HB 740 North Carolina House · 2025-2026 Session

Limit Contractor Liability in State Contracts.

HB 740 limits state contractors' liability for damages arising from contracts to twice the contract value (up to three times if a risk assessment confirms it's necessary). It requires contractors to prove sufficient financial resources - through insurance or other means - to cover this liability before signing contracts. The law excludes liability for intentional misconduct, property damage, or personal injuries and mandates annual reports on contracts exceeding the standard liability limit. This applies to all new or renewed state contracts after enactment, focusing on financial accountability without altering contractor obligations to third parties.

Bill status died 1 of 4 stages cleared

Introduction

Apr 2025

Committee Review

Floor Vote

Governor

Introduced Apr 2, 2025 Last action Jun 18, 2025

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What changed between versions

Edition 1 → Edition 2 · 7 edits

MODERATE

The bill was significantly revised to remove a separate disaster relief portal initiative and consolidate the legislation into a single contractor liability limit act. The short title was changed to reflect only the contractor liability provisions, and the effective date was moved from July 1, 2025 to October 1, 2025. The core contractor liability provisions were modified to add specific requirements for risk assessments and financial resource reviews before liability limits can be increased.

Scope change

The bill's scope was narrowed by removing the disaster-focused constituent portal provisions entirely. The remaining scope focuses solely on establishing liability limits for state procurement contracts.

SCOPE

All provisions related to creating a disaster-focused constituent engagement portal, including funding of $500,000 and an effective date of July 1, 2025, were removed from the bill.

REQUIREMENT

Added a requirement that the Secretary must complete a risk assessment before bid solicitation to determine if increased liability is necessary to protect the State's best interests.

Added a requirement that the bid solicitation or request for proposals must explicitly indicate that increased liability will be required for the resulting contract.

Added a requirement that the Secretary must reasonably determine the contractor has sufficient financial resources, such as insurance, to satisfy the agreed liability limit before entering into the contract.

ENFORCEMENT

Added authority for the Secretary to impose a fee of up to $250 to review a contractor's financial resources.

TIMELINE

Changed the effective date from July 1, 2025 to October 1, 2025, and removed the separate effective date provision for Part II.

TECHNICAL

Changed the statute section number from § 143-49.2 to § 143-49.3 and removed the separate Part II and Part III structure, consolidating into a single Part with one Section.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Jun 18, 2025

Committee

Re-ref to the Com on Finance, if favorable, Rules, Calendar, and Operations of the House

lower

Jun 17, 2025

Committee

Re-ref Com On Appropriations

lower

Jun 17, 2025

Lower · Passed

Reptd Fav Com Substitute

lower

Apr 3, 2025

Committee

Ref to the Com on State and Local Government, if favorable, Appropriations, if favorable, Finance, if favorable, Rules, Calendar, and Operations of the House

lower

Apr 2, 2025

Introduced

Filed

lower

0 primary · 1 co-sponsor