House Bill 1095 would phase out the use of North Carolina’s development tier designations as a general eligibility or ranking tool for a wide range of state and local programs by July 1, 2028. The bill directs affected agencies and entities to develop their own replacement criteria for the programs they administer, with those criteria required to be objective, based on publicly available or verifiable data where practicable, and tailored to each program’s purpose. The bill also requires the proposed replacement criteria to be reported to the appropriate legislative oversight committees and the Fiscal Research Division, and it states that any new criteria must be enacted by the General Assembly before implementation.
The bill applies to a broad set of agencies and programs, including agriculture, environmental, cultural, technology, health, transportation, revenue, commerce, public education, community colleges, and university programs. It specifically references uses of tier designations in taxes, economic development, grant programs, child care, school capital funding, health workforce assistance, navigation and aquatic weed funding, museum grants, broadband-related rural access programs, and transportation project prioritization. Until replacement criteria are adopted or until July 1, 2028, agencies may continue using the most recently published tier designations. The bill also freezes downward reclassification for certain counties during the 2026 through 2028 calendar years, while still allowing counties to move to a higher tier if annual rankings warrant it.
The bill appropriates $1.1 million in nonrecurring General Fund money to the Office of State Budget and Management for fiscal year 2026-2027 to help affected agencies develop substitute criteria. OSBM would distribute the funds at its discretion based on the number, complexity, and funding level of the programs each entity must review. In effect, the bill would shift the state away from a centralized county development tier framework and toward program-specific eligibility standards developed by individual agencies and later approved by the legislature.
Because there are no recorded votes or committee transcripts in the provided materials, the overall sentiment cannot be measured from debate or floor action. Based on the bill’s structure, it appears to be a policy-driven reform aimed at improving precision and program fit, but it also imposes a significant administrative burden on agencies that must redesign multiple eligibility systems. The main point of potential contention is the elimination of a long-standing statewide tier system and the requirement that agencies create new criteria for many programs, which could raise concerns about complexity, consistency, implementation costs, and the loss of a familiar economic development tool.
HB1095 would amend the practical use of North Carolina’s development tier system by requiring state and local entities to stop relying on tier designations for specified programs by July 1, 2028, and by limiting the Department of Commerce’s role in future annual tier changes for 2026-2028. It would not repeal G.S. 143B-437.08 outright, but it would substantially reduce the statute’s operational use across multiple agencies and programs, replacing it with agency-specific criteria that must later be enacted by the General Assembly. The bill also appropriates $1.1 million to OSBM to support the transition and affects agencies involved in taxation, economic development, education, health, transportation, and other state programs.
No committee discussion or votes were provided, so there is no direct evidence of support or opposition from the legislative record included here. The bill’s text suggests a reform-oriented approach that may appeal to lawmakers seeking more targeted and data-driven program eligibility rules, while also signaling caution by preserving the current tier designations temporarily and requiring legislative approval of replacement criteria. Overall, the measure appears technically and administratively significant rather than overtly partisan in the materials provided.
The likely points of contention are the elimination of the development tier system as a common statewide benchmark, the administrative work required of multiple agencies to design replacement criteria, and the possibility that different programs could end up using different standards instead of one uniform system. Supporters would likely emphasize better alignment between program goals and eligibility rules, while critics may worry about fragmentation, implementation costs, and uncertainty for counties and recipients that currently depend on tier-based classifications. The freeze on downward tier changes for 2026-2028 may also be debated as a transitional protection or as an interference with the normal annual ranking process.