Senate committee substitute makes the following changes to the 3rd edition. Amends the act's titles.

Deletes all provisions of previous Parts I (Economic Support), II (Education), III (Health Care), and V (Continuity of State Government), except as noted below. Please note that provisions removed from this bill may be addressed in Senate Bill 704. We recommend referring to both this bill and the 4th edition of Senate Bill 704.

Part I. General Provisions

Contains the provisions set forth in previous Part IV, Appropriations, Subpart IV-A, General Provisions, with the following modifications and additions.

Section 1.1 Title of the Act

Titles the act as "2020 COVID-19 Recovery Act."

Section 1.2 Definitions

Amends previous section IVA.1 to change the definition provided for the term Coronavirus or COVID-19, now defining the term as the Coronavirus Disease 2019, rather than by federal statutory cross-reference.

Eliminates the following defined terms: Coronavirus Relief Fund; COVID-19 diagnostic test; COVID-19 antibody test; and State agency.

Section 1.3 Findings and Purpose

Amends previous section IVA.2, rewriting the act's purpose and findings. Now includes legislative findings regarding State government's role in the facilitation of local government, community, family, worker, and individuals and businesses in accessing federal relief and recovery funds related ot the COVID-19 pandemic. States that the act's purpose is to fulfill the NCGA's constitutional duty to appropriate all funds, including federal funds appropriated or otherwise made available under the COVID-19 Recovery Legislation, and to direct the use of those funds consistent with authorizing federal legislation and the public health and economic well-being of the State.

Section 1.4 Requirement to Maximize Use of Federal Funds

Substantively identical to previous section IVA.3, with technical changes to conform to the new organization of the act.

Section 1.5 Conflict with Federal Law

Substantively identical to previous section IVA.4, with technical changes to conform to the new organization of the act.

Section 1.6 General Guidance on Use of Funds

Identical to previous section IVA.5.

Section 1.7 Requires Report on Use of Funds

Substantively identical to previous section IVA.6, with technical changes to conform to the new organization of the act.

Section 1.8 Audit Requirement

Identical to previous section IVA.7

Eliminates previous section IVA.8, concerning technical language appropriating departmental receipts.

Part II. Establishment of Reserves and Funds

Contains the provisions set forth in previous Part IV, Appropriations, Subpart IV- B, COVID-19 Relief Reserve and Funds Established, with the following modifications and additions.

Section 2.1 Establishment of Coronavirus Relief Reserve

Substantively identical to previous section IVB.1, with technical changes to conform to the new organization of the act. Changes the section heading.

Section 2.2 Establishes the Coronavirus Relief Fund

Identical to previous section IVB.2. Changes the section heading.

Section 2.3 Establishment of Local Government Coronavirus Relief Reserve

Adds the following (identical to section 2.4, S704, 3rd edition). Requires the State Controller to establish a Local Government Coronavirus Relief Reserve (Local Reserve) in the General Fund to maintain certain federal funds transferred from the Reserve that are eligible to mitigate the impact of the COVID-19 outbreak in North Carolina on the revenue of local governments. Requires the transfer of $300 million from the Reserve to the Local Reserve. States the NCGA's intent to appropriate up to $150 million if local governments experience a revenue shortfall and the CARES Act is amended to allow the use of federal funds for that purpose. Specifies that funds reserved in the Local Reserve do not constitute an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution.

Part III. Transfer, Appropriations, and Allocations

Contains the provisions set forth in previous Part IV, Appropriations, Subpart IV- C, Transfer, Appropriations, and Allocations, with the following modifications and additions.

Section 3.1 Transfer of Funds from Reserves to Relief Fund

Amends previous section IVC.1. Decreases the amount of funds the State Controller is required to transfer from the Coronavirus Relief Reserve (Reserve) to the Coronavirus Relief Fund (Fund), from $1,635,567,029 to $1,275,988,029 for the 2019-20 fiscal year. Adds an additional directive for the State Controller to transfer $150 million from the Local Government Coronavirus Relief Reserve (Local Government Reserve) to the Fund for the 2019-20 fiscal year.

Section 3.2 Appropriation of Funds from Relief Fund to OSBM

Amends previous section IVC.2, decreasing the amount appropriated from the Fund to the Office of State Budget and Management (OSBM) in nonrecurring funds for the 2019-20 fiscal year from $1,635,567,029 to $1,425,988,029. Makes conforming organizational changes.

Section 3.3 Allocation of Funds Appropriated to OSBM

Amends previous section IVC.3. Reorganizes the subdivisions, modifies and adds to the allocations of the funds appropriated to OSBM as follows.

Subdivision (1)

Adds new subdivision (1), allocating $50 million to the NC Healthcare Foundation, the NC Senior Living Association, the NC Medical Society, and the Department of Public Safety (DPS), Division of Emergency Management, for the purchase of supplies and personal protective equipment (similar to section 3.3(1), SB704, 3rd edition). Provides for allocations to each entity.

Subdivision (2) 

Amends previous subdivision IVC.3(35). Allocates $150 million, rather than $350 million, to counties ineligible to receive direct funding from the CARES Act. Changes the distribution of the funds, now requiring base allocations of $250,000 to each eligible county, with the remainder distributed on a per basis (previously, required distribution on a per capita basis with no eligible county receiving less than $500,000). 

Subdivision (3)

Amends previous subdivision IVC.3(37), now identical to Section 3.3(11) of S704, 3rd edition. Allocates $70 million, rather than $80 million, for the continuity of operation needs across State government. Adds that expenditures incurred during the period that begins on March 1, 2020, and ends on December 30, 2020, are eligible for funding, and expands upon allowable expenditures. Maintains the allowable allocations for establishment of the NC Pandemic Recovery Office and the required audit by the Office of the State Auditor. Eliminates the permitted allocation of up to $10 million for the Department of Agriculture and Consumer Services for animal depopulation and disposal activities. Maintains reporting requirements. 

Subdivision (4)

Amends previous section IVC.3(34). More specifically allocates $300 million to OSBM to allocate to the General Maintenance Reserve in the Highway Fund for the Department of Transportation (DOT). Makes technical and clarifying changes. Adds a new provision prohibiting the Governor from using the funds to make budget adjustment or reallocations under specified state laws. Further, requires the funds to be transferred and to remain unspent until legislatively appropriated if the previously described conditions concerning the revision of specified US Department of Treasury guidelines has not occurred by June 15, 2020.

Subdivision (4a)

Amends previous section IVC.3(36). Allocates $20 million, rather than $30 million to OSBM for allocation to State agencies negatively impacted by the loss of anticipated receipts. 

Subdivision (5)

Adds new subdivision (identical to section 3.3(12), S704, 3rd edition). Allocates $100,000 to the NCGA to be used to reimburse funds previously provided to Wake Forest University Health Services for COVID-19 research data.

Subdivision (6)

Amends previous section IVC.3(1), allocating $75 million, rather than $80 million, to the Department of Public Instruction (DPI) for school nutrition services as previously specified.

Subdivision (7)

Amends previous section IVC.3(3), allocating $1 million, rather than $1,348,500, to DPI to improve internet connectivity for students by installing extended reach mobile wifi gateway router devices in school buses (was, installing internet access points in school buses).

Subdivision (8) 

Amends previous section IVC.3(4), allocating $11 million, rather than $21.2 million, to DPI to improve internet connective for students by providing community and mobile internet access points. Adds a new provision restricting use of the funds to the purchase of devices, and not for subscription services.

Subdivision (9)

Amends previous section IVC.3(5), allocating $30 million, rather than $35 million, to DPI to purchase computers or other electronic devices for use by elementary and secondary students as previously specified.

Subdivision (10)

Amends previous section IVC.3(6), allocating $5 million, rather than $7.42 million, to DPI to purchase computers or other electronic devices for use by elementary and secondary school personnel as previously specified.

Subdivision (11)

Amends previous section IVC.3(8), allocating $4.5 million, rather than $5.55 million to DPI to establish a statewide shared cybersecurity  infrastructure and district monitoring and support. Adds a new requirement for DPI to evaluate the described infrastructure and services and report to the specified NCGA committees by October 1, 2020.

Subdivision (12)

Amends previous section IVC.3(9), allocating $10 million, rather than $35 million, to DPI for contracted services for school health personnel, provided no later than December 30, 2020, consistent with the Instructional Support Allotment (previously, did not specify the school health personnel would be for contracted services within a specified period).

Subdivision (13)

Amends previous section IVC.3(10), concerning the $70 million allocation to DPI for supplemental summer learning programs. Modifies the parameters for the minimally $35 million that must be used for reading interventions for students in grades two and three during the 2019-20 school year, to require up to 25% of the funds to be used to provide supplemental literacy support for students in grades three and four during the 2020-21 school year who were not on track to meet 2020-21 year-end expectations, as identified by their 2020-21 school year reading teachers; requires these funds to be used prior to December 30, 2020 (previously, required the funds required for the reading interventions for 2019-20 second and third grade students to be used by August 17, 2020, with unexpended funds to be used for supplemental literacy support for those described 2020-21 third and fourth grade students). Eliminates the deadline by which any unexpended funds for the described purposes must be used for reading interventions for the described 2019-20 kindergarten, grade one, and grade four students, and math interventions for 2019-20 grades K-4 students.

Adds that DPI can provide necessary feedback on summer learning programs. Requires each public school unit to begin its summer learning program consistent with its plan submitted to DPI and not delay the start of its summer learning program pending feedback from DPI. Specifies that summer learning programs are not to be included in 2019-21 school year instructional time. Clarifies that parents or guardians have the final decision regarding qualified student attendance at summer learning programs. Maintains State Board reporting requirements as previously specified.

Subdivision (14)

Identical to previous section IVC.3(11).

Subdivision (15)

Amends previous section IVC.3(12), allocating $3 million, rather than $5 million, to DPI to provide nondigital remote instruction resources for students with limited connectivity.

Subdivision (16)

Amends previous section IVC.3(13), allocating $15 million, rather than $17.9 million, to DPI for Extended School Services and future services for qualified exceptional children. Specifies that DPI must hold the allocation in reserve and award grants, at DPI's discretion, to provide public school units that apply for funds to support extraordinary costs associated with provided such services.

Subdivision (17)

Amends previous section IVC.3(14), allocating $660,029, rather than $621,000, to DPI for the School of the Blind and Schools of the Deaf, for previously specified purposes.

Subdivision (18)

Amends previous section IVC.3(15), allocating $5 million, rather than $6 million, to DPI for the Extended Learning and Integrated Student Supports Competitive Grant Program for the 2019-20 and 2020-21 fiscal years.

Subdivision (19)

Identical to previous section IVC.3(16).

Subdivision (20)

Amends previous section IVC.3(17), allocating $44.4 million, rather than $48,690,529, to the UNC Board of Governors (UNC BOG) for previously specified puroses.

Subdivision (21)

Amends previous section IVC.3(18), allocating $20 million, rather than $30 million, to the UNC BOG to be allocated to the State Education Assistance Authority (Authority) for private secondary institutions. No longer provides for the funds to be used students and families impacted by COVID-19. No longer includes restrictions concerning limiting use to actions taken to respond to COVID-19.

Subdivision (22)

Adds a new provision (identical to section 3.3(13a), S704, 3rd edition). Allocates $15 million to OSBM to allocate to Duke University Human Vaccine Institute to develop a COVID-19 vaccine.

Subdivision (23)

Amends previous section IVC.3(19), allocating $29 million, rather than $110 million, to UNC Chapel Hill to allocate to the NC Policy Collaboratory (Collaboratory) (previously, allocated the $110 million to ISBM to establish the COVID-19 Response Research Fund, with allocations to the Collaboratory, with specified amounts allocated to specified Schools, and the Campbell University School of Osteopathic Medicine). Maintains the required uses of the funds with clarifying changes and makes conforming changes concerning the Collaboratory's facilitation of best practices and strategies among various entities, and the assembly of an advisory panel. Makes conforming changes to the September 1, 2020, reporting requirement, now applicable to the Collaboratory only. No longer includes in the reporting requirement identification of the source and amount of all other funds received for the purposes of the subdivision. 

Subdivision (24)

Adds a new provision. Allocates $15 million to the Brody School of Medicine at ECU for identical purposes as those required of the allocation to the Collaboratory in subdivision (23). Establishes an identical reporting requirement as that required of the Collaboratory under subdivision (23).

Subdivision (25)

Adds a new provision. Allocates $6 million to OSBM to allocate to the Campbell University School of Osteopathic Medicine for community- and rural-focused primary care workforce response to COVID-19, as specified. Establishes a reporting requirement, requiring the School to report to the specified NCGA committee by September 1, 2020.

Subdivision (26)

Adds a new provision (identical to section 3.3.(13), S704, 3rd edition). Allocates $20 million to OSBM to allocate to Wake Forest University Health Services to be used to expand its COVID-19 study to include syndromic surveillance and representative sample antibody testing.

Subdivision (27)

Amends previous section IVC.3(20), allocating $20 million, rather than $25 million, to the Department of Health and Human Services (DHHS), for local health departments, rural health providers, the State Laboratory of Public Health, and behavioral health and crises services. Specifies that these supporting funds are flexible funds.

Subdivision (28)

Substantively identical to previous section IVC.3(25)a, allocating $6 million to DHHS to be allocated equally among the six food banks. Adds that food banks are encouraged to use the funds to purchase food from NC-based farmers and vendors.

Subdivision (29)

Adds a new provision (identical to section 3.3(5), SB704, 3rd edition). Allocates $290,000 to DHHS, Division of Social Services (DSS), to provide funds for the LINKS program.

Subdivision (30)

Identical to previous section IVC.3(27).

Subdivision (31)

Amends previous section IVC.3(28). Allocates $50 million, rather than $25 million, to DHHS to provide funds for rural and underserved communities especially hard hit by the COVID-19 pandemic. Makes technical and clarifying changes. No longer includes the provision permitting funds to be used to fund items not addressed by federal relief funds or as needed to address health care needs until federal funds are received for such purposes.

Subdivision (32)

Adds a new section (similar to section 3.3(7), S704, 3rd edition). Allocated $5 million to OSBM to be allocated to the NC Association of Free and Charitable Clinics to be sued for distribution to its member clinics to cover the cost of eligible health services provided during the COVID-19 emergency. Requires reporting to the specified NCGA committee by August 1, 2020, and February 1, 2021, as specified.

Subdivision (33)

Identical to previous section IVC.3(31).

Subdivision (34)

Amends previous section IVC.3(30). Allocates $5 million to OSBM to be allocated to the NC Community Health Centers Association (NCHCA) for distribution to its member health centers to cover the cost of eligible health services provided during the COVID-19 emergency (previously, allocated $1.4 million to DHHS, Division of Central Management and Support, Office of Rural Health, to provide directed grants of equal amounts to member clinics of NCHCA). Requires reporting to the specified NCGA committee by August 1, 2020, and February 1, 2021, as specified.

Subdivision (35)

Identical to previous section IVC.3(24), except makes the provisions subject to new section 4.10 of the act that sets forth conditions that must be met by DHHS prior to release of the $25 million allocation set aside for COVID-19 testing, contract testing, and trends tracking and analysis.

Subdivision (36)

Amends previous section IVC.3(21), allocating $20 million, rather than $25 million, to DHHS to provide funds to support behavioral health and crisis services.

Subdivision (37)

Amends previous section IVC.3(25). Allocates $19 million, rather than $50 million, to DHHS to provide funding for food banks, to support residential settings, for adult and child protective services response, support for homeless and domestic violence shelters and housing security, support for child care response, and costs to expand NCCARE360 (previously, the purposes included funding for adult and child protective services response, support for homeless and domestic violence shelters and housing security, child care response, and technology modifications). Maintains specified allocations of this amount to Reinvestment Partners, as previously specified. 

Subdivision (38)

Adds a new provision (identical to section 3.3(16), S704, 3rd edition). Allocates $1.8 million to OSBM to be allocated to the Old North State Medical Society, Inc., for targeting rural areas and African American communities with outreach, health education, and testing.

Subdivision (39)

Amends previous section IVC.3(29). Allocates $65 million, rather than $75 million, to OSBM to be allocated to the NC Healthcare Foundation (NCHF) to award grants to hospitals designated by the CMS as critical access hospitals or non-critical access rural hospitals (was, to provide a directed grant to NCHF to funds award grants to rural hospitals). Directs that grants be awarded of at least $350,000 for each eligible critical access hospital and of at least $250,000 for each eligible non-critical access rural hospital. Requires that any remaining funds be used to increase the grant amounts based on a pro rata share of the 2018 hospital operating costs for these hospitals. Establishes preconditions for receipt of funds. Requires submission of a written report to the specified NCGA committees by December 1, 2020, concerning expenditure of funds and amounts received from COVID-19 Recovery Legislation. Adds that NCHF must also report to the specified NCGA committees by December 1, 2020, concerning use of funds appropriated, along with recommendations on how grant recipients can prepare for post-COVID-19 sustainability. Makes further conforming and technical changes.

Subdivision (40)

Amends previous section IVC.3(32). Allocates $15 million, rather than $25 million, to OSBM to establish the COVID-19 Teaching Hospitals Relief Fund. Identifies the five teaching hospitals in the State, classified by CMS. Adds a directive to require OSBM to award $3 million grants to each eligible teaching hospital (previously, based on the amount of charitable care provided in NC and the amount of lost revenue sustained in NC as a result of the COVID-19 pandemic). Makes further clarifying changes. Maintains use restrictions and conditional provisions.

Subdivision (41)

Amends previous section IVC.3(33). Allocates $15 million, rather than $25 million, to OSBM to establish the COVID-19 General Hospitals Relief Fund to allocate as grants to hospital located in the State that are not eligible for grants under subdivisions (39) or (40) (previously, for directed grants for those not classified as rural or teaching hospitals by CMS). Requires the grants to be awarded based on a pro rata share of the 2018 hospital operating costs (previously, based on the amount of charitable care provided in NC and the amount of lost revenue sustained in NC as a result of the COVID-19 pandemic). Makes further clarifying changes. Maintains use restrictions and conditional provisions.

Subdivision (42)

Identical to previous section IVC.3(26).

Subdivision (43)

Adds a new provision (similar to previous section IVC.3(37)a.) Allocates $15 million to the Department of Agriculture and Consumer Services for animal depopulation and disposal activities (section IVC.3(37)a. permitted up to $10 million of the funds appropriated to OSBM for the continuity of government needs to be allocated to DACS for this purpose).

Subdivision (44)

Adds a new provision (identical to section 3.3(14), SB704, 3rd edition). Allocates $5 million to the Department of Commerce  to contract with a nonprofit corporation for marketing COVID-19 concepts, strategies, and materials, as specified.

Subdivision (45)

Adds a new provision (similar to previous section 1C.1(a)). Allocates $125 million to OSBM for Golden LEAF to provide loans pursuant to the parameters set forth in new section 4.2 of the act (previously, appropriated $75 million from the Coronavirus Relief Fund to OSBM to provide Golden Leaf with funds to provide the grants as described).

Subdivision (46)

Adds a new provision (identical to section 3.3(21), S704, 3rd edition). Allocates $9 million to the Department of Information Technology to use for the Growing Rural Economies with Access to Technology (GREAT) Fund for supplementary project funding for all qualifying GREAT program applicants whose applications are received on or before April 1, 2020, and meet statutory criteria, with application resubmission permitted as specified. 

Deletes allocations set forth in the following previous provisions: section IVC.3(2) (to DPI to work with the Friday Institute for Education Innovation at NCSU); section IVC.3(7) (to DPI to purchase pre-packaged digital curricula); section IVC.3(22) (to DHHS, Division of Health Benefits for additional Medicaid costs); and section IVC.3(23) (to DHHS and DPS, Division of Emergency Management for personal protective equipment and other supplies and equipment; now partially covered in new subdivision (1)).

Part IV. Additional Allocations, Appropriations, and Other Revisions

Section 4.1 Appropriation of COVID-19 Federal Grant Funds and Receipts

Substantively identical to previous Part IV, Appropriations, Part IV-G, Additional Allocations and Appropriations. Makes technical changes to conform to the new organization of the act.

Section 4.2 Appropriation for Small Business Loan Assistance

Amends previous section IC.1. Makes conforming changes to reference the funds allocated in new section 3.3(45). Adds a new statement of legislative intent for an equitable portion of funds allocated to be used for the benefit of historically underutilized businesses. Adds to the parameters of the small business loan assistance program to require Golden LEAF to work with the NC Small Business Center Network, the Office of Historically Underutilized Businesses within the Department of Administration, the NC Small Business and Technology Development Center, the NC Institute of Minority Economic Development, Inc., and other similar entities to ensure all qualifying businesses are aware of the program. Adds a new provision authorizing Golden LEAF to use up to $2 million to provide grants for the purpose of providing technical assistance to businesses working to apply for a loan from the program or for other federal assistance programs. 

Makes changes to the definitions set forth applicable to the section. Defines compensation by Internal Revenue Code cross-reference, rather than state law. Makes conforming changes to the definition of net loan funds, and to eliminate the defined term Coronavirus Relief Fund.

Changes the matching requirements to now require Golden LEAF to provide matching funds from other non-State funds at $15 of non-State funds for every $125 of State funds allocated.

Section 4.3 Establishment of Temporary Pandemic Recovery Office

Identical to previous section IVE.1.

Section 4.4 Release of Certain Grant Funds

Adds a new provision (identical to section 6.10, S704, 3rd edition). Directs OSBM to release the $700,000 allocation authorized in Section 26.2(c)(3) of SL 2017-57, which provides for the amount to be allocated to the NC Symphony upon certain non-State fund fundraising requirements having been met.

Section 4.5 Provide Medicaid Coverage for COVID-19 Testing to Uninsured Individuals in NC During the Nationwide Public Health Emergency

Amends previous section IVD.2, which authorizes DHHS, Division of Health Benefits to provide Medicaid coverage described in federal law that covers COVID-19 testing during a declared nationwide public health emergency for COVID-19, to specify that the federal medical assistance percentage is 100% for such coverage.

Section 4.6 Medicaid Rate Increases

Amends previous section IVD.1 to set the rate increase expiration on the earlier of (1) the date the declared nationwide public health emergency as a result of the 2019 novel coronavirus expires; (2) the date of Executive Order No. 116 expires or is rescinded; or (3) March 31, 2021 (previously, provided for the rate increase through the duration of the declared nationwide public health emergency as a result of the 2019 novel coronavirus).

Section 4.7 Implement Temporary Provider Enrollment Changes Authorized Under the Medicaid 1135 Waiver

Identical to previous section IVD.4.

Section 4.8 Disabled Adult Child Passalong Eligibility/Medicaid

Identical to previous section IIIE.6.

Section 4.9 Use of FY 2019-20 Child Care and Development Fund Block Grant Increased Availability to Address Immediate Child Care Needs

Adds a new section (identical to section 6.11, S704, 3rd edition). Amends Section 1.1 of SL 2019-192 to increase the schedule of appropriations from federal block grant funds made for the 2019-20 fiscal year for child care and development, from $347,525,572 to $395,525,572.

Section 4.10 Funds for Testing, Contact Tracing, and Trends Tracking and Analysis

Adds a new section (substantively similar to section 6.26, S704, 3rd edition). Prohibits OSBM from releasing the $25 million allocated to DHHS in section 3.3(35) until DHHS fulfills five detailed requirements, including reporting of all diagnostic service results, posting contractor testing on its website, collection and reporting of recovery rates on its website, reporting of COVID-19-related hospital discharges and underlying health conditions, and provision of comprehensive COVID-19 deaths. Requires DHHS and any public or private entity receiving the allocated funds to report on the use of funds to the specified NCGA committees within six months after receipt of funds.

Section 4.11 Funds for Overdose Medications

No longer includes the provisions of previous section IVD.3, concerning temporary Medicaid coverage for the prevention, testing, and treatment of COVID-19.

Identical to previous section IVF.1.

Part V.

Section 5.1 Effect of Headings

Provides that the act's headings are for reference only.

Section 5.2 Severability

Includes the identical severability clause of previous Part VI.

Section 5.3 Effective Date

Includes the identical effective date provision of previous Part VII. Now provides that the entire act is repealed if SB704 (COVID-19 Recovery Act) is vetoed. Reenacts the entire act if a veto to SB704 is overridden.