Local governments and public authorities in North Carolina should be aware of new reporting requirements in the recently passed state budget bill (Senate Bill 257 / Session Law 2026-41) concerning appropriations and disbursements for economic development.
Under S.L. 2026-41 Section 39.3 (page 525), units must now notify the State Auditor of any disbursement exceeding $25,000 that is made for economic development purposes. The law also limits the use of appropriations for economic development appropriations to purposes expressly authorized by law. These changes are anticipated to be codified as G.S. 159-28(b1) and G.S. 159-13(b)(21) respectively.
As part of these new requirements, the Office of the State Auditor (OSA) will provide forms and instructions for units to use when reporting economic development disbursements exceeding $25,000. OSA will receive these reports and submit them annually to the Local Government Commission (LGC) and to the Joint Legislative Commission on Governmental Operations.
Units are advised to read the section in its entirety and contact OSA with any questions about the new requirements at economicdevelopment@ncauditor.gov.
These changes are effective July 7, 2026, when the state budget bill became law. They apply to local government budgets adopted and disbursements made on or after that date.