing 38
87	92		annual longevity payments to teachers paid on the teacher salary schedule, the amounts of those 39
88	93		longevity payments are included in the monthly amounts under the teacher salary schedule. 40
89	94		SECTION 1.(e) A teacher compensated in accordance with this salary schedule for 41
90	95		the 2025-2026 school year shall receive an amount equal to the greater of the following: 42
91	96		(1) The applicable amount on the salary schedule for the applicable school year. 43
92	97		(2) For teachers who were eligible for longevity for the 2013-2014 school year, 44
93	98		the sum of the following: 45
94	99		a. The salary the teacher received in the 2013-2014 school year pursuant 46
95	100		to Section 35.11 of S.L. 2013-360. 47
96	101		b. The longevity that the teacher would have received under the longevity 48
97	102		system in effect for the 2013-2014 school year provided in Section 49
98	103		35.11 of S.L. 2013-360 based on the teacher's current years of service. 50
99	104		c. The annual bonus provided in Section 9.1(e) of S.L. 2014-100. 51 General Assembly Of North Carolina Session 2025
100		-	~~Senate Bill 659-First Edition~~ Page 3
	105	+	DRS35204-MTfap-71C Page 3
101	106		(3) For teachers who were not eligible for longevity for the 2013-2014 school 1
102	107		year, the sum of the salary and annual bonus the teacher received in the 2
103	108		2014-2015 school year pursuant to Section 9.1 of S.L. 2014-100. 3
104	109		SECTION 1.(f) As used in this section, the term "teacher" shall also include 4
105	110		instructional support personnel. 5
106	111		SECTION 1.(g) There is appropriated from the General Fund to the Department of 6
107	112		Public Instruction for the 2025-2026 fiscal year the sum of eight hundred seventy-two million 7
108	113		six hundred forty-two thousand three hundred thirty-six dollars ($872,642,336) in recurring funds 8
109	114		to implement the teacher raises provided in this section. 9
110	115		10
111	116		PART II. PAY RAISES FOR STATE EMPLOYEES/COMMUNITY 11
112	117		COLLEGES/UNIVERSITY OF NORTH CAROLINA AND COST -OF-LIVING 12
113	118		INCREASES FOR RETIREES 13
114	119		14
115	120		ELIGIBLE STATE -FUNDED EMPLOYEES AWARDED COST -OF-LIVING 15
116	121		ADJUSTMENT/LEGISLATIVE SALARY INCREASES 16
117	122		SECTION 2.1.(a) Effective July 1, 2025, except as provided by subsection (c) of 17
118	123		this section, a person (i) whose salary is set by this Part, pursuant to the North Carolina Human 18
119	124		Resources Act or as otherwise authorized in this act, and (ii) who is employed in a State-funded 19
120	125		position on June 30, 2025, is awarded a compensation adjustment as follows: 20
121	126		(1) Three percent (3%) effective July 1, 2025. 21
122	127		(2) As otherwise allowed or provided by law. 22
123	128		SECTION 2.1.(a1) Except as provided by subsection (c) of this section, a person (i) 23
124	129		whose salary is set by this Part, pursuant to the North Carolina Human Resources Act or as 24
125	130		otherwise authorized in this act, and (ii) who is employed in a State-funded position on June 30, 25
126	131		2026, is awarded a cost-of-living adjustment as follows: 26
127	132		(1) Three percent (3%) effective July 1, 2026. 27
128	133		(2) As otherwise allowed or provided by law. 28
129	134		SECTION 2.1.(b) For the 2025-2027 fiscal biennium, the following persons are not 29
130	135		eligible to receive the legislative salary increases provided by subsections (a) and (a1) of this 30
131	136		section: 31
132	137		(1) Employees of local boards of education. 32
133	138		(2) Local community college employees. 33
134	139		(3) Employees of The University of North Carolina. 34
135	140		(4) Clerks of superior court compensated under G.S. 7A-101. 35
136	141		(5) Officers and employees of the Department of Adult Correction to which 36
137	142		Section 2.7 or 2.8 of this Part applies. 37
138	143		(6) State law enforcement officers to which Section 2.9 of this Part applies. 38
139	144		(7) Employees of the State Highway Patrol to which Section 2.9A of this Part 39
140	145		applies. 40
141	146		(8) Employees of schools operated by the Department of Health and Human 41
142	147		Services, the Department of Public Safety, the Department of Adult 42
143	148		Correction, and the State Board of Education who are paid based on the 43
144	149		Teacher Salary Schedule. 44
145	150		SECTION 2.1.(c) Permanent part-time employees shall receive the increase 45
146	151		authorized by this section on a prorated and equitable basis. 46
147	152		SECTION 2.1.(d) No eligible State-funded employee shall be prohibited from 47
148	153		receiving the full salary increase provided in this section solely because the employee's salary 48
149	154		after applying the legislative increase is above the maximum of the salary range prescribed by 49
150	155		the State Human Resources Commission. 50
151	156		51 General Assembly Of North Carolina Session 2025
152		-	Page 4 ~~Senate Bill 659-First Edition~~
	157	+	Page 4 DRS35204-MTfap-71C
153	158		RECEIPT-SUPPORTED COST -OF-LIVING ADJUSTMENT RESERVE 1
154	159		SECTION 2.2. State Agencies are authorized to use the funding allotted to them 2
155	160		from the Receipt-Supported Cost-of-Living Adjustment Reserve to fundshift a limited number 3
156	161		of receipt-supported positions in the General Fund to net appropriation funding. 4
157	162		5
158	163		RETENTION PAY FOR STATE EMPLOYEES 6
159	164		SECTION 2.3.(a) All references to "longevity" pay in Chapter 126 of the General 7
160	165		Statutes shall be replaced with "retention" pay. 8
161	166		SECTION 2.3.(b) The amount of retention pay provided to employees who are 9
162	167		full-time or over half-time and have a permanent, time-limited, or probationary appointment and 10
163	168		who are in pay status for one-half of the regularly scheduled workdays and holidays in a pay 11
164	169		period shall be increased to the following amounts: 12
165	170		Years of Total Service Retention Pay Percentage 13
166	171		2 but less than 5 years 1.0% 14
167	172		5 but less than 10 years 1.5% 15
168	173		10 but less than 15 years 2.0% 16
169	174		15 but less than 20 years 2.5% 17
170	175		20 but less than 25 years 3.5% 18
171	176		25 or more years 4.5% 19
172	177		20
173	178		RETENTION BONUS AWARDED FOR FISCAL YEAR 21
174	179		SECTION 2.4.(a) Any person (i) whose salary is set by Section 1 of this act or this 22
175	180		Part, pursuant to the North Carolina Human Resources Act, or as otherwise authorized in this act 23
176	181		and (ii) who is continuously employed by the State or a public school unit from July 1, 2025, to 24
177	182		October 31, 2025, shall be awarded a retention bonus for the 2025-2026 fiscal year in the amount 25
178	183		of five hundred dollars ($500.00), payable during the month of November 2025. For otherwise 26
179	184		eligible local education employees, eligibility for the bonus shall be measured beginning not on 27
180	185		July 1, 2025, but on the first day when staff report for the 2025-2026 school year. 28
181	186		SECTION 2.4.(b) Any person (i) whose salary is set by Section 1 of this act or this 29
182	187		Part, pursuant to the North Carolina Human Resources Act, or as otherwise authorized in this act 30
183	188		and (ii) who is continuously employed by the State or a public school unit from November 1, 31
184	189		2025, to March 31, 2026, shall be awarded an additional retention bonus for the 2025-2026 fiscal 32
185	190		year in the amount of five hundred dollars ($500.00), payable during the month of April 2026. 33
186	191		SECTION 2.4.(c) Employers of State employees and local education employees 34
187	192		shall provide an additional retention bonus of two hundred fifty dollars ($250.00), payable 35
188	193		during the month of November 2025, to all permanent full-time State employees and local 36
189	194		education employees who are continuously employed by the State or a public school unit from 37
190	195		July 1, 2025, to October 31, 2025, and who earn an annual salary that does not exceed 38
191	196		seventy-five thousand dollars ($75,000). 39
192	197		SECTION 2.4.(d) Employers of State employees and local education employees 40
193	198		shall provide an additional retention bonus of two hundred fifty dollars ($250.00), payable 41
194	199		during the month of April 2026, to all permanent full-time State employees and local education 42
195	200		employees who are employed by the State or a public school unit from November 1, 2025, to 43
196	201		March 31, 2026, and who earn an annual salary that does not exceed seventy-five thousand 44
197	202		dollars ($75,000). 45
198	203		SECTION 2.4.(e) The funds appropriated for retention bonuses in excess of the 46
199	204		amounts required to implement these bonuses shall revert and not be credited to the Pay Plan 47
200	205		Reserve. 48
201	206		SECTION 2.4.(f) Notwithstanding G.S. 135-1(7a), the compensation bonuses 49
202	207		awarded by this section are not compensation under Article 1 of Chapter 135 of the General 50
203	208		Statutes, the Teachers' and State Employees' Retirement System. 51 General Assembly Of North Carolina Session 2025
204		-	~~Senate Bill 659-First Edition~~ Page 5
	209	+	DRS35204-MTfap-71C Page 5
205	210		SECTION 2.4.(g) The compensation bonuses awarded by this section are not part 1
206	211		of annual salary and shall be paid out separately. The compensation bonus shall be awarded to 2
207	212		eligible permanent employees without regard to an employee's placement within the salary range, 3
208	213		including employees at the top of the salary range. The compensation bonus shall be adjusted pro 4
209	214		rata for permanent part-time employees. 5
210	215		6
211	216		COMMUNITY COLLEGES 7
212	217		SECTION 2.5.(a) Community college personnel shall receive the following 8
213	218		cost-of-living adjustments: 9
214	219		(1) Effective July 1, 2025, the State Board of Community Colleges shall provide 10
215	220		community college faculty and non-faculty personnel with an 11
216	221		across-the-board salary increase in the amount of three percent (3%). 12
217	222		(2) Effective July 1, 2026, the State Board of Community Colleges shall provide 13
218	223		community college faculty and non-faculty personnel with an 14
219	224		across-the-board salary increase in the amount of three percent (3%). 15
220	225		SECTION 2.5.(b) The minimum salaries for nine-month, full-time curriculum 16
221	226		community college faculty for the 2025-2027 fiscal biennium are as follows: 17
222	227		Education Level FY 2025-26 FY 2026-27 18
223	228		Vocational Diploma/Certificate or Less $44,414 $45,746 19
224	229		Associate Degree or Equivalent 45,032 46,383 20
225	230		Bachelor's Degree 47,411 49,142 21
226	231		Master's Degree or Education Specialist 50,088 51,591 22
227	232		Doctoral Degree 53,515 55,120 23
228	233		SECTION 2.5.(c) No full-time faculty member shall earn less than the minimum 24
229	234		salary for his or her education level. The pro rata hourly rate of the minimum salary for each 25
230	235		education level shall be used to determine the minimum salary for part-time faculty members. 26
231	236		27
232	237		UNIVERSITY OF NORTH CAROLINA SYSTEM 28
233	238		SECTION 2.6.(a) Effective for the 2025-2027 fiscal biennium, the annual salaries 29
234	239		of The University of North Carolina SHRA employees shall be increased as provided by Section 30
235	240		2.1 of this act. 31
236	241		SECTION 2.6.(b) For the 2025-2027 fiscal biennium, the Board of Governors of 32
237	242		The University of North Carolina may provide EHRA employees a salary increase pursuant to 33
238	243		the policies adopted by the Board. Funds for EHRA compensation increases may be used for any 34
239	244		one or more of the following purposes: (i) merit pay, (ii) across-the-board increases, (iii) 35
240	245		recruitment bonuses, (iv) retention increases, and (v) any other compensation increase pursuant 36
241	246		to those policies. 37
242	247		SECTION 2.6.(c) The Board of Governors of The University of North Carolina shall 38
243	248		make a report on the use of compensation increase and bonus funds to the General Assembly by 39
244	249		no later than March 1 of each year of the biennium. 40
245	250		41
246	251		CORRECTIONAL OFFICER SALARY SCHEDULE 42
247	252		SECTION 2.7.(a) State employees serving as correctional officers in the Department 43
248	253		of Adult Correction shall be compensated at a specific pay rate on the basis of a salary schedule 44
249	254		determined according to the duration of the employee's correctional officer work experience. 45
250	255		SECTION 2.7.(a1) State employees serving in the Department of Adult Correction, 46
251	256		Division of Juvenile Justice and Delinquency Prevention, shall be compensated at a specific pay 47
252	257		rate set on the basis of a salary schedule determined according to the duration of the employee's 48
253	258		work experience, as follows: 49
254	259		(1) Youth Counselor Technicians shall be paid under the Correctional Officer I 50
255	260		salary schedule. 51 General Assembly Of North Carolina Session 2025
256		-	Page 6 ~~Senate Bill 659-First Edition~~
	261	+	Page 6 DRS35204-MTfap-71C
257	262		(2) Youth Services Behavioral Specialists shall be paid under the Correctional 1
258	263		Officer II salary schedule. 2
259	264		(3) Youth Counselors shall be paid under the Correctional Officer III salary 3
260	265		schedule. 4
261	266		SECTION 2.7.(b) The following annual salary schedule applies under this section 5
262	267		for the 2025-2027 fiscal biennium, effective for each year on July 1, 2025, and July 1, 2026, 6
263	268		respectively: 7
264	269		8
265	270		FY 2025-26 FY 2026-27 9
266	271		Experience COI COII COIII COI COII COIII 10
267	272		0 $38,750 $40,025 $42,805 $39,913 $41,226 $44,089 11
268	273		1 $41,461 $42,825 $45,802 $42,705 $44,110 $47,176 12
269	274		2 $43,950 $45,441 $48,551 $45,269 $46,804 $50,008 13
270	275		3 $46,147 $47,665 $50,979 $47,531 $49,095 $52,508 14
271	276		4 $47,992 $49,572 $53,017 $49,432 $51,059 $54,608 15
272	277		5 $49,433 $51,058 $54,608 $50,916 $52,590 $56,246 16
273	278		6+ $50,422 $52,080 $55,700 $51,935 $53,642 $57,371 17
274	279		18
275	280		PROBATION AND PAROLE OFFICER/JUVENILE COURT COUNSELORS – 19
276	281		SALARY SCHEDULE 20
277	282		SECTION 2.8.(a) Probation and parole officers shall be compensated pursuant to 21
278	283		the experience-based salary schedule based on the officer's respective work experience, as 22
279	284		established in subsection (b) of this section. 23
280	285		SECTION 2.8.(a1) State employees serving in the Department of Adult Correction, 24
281	286		Division of Juvenile Justice and Delinquency Prevention, as Juvenile Court Counselors shall be 25
282	287		compensated under the probation and parole officer salary schedule. 26
283	288		SECTION 2.8.(b) The following annual salary schedule applies under subsections 27
284	289		(a) and (a1) of this section for the 2025-2027 fiscal biennium, effective July 1, 2025, and July 1, 28
285	290		2026, for each respective fiscal year: 29
286	291		30
287	292		Years of Experience FY 2025-26 FY 2026-27 31
288	293		0 $46,785 $48,189 32
289	294		1 49,825 51,320 33
290	295		2 53,066 54,658 34
291	296		3 56,514 58,209 35
292	297		4 60,188 61,994 36
293	298		5 64,100 66,023 37
294	299		6+ 68,266 70,314 38
295	300		39
296	301		STATE LAW ENFORCEMENT OFFICER SALARY SCHEDULE 40
297	302		SECTION 2.9.(a) Law enforcement officers of the Alcohol Law Enforcement and 41
298	303		the State Bureau of Investigation compensated pursuant to an experience-based salary schedule 42
299	304		shall be compensated based on the officer's respective work experience pursuant to the salary 43
300	305		schedule in subsection (b) of this section. 44
301	306		SECTION 2.9.(b) The following annual salary schedule applies under subsection 45
302	307		(a) of this section for the 2025-2027 fiscal biennium, effective July 1, 2025, and July 1, 2026, for 46
303	308		each respective fiscal year: 47
304	309		48
305	310		Years of Experience FY 2025-26 FY 2026-27 49
306	311		0 $55,081 $56,733 50
307	312		1 58,663 60,423 51 General Assembly Of North Carolina Session 2025
308		-	~~Senate Bill 659-First Edition~~ Page 7
	313	+	DRS35204-MTfap-71C Page 7
309	314		2 62,476 64,350 1
310	315		3 66,537 68,533 2
311	316		4 70,862 72,988 3
312	317		5 75,468 77,732 4
313	318		6+ 80,374 82,785 5
314	319		6
315	320		STATE HIGHWAY PATROL/SALARY SCHEDULE 7
316	321		SECTION 2.9A.(a) Law enforcement officers of the State Highway Patrol 8
317	322		compensated pursuant to an experience-based salary schedule shall be compensated based on the 9
318	323		officer's respective work experience pursuant to the salary schedule in subsection (b) of this 10
319	324		section. 11
320	325		SECTION 2.9A.(b) The following annual salary schedule applies under subsection 12
321	326		(a) of this section for the 2025-2027 fiscal biennium, effective July 1, 2025, and July 1, 2026, for 13
322	327		each respective fiscal year: 14
323	328		15
324	329		Years of Experience FY 2025-26 FY 2026-27 16
325	330		0 $56,650 $58,350 17
326	331		1 60,332 62,142 18
327	332		2 64,253 66,181 19
328	333		3 68,430 70,483 20
329	334		4 72,878 75,064 21
330	335		5 77,615 79,943 22
331	336		6+ 82,660 85,140 23
332	337		24
333	338		STATE AGENCY TEACHERS 25
334	339		SECTION 2.10.(a) Employees of schools operated by the Department of Health and 26
335	340		Human Services, the Department of Public Safety, the Department of Adult Correction, and the 27
336	341		State Board of Education who are paid on the Teacher Salary Schedule shall be paid as authorized 28
337	342		in this act. 29
338	343		SECTION 2.10.(b) Employees of the School of Science and Mathematics of The 30
339	344		University of North Carolina who are paid pursuant to a salary schedule adopted by the North 31
340	345		Carolina School of Science and Mathematics Board of Trustees shall be paid in accordance with 32
341	346		the schedule adopted by the Board. 33
342	347		34
343	348		ALL STATE -SUPPORTED PERSONNEL/FLEXIBLE ADMINISTRATION OF 35
344	349		COST-OF-LIVING ADJUSTMENTS 36
345	350		SECTION 2.11.(a) The cost-of-living adjustments authorized by this act: 37
346	351		(1) For the 2025-2026 fiscal year, shall be paid effective on July 1, 2025, and do 38
347	352		not apply to persons separated from service due to resignation, dismissal, 39
348	353		reduction in force, death, or retirement or whose last workday is prior to June 40
349	354		30, 2025. 41
350	355		(2) For the 2026-2027 fiscal year, shall be paid effective on July 1, 2026, and do 42
351	356		not apply to persons separated from service due to resignation, dismissal, 43
352	357		reduction in force, death, or retirement or whose last workday is prior to June 44
353	358		30, 2026. 45
354	359		SECTION 2.11.(b) The Director of the Budget is granted flexibility to administer 46
355	360		the compensation increases enacted by this act. 47
356	361		SECTION 2.11.(c) The State employer contribution rates enacted by this act for 48
357	362		retirement and related benefits may be deemed by the Director of the Budget for administrative 49
358	363		purposes to become effective after July 1 of the applicable fiscal year to provide flexibility in the 50
359	364		collection and reconciliation of salary-related contributions as required by law, provided the 51 General Assembly Of North Carolina Session 2025
360		-	Page 8 ~~Senate Bill 659-First Edition~~
	365	+	Page 8 DRS35204-MTfap-71C
361	366		estimated amount contributed to any affected employee benefit trust equals the amount that 1
362	367		would have been contributed to the employee benefit trust if the enacted employer contribution 2
363	368		rates had been effective on July 1 of the applicable fiscal year. 3
364	369		SECTION 2.11.(d) This section applies to all employees paid from State funds, 4
365	370		whether or not subject to or exempt from the North Carolina Human Resources Act, including 5
366	371		employees of public schools, community colleges, and The University of North Carolina. 6
367	372		7
368	373		MOST STATE EMPLOYEES 8
369	374		SECTION 2.12. Unless otherwise expressly provided by this Part, the annual salaries 9
370	375		in effect for the following persons on June 30, 2025, and June 30, 2026, shall be legislatively 10
371	376		increased as provided by Section 2.1 of this act: 11
372	377		(1) Permanent, full-time State officials and persons whose salaries are set in 12
373	378		accordance with the State Human Resources Act. 13
374	379		(2) Permanent, full-time State officials and persons in positions exempt from the 14
375	380		State Human Resources Act. 15
376	381		(3) Permanent, part-time State employees. 16
377	382		(4) Temporary and permanent hourly State employees. 17
378	383		18
379	384		USE OF FUNDS APPROPRIATED FOR COST -OF-LIVING ADJUSTMENT/BENEFIT 19
380	385		INCREASES 20
381	386		SECTION 2.13.(a) The Office of State Budget and Management shall ensure that 21
382	387		the appropriations made in this act for cost-of-living adjustments and employee benefits are used 22
383	388		only for these purposes. 23
384	389		SECTION 2.13.(b) If the Director of the Budget determines that funds appropriated 24
385	390		to a State agency for mandated salary increases and employee benefits exceed the amount 25
386	391		required by that agency for those purposes, the Director may reallocate those funds to other State 26
387	392		agencies that received insufficient funds for required cost-of-living and benefit increases. 27
388	393		SECTION 2.13.(c) Funds appropriated for cost-of-living adjustments and employee 28
389	394		benefit increases may not be used to adjust the budgeted salaries of vacant positions or to provide 29
390	395		salary increases in excess of those required by the General Assembly except to increase the 30
391	396		budgeted salary of any position to the minimum of the position's salary range and to meet 31
392	397		retention pay needs. 32
393	398		SECTION 2.13.(d) Any funds appropriated for cost-of-living adjustment and 33
394	399		employee benefit increases in excess of the amounts required to implement the increases pursuant 34
395	400		to subsection (c) of this section shall be credited to the Pay Plan Reserve. 35
396	401		SECTION 2.13.(e) No later than March 1 of each year of the biennium, the Office 36
397	402		of State Budget and Management shall report to the Fiscal Research Division on the expenditure 37
398	403		of funds for legislatively mandated salary increases and employee benefits. This report shall 38
399	404		include at least the following information for each State agency: 39
400	405		(1) The total amount of funds that the agency received for legislatively mandated 40
401	406		salary increases and employee benefits. 41
402	407		(2) The total amount of funds transferred from the agency to other State agencies 42
403	408		pursuant to subsection (b) of this section. This section of the report shall 43
404	409		identify the amounts transferred to each recipient State agency. 44
405	410		(3) The total amount of funds used by the agency for legislatively mandated salary 45
406	411		increases and employee benefits. 46
407	412		(4) The amount of funds used pursuant to subsection (c) of this section. 47
408	413		48
409	414		MITIGATE BONUS LEAVE 49
410	415		SECTION 2.14. During the 2025-2027 fiscal biennium, State agencies, departments, 50
411	416		institutions, the North Carolina Community College System, and The University of North 51 General Assembly Of North Carolina Session 2025
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413	418		Carolina may offer State employees the opportunity to use or to cash in special bonus leave 1
414	419		benefits that have accrued pursuant to Section 28.3A of S.L. 2002-126, Section 30.12B(a) of S.L. 2
415	420		2003-284, Section 29.14A of S.L. 2005-276, and Section 35.10A of S.L. 2014-100, but only if 3
416	421		all of the following requirements are met: 4
417	422		(1) Employee participation in the program must be voluntary. 5
418	423		(2) Special leave that is liquidated for cash payment to an employee must be 6
419	424		valued at the amount based on the employee's current annual salary rate. 7
420	425		(3) By September 1, 2025, and September 1, 2026, a report on the demographic 8
421	426		information shall be submitted to the respective agency head or employing 9
422	427		agency and to the Fiscal Research Division. 10
423	428		11
424	429		PROVIDE COST-OF-LIVING ADJUSTMENT FOR RETIREES OF THE TEACHERS ' 12
425	430		AND STATE EMPLOYEES ' RETIREMENT SYSTEM, THE CONSOLIDATED 13
426	431		JUDICIAL RETIREMENT SYSTEM, AND THE LEGISLATIVE RETIREMENT 14
427	432		SYSTEM 15
428	433		SECTION 2.15.(a) G.S. 135-5 is amended by adding the following new subsections 16
429	434		to read: 17
430	435		"(aaaa) Effective July 1, 2025, the retirement allowance payable to, or on account of, 18
431	436		beneficiaries whose retirement commenced on or before July 1, 2024, is increased by two percent 19
432	437		(2%) of the allowance payable on June 1, 2024, in accordance with subsection (o) of this section. 20
433	438		Effective July 1, 2025, the retirement allowance payable to, or on account of, beneficiaries whose 21
434	439		retirement commenced after July 1, 2024, but before June 30, 2025, is increased by a prorated 22
435	440		amount of two percent (2%), as determined by the Board of Trustees based upon the number of 23
436	441		months that a retirement allowance was paid between July 1, 2024, and June 30, 2025. 24
437	442		(bbbb) After September 1, 2025, but on or before October 31, 2025, a one time cost of living 25
438	443		supplement payment shall be made to, or on account of, beneficiaries who are living as of 26
439	444		September 1, 2025, and whose retirement commenced on or before September 1, 2025. The 27
440	445		payment shall be two percent (2%) of the beneficiary's annual retirement allowance payable as 28
441	446		of September 1, 2025, and shall not be prorated for date of retirement commencement. If the 29
442	447		beneficiary dies before the payment is made, then the payment shall be payable to the member's 30
443	448		legal representative. No beneficiary shall have a vested right to any future supplemental payments 31
444	449		under this Article. 32
445	450		(cccc) After September 1, 2026, but on or before October 31, 2026, a one time cost of living 33
446	451		supplement payment shall be made to, or on account of, beneficiaries who are living as of 34
447	452		September 1, 2026, and whose retirement commenced on or before September 1, 2026. The 35
448	453		payment shall be one percent (1%) of the beneficiary's annual retirement allowance payable as 36
449	454		of September 1, 2026, and shall not be prorated for date of retirement commencement. If the 37
450	455		beneficiary dies before the payment is made, then the payment shall be payable to the member's 38
451	456		legal representative. No beneficiary shall have a vested right to any future supplemental payments 39
452	457		under this Article." 40
453	458		SECTION 2.15.(b) G.S. 135-65 is amended by adding the following new 41
454	459		subsections to read: 42
455	460		"(ll) Effective July 1, 2025, the retirement allowance payable to, or on account of, 43
456	461		beneficiaries whose retirement commenced on or before July 1, 2024, is increased by two percent 44
457	462		(2%) of the allowance payable on June 1, 2024. Effective July 1, 2025, the retirement allowance 45
458	463		payable to, or on account of, beneficiaries whose retirement commenced after July 1, 2024, but 46
459	464		before June 30, 2025, is increased by a prorated amount of two percent (2%), as determined by 47
460	465		the Board of Trustees based upon the number of months that a retirement allowance was paid 48
461	466		between July 1, 2024, and June 30, 2025. 49
462	467		(mm) After September 1, 2025, but on or before October 31, 2025, a one-time cost-of-living 50
463	468		supplement payment shall be made to, or on account of, beneficiaries who are living as of 51 General Assembly Of North Carolina Session 2025
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465	470		September 1, 2025, and whose retirement commenced on or before September 1, 2025. The 1
466	471		payment shall be two percent (2%) of the beneficiary's annual retirement allowance payable as 2
467	472		of September 1, 2025, and shall not be prorated for date of retirement commencement. If the 3
468	473		beneficiary dies before the payment is made, then the payment shall be payable to the member's 4
469	474		legal representative. No beneficiary shall have a vested right to any future supplemental payments 5
470	475		under this Article. 6
471	476		(nn) After September 1, 2026, but on or before October 31, 2026, a one-time cost-of-living 7
472	477		supplement payment shall be made to, or on account of, beneficiaries who are living as of 8
473	478		September 1, 2026, and whose retirement commenced on or before September 1, 2026. The 9
474	479		payment shall be one percent (1%) of the beneficiary's annual retirement allowance payable as 10
475	480		of September 1, 2026, and shall not be prorated for date of retirement commencement. If the 11
476	481		beneficiary dies before the payment is made, then the payment shall be payable to the member's 12
477	482		legal representative. No beneficiary shall have a vested right to any future supplemental payments 13
478	483		under this Article." 14
479	484		SECTION 2.15.(c) G.S. 120-4.22A is amended by adding the following new 15
480	485		subsections to read: 16
481	486		"(ff) In accordance with subsection (a) of this section, effective July 1, 2025, the retirement 17
482	487		allowance payable to, or on account of, beneficiaries whose retirement commenced on or before 18
483	488		January 1, 2025, is increased by two percent (2%) of the allowance payable on June 1, 2025. 19
484	489		Effective July 1, 2025, the retirement allowance payable to, or on account of, beneficiaries whose 20
485	490		retirement commenced after January 1, 2025, but before June 30, 2025, is increased by a prorated 21
486	491		amount of two percent (2%), as determined by the Board of Trustees based upon the number of 22
487	492		months that a retirement allowance was paid between January 1, 2025, and June 30, 2025. 23
488	493		(gg) In accordance with subsection (a) of this section, after September 1, 2025, but on or 24
489	494		before October 31, 2025, a one-time cost-of-living supplement payment shall be made to, or on 25
490	495		account of, beneficiaries who are living as of September 1, 2025, and whose retirement 26
491	496		commenced on or before September 1, 2025. The payment shall be two percent (2%) of the 27
492	497		beneficiary's annual retirement allowance payable as of September 1, 2025, and shall not be 28
493	498		prorated for date of retirement commencement. If the beneficiary dies before the payment is 29
494	499		made, then the payment shall be payable to the member's legal representative. No beneficiary 30
495	500		shall have a vested right to any future supplemental payments under this Article. 31
496	501		(hh) In accordance with subsection (a) of this section, after September 1, 2026, but on or 32
497	502		before October 31, 2026, a one-time cost-of-living supplement payment shall be made to, or on 33
498	503		account of, beneficiaries who are living as of September 1, 2026, and whose retirement 34
499	504		commenced on or before September 1, 2026. The payment shall be one percent (1%) of the 35
500	505		beneficiary's annual retirement allowance payable as of September 1, 2026, and shall not be 36
501	506		prorated for date of retirement commencement. If the beneficiary dies before the payment is 37
502	507		made, then the payment shall be payable to the member's legal representative. No beneficiary 38
503	508		shall have a vested right to any future supplemental payments under this Article." 39
504	509		40
505	510		APPROPRIATION FOR PAY RAISES FOR STATE EMPLOYEES/COMMUNITY 41
506	511		COLLEGES/UNIVERSITY OF NORTH CAROLINA AND COST -OF-LIVING 42
507	512		INCREASES FOR RETIREES 43
508	513		SECTION 2.16. To fund the pay increases and cost-of-living adjustments awarded 44
509	514		in this Part, all of the following apply: 45
510	515		(1) Effective July 1, 2025, there is appropriated from the General Fund to the 46
511	516		Reserve for Compensation Increases the sum of four hundred eight million 47
512	517		forty thousand dollars ($408,040,000) in recurring funds for the 2025-2026 48
513	518		fiscal year. 49
514	519		(2) Effective July 1, 2025, there is appropriated from the General Fund to the 50
515	520		Reserve for Compensation Increases the sum of five hundred forty-three 51 General Assembly Of North Carolina Session 2025
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517	522		million five hundred eleven thousand dollars ($543,511,000) in nonrecurring 1
518	523		funds for the 2025-2026 fiscal year. 2
519	524		(3) Effective July 1, 2026, there is appropriated from the General Fund to the 3
520	525		Reserve for Compensation Increases the sum of seven hundred one million 4
521	526		one hundred thousand dollars ($701,100,000) in recurring funds for the 5
522	527		2026-2027 fiscal year. 6
523	528		(4) Effective July 1, 2026, there is appropriated from the General Fund to the 7
524	529		Reserve for Compensation Increases the sum of forty million dollars 8
525	530		($40,000,000) in nonrecurring funds for the 2026-2027 fiscal year. 9
526	531		10
527	532		PART III. EXPAND THE WAGE$ PROGRAM STATEWIDE 11
528	533		SECTION 3. There is appropriated from the General Fund to the Department of 12
529	534		Health and Human Services, Division of Child Development and Early Education (Division), the 13
530	535		sum of twenty-two million seven hundred thousand dollars ($22,700,000) in recurring funds for 14
531	536		the 2025-2026 fiscal year and the sum of thirty-six million three hundred thousand dollars 15
532	537		($36,300,000) in recurring funds for the 2026-2027 fiscal year to expand the Child Care WAGE$ 16
533	538		program, which provides salary supplements for early childhood educators. The funds shall be 17
534	539		used to provide education-based supplements to low-wage educators and expand the program to 18
535	540		all 100 counties in this State. The Division shall administer the WAGE$ program in the same 19
536	541		manner as the Infant-Toddler Educator AWARD$ program. 20
537	542		21
538	543		PART IV. SMALL BUSINESS TAX CREDIT 22
539	544		SECTION 4.(a) Article 4A of Subchapter I of Chapter 105 of the General Statutes 23
540	545		is amended by adding a new section to read: 24
541	546		"§ 105-163.6B. Credit to employers for wages paid. 25
542	547		(a) Credit. – A qualifying taxpayer is allowed a credit against the tax imposed by Part 1 26
543	548		or Part 1A of Article 4 of this Chapter, as appropriate, equal to the lesser of (i) ten thousand 27
544	549		dollars ($10,000) or (ii) five percent (5%) of the wages paid by the qualifying taxpayer during 28
545	550		the taxable year. 29
546	551		(b) Credit Refundable. – If the credit allowed by this section exceeds the tax imposed on 30
547	552		the qualifying taxpayer for the taxable year reduced by the sum of all credits allowable, the 31
548	553		Secretary must refund the excess to the qualifying taxpayer. The refundable excess is governed 32
549	554		by the provisions governing a refund of an overpayment by the taxpayer of the tax imposed by 33
550	555		Article 4 of this Chapter. In computing the amount of tax against which multiple credits are 34
551	556		allowed, nonrefundable credits are subtracted before refundable credits. 35
552	557		(c) Substantiation. – To claim a credit allowed by this section, the qualifying taxpayer 36
553	558		must provide any information required by the Secretary. Each qualifying taxpayer claiming a 37
554	559		credit under this section must maintain and make available for inspection by the Secretary any 38
555	560		records the Secretary considers necessary to determine and verify the amount of the credit to 39
556	561		which the qualifying taxpayer is entitled. The burden of proving eligibility for a credit and the 40
557	562		amount of the credit rests upon the qualifying taxpayer, and no credit may be allowed to a 41
558	563		qualifying taxpayer that fails to maintain adequate records or to make them available for 42
559	564		inspection. 43
560	565		(d) Sunset. – This section is repealed effective for taxable years beginning on or after 44
561	566		January 1, 2028." 45
562	567		SECTION 4.(b) G.S. 105-163.1 is amended by adding a new subdivision to read: 46
563	568		"(11c) Qualifying taxpayer. – An employer or payer subject to income tax under 47
564	569		Article 4 of this Chapter that has annual receipts for the most recent previous 48
565	570		tax year of eight million dollars ($8,000,000) or less." 49
566	571		SECTION 4.(c) This section is effective for taxable years beginning on or after 50
567	572		January 1, 2025. 51 General Assembly Of North Carolina Session 2025
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569	574		1
570	575		PART V. EFFECTIVE DATE 2
571	576		SECTION 5. Except as otherwise provided, this act becomes effective July 1, 2025. 3