The NC General Assembly returned to Raleigh this week for its first special session since 2018. Lawmakers approved a bill to create a gas tax holiday in North Carolina through November 30. This week’s policy update provides details about the bill passed during this week’s special session and information about potential legislation that could affect nonprofits when lawmakers finish the year with a more comprehensive post-election legislative session. We remind you about today’s voter registration deadline and that nonprofits should consider submitting public comments on proposed Census changes and advocating on state constitutional amendments. And we include a plug for the Center’s upcoming statewide nonprofit conference in on October 20-21; register today to get your $75 discount!
|
|
|
|
State Legislators Suspend Gas Tax Through November 30
|
The NC General Assembly held a one-day special session on Wednesday to consider legislation to provide relief from high gas prices. Both chambers quickly approved a bill (H.B. 3) that suspends the state’s motor fuel tax – which is currently 41 cents per gallon of gas – through November 30. The House approved the bill by a 111-1 vote, and the Senate passed it unanimously. Governor Josh Stein signed the bill into law this morning, so the gas tax holiday will begin tomorrow. Potentially, reductions in gas prices can create cost savings for nonprofits that pay directly for the cost of fuel for vehicles driven while providing services and for nonprofit staff, volunteers, and clients.
The bill provides that “the cost of motor fuel shall not include the amount of motor fuel tax that would have otherwise been included but for the suspension under this section so that the ultimate price per gallon of motor fuel paid by the consumer reflects the savings due to the suspension of the motor fuel tax under this section” (translation from legalese to English: gas retailers are supposed to reduce the bottom line price of gas by 41 cents through the end of November). However, the bill does not include penalties or an enforcement mechanism for gas retailers that chose to increase their profits by making smaller (or no) reductions to the price of gas to account for the temporary elimination of the 41 cents per gallon motor fuel tax. A Senate amendment to the bill would have given the NC Attorney General the authority to enforce the law to ensure that North Carolinians fuel costs were actually reduced during the gas tax holiday, but the Senate rules did not allow the amendment to be considered. Additionally, fuel retailers do not need to cut prices on gas they have already purchased from wholesalers (on which they have already paid the 41 cents per gallon motor fuel tax). Practically, these limitations in the bill make it difficult to know when or by how much actual gas prices will be lowered in North Carolina.
A few types of nonprofits – volunteer fire departments, volunteer rescue squads, and organizations that contract with local governments to provide transportation services – are eligible for quarterly refunds of the motor fuel taxes that they pay. It is possible that the gas tax holiday may actually increase fuel costs for these nonprofits, since they will not be eligible for refunds of motor fuel taxes during the gas tax holiday (since the tax rate is 0 cents per gallon instead of 41 cents per gallon), but it is possible (or probably likely) that the actual cost of gas will be reduced by less than 41 cents per gallon.
|
|
| |
NC General Assembly Set to Return to Raleigh after the November Election
|
This week’s special session of the NC General Assembly was limited to considering legislation dealing with state gas taxes. However, lawmakers are scheduled to return to Raleigh on November 16-19 and then again from November 30 through December 18 to consider a broader range of bills.
During the post-election legislative session, lawmakers could vote on any of the 14 bills currently in House-Senate conference committees, although some of those bills could be transformed into legislation that is unrelated to the subject matter of the original bills. Legislators also could vote to override Governor Stein’s vetoes of two bills with implications for nonprofits:
|
-
A bill (H.B. 171) seeking to eliminate diversity, equity, and inclusion (DEI) initiatives in state and local government in North Carolina. The bill would prohibit state agencies, local governments, and public schools from promoting, supporting, funding, implementing, or maintaining DEI programs, policies, or initiatives and from applying for, accepting, or using federal funds, grants, or financial assistance that require compliance with DEI policies, initiatives, or mandates. If the bill becomes law, the biggest practical impact for nonprofits will likely be that local governments will no longer be permitted to provide DEI-related grants to nonprofits. Under the bill, state agencies and local governments also would be prohibited from federal grants that support DEI initiatives, but federal agencies are not currently funding DEI because of Trump Administration policies. However, by establishing a state law that prohibits state agencies and local governments from receiving federal grants related to DEI, the bill would continue to prevent state agencies and local governments in North Carolina from receiving federal grants supporting DEI initiatives - including pass-through grants that might have gone to nonprofits – even if a future administration were to revoke President Trump’s anti-DEI Executive Orders and related federal executive actions.
-
A bill (H.B. 437) that would establish a drug-free zone within 100 feet of any facility (including a nonprofit) that receives government funding to provide housing or temporary shelter for people experiencing homelessness. The bill would create a criminal penalty for nonprofits that operate facilities to provide housing or temporary shelter for people who are experiencing homelessness if they intentionally allow the manufacture, sale, or distribution of illegal drugs at their facilities (with a limited exception for small quantities of marijuana). The bill would only apply to nonprofits that provide housing or temporary shelter for people experiencing homelessness and not to organizations that primarily provide other types of services to people experiencing homelessness. If the bill becomes law, affected nonprofits providing housing or temporary shelter for people experiencing homelessness also would be required to post at least one permanent sign at their facilities identifying them as drug-free zones.
|
|
|
|
Election Tip of the Week: Today is Deadline to Register to Vote on Election Day |
With the 2026 election coming up soon, the Center will be offering some concrete (and simple) ways that your nonprofit can provide clear and accurate (and, of course, nonpartisan) information about the election to your staff, volunteers, and community in the coming weeks.
Today’s tip: North Carolina citizens who plan to vote on Election Day (Tuesday, November 3) must be registered to vote at their current address by 5 p.m. today. Unregistered voters and people who have moved within the same county can also register or update their registration during the early voting period (October 15-31). Now is a great time for nonprofits to remind their staff, volunteers, clients, and communities to register to vote!
For more on important election dates and details about the 2026 election in North Carolina, check out You Can Vote’s nonpartisan voter guide. |
|
|
|
Reminder: Submit Public Comments on Proposed U.S. Census Changes by November 2
|
Last month, the U.S. Census Bureau published a proposed rule on the Federal Register that would make three fundamental changes to the 2030 U.S. Census and future decennial censuses: |
-
It would change the way “usual residence” is determined from where people are living on April 1 to the place where “they have lawfully spent the greatest number of days” between January 3 and April 1, as evidenced by their tax records. This could create challenges and mistakes for many people who receive services from nonprofits, including people experiencing homelessness, people who do not file taxes, and college students.
-
It would change the criteria that are used for counting residents of states for the purpose of the apportionment of U.S. House of Representatives districts among states. Specifically, the proposed rule would exclude many non-citizens from the count in this apportionment, despite language in the U.S. Constitution that provides that the decennial census is an enumeration of “persons” living in each state rather than U.S. citizens living in each state. The Census Bureau’s explanation of the proposed rule strongly hints that the change in residence criteria would require the 2030 U.S. Census to include a question about the citizenship status of U.S. residents.
- It would prohibit the decennial census from including questions about race, ethnicity, and sexual orientation. Every decennial census since 1790 has asked about race and ethnicity of U.S. residents, but the decennial census has never sought information about sexual orientation.
|
The proposed changes to the Census could have significant impacts for North Carolina nonprofits. Among other things, these changes could: |
-
Create significant challenges in getting a complete and accurate count of communities with significant immigrant populations;
- Reduce North Carolina’s representation in Congress;
- Jeopardize significant federal funding for North Carolina by reducing the number of people counted; and
- Eliminate important demographic data that many nonprofits use in assessing how and where to provide services.
|
The proposed rule is open for public comments through November 2. The Center encourages all nonprofits to submit public comments explaining the potential impact of the proposal on their nonprofits and their communities. Two resources that can help nonprofits prepare public comments are: |
- The NC Counts toolkit on the proposed Census rule, including more details about the proposal and its impact on North Carolina and tips on submitting public comments; and
-
The National Council of Nonprofits public comments guide.
|
|
|
|
Learn About Impact of Three Constitutional Amendments on 2026 Ballot in North Carolina |
This fall’s ballot will include three state constitutional amendments with implications for nonprofits and the people they serve. The three amendments would: |
-
Require all voters to provide photo ID when voting;
- Cap the state income tax rate at 3.5%; and
- Limit the ability of local governments to set property tax rates in the future.
|
The Center encourages nonprofits to understand these amendments and to communicate to their staff, volunteers, and communities about their potential impacts. Two Center partners have great information and resources on the amendments: |
-
You Can Vote has a one-page educational fact sheet about the three amendments that translates the ballot language into plain English, clearly explaining what the amendments would mean for various North Carolinians (and for the nonprofits that serve them).
-
The NC Budget & Tax Center has several excellent resources explaining the potential (negative) impacts that the tax amendments could have on North Carolina communities.
|
|
|
|
Register Now! Statewide Nonprofit Conference Starts in 11 Days
|
If legal and public policy changes are on your radar, the 2026 Conference for NC Nonprofits has plenty to offer – including a deep dive session on how your organization and the nonprofit sector can adapt to recent legal and public policy developments. Check out the full agenda and join nonprofit peers, funders, and community partners from across the state for two days of insightful learning, fresh perspectives, and meaningful conversations about the challenges and opportunities shaping nonprofit work right now. Register now – the $75 discount expires today.
|
|
|
|
Third Quarter Lobbying Reports are Due by October 21
|
|
|
|
Two Lawsuits Challenge Pocket Rescissions
|
Two weeks ago, President Trump announced that he had issued a “pocket rescission” that cancels about $1 billion in congressionally-approved funding for a variety of federal programs. Much of the rescinded funding is the elimination of grants to nonprofits (which Congress had approved) that are inconsistent with President Trump’s policy priorities. Among the cancelled funding are programs that would provide services to immigrants, grant programs that use race or sex as criteria for providing services, grants related to climate change and gender affirming care. Under federal law, a President typically needs congressional approval within 45 days of issuing a rescission order to cancel funding that has already been approved by Congress. Under a “pocket rescission,” which the U.S. Government Accountability Office and many legal scholars believe is impermissible under the Impoundment Control Act, a President cancels already appropriated funding without congressional approval by issuing a rescission order less than 45 days before the end of the federal fiscal year.
Two lawsuits, one filed by seven state attorneys general in a federal court in California and another filed by housing nonprofits in a federal court in the District of Columbia, are challenging the pocket rescissions. Last year, the U.S. Supreme Court allowed President Trump to move forward without pocket rescissions but did not rule on whether they are legal under the Impoundment Control Act. It is unclear how quickly the courts will rule in the two pending cases and whether any court rulings may be appealed.
|
|
|
|
|
