Earlier this week, North Carolina Governor Josh Stein signed into law S.B. 445, the Regulatory Reform Act of 2026. It reached his desk after unanimously passing the Senate. While the law covers a wide variety of subjects, it stands out for its landmark reforms to the state’s treatment of judicial oversight of regulatory language, its housing regulations, and its enactment of a voluntary portable benefits law.
Crucially for judicial and regulatory reform advocates, the new law codifies the overturn of judicial deference by mandating de novo review for agency rules and court challenges, (meaning the courts must judge the language on its own merits, not bound by previous interpretations or the agency’s own view). While the North Carolina Supreme Court already struck down judicial deference last October, this legislation further cements the independence of the judiciary, rejecting prior precedents that systematically bias courts against businesses and individuals. Regulatory agencies have repeatedly shown themselves incapable of fairly judging themselves, and law-abiding citizens have the right to fair consideration of their case under the law.
The law includes major housing reforms, legalizing accessory dwelling units and allowing for some residential housing (for converted and/or redeveloped buildings) in commercial areas in larger cities, increasing property rights and the housing supply. The bill also increases vested rights for developers from two years to five years, thereby allowing developers to continue building already approved housing projects regardless of if the zoning laws change while the project is under construction. Additionally, it requires that localities maintain transparent and predictable impact fees, reducing costs and surprises for property owners. Finally, it amends the definition of manufactured housing, removing the permanent chassis requirement for manufactured housing.
With the passage of the Regulatory Reform Act, North Carolina became the 11th state to enact a voluntary portable benefits law. The law will provide self-employed North Carolinians an opportunity to open and directly contribute to pre-tax portable benefits accounts. Approved third party institutions will offer the accounts while business clients can directly contribute compensation to the accounts. While fewer than 10 percent of self-employed workers prefer traditional employment even without this change, the law removes governmental barriers to these workers.
These reforms will go a long way towards restoring affordability and opportunity to North Carolinians.
Molly Powell is a Senior Regulatory Policy Analyst at Americans for Prosperity.
