This North Carolina legislation restores financial benefits for educators and state employees, effective July 1, 2026. It reinstates salary supplements for teachers and instructional support personnel and restores longevity payments based on years of service, while also preventing the elimination of medical benefits for certain retirees. Furthermore, the bill expands the Teaching Fellows Program by setting new selection criteria for participating institutions and providing forgivable loans to students pursuing teacher licensure. These changes are funded through specific appropriations from the General Fund.
This North Carolina legislation reinstates a state tax credit for individuals who claim the federal Earned Income Tax Credit. Eligible taxpayers would receive a credit equal to five percent of their federal EITC amount, which is refundable if it exceeds their state tax liability. The bill takes effect for tax years beginning in 2026 and includes a sunset provision that repeals the credit for tax years starting on or after January 1, 2029.
House Bill 859 proposes to prohibit counties and cities in North Carolina from establishing or enforcing guaranteed income programs. This directly affects local governments by restricting their ability to implement certain types of financial aid programs for their residents. The bill defines a "guaranteed income program" as one that issues unconditional cash payments to individuals on a regular basis for any purpose. However, it clarifies that programs requiring recipients to seek reemployment, perform work, or attend training are not included in this prohibition. This restriction would apply unless such programs are specifically authorized by other general or local laws.
SB 354 reenacts North Carolina’s Research and Development (R&D) tax credit with updated eligibility rules, primarily affecting small businesses conducting qualified research in the state. To qualify, businesses must meet specific wage standards (e.g., paying at least 90% of county average wages in certain areas), provide health insurance covering 50% of premiums for full-time employees, maintain environmental and safety compliance, and have no overdue tax debts. The credit applies to expenses for research performed in North Carolina, including costs paid to state universities for research. This bill modifies existing rules to tighten eligibility while maintaining the credit for qualifying small businesses through 2040.
SB 239 increases the hourly wage for Direct Support Professionals (DSPs) serving Medicaid beneficiaries under North Carolina's Innovations waiver program by $5 per hour for the 2025-2026 fiscal year and another $5 per hour for 2026-2027. The law requires providers receiving this funding to use at least 90% of the increased payments to raise DSP wages directly, with verification through payroll documentation. The Department of Health and Human Services (DHB) will adjust payments to managed care organizations (LME/MCOs), which must pass the increase to providers and report quarterly on DSP wage changes. This policy directly affects DSPs working with people with intellectual and developmental disabilities (I/DD) and their employers under the waiver program.
Senate Bill 110, titled "North Carolina Work and Save," establishes the North Carolina Small Business Retirement Savings Program. This program aims to help private-sector employees aged 18 and older in North Carolina save for retirement if their employer does not already offer a retirement plan. It enables participating employers to offer a voluntary payroll deduction Individual Retirement Account (IRA) arrangement for their employees. A new North Carolina Small Business Retirement Savings Board would be created to oversee the program and manage its funds through private-sector entities.
HB 391 appropriates $2.178 million for the 2025-2026 fiscal year and $4.542 million for 2026-2027 to hire 50 additional Adult Protective Services (APS) workers statewide. The funds, distributed based on need factors like case volume and senior population, directly support county social services departments overwhelmed by rising elder abuse reports. Counties must use the funds solely for APS worker salaries and benefits, not to replace existing funding. This addresses a critical staffing gap identified by counties, where federal funds are depleted early and reports of elder abuse have increased significantly.
SB 431 protects law enforcement officers (including criminal justice and justice officers) who report excessive force or misconduct by colleagues. It requires officers to report such incidents within 72 hours to a supervisor not involved, and prohibits retaliation like termination or discipline for making a good-faith report. The bill explicitly allows agencies to still discipline officers for misconduct that occurred *before* the report was made. It also allocates $50,000 each to two training commissions for implementing these changes, effective December 2025.
HB 258, the Utility Worker Protection Act, increases penalties for assaulting utility and communications workers by designating such assaults as Class A1 misdemeanors - the highest misdemeanor level - when the worker is visibly identifiable (e.g., wearing company-logoed uniforms) and performing duties. It directly affects workers providing electricity, gas, telecommunications, or internet services, including those employed by public, private, or cooperative entities. The bill adds specific language to North Carolina’s assault statute, requiring prosecutors to apply this enhanced penalty for assaults meeting these criteria, without needing other legal provisions. The law takes effect December 1, 2025, applying to offenses committed on or after that date.
House Bill 272, known as "The Sergeant Mickey Hutchens Act," allows certain law enforcement, probation/parole, and correctional officers in North Carolina to purchase additional retirement service credit. Officers who hold an advanced law enforcement or corrections certificate and have at least five years of membership service can buy up to four years of creditable service. This purchase applies to members of the Teachers' and State Employees' Retirement System or the Local Governmental Employees' Retirement System. To do so, they must pay a lump sum covering the full cost of the increased retirement system liability and an administrative fee, with the option for their employer to contribute to this cost.
