North CarolinaSB 4452025-2026 SessionSenateWALLET

Regulatory Reform Act of 2026.

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Bill Overview

Analyzed Economic Effects

47 provisions identified: 29 benefits, 4 costs, 14 mixed.

Stronger protections from fake caller ID

Telemarketers may not send misleading caller‑ID information, starting December 1, 2026. Subscribers can recover $10,000 for each call made in knowing violation of this caller‑ID rule. The law also states your telephone number is your property, subject to your carrier contract. Carriers cannot knowingly give numbers to entities that use them to break these laws.

Much higher fines for littering, water theft

Starting December 1, 2026, littering fines rise sharply: $1,000–$3,000 for small first offenses, $3,000–$5,000 for repeat small offenses, and $5,000–$10,000 for 10–500 pounds plus 50–100 hours of service. Over 500 pounds or commercial/hazardous waste is a felony with $10,000–$15,000 in fines and at least 100 hours of service. Unauthorized connection to water pipes carries at least $10,000 or triple damages, plus attorneys’ fees.

2027 tax rules for portable benefits

Beginning January 1, 2027, you can subtract your portable‑benefit contributions from North Carolina taxable income, to the extent they were in your federal AGI. State withholding does not apply to pay that is deposited into a portable benefit account. If you withdraw money and do not spend it on permitted benefits, you must add that amount back to your North Carolina taxable income. Permitted uses include HSAs, FSAs/HRAs, health insurance, transit/parking, disability or life insurance, traditional IRAs/401(k), and savings, plus reasonable disclosed fees.

Missed deadlines ease home tank cleanup

If you report a discharge from a noncommercial underground storage tank, the Commission must decide the risk and notify you within five years. If it misses that deadline and the discharge is later found to be low‑risk, the Commission cannot require cleanup or further action unless it later issues written findings that the discharge poses an unacceptable or potentially unacceptable risk. The Commission can still require cleanup for intermediate‑ or high‑risk discharges.

ADUs allowed in larger cities

Beginning January 15, 2027, cities with 50,000+ people not on the coast must allow one ADU per single‑family lot. ADUs must be smaller than the main home and between 800 and 1,000 square feet. Towns cannot require conditional zoning, extra parking, or higher permit fees, and they must allow separate long‑term rentals. Historic districts, National Historic Landmarks, and private covenants may still restrict ADUs. Local rules are due by July 1, 2027; if not adopted, ADUs are allowed without limits.

Help rebuilding private roads and bridges

Starting July 1, 2026, the private road and bridge program can use up to 2% of funds for administration and must prioritize projects that restore sole emergency access to lived‑in homes, serve multiple homes, or serve recreation or commercial sites. Funds can pay for engineering, design, construction, nonprofit help, and FEMA no‑rise certification support. NC Emergency Management must create a separate private bridge design standard for residential and farm use and finish it within 60 days. The agency must allow design‑build delivery for private bridges costing $500,000 or less when a highway‑classified NC contractor uses a licensed engineer to seal a site‑specific design. NCEM will also try to renegotiate existing contracts to match the new standard and add faster, standardized procurement for new work.

Portable benefits don’t change contractor status

Contributions by a hiring party to your portable benefit account are not proof that you are an employee. The law does not change the legal test for independent‑contractor status and does not change who can get unemployment insurance.

Faster start for foundation work

Effective August 11, 2026, local governments must issue an at‑risk foundation permit when you have held a pre‑submittal meeting, submitted sealed plans, secured needed approvals, and have an approved erosion‑control plan. They must also issue any needed trade permits for that scope. This lets you start foundation work while other approvals continue.

Limits on local storefront glazing

Local rules cannot force more than 35% glass on a ground‑floor commercial facade. Many non‑storefront uses have a 20% cap. You can choose more glass, but approvals cannot require it. Exceptions include safety codes, floodplain, historic reviews, and airport or military safety. These limits take effect October 1, 2026.

Longer vested rights for development plans

Site‑specific vesting plans now carry a five‑year right, up from two years. Local governments may allow up to eight years when size, phasing, investment, economic cycles, or similar factors justify it.

No bond for some compost sites

Starting December 1, 2026, permitted Small or Large Type 1 or Type 2 compost facilities are exempt from the State’s financial assurance rules. The exemption applies only to those permitted and classified facility types.

Portable benefits for independent contractors

The law creates portable benefit accounts you own and control. You must opt in with a clear written agreement, and you can opt out anytime. Hiring parties can contribute but cannot pick your provider or control the account. Contributions count as compensation. Providers must keep your money separate, carry financial protection, send quarterly statements, and act in your best interest. The Labor Commissioner approves providers and posts a public list.

Faster sewer approvals for communities and builders

Beginning Oct 31, 2026, DEQ and DHHS must count each other’s permits for combined wastewater treatment facilities. They add the permitted capacity from both permits when deciding total and available capacity. The rule applies to sewer extensions, capacity allocations, and moratoria. This helps owners, builders, and towns get sewer connections and approvals faster when a plant operates under both DEQ and DHHS permits.

Sewer permits must credit full capacity

Starting October 31, 2026, DEQ issues sewer‑extension approvals based on a plant’s full combined permitted capacity, including capacity authorized by Health and Human Services. The environmental and public‑health commissions may adopt rules to carry this out, but rules cannot delay or block crediting interagency‑authorized capacity.

Streamlined approvals for large wastewater systems

Beginning October 31, 2026, DEQ and DHHS must coordinate permits for jointly regulated facilities and can credit a combined capacity. Each agency permits only its part and references the other permit. The agencies must sign a memorandum of agreement by October 31, 2026. For subsurface systems at 25,000 gallons per day or more, DEQ has 120 days to finish a compliance review after a complete application; the clock pauses while waiting for your information. If compliant, DEQ sends written confirmation; if not, that final decision can be appealed.

Housing allowed in commercial zones

In cities of 80,000+ within counties of 1,000,000+, redevelopment parcels in commercial, business, or light industrial zones must allow housing by right. Multifamily over four units and mixed‑use are allowed, and cities cannot cap height below 60 feet. This does not apply to never‑developed vacant parcels or sites with unremediated contamination.

Stronger protection for approved projects

If you have a site‑specific vested right, local rules generally cannot change or delay your approved project. Exceptions need your written consent, a hearing showing a serious safety threat (with compensation where required), a hearing on material misrepresentation, or higher‑law limits. The 24‑month discontinuance clock is paused during related appeals, other project litigation, and during declared emergencies that include the property.

No shortcut on capacity or permits

As of October 31, 2026, recognizing combined capacity does not let agencies lower any treatment, water‑quality, design, setback, or operating standard. A system’s capacity counts only if its permit remains valid and the system is in substantial compliance with permit and public‑health requirements. DHHS permits relied on for capacity remain reviewable, and DEQ keeps full power to inspect, require fixes, and change or revoke approvals. DEQ must adopt temporary rules and then permanent rules to carry out these changes.

LPG tags and emergency refill rights

Starting December 1, 2026, any LPG supply tank over 5 gallons in service must be tagged with the supplier’s contact and the owner’s name. When a customer changes suppliers, the new supplier must notify the former one, cap or plug open outlets, leak‑test, and leave equipment compliant. During a qualifying emergency, someone other than your supplier may deliver up to 20% of tank capacity if you have under 20% left, your supplier cannot deliver within three business days, the system is inspected, and the emergency supplier tags and promptly notifies the current supplier in writing. Emergency suppliers are generally immune from civil damages for that help unless they act with willful or wanton negligence or intentional wrongdoing.

LPG safety: higher penalties, warning period

Starting December 1, 2026, it is a Class A1 misdemeanor to disconnect or fill an LPG system without the supplier’s consent. Civil penalties are up to $1,000 for the first violation, $2,000 for the second, and $3,000 for later violations. From December 1, 2026 through December 1, 2027, the Department issues warnings instead of penalties for missing supplier tags or leak tests.

Faster mining permits, stricter bond rules

Beginning October 1, 2026, the Department checks mining permit applications in 10 working days, then has 60 days for technical review; if it does not act after it has all required information, the application is approved. If the Department asks for more, you get up to 180 days to respond (one‑year extensions are possible); miss that and you must refile with a new fee. The Department cannot refuse to take or issue a permit just because other project permits are not in hand, unless other laws require it. You must pay the application fee within 30 days of the Department receiving the application and deposit the required bond within 60 days after the Department mails notice, or the application is denied or not issued. If a required bond lapses and is not replaced within 30 days after notice (or 45 days after a surety’s cancellation notice), the permit is automatically revoked; timber work inside a permit area that follows forestry water‑quality rules is not treated as “mining.”

Energy‑savings contracts add audits and guarantees

Governmental units may use guaranteed energy‑savings contracts only when projected savings cover total contract cost, including construction, financing, maintenance, and training, minus applicable incentives; terms cannot exceed 20 years from installation. Providers must run an investment‑grade audit, post security equal to 100% of guaranteed savings, and pay any annual shortfall after measurement and verification. Before award, units must issue an RFQ with at least 15 days’ public notice and required content; if only one response arrives, they may proceed with a written reason (State units need State Energy Office concurrence). The State Energy Office must review State contracts within 10 business days and confirm compliance before signing. State contracts must include annual independent third‑party M&V, and units cannot be forced to buy maintenance from the installer.

ATV rider‑fit option for some kids

The law lets some children 8 to under 16 operate an ATV under a rider‑fit exception tied to an approved safety course. A certified instructor must write that a standard age‑labeled ATV is not safe and that the proposed ATV is appropriate, and the child must meet fit checks (brake reach, leg angle, grip reach, handlebar control). The child is supervised by the instructor during training and by an adult 18+ after the course, and must wear a helmet and eye protection. The safety certificate for a person under 16 may include the rider‑fit decision and the ATV size/type the instructor approved.

Clearer local development fee quotes

Effective August 11, 2026, towns must post current fee schedules online and update them within 30 days of changes. After a complete permit application, they must give you the schedule and an itemized estimate within 10 business days. If your project changes, they must update the estimate within 10 business days. The final fee cannot exceed the most recent estimate unless the fee schedule was changed by ordinance.

Quicker approvals for home power

Starting July 1, 2027, local governments must accept sealed designs and certified field inspections by licensed architects or engineers for home power systems up to 600 volts. When accepted, the local inspector is released from liability for that certified work. The pre‑service wiring inspection can use this same path. By July 1, 2027, the State posts a standard work certification form.

Right to fly U.S. or NC flag

Covenants cannot stop you from displaying a U.S. or North Carolina flag up to 4 by 6 feet. You must follow federal flag customs. This applies only on property you own, not shared areas or easements.

Simpler hookups for manufactured homes

Effective August 11, 2026, short utility hookups for manufactured homes face fewer rules. Water lines up to 100 feet from the meter and sewer lines 3 or 4 inches up to 10 feet can connect to approved points. You cannot modify septic components or existing lines under this exemption. Work must follow the building code, get required permits, be inspected, and not be covered before approval.

Deployment affidavits: forms and privacy

By October 1, 2026, the Secretary of State provides the forms and systems to file deployment and extended‑deployment affidavits. Information in those affidavits is confidential and public agencies are not required or allowed to disclose it.

No license for shampooing or blow‑dry

People whose duties are only shampooing or blow drying hair are exempt from barber or cosmetology licensing while doing those tasks. They must still follow the State’s sanitary rules.

Stretching‑only services don’t need license

The law defines stretching and says certain massage techniques are not stretching. If a person only provides the defined stretching services, they do not need a massage license. Studios may hire or contract these providers, but they cannot perform other massage or bodywork.

Easier temporary power at trade shows

For permitted international wholesale trade shows, you may attach listed single 3‑prong receptacles or power taps to temporary lights and plug into permanent outlets. You must get a local electrical permit and pass inspection before the show opens.

Filing relief for deployed owners

If over 50% of your company is owned by deployed service members, you get extra time and waived fees. Corporations and LLPs are on time if they file within 90 days after deployment ends. LLCs are on time if they file by April 15 of the year after deployment ends (effective Oct 1, 2026). You must file a sworn affidavit before deployment, and you may file an extended affidavit within 180 days if dates change. The next report is due 90 days after the affidavit’s end date. The State delays dissolution or revocation until 180 days past that date.

Lower fees for fuel storage tanks

Starting October 1, 2026, the annual fee for each commercial petroleum underground storage tank is $420. The late penalty is $5 per day per tank, capped at $420, after 30 days late. Each separate compartment counts as a tank. The law also removes the four‑year automatic fee‑adjustment rule.

Some older local sign rules preserved

If a local on‑premises sign ordinance had a 10‑year (or longer) amortization and its compliance date passed by July 1, 2024, that local rule still applies. State preemption does not wipe out those ordinances in those cases.

New school‑range distance rule in Brunswick

New school buildings in Brunswick County must be at least one mile from any existing sport shooting range. The distance is measured in a straight line from property line to property line.

State okays prefab stormwater systems

The State must approve prefabricated permeable block panel systems as new stormwater technology when approved for use. Design criteria follow the maker’s installation and service rules when consistent with federal rules. A licensed engineer may use them in private traffic‑rated areas if they meet H‑20 loading. DOT‑rated areas are excluded.

New telemarketing rules for businesses

Agents who make sales calls are treated as telephone solicitors, starting December 1, 2026. Telemarketers must keep caller records for 24 months that show each caller’s legal and any fictitious name, address, phone number, and job title.

Portable account providers: disclose and report

Before an account opens or any money is added, providers must give a clear written list of all fees, charges, and penalties. Providers must give 30 days’ written notice before any material fee change. Starting January 1, 2027, providers must also supply the Secretary of Revenue, no more than once a year, account owner names, tax IDs, and contribution and distribution records needed for tax compliance.

Simpler home energy code paths

Until permanent rules are set, spray foam at R‑13 (zones 3–4) or R‑15 (zone 5) can meet wall rules without continuous insulation if the home tests at ACH50 ≤ 3.0. Also, the R406 energy rating path now uses ANSI/RESNET 301‑2022 instead of deleted tables. The Building Code Council must adopt permanent rules matching these updates.

State aligns manufactured‑home rules

Starting October 1, 2026, the State uses the federal definition of “manufactured home” for units built on or after June 15, 1976. Older homes keep prior state definitions where statutes say so. This changes how lenders, insurers, and offices classify, title, and insure these homes.

Water bills by hot‑water meters

Effective August 11, 2026, landlords in mobile home parks sited before 1989 may bill water and sewer by each home’s hot‑water submeter when full metering is impractical. Bills must exclude common areas and leaks, follow AWWA meter guidance, keep 12 months of records, disclose key data, and allow at least 25 days before past‑due.

How judges review agency rules changes

In contested cases, administrative law judges may consider agency expertise on facts but must use de novo review when reading State rules. On court review of final decisions, courts use de novo review for rule interpretation and the whole record standard for other listed issues. These standards apply to affected agencies and to actions pending or filed after the law takes effect.

More approved concealed‑carry training options

The list of approved groups whose training counts for concealed handgun permits now includes the North Carolina Concealed Carry Association and U.S. LawShield. Instructors must file their course description, outline, and proof of certification each year or when changed. These rules apply to permit applications filed on or after October 1, 2026.

Short‑term vendor checks for local hiring

Counties and cities may hire third‑party vendors to run required criminal history checks, following fingerprint and data rules. These contracts must end by December 1, 2026, or when the SBI awards its RFP, whichever is later.

Limits on lawsuits against event venues

A facility that was lawful when built and hosted rural recreational or heritage events within 24 months before a nearby owner’s purchase (or building) is not subject to nuisance or takings suits by that owner. The rule protects event facilities that predate nearby development and limits some remedies for those neighbors.

Temporary residential code update power

The Residential Code Council can adopt temporary rules to update the 2018 and 2024 home codes once it is fully formed. This authority starts when the law takes effect and ends two years after the council is fully constituted. Temporary rules can change statewide building standards.

Teacher‑prep report and old rules repealed

By October 15, 2026, the State Board of Education must recommend an accountability model for educator‑prep programs and any needed law changes. The law also repeals parts of Session Laws 2017‑189 and 2019‑149.

Sponsors & Cosponsors

Sponsor

Steve Jarvis
Republican • Senate

Cosponsors

Amy S. Galey
Republican • Senate
Ralph Hise
Republican • Senate
Tom McInnis
Republican • Senate
Timothy D. Moffitt
Republican • Senate