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HB 891

An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for Keystone State Apprenticeship Tax Credit; establishing the Keystone State Apprenticeship Tax Credit Program; and imposing duties on the Department of Labor and Industry.

2025-2026 Regular Session Introduced by Danilo Burgos and 9 co-sponsors

HB 891 sets North Carolina state courts as the preferred forum for lawsuits involving the state or its subdivisions, restricting removal to federal court and limiting AG participat

Referred to Labor & Industry
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Bill Summary · HB 891

Summary — HB 891 (2025) — Civil Actions/State Agency and AG Litigation (North Carolina)

Overview / Purpose

HB 891 enacts a “Government Agency Forum Selection Act” that directs where civil lawsuits involving the State of North Carolina or its political subdivisions must be filed and limits the State’s participation in out‑of‑state litigation. The bill aims to (1) make North Carolina state courts the preferred forum for civil disputes involving the State or its subdivisions when state and federal courts have concurrent jurisdiction, (2) restrict removal of state‑filed matters to federal court and consent to removal when the State is a defendant, and (3) constrain the Attorney General’s participation in litigation in other jurisdictions that would seek to invalidate statutes enacted by the General Assembly.

Key provisions

  • Adds a new Article 54 to Chapter 1 of the General Statutes (Government Agency Forum Selection Act), creating:
    • G.S. § 1‑665 — Forum selection rules:
    • If state and federal courts have concurrent jurisdiction, actions brought by the State or a local political subdivision must be filed in North Carolina state court.
    • A State or local subdivision may file in federal court only when the federal forum has exclusive jurisdiction.
    • When the State or a local political subdivision is a defendant, it must not remove, or consent to removal of, the action from State court to federal court.
    • G.S. § 1‑666 — Severability clause for the new Article.
  • Amends G.S. 114‑2.8 (Attorney General litigation limits):
    • Requires the Attorney General, when initiating actions to enforce or defend State law, not to participate in out‑of‑state litigation (as party, amicus, or other participant) in a way that advances arguments seeking to invalidate statutes enacted by the General Assembly.

Explicit exemptions

The forum selection rules in § 1‑665 do not apply to certain matters, including (depending on version language):
- Agents acting under specific statutory authorities (G.S. 1‑72.2 or G.S. 120‑32.6)
- Lawsuits against judicial department employees (including judges)
- Actions against district attorneys
- Lawsuits against law enforcement officers and agencies
- Lawsuits against local governments
- Suits filed by incarcerated persons
- Medicaid‑related litigation
- Employment discrimination claims

(Exemptions vary slightly across editions; the committee substitute lists the above categories.)

Who is affected

  • State of North Carolina and local political subdivisions (cities, counties, boards)
  • North Carolina Attorney General’s Office (limits on multijurisdictional litigation strategy)
  • State and federal courts (jurisdictional and removal practice changes)
  • Plaintiffs and defendants in suits involving the State or subdivisions
  • External multistate coalitions and entities that coordinate litigation with the State

Potential impacts and considerations

  • Litigation strategy: reduces use of federal forums for State‑initiated actions when jurisdiction is concurrent and bars removal/consent to removal by the State when sued in state court.
  • Intergovernmental litigation coordination: could complicate or limit the Attorney General’s participation in multistate or out‑of‑state litigation efforts aimed at challenging laws in other jurisdictions.
  • Legal challenges: the restrictions on removal and on the AG’s extraterritorial advocacy may prompt constitutional or federal‑jurisdiction challenges (e.g., conflict with federal removal statutes, interstate comity, or separation of powers issues).
  • Administrative impact: modifies how the Attorney General and state agencies choose fora and participate in national litigation efforts.

Procedural status / timeline

  • Introduced in the North Carolina General Assembly (First reading mid‑April 2025).
  • Committee substitute reported favorably (Reptd. Fav. Com. Substitute) — committee action recorded 5/6/2025.
  • Effective date: provision states “This act is effective when it becomes law.”
  • Next steps: floor consideration and, if passed by both chambers, signature by the Governor.

This summary reflects the committee‑substitute version that adds Article 54 (G.S. § 1‑665 and § 1‑666) and amends G.S. 114‑2.8.

Compiled from official sources — confirm details with the bill’s official record.

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