North CarolinaHB 562025-2026 SessionHouseWALLET

2026 Budget Technical Corrections.

Sponsored By: Donnie Loftis (Republican), Erin Paré (Republican), Steve Tyson (Republican), Jeff Zenger (Republican)

Signed by Governor

APPOINTMENTSAPPROPRIATIONSBOARDSBUDGET & MANAGEMENT OFFICEBUDGETINGCAPITAL SPENDINGCOLLEGES & UNIVERSITIESCOMMERCECOMMISSIONSCONTRACTSCONTROLLED SUBSTANCESCORPORATIONS, FOR-PROFITCOUNCIL OF STATECOUNTIESCOURTSDAY CAREDISASTERS & EMERGENCIESDISEASES & HEALTH DISORDERSECONOMIC DEVELOPMENTEDUCATIONEDUCATION ADMINISTRATIONEDUCATION BOARDSELECTRICITY GENERATION & DISTRIBUTIONELEMENTARY EDUCATIONEMERGENCY MANAGEMENTEMERGENCY MEDICAL SERVICESEMERGENCY SERVICESEMPLOYMENTFUNDINGFUNDS & ACCOUNTSGOVERNORGRANTSHEALTH SERVICESHIGHER EDUCATIONHOSPITALSINFORMATION TECHNOLOGYINFRASTRUCTUREINTERNETJUDGESKINDERGARTENLABOR DEPT

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Bill Overview

Analyzed Economic Effects

27 provisions identified: 15 benefits, 2 costs, 10 mixed.

Medicaid copay relief for some services

Beginning July 1, 2027, Medicaid copays set at the federal maximum do not apply to dialysis services. They also do not apply to Innovations waiver and Traumatic Brain Injury waiver services. These services are exempt from the maximum copays.

13% raises for SBI and ALE

Sworn SBI and ALE officers not paid under subsection (a) on June 30, 2026 receive a 13% salary increase. The raise takes effect July 1, 2026, for the 2026–2027 fiscal year.

K-12 bonuses and textbook fix

School nutrition and custodial staff funded locally or federally get a one-time $1,750 bonus. The law sets $17,020,811 to pay those bonuses. It also provides $13,800,000 for middle school literacy training and $10,000,000 for a K–8 math curriculum project. The recurring cut to the State Textbook Fund is reduced by $836,594, setting the FY 2026–2027 reduction at $59,409,859. DPI must use remaining Helene balances in Budget Code 23510 to make the required Helene transfers. These reinvestments use Opportunity Scholarship savings and apply only if SB 257 becomes law.

New pay rules for principals

The law sets new principal salary schedules for July 1–Dec 31, 2026 and Jan 1–June 30, 2027. Pay placement is based on school size and growth scores. By January 31, 2027, qualifying principals get a supplement equal to half the gap between two schedule amounts. Longevity is built into the salary schedule.

More money for DPS buildings

Project caps rise for two Department of Public Safety projects. DPS23-3 is set at $63,785,000 and DPS23-7 at $84,103,000. For FY 2026–2027, cash flows increase to $30,174,500 for DPS23-3 and $49,265,400 for DPS23-7.

State buys opioid overdose antidotes

The state must seek bids within 90 days to buy intranasal and intramuscular opioid antidotes directly from manufacturers. Vendors must have at least two years of U.S. manufacturing and distribution and meet transparency rules. Contracts last one year and can renew up to three times, with only one contract per product. Purchases use only the funds named in Section 9G.5(a)(3).

UNC can expand exempt jobs

The UNC Board of Governors can set more jobs as exempt from state minimum wage and overtime rules. New exempt categories include legal affairs, health affairs, and institutional development roles. This can reduce overtime pay for affected employees.

Child care rate raise delayed

The raise in child care subsidy rates is moved to October 1, 2026. On that date, rates for rated centers and homes go to the statewide 75th percentile. Counties below the State rate are set to the State’s 75th percentile. The next market study must also show 50th percentile statewide rates.

Electricity tax sharing and reports

Cities receive 44% of net electricity tax each quarter, but that amount is reduced by datacenter-related proceeds and administration costs. Payments to cities must happen within 75 days after each quarter. Buyers of electricity for qualifying datacenters must report the tax paid each quarter within 30 days. These rules apply starting with the first billing period that begins at least 30 days after enactment.

Adds designated state employees to list

Effective October 1, 2026, certain designated State employees are added to a listed category in State personnel law. This applies only if House Bill 1126 and Senate Bill 1041 also become law. The change expands who is covered by that subsection.

Grants for sheriffs and volunteer fire

Grants support local public safety: $200,000 to the Lenoir County Sheriff’s Office, $10,000 to Cabarrus County for Odell Volunteer Fire Department #2, and an extra $100,000 for Craven sheriff vehicles. A grant for the Craven sheriff’s office moves from a nonprofit to the county. A Burke County sheriff vehicles grant is managed by the county. Rutherford County may use its sheriff capital grant for Command Center renovation. Rowan County’s grant is reduced by $10,000 and that money goes to listed volunteer fire departments (not Odell VFD #2). Except for the Burke County allocation, these changes apply only if SB 257 becomes law and FY 2026–2027 OSBM Special Appropriations are available.

New family court judges and appointments

Starting July 1, 2026, the Chief Justice appoints three Complex Family Financial Court Judges, each serving up to eight years, with retirement at age 78. Beginning January 1, 2025, two special superior court judgeships are filled by laws passed by the General Assembly, with one nominee from each chamber leader. Two specific position numbers are now under this legislative appointment process. These changes apply only if SB 257 becomes law.

One-time grants for books, camps, trails

For FY 2026–2027, Book Harvest gets a $1 million grant and Camp Grier gets $2.5 million. Also, $650,000 moves from the Great Trails Fund to OSBM for one-time grants: $100,000 to the Town of Hope Mills, $50,000 to the Richmond County Sheriff’s Department, and $500,000 to Baptist Children’s Homes. These items depend on Special Appropriations funds and Senate Bill 257 becoming law.

Hospital and emergency care grants updated

A rural emergency care grant is redirected from Martin County to ECU Health in the same amount and for the same purpose. Carteret County General Hospital keeps its directed grant for medical facilities. The Blue Ridge Healthcare System grant is retitled “UNC Health Blue Ridge” and remains for infrastructure, equipment, and expansion.

One-time grants to local health providers

Several local health nonprofits receive one-time grants for FY 2026–2027: $500,000 to Charlotte Healthcare Coalition, $200,000 to Care Ring, and $100,000 to Southeastern Healthcare. The North Carolina Sickle Cell Program continues to receive funding as a grant, and Sickle Cell Partners of the Carolinas is named for a directed grant. Iredell Memorial Hospital may use its directed grant for renovations and repairs instead of mental health beds. These items depend on budget funds and Senate Bill 257 becoming law.

Local town and water projects funding

OSBM provides a one-time $500,000 grant to the Town of Yanceyville for capital projects. The State transfers $4.5 million for the Town of Fair Bluff’s riverwalk. New Hanover County may use its allocated water funds for any water or wastewater project, not just Blue Clay Business Park.

Labor can add more safety staff

The Labor Commissioner may use OSHA Division funds to hire or support more staff as needed. This can increase inspections and safety work statewide. This authority applies only if SB 257 becomes law.

JMAC jobs timing rule change

For JMAC agreements, a business must create and keep at least 500 new full-time jobs during the 24 months before entering the agreement and through its term. This replaces the prior phrasing that tied the requirement to the full grant term. This change applies only if Senate Bill 257 becomes law.

Cuts to several nonprofit grants

Several nonprofit and cultural grants are cut: Diaper Bank of North Carolina (-$500,000), Greensboro Science Center (-$500,000), Healthstar Community Care (-$200,000), and a church youth school (-$100,000). One grant is reassigned to a different nonprofit with the same amount and purpose (to Five 14 Revolution, Inc.). These changes apply only if SB 257 becomes law and FY 2026–2027 OSBM Special Appropriations are available.

NCSSM residency rule starts in 2028

The new residency rule for the North Carolina School of Science and Mathematics now starts with applications for the 2028–2029 school year. Families applying before then follow the current residency standard.

Testing rules for scholarship schools

Starting with the 2026–2027 school year, nonpublic schools that take Opportunity Scholarship students must give required annual tests in grades 3 and up. Schools must keep test records for four years and certify compliance each year. At least 4% of schools are checked annually. Test performance data sent to the Authority is not public.

Repeals of parts of SB 257

The law repeals three parts of Senate Bill 257: Sections 12.3(a), 11.13, and 17.12. This removes the rules those sections created. These repeals apply only if SB 257 becomes law.

Shifts in local water and parks money

The law transfers $750,000 to the Town of Warsaw to buy land for wastewater system expansion. It adds $500,000 to Yanceyville water and wastewater (total $1,000,000). It cuts Greensboro water and wastewater by $1,000,000, Pleasant Garden by $250,000, and Yanceyville Municipal Airport by $1,000,000. It allocates a parking-improvement grant directly to the City of King and reduces Lenoir County’s Neuseway Nature Center Campground by $200,000 and Mayodan’s Washington Mills Park by $250,000. The city and county grant changes, except the Warsaw transfer, apply only if SB 257 becomes law and FY 2026–2027 OSBM Special Appropriations are available.

Trail funds shift and expand uses

For FY 2026–2027, the state moves $5,516,000 from the Complete the Trails Fund to the Great Trails Fund. The Burke River Trail Association may also use its grant for trail projects and expansion. The fund shift applies only if SB 257 becomes law.

Health training funds rebalanced

UNC–Chapel Hill gets $2.123 million one-time and $1 million recurring for the Mountain Area Health Education Center. The state also cuts $1 million recurring and $500,000 one-time from Healthcare Workforce Programs Expansion.

Targeted shifts in school grants

The grant to GTCC’s Aviation Center is cut by $2.123 million for FY 2026–2027. A merit scholarship allocation at ECU is moved to the ECU Business School. A Marvin Ridge High School grant shifts from the Academic Booster Club to the Athletic Booster Club. These changes depend on Special Appropriations funds and Senate Bill 257 becoming law.

Hospital sales tax refunds prorated

For the fiscal year starting July 1, 2026, annual hospital sales tax refunds are prorated daily. Refunds for purchases made before the law’s effective date follow prior law. Refunds for purchases made on or after the effective date follow the amended law.

Sponsors & Cosponsors

Cosponsors

Jonathan L. Almond
Republican • House
John M. Blust
Republican • House
Jerry "Alan" Branson
Republican • House
Tricia Ann Cotham
Republican • House
Ben T. Moss, Jr.
Republican • House
Howard Penny, Jr.
Republican • House

Roll Call Votes

All Roll Calls

Yes: 298 • No: 115

House vote • 7/2/2026

HB 56: 2026 Budget Technical Corrections.

Yes: 84 • No: 21 • Other: 10

Senate vote • 7/2/2026

HB 56: 2026 Budget Technical Corrections

Yes: 30 • No: 13 • Other: 7

House vote • 4/21/2026

HB 56: UNC Enrollment.

Yes: 69 • No: 43 • Other: 4

Senate vote • 9/22/2025