North CarolinaHB 10122025-2026 SessionHouseWALLET

Disaster Recovery Act of 2025 - Part II.

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Bill Overview

Analyzed Economic Effects

24 provisions identified: 19 benefits, 2 costs, 3 mixed.

Major water repairs and septic help

DEQ receives $685.6 million in federal disaster funds for water projects: $253.7 million for clean water and $409.4 million for drinking water. Another $22.5 million strengthens septic and decentralized wastewater and can fund household connections to central systems. Starting June 27, 2025, local governments, nonprofit water corporations, CDFIs, and qualifying nonprofits can apply for clean‑water loans or grants and then help homeowners pay for septic repairs. This can lower out‑of‑pocket costs for affected households.

More DOT recovery money and reporting

The state directs $298.2 million to DOT for Helene recovery, including up to $270 million in Credit Balance Funds and $28.2 million reallocated from prior storm funds. DOT must keep Helene recovery money in a separate account and report weekly spending and federal reimbursements until recovery ends. In 2026–2027, DOT also uses a temporary railroad dividend. State‑owned railroads must pay 25% of prior‑year trackage‑rights income into the Highway Fund by February 15 each year. For 2025–2026, DOT pays $2 million each to Blue Ridge Southern Railroad and Great Smoky Mountains Railroad for repairs and sets aside $600,000 for related work; leftover railroad funds revert to the Highway Fund on June 30, 2027.

50% payback for private roads and bridges

NC Emergency Management (NCEM) funds a Private Road and Bridge Repair Program for Hurricane Helene damage. People and HOAs can get 50% of eligible repair costs reimbursed. Applications stay open for six months from the program start. $25 million is reserved first to reimburse completed qualifying projects. NCEM may use up to 0.5% ($1.4 million) for administration.

More help for farms and forestry

$63 million goes to Agriculture. $25 million helps farms cover verifiable farm‑infrastructure losses in the listed counties. $15 million supports streamflow rehab. $15 million strengthens the Forest Service’s wildfire assets and readiness. $8 million supports agricultural manufacturing and processing projects. The department must open applications and may fund past applicants.

Airport emergency repair and upgrade grants

NCEM runs grants to repair hurricane-damaged local airports and add emergency capacity. Applicants must seek insurance and federal aid first. One airport can receive up to $5 million, and a county can get no more than two grants. Airports must meet strict readiness rules (24/7 fuel truck, on‑site mechanics, emergency operations, and no passenger service).

Grants to cut future flood risk

NCEM offers flood‑mitigation grants to local governments and nonprofits. Grants reimburse costs and do not require a local match. Projects can upgrade culverts and drainage, relocate at‑risk assets, and harden critical facilities. No more than 10% goes to one recipient or 20% to one county.

School rebuild funds for Yancey County

About $56.3 million in interest moves to the Department of Public Instruction on June 30, 2025. $25 million goes to Yancey County to rebuild destroyed schools and repair Helene damage that insurance and federal aid do not cover. $31.3 million goes to school Capital Recovery Funds.

Tourism boost and site development funds

$10 million goes to Commerce: $5 million promotes Western NC tourism through Visit NC’s nonprofit partner, and $5 million supports community revitalization staffing. The state also moves $15 million into the Selectsite Fund to prepare sites and public infrastructure for economic development.

No double-dipping and 2030 deadline

Recipients of state disaster money must first seek insurance and federal aid. Colleges and other non‑state groups must also look for private donations. If you later get other funds for the same loss, you must repay the state up to the amount you received. These rules must be written into your grant or contract. Part II disaster funds that are not spent or under contract by June 30, 2030 return to the state reserve.

Emergency rules extended, tighter spending guardrails

The statewide emergency stays in place through October 1, 2025. The Governor gets limited power to reallocate other departmental funds during a declared emergency when listed funds are not enough. The Governor must spend this act’s money in ways that keep people eligible for federal disaster aid and avoid using state money when federal funds will pay. The law also blocks the Governor from shifting the act’s funds under certain budget or reallocation laws. The Governor’s Western NC Recovery Office gets $10 million over two years to coordinate help.

Help for local governments to fix damage

OSBM runs a Local Government Capital Grant Program to fix Helene‑damaged infrastructure denied by FEMA. Grants use a damage‑per‑capita formula, favor places with 300,000 people or less, and cap awards (20% per county, 5% per recipient). Madison County gets $20 million. Canton gets $16 million to keep wastewater running and buy a new regional site. Six private colleges share $4.25 million for repairs, and statewide groups get $6 million to help towns apply. The State Treasurer also offers $51.5 million in short‑term cash‑flow loans. Programs must reduce a unit’s general award by any named allocation to that same unit.

Dam safety grants and landslide mapping

DEQ provides $10 million through a Dam Safety Grant Fund to repair, modify, or remove dams damaged by Helene, with priority for projects that draw FEMA high‑hazard dam funding. Another $3 million maps landslide risks in the affected area. The dam fund does not expire.

Election funds flex for recovery

The State Board of Elections can use remaining funds from earlier allocations to run and staff elections in the affected area. The money can pay for equipment, technology, and other operations. Funds moved elsewhere by this act cannot be used.

Grants for fire departments in mountains

$18 million funds $50,000 grants to eligible fire departments and rescue squads in listed western counties. Money pays for damaged equipment and facilities and wildfire readiness. It cannot fund full‑time staff positions.

Helene counties get grant priority

From June 27, 2025 to June 30, 2026, the state gives priority for parks and water grants to counties HUD marked most impacted by Helene and with 2023 populations of 300,000 or less. This applies to Parks and Recreation Trust Fund projects and State drinking water and wastewater grants. Applicants must attest the request is for Helene repair, replacement, construction, or capacity, and is unmet need after insurance and available federal aid.

Longer timeline for water loans

Beginning June 27, 2025, interest‑free water infrastructure loans come due when a provider gets disaster relief or by June 30, 2035, whichever is first. This replaces the old June 30, 2030 deadline. The delay eases cash flow for providers and can help limit short‑term rate hikes for customers.

More money for the Helene Fund

The state moves $64.75 million into the Helene Recovery Fund in 2025–2026 from listed agencies. This money is now available for recovery programs funded by the act.

One-stop disaster recovery portal

The state spends $3 million to build a one‑stop disaster recovery portal. It will combine FEMA, HUD, and state program information and support case management for residents.

Parks and local recreation repair funds

$12.25 million goes to the Parks and Recreation Trust Fund for work in the affected area. 65% supports state parks and forests, and 35% helps local governments with matching projects. Usual maximum grant size limits do not apply to this money.

State match to restore Lumber River

The state transfers $20 million to Robeson County to meet the match for federal Lumber River restoration after recent storms. Any unspent money returns to the State Capital and Infrastructure Fund for its original use.

Faster demolition of condemned buildings

Starting June 27, 2025, NC State University can demolish up to three condemned buildings leased to Black Mountain Home for Children if Helene caused the damage and the State Construction Office condemned them. The CFO, Chancellor, and Board of Trustees must approve. All permits and laws still apply.

School and college repairs and student aid

The law gives $8,000,000 to the state education agency for competitive school repair grants after Hurricane Helene. Schools qualify only if insurance and federal aid were denied, and each grant is capped at $500,000. It gives $1,000,000 to the North Carolina School for the Deaf in Morganton to fix damaged buildings and infrastructure. It gives $6,000,000 to the UNC Board of Governors—$2,000,000 each to Western Carolina, Appalachian State, UNC Asheville, and the NC Arboretum—for repair and resiliency projects. It also moves $3,637,000 in community college funds: $2,473,971 to colleges with enrollment drops and $1,163,029 to help students pay tuition, fees, and emergency costs.

Cuts to community and GROW NC funds

The law cuts $5,000,000 each year in 2025–2027 from Future Building Reserves for the Division of Community Revitalization. It also cuts $5,000,000 each year in 2025–2027 from Future Building Reserves sent to GROW NC. These cuts lower grant money for community and business projects.

Possible reversal of two funding cuts

If House Bill 125 becomes law, two sections in this act that reduce transfers to the Division of Community Revitalization and G.R.O.W. NC are repealed. If it does not, the cuts remain in effect.

Sponsors & Cosponsors

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Cosponsors

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