NC S126

Requires executive branch state agencies to submit zero-based budget plans to the Office of State Budget and Management (OSBM) on a rotating 8-year cycle, beginning with the fiscal year starting July 1, 2025

Defines zero-based budgets as starting from $0 rather than prior appropriation amounts, requiring agencies to justify all funding needed to achieve cost-effective performance over a two-year period

Mandates agency plans include descriptions of each activity with legal justification, adverse impact estimates if discontinued, quantifiable program outcomes, itemized expenditures for minimum and current service levels, and activity rankings

Establishes a staggered schedule with DHHS divisions first in 2025, followed by remaining DHHS divisions and DPI in 2027, then other major departments (Adult Correction, Commerce, Justice, Revenue, etc.) in 2029 and 2031

Excludes statutory appropriations from zero-based budgeting requirements and directs OSBM to provide technical assistance to agencies preparing their plans