Zero-Based Budgeting.

SB 126 requires North Carolina state agencies to create zero-based budget plans every eight years on a rotating schedule, starting in 2025. Agencies must justify all activities from a "zero" funding baseline (not building on past budgets), detailing current services, minimum service levels, potential impacts of cuts, and program outcomes. The bill specifically excludes statutory appropriations (legally mandated funds) from these plans. It affects all executive branch agencies, with the Department of Health and Human Services divisions first required to submit plans in 2025. This policy mandates agencies to justify each program's necessity and cost-effectiveness before requesting funding.