House committee substitute to the 1st edition engrosses the committee amendments from the Appropriations Committee, which are summarized in the previous digest.

Part I names the act "The Disaster Recovery Act of 2016."

Part II states legislative findings of unmet needs for impacts and damages caused by Tropical Storms Julia and Hermine, Hurricane Matthew, and western North Carolina wildfires; further finds that the benefits of programs authorized in the act serve the public purpose of collective recovery from these natural disasters.

Part III defines the scope of the act as being all counties covered under presidential disaster declarations and gubernatorial executive orders for the natural disasters named in Part II (hereinafter “natural disasters”).

Part IV appropriates $100,928,370 in nonrecurring funds from the Savings Reserve Account (“Rainy Day Fund”) and $100 million in nonrecurring funds from the unappropriated General Fund balance for disaster relief.  Section 4.1 allocates this total of $200,928,370 as follows:

• $20 million to the Housing Trust Fund (established under GS Chapter 122E) to fund housing projects for individuals and families impacted by the natural disasters.  The income of eligible recipients cannot exceed 100% of the median income of the area with family size adjustments based on U.S. Housing and Urban Development figures.

• $9 million to the Division of Emergency Management to provide additional short-term housing assistance to impacted individuals and families.

• $11.5 million to the Division of Emergency Management for resilient redevelopment planning and technical assistance in the 49 counties covered under the presidential disaster declaration issued in Hurricane Matthew.

• $66,228,370 to the State Emergency Response and Disaster Relief Fund to match federal disaster assistance.

• $10 million to the State Emergency Response and Disaster Relief Fund for future emergencies.

• $5 million to Golden L.E.A.F., Inc., for small business loans to businesses impacted by the natural disasters.

• $20 million to Golden L.E.A.F., Inc., and $10 million to the Department of Commerce Rural Economic Development Division for grants to local governments to construct new infrastructure required for residential development outside the 100-year floodplain and for repair or replacement of existing infrastructure (including water, sewer, sidewalks, storm drainage, and similar projects).

• $10 million to the Department of Environmental Quality for disaster-related infrastructure and clean-up needs (such as repairs to wastewater and drinking water systems and dams, and solid waste clean-up), and burial site mitigation.

• $37,950,000 to the Department of Agriculture and Consumer Services for forest service repairs and operational expenses ($25.5 million), soil and water conservation stream debris removal, farm road repairs, and farm pond and dam repairs ($12.2 million), and research station dike repairs ($250,000).

• $1 million to the State Fire Marshal’s Office for grants to volunteer fire departments.

• $250,000 to the Department of Commerce to assess business needs; the Department shall report findings and recommendations on recovery assistance funds administration to the House and Senate Appropriations committee chairs and Fiscal Research Division by March 1, 2017.

Section 4.2 limits the Governor’s expenditure flexibility for funds appropriated in the act by prohibiting the Governor from making budget adjustments otherwise authorized under GS 143C-6-4 or making emergency reallocations of other state funds under GS 166A-19.40.  These restrictions are limited to the funds appropriated in the act and not to any other state funds.

Section 4.3 provides that the appropriations made in the act are for maximum amounts necessary to implement the act within the assistance categories and programs authorized under the act.

Section 4.4 provides that the funds appropriated in the act are non-reverting.

Part V (Sections 5.1 – 5.6) provides authorization for various measures to implement the act, including:

• Authorizing the Governor to establish part-time and full-time positions.

• Authorizing the Governor to establish advisory councils.

• Requiring subrogation of insurance proceeds for individuals receiving housing relocation or buy-out assistance from the Hazard Mitigation Grant Program or the State Acquisition and Relocation Fund.

• Encouraging state agencies to purchase goods and services from historically underutilized businesses.

• Stating the General Assembly’s intent to review and address continuing unmet needs during 2017 and 2018.

• Prohibiting the expenditure of state funds for constructing new residences within a 100-year floodplain unless the structure conforms to the local jurisdiction’s flood plain management ordinance and the property owner maintains federal flood insurance on the property.

• Limiting business assistance to that authorized under the Small Business Administration disaster loan assistance program.

Section 5.7 provides calendar flexibility for local boards of education, cooperative innovative high schools, regional schools, and charter schools that closed any school for at least two consecutive school days during the month of October 2016 due to Hurricane Matthew; such schools are deemed to have completed any instructional hours and days beyond those closed two days.  Charter schools that closed for at least two consecutive days in November 2016 due to the western North Carolina wildfires are granted the same calendar flexibility. 

Section 5.8 requires the Office of State Budget and Management to report on a monthly basis to the Senate and House Appropriations committee chairs and the Fiscal Research Division on the implementation of the act, including expenditures of funds.

Section 5.9 waives fees assessed by the Division of Motor Vehicles against residents of counties impacted by Hurricane Matthew for duplicate driver's licenses, commercial driver's licenses, special identification cards, duplicate or corrected certificates of title, replacement registration plates, duplicate registration cards, and late payment of motor vehicle registration renewal fees.  These fee waivers are effective October 1, 2016, and expire December 1, 2016.

Section 5.10 directs the Governor to ensure that state disaster relief funds are not expended in a manner that adversely impacts federal assistance eligibility for individuals and businesses, and to avoid expending state funds to cover costs that will be covered by federal funds.

Section 5.11 transfers to the Division of Emergency Management all Community Development Block Grant Disaster Recovery Funds received by the Department of Commerce.

Section 5.12 directs the Governor to recommend in his recommended FY2017-18 budget transferring to the Savings Reserve Account (“Rainy Day Fund”) the amount of funds appropriated from that account in this act ($100,928,370).

Part VI provides that the act is effective when it becomes law unless otherwise provided for in the act.

Amends Section 36.19A(a) of SL 2016-94 (2016 Appropriations Act) to require the Office of State Human Resources (Office) to commence the implementation phase of the Statewide Compensation System Project, which calls for the Office to reassign state employee salary grades, no later than December 31, 2016 (previously, barred the Office from commencing implementation prior to February 1, 2017).