Part I. 

Section 1. 

Titles the act “The Disaster Recovery Act of 2025-Part II.” Declares act’s intent that its appropriations and allocations are for maximum amounts necessary. Directs that savings must be effected where the total amounts appropriated or allocated are not required to implement the act. Defines affected area as the counties designated before, on, or after the effective date of the act under a major disaster declaration by the President of the United States under the Stafford Act (PL 93-288) as a result of Hurricane Helene. Also defines Helene Fund (the Hurricane Helene Disaster Recovery Fund established in Section 4.1 of SL 2024-51), FEMA, HUD, NCEM (the Division of Emergency Management of the Department of Public Safety-DPS), NCSBE (North Carolina State Board of Elections), and OSBM (Office of State Budget and Management). Specifies that Part II applies to North Carolina counties in the affected area, unless otherwise provided. Sets forth findings concerning the wildfires that burned through Western North Carolina, including the March 26, 2025, gubernatorial state of emergency relating to those fires.  

Part II. 

Subpart II-A. 

Section 2A.1. 

Instructs NCInnovation to transfer $500 million back to the State after consulting with and upon the directions of the State Controller (Controller). Requires the Controller to facilitate the return of those funds and to deposit the money into the Helene Fund, as described. Specifies that the funds will remain unappropriated unless the NCGA approves the funds in the act or in subsequent legislation. Provides for investment of funds in the Reserves by the State Treasurer (Treasurer) in line with GS 147-69.1(d).  

Repeals Article 76A of GS Chapter 143 (establishing NCInnovation) once the transferred funds have been returned to the State. Specifies that if Senate Bill 257, 2025 Regular Session, becomes law and contains a provision repealing Article 76A of GS Chapter 143, then the section is repealed. 

Section 2A.2. 

Directs the Controller to transfer $69.35 million for 2025-26 year and $4.6 million for 2026-27 year from the amounts that were previously appropriated or allocated to the agencies as set forth below:  

1. $45 million to the Department of Environmental Quality (DEQ) to be used in the specified amounts for the Water Infrastructure Emergency Bridge Loan Program, as described. 

2. $12.5 million to the Department of Public Instruction (DPI) previously allocated for lost compensation from school closures as described. 

3. $5 million to the UNC System Office for the repair and renovation of the described facilities.  

4. $2.25 million to the NC State Board of Elections (NCSBE) to conduct the 2024 General Election in the affected area. 

Section 2A.3. 

Appropriates $464.75 million for the 2025-26 year as follows:  

1. $55 million to the Department of Agriculture and Consumer Services (DACS) to be allocated in the specified amounts for the Farm Infrastructure Disaster Recovery Program Streamflow Rehabilitation Assistance Program, and the NC Forestry Service.  

2. $60 million to the Department of Commerce (DOC) for the Helene Business Recovery Grant Program (BRGP), as described in Subpart II-B below.  

3. $10 million to DEQ for the Dam Safety Grant Program, as described.  

4. $3 million to the Department of Information Technology (DIT) to develop the disaster recovery constituent portal as described in Subpart II-H below.  

5. $12.5 million to the Department of Natural and Cultural Resources (DNCR) for damage done to the State Parks System and local parks, libraries, and museums in the specified amounts. 

6. $10 million to the Department of Transportation (DOT), Rail Division for grants to the Blue Ridge Southern Railroad, LLC and Great Smoky Mountains Railroad, LLC in the specified amounts for the purposes described. 

7. $33 million to DPI in the specified amounts for two grant programs for damaged public school infrastructure. 

8. $165 million to NCEM in the specified amounts for a State match for federal program, Private Road and Bridge Repair Program, Aerial Asset Accessibility Grant Program, Disaster Relief and Mitigation Fund, and grants to VOADs.  

9. $10 million to the Housing Finance Agency for repair and preservation of existing rental units in specified areas.  

10. $5 million to the NC Community College System (System) for specified expenses for students that impact their ability to remain enrolled.  

11. $76.25 million to OBSM to be allocated in the amounts specified for the Hurricane Helene Local Government Capital Grant Program, for debris and sedimental removal, for grants to the specified Colleges and Universities to repair damage, and for grants to the NC League of Municipalities and the NC Association of County Commissioners for assistance to local governments.  

12. $18 million to the Office of the State Fire Marshal (OSFM) to distribute $50,000 grants to fire departments and rescue squads for equipment and facilities.  

13. $6 million to the UNC Board of Governors (UNC Board) in the specified amounts to the three described recipients for damaged buildings or infrastructure and for resiliency and hazard mitigation.  

14. $1 million to the NC School for the Deaf for damaged buildings or infrastructure.  

Authorizes NCBSE to use the remaining funds allocated to it under Section 6.1 and 9.1 of SL 2024-51 (Helene Relief Package I) for conducting and staffing elections, including for equipment, technology, and other purposes necessary for operation, in the affected area. 

Section 2A.4. 

Requires any State-owned railroad company that has trackage in more than two counties to issue an annual cash dividend of 25% of the company’s income from the prior year’s trackage rights agreements to the State for each year of the 2025-27 biennium. Provides a due date of February 15 and accrual of interest at the annual rate of prime plus 1% if the payment is not made by then. Provides for immunity for the directors of any State-owned railroad company that vote for or assent to the dividend. Directs for the dividend to be deposited in the Highway Fund to be transferred to the Helene Fund to be used by DOT’s Rail Division to repair rail infrastructure, as described.  

Subpart II-B. 

Section 2B.1. 

Establishes the Hurricane Helene Economic Recovery Grant Program (Program), administered by DOC, to ensure the economic viability of Western North Carolina in the aftermath of Hurricane Helene by providing a one-time grant to qualifying businesses in the affected area that meet the following four requirements: (1) is subject to State income tax, (2) has experienced economic loss of at least $25,000, (3) has been registered to do business in the State and actively engaged as such in the affected area for a minimum of two years preceding its grant application, and (4) has not filed or initiated a bankruptcy proceeding during the five years prior to its application for grant funding.  Directs DOC to prioritize job retention, economic viability, and commercial stability within the affected area when awarding grants under the Program. 

Requires DOC, along with the Department of Revenue (DOR) to verify an applicant’s economic loss. Provides for an application form developed by DOC. Requires funds to be awarded on a first-come, first-served basis. Sets the grant amounts as equal to the lesser of: (1) 25% of the qualifying business’s economic loss or (2) $75,000.  Allows the grants to be used for working capital and normal business expenses consistent with the allowable use of loan proceeds under the Economic Injury Disaster Loan program of the Small Business Administration. Tasks DOC with developing guidelines on grant use. Authorizes DOC to retain up to 1.5% of the allocated funds for administrative expenses. Caps the amount of grants awarded at the amount allocated to the Program under the act. Contains a clawback provision so that if a recipient receiving a Program grant is ineligible for the grant, the recipient forfeits the assistance awarded and that it bears interest at the statutory rate set forth in GS 105-241.21 until repaid. Requires forfeited financial assistance that is not repaid to be recouped through a civil action by the Attorney General at the request of DOC. Conditions Program grants on the recipient maintaining operations for a minimum of one year following receipt of the grant. Directs DOC to clawback a proportionate amount for any portion of the one year the recipient does not maintain operations.  Requires DOC to submit a report to the specified NCGA committee and division every six months on the Program on the matters described, starting May 1, 2026.  

Subpart II-C. 

Section 2C.1 

Establishes the Hurricane Helene Local Government Capital Grant Program (LG Program), administered by OSBM to disburse grants to eligible local government or federally recognized tribe recipients in the affected area for capital projects in the affected area, as follows. Directs that the grants be used for capital projects to repair, renovate, or replace infrastructure damaged by Hurricane Helene. Specifies that the capital projects must be projects that have been denied eligibility for FEMA Public Assistance reimbursement. Instructs OBSM to prioritize grants to an eligible recipient with a population of 300,000 or fewer and that qualify for the specified FEMA Public Assistance Categories. Caps awards at the following percentages from the funds appropriated for the LG Program: (1) 20% to one county, including grants to local governments within that county; (2) 5% per eligible recipient; and (3)5% per zip code if that zip code only qualifies for the specified FEMA Public Assistance Categories. Requires OBSM to submit a report to the specified NCGA committees and divisions every six months on the LG Program on the matters described. 

Subpart II-D. 

Section 2D.1. 

Establishes the Hurricane Helene Flood Mitigation Grant Program (Flood Program) to provide flood mitigation grants to units of local government and nonprofit organizations to undertake flood mitigation projects in the affected area from the funds appropriated in this act to NCEM for the Disaster Relief and Mitigation Fund (DRMF). Allows units of local government to also apply for engineering assistance grants. Limits use of funds from the Flood Program to: (1) four structural or nonstructural measures that reduce the risk of future damage from flooding and (2) for local governments, to identify and design shovel-ready projects related to flood mitigation. Caps grants at either (1) 10% to a single recipient or (2) 20% to a single county of the total funds allocated to the Flood Program. Specifies that grant recipients with be paid under a reimbursement model for costs incurred for eligible flood mitigation or engineering assistance grants. Allows NCEM to retain up to 1.5% of the funds appropriated for administrative expenses. Clarifies that to the extent the Flood Program’s requirements conflict with DRM requirements, the section of the act establishing the Flood Program controls.  

Subpart II-E. 

Section 2E-1. 

Establishes the Farm Infrastructure Disaster Recovery Program (Farm Program) within DACS to repair, rebuild, and restore farm infrastructure damaged by Hurricane Helene.  Defines farm infrastructure as fencing, greenhouses, barns, equipment, and farm roads, or other structures or improvements used for farming purposes. Directs DACS to open an application period of six months within 30 days of the section becoming law to allow persons in the affected area to apply for funds for these purposes. Requires applicants to verify to DACS that the losses were directly caused by Hurricane Helene. Allows DACS to audit the recipient’s financial and other records to ensure that the funds are used according to the Farm Program’s requirements; sets out further regulations governing these audits. Requires DACS to submit a report to the specified NCGA committee every six months on the Farm Program on the matters described, starting six months after the Farm Program opens. Sunsets the Farm Program 30 months after the section becomes effective.  Specifies that any funds allocated to the Farm Program not expended or encumbered by that date revert to the Helene Fund.  

Subpart II-F. 

Section 2F.1 

Establishes the Aerial Asset Accessibility Grant Program (AA Program), administered by NCEM to disburse grants to local airports and airfields in the affected area to (1) repair, replace, and restore the described infrastructure damaged by Hurricane Helene and (2) build and improve capacity for emergency preparedness and disaster response for future natural disasters and emergencies. Requires NCEM to consult with DOT if grant applications concern airport roads or other infrastructure, as necessary. Limits eligibility to persons or units of local government that own an airport that is either currently in operation or was in operation before Hurricane Helene and not currently operating due to damage from the hurricane and that also meet the four listed requirements. Requires grant applicants to pursue insurance and federal aid before applying for a grant. Instructs NCEM to prioritize applicants with facilities that demonstrate adequate runway capacity, storage capacity, and personnel that can substantially contribute to enhanced regional emergency and disaster readiness. These prioritized applicants must also be capable of facilitating access of various forms and sizes of aircraft providing adequate takeoff and landing clearance. Caps AA program grants at $5 million per recipient and two grants per county. Requires NCEM to submit a report to the specified NCGA committee and division every six months on the AA Program on the matters described, starting no later than six months after the AA Program opens.  

Subpart II-G. 

Section 2G-1. 

Enacts GS 143-215.32B creating a special, nonreverting account known as the Dam Safety Grant Fund (Dam Fund) within DEQ to issue grants to eligible damaged dam owners for the described purposes.  Directs DEQ to prioritize grants that serve as the State match to eligible projects based on the Risk-Based Prioritization Method established under the specified FEMA program.  Allows funds to also be used for dams not eligible for federal match under the described FEMA program if the dam was damaged by a natural disaster and classified as high hazard. Requires DEQ to administer grants from the Dam Fund consistent with applicable State and federal laws. Requires DEQ to submit an annual report to the specified NCGA committee on the Dam Fund, as described.  

Subpart II-H. 

Section 2H.1. 

Requires DIT to issue a request for proposals for the development and creation of a disaster relief portal, focused on constituent engagement, that will operate as a central platform for relevant updates and constituent services in response to natural disasters occurring in the State. 

Subpart II-1. 

Section 2I.1. 

Finds that the described federal funds should be used expeditiously for repair and replacement of drinking water and wastewater infrastructure damaged by Hurricane Helene. Appropriates $685.613 million in federal disaster funding to be received by DEQ for the 2025-26 year as follows: 

1. $253.681million to the Clean Water State Revolving Fund (CWSRF) and $409.422  million to the Drinking Water State Revolving Fund to fund projects as described to eligible entities that were damaged, can demonstrate impact, or experienced a loss or disruption of a mission-essential function caused by Hurricane Helene. 

2. $22.51 million to CWSRF to improve the resilience of decentralized wastewater treatment systems to flooding, to assess the potential to connect homes served by decentralized wastewater treatment systems to centralized wastewater systems, and to fund such connections. 

Part III. 

Section 3.1. 

Directs State agencies and units of local government to use the United States Army Corps of Engineers (USACE) to remove and clear debris and other detritus from lands and waterways from Hurricane Helene in the affected area prior to using contractors hired by the State unless the USACE is not able 1to service the area, including in an expeditious or efficient manner, then the State agency or unit of local government may use the State or private contractors. Applies to contracts entered on or after the section becomes law. Clarifies that the section does not apply to or impair existing contracts. 

Section 3.2. 

Extends the maturity date of the Water Infrastructure Loans established under Section 4C.7 of SL 2024-53 (Helene Relief Package II) from June 30, 2030, to June 30, 2040.  

Part IV. 

Section 4.1. 

Directs that, except as otherwise provided, funds appropriated under the act revert to the Savings Reserve if not expended or encumbered by June 30, 2030. 

Requires recipients of State funds under the act to use best efforts and take all reasonable steps to obtain alternative funds to cover losses or needs for which State funds are provided, including insurance funds.  Requires institutions of higher education or non-State entities to seek private donations to help cover the losses or needs for which Sate funds are provided.  Provides for notice to State aid recipients of this requirement. Requires recipients of alternative funds to remit the funds to the State agency from which the State funds were received not exceeding the amount of State funds provided to the recipient. Directs that any contract or other instrument entered into for the receipt of funds to include the alternate funds requirements set out above 

Prevents the Governor from using the funds described in the act to make budget adjustments or reallocations. Direct the Governor to ensure that funds allocated in the act are expended in such a manner that does not adversely affect any person's or entity's eligibility for federal funds that are made available, or are anticipated to be made available, as a result of natural disasters and to avoid using State funds to cover costs that will, or likely will, be covered by federal funds. Requires OSBM to add the appropriations and allocations provided for in this act to the reporting requirements set forth in Section 4.1(g) of SL 2025-2 (2025 Helene Relief Package I). Requires the Governor to continue the reporting requirements set forth in Section 4.2 of SL 2025-2. Directs the State Auditor to include all funds appropriated and allocated under this act in its report to the described NCGA committees.  

Part V. 

Section 5.1. 

Specifies that the headings to the parts and sections of the act are a convenience and do not expand, limit, or define the text of the act, except for effective dates referring to a part or section. 

Section 5.2. 

Contains a severability clause. 

Section 5.3. 

Effective when the act becomes law, except as otherwise provided.