Senate committee substitute replaces the content of the 1st edition in its entirety with the following. Changes the act's titles.

Part I.

Subpart I-A.

Contains the NCGA’s findings pertaining to Tropical Storm Chantal’s impact in the central region of the State, including a listing of State and federal disaster declarations.  Directs that funds allocated by Part I of the act apply only to the impacted area, which means Alamance, Caswell, Chatham, Durham, Granville, Moore, Orange, Person, and Wake counties.

Subpart I-B.

Appropriates $65 million from the State Emergency Response and Disaster Relief Fund (Fund) for 2025-26 to be allocated to the Department of Public Safety (DPS), Division of Emergency Management (NCEM), the Office of the State Auditor (Auditor), Office of State Budget and Management (OSBM), and the UNC Board of Governors in the specified amounts for the purposes described.

Requires that $5.5 million from the Transportation Emergency Reserve (Transportation Reserve) be used to provide the nonfederal share for State highways damaged by Tropical Storm Chantal from the funds appropriated to the Department of Transportation (DOT).

Provides for appropriation of funds received on or after September 1, 2025, under the federal Stafford Act and other federal disaster assistance programs for Tropical Storm Chantal in the amounts provided in the notifications of award from the federal government or any entity acting on behalf of the federal government to administer federal disaster recovery funds. Directs OSBM to provide notice to the specified NCGA commission and division, as described.

Subpart I-C.

Amends Section 4.2 of SL 2020-4, as amended, so that net loan funds  no longer deducts an amount equal to the amount of non-State funds provided as matching funds from the total loan fund allocated as described.

Subpart I-D.

Reverts funds appropriated under I-B to the Savings Reserve if not expended or encumbered by June 30, 2031.

Requires that those receiving funds under Subpart I-D of the act use best efforts and take reasonable steps to obtain alternative funds that cover the losses or needs for which the State funds are provided, including funds from insurance and available federal aid; for institutions of higher education, alternative funds include private donations. Declares State funds paid under Part I of the act to be excess over funds received by a recipient from the settlement of a claim for loss or damage covered under the recipient's applicable insurance policy in effect or federal aid. Requires agencies awarding State funds for disaster relief to include a notice to the recipient of these requirements.

Requires recipients obtaining alternative funding to remit the funds to the agency from which they were received, which must transfer those funds to the Savings Reserve. These requirements are to be included in any contract entered into by a recipient for receipt of funds under Part I.

Prohibits the Governor from using funds described in Part I to make budget adjustments. Requires the Governor to ensure that funds allocated in Subpart I-D are expended in a manner that does not adversely affect any person's or entity's eligibility for federal funds that are made available, or anticipated to be made available, as a result of natural disasters. Also requires the Governor, to the extent practicable, to avoid using State funds to cover costs that will be, or likely will be, covered by federal funds.

Requires OSBM to add the appropriations and allocations in Part I to the reporting requirements Section 4.1(g) of SL 2025-2.

Requires the Governor’s Office to continue reporting requirements in Section 4.2 of SL 2025-2 for funds described in Part I. Requires the State Auditor to include all funds appropriated and allocated under Part I in its report to the Joint Legislative Commission on Governmental Operations and include the expenditure of these funds in the public dashboard.

Effective when the act becomes law.

Part II.

Authorizes the $10 million appropriated from the General Fund to the Community Colleges Systems Office under Section 2A.5A of SL 2025-89 (implementing various State budgetary adjustments) to remain available until June 30, 2027, instead of reverting at the end of the 2025-26 year.

Makes technical correction to GS 115C-366 as amended by SL 2025-72. Expands the persons who the State Board of Community Colleges may waive tuition and fees for under GS 115D-39.5(a)(2)(j) to include Catawba Indian Nation law enforcement, fire, or EMS or rescue and lifesaving tribal government departments or programs. Repeals identical provision in Section 5 of SL 2025-57. Prevents full-time staff members of UNC from enrolling in more than three courses per year (currently, those staff members may enroll in not more than three courses per year) in GS 116-143, as amended by SL 2025-17. Makes clarifying changes. Effective June 26, 2025, and applies beginning with the 2025-26 academic year. Repeals Part IV of SL 2025-46, pertaining to nondiscriminatory admissions evaluations and military deferment. Repeals Part III of SL 2025-56, pertaining to residency licenses for certain nonpublic teachers. Effective when the act becomes law, except as otherwise provided.

Modifies the reduction of the appropriation to the Department of Public Instruction (DPI) in Section 2A.6 of SL 2025-89 so that: (1) any small specialty high school that received funding for the described statutory purposes during the 2024-25 year will continue to receive funding for a single additional principal and clerical position hired pursuant to that section and (2) any cooperative innovative high school originally approved as a virtual cooperative innovative high school will continue to receive funding.

Instructs DPI to allocate $635,000 in recurring funds for the 2025-27 biennium of those funds appropriated to it for cooperative innovative high schools in amounts consistent with those set forth in GS 115C-238.54A, as enacted by the act, as supplemental funding for the three named cooperative innovative high schools. Authorizes those high schools to operate as cooperative innovative high schools, as described, beginning with the 2025-26 school year. Appropriates $1.110 million from the General Fund to DPI in recurring funds for the 2025-27 biennium to provide supplemental funding to the five named high schools.

Enacts GS 115C-238.54, requiring DPI to allocate cooperative innovative high school supplemental allotment funds to local school administrative units with a cooperative innovative high school based on developmental tier area in the described amounts. Specifies that the allocation of funds includes cooperative innovative high schools approved pursuant to GS 115C-238.51A(c) operated by a local school administrative unit regardless of not receiving allotments in a prior fiscal year. Directs that funds will not be allocated to local administrative units for cooperative innovative high schools approved by the State Board of Education that are not eligible for additional funds under GS 115C-238.51A(b).

Appropriates $2.8 million from the General Fund to the UNC Board of Governors for each year of the 2025-27 biennium in recurring funds to support tuition grants for increased eligible high school graduates of the North Carolina School of Science and Mathematics and the University of North Carolina School of the Arts.

Requires a postsecondary UNC institution/community college to maintain accreditation from a preferred accrediting agency under GS 116-11.4 (accreditation-UNC) and GS 115D-21.2 (accreditation-community colleges). Defines preferred accrediting agency to include institutional accrediting agencies (defined as an accrediting agency recognized as an institutional accrediting agency by the US Department of Education) that are one of the seven listed accrediting agencies, now including the Commission for Public Higher Education. Authorizes a postsecondary UNC institution/community college to also receive accreditation from an accrediting agency that is not a preferred accrediting agency as long as the constituent institution/community college continues to maintain its accreditation from a preferred accrediting agency. Removes provisions prohibiting consecutive accreditation by an accrediting agency and an accreditation transfer procedure. Makes organizational, conforming, and technical changes. Makes conforming changes to GS 90-354, GS 90-357, GS 90-357.5, GS 90-359, GS 90-631 as amended, GS 93A-4 as amended, GS 93A-38.5 as amended, GS 93E-1-8 as amended, GS 115C-555, GS 116-280 as amended, and GS 130A-309.28 to account for new term "institutional accrediting agency" or "preferred accrediting agency."  

Amends the requirements for eligible providers who can partner with local school administrative units for e-learning opportunities so that they must be accredited by an accrediting agency such Cognia or an institutional accrediting agency (currently, have to be accredited by a regional accrediting agency such as those described).

Makes technical changes to GS 116-201(b) as amended.

Specifies that $25 million appropriated pursuant to SL 2023-134 as a directed grant to Brunswick Community College for its workforce development center and public safety center capital projects will not revert but instead remain available until December 31, 2028.

Appropriates $400,000 each from the General Fund to the Governor Morehead School for the Blind, North Carolina School for the Deaf, and the Eastern North Carolina School for the Deaf in recurring funds for the 2025-27 biennium for costs associated with the school functioning as an independent agency. Allows these funds to be used for additional positions, reclassification of existing  positions, or administrative, legal, technology, or operational expenses to ensure compliance with State agency requirements.

Part III (reserved).

Part IV.

Section 4.1.

Authorizes the Department of Labor (DOL) in GS 95-13 to take appropriate action in State civil courts to enforce its rules and regulations (was, only Attorney General at the DOL's request). Authorizes the Attorney General (AG) to designate staff to fulfill its duty to represent DOL in such proceedings upon DOL’s request. Makes clarifying changes. Requires actions to recover civil penalties pertaining to regulation of private personnel services under GS 95-47.9 to be brought by DOL unless it requests the AG to initiate such actions at the discretion of the Commissioner of Labor instead.  

Authorizes DOL to represent itself in any action or proceeding in connection with the State’s Wage and Hour Law under GS 95-25.18. Authorizes the AG to designate staff to fulfill its duty to represent DOL in such proceedings upon DOL’s request.

Authorizes DOL to represent itself in any action or proceeding in connection with: (1) the State’s Wage and Hour Law under GS 95-25.18, (2)  the State’s Elevator Safety Act under GS 95-110.12, (3) the Amusement Device Safety Act of North Carolina under GS 95-111.15, and (4) the State’s Occupational Health and Safety Act. Authorizes the AG to designate staff to fulfill its duty to represent DOL in such proceedings upon DOL’s request. Makes conforming changes.

Expands the Commissioner of Labor’s powers under GS 95-4 to engage counsel to provide litigation services and represent DOL, as described.

Effective when it becomes law.

Section 4.2.

Appropriates $650,000 in recurring funds from the General Fund to DOL for 2025-26 and 2026-27 for three full-time equivalent attorney positions. Appropriates $150,000 in recurring funds from the General Fund to DOL for 2025-26 and 2026-27 for security services.

Section 4.3.

Appropriates $35 million from the Stabilization and Inflation Reserve to OSBM for 2025-26 to be allocated within 60 days of the act’s effective date to the Centennial Authority (CA). Directs CA to disburse the funds allocated to a qualifying entity (i.e., the entity with which the CA has contracted for the redevelopment of the land surrounding the regional entertainment and sports arena benefitted by the appropriation, or the entity’s designee) for costs incurred for public infrastructure improvements on, adjacent to, or supporting a regional entertainment and sports arena owned by the CA. Specifies that the funds do not revert but instead remain with the CA until completion of the improvements.

Section 4.4.

Appropriates $51 million from the Stabilization and Inflation Reserve to the Department of Commerce (DOC) for 2025-26, so long as it enters into the agreement with Hertford County, the Hertford County Rural Development Authority, or both, as described, for the following purposes: (1) $40 million for reimbursement for costs incurred in permitting, engineering, designing, and constructing a publicly owned dock at a project site and (2) $11 million for constructing a public road leading to the publicly owned dock and capable of accommodating industrial loads. Specifies that these funds do not revert but remain available for those purposes. Authorizes payments to be made to a county, rural development authority, or eligible business (defined). Provides for appropriations for public roads to be transferred to the Department of Transportation, as appropriate. Requires DOC to submit an annual report on September 1 to the specified NCGA committees and division, as described.

Section 4.5.

Allows a qualifying business (defined) to request the resetting of, and the Committee may agree to reset, the base period applicable to the transformative project. Specifies that the definitions contained in GS 143-437.1 (the Job Development Investment Grant Program) apply to the section. Effective when it becomes law and expires June 30, 2026.

Part V (reserved).

Part VI.

Requires the Department of Administration (DOA), by December 1, 2025, in consultation with the State Auditor, to assign office space consisting of two additional floors (for a total of four floors) within the Albemarle Building in Raleigh to the State Auditor for its exclusive use. Specifies that this provision of the act controls over any conflicting space assignment plan or policy to the extent of the conflict. Effective when it becomes law.

Part VII (reserved).

Part VIII.

Increases the appropriation from the State Capital and Infrastructure Fund to OSBM under Section 5.1 of SL 2025-89 from $823,565,897 to $888,565,897. Increases the allocation to project code TRAN23-1 from $60 million to $125 million. Appropriates $5 million from the State Capital and Infrastructure Fund to OSBM for 2025-26 to be allocated to UNC at Pembroke for the Regional Emergency Response Center. Assigns a project code and caps the project authorization at $5 million. Appropriates $1.5 million from the State Capital and Infrastructure Fund to OSBM for 2025-26 to be allocated to the State Highway Patrol (SHP) to be used for repair and renovation projects.

Directs that the net proceeds from the sale of the Chancellor's residence at North Carolina Central University (NCCU) to be retained by NCCU and be deposited in a special fund to be used solely for the purchase of another residence for the Chancellor, as approved by the Board of Trustees of North Carolina Central University and consistent with applicable policies of the UNC Board of Governors.

Part IX.

Appropriates $750,000 from the Stabilization and Inflation Reserve to DOT’s Division of Aviation for each year of the 2025-27 biennium to support the efforts of the Raleigh-Durham Airport Authority to expand international nonstop service to Dublin, Ireland, at Raleigh-Durham International Airport (RDU), as described.

Specifies that the funds provided as a grant to the Brunswick County Airport in Item 39, page J 31 of the Committee Report referenced in Section 43.2 of SL 2023-134 do not revert but instead remain available for the purposes described.

Appropriates $3.6 million from the named budget code in the Highway Fund to DOT’s Division of Aviation for 2025-26 to be used for costs associated with hangar improvements at the Tri-County Airport. Specifies that the appropriated funds do not revert, but remain available until completion of improvements.

Provided the Coastal Carolina Regional Airport Authority enters into a long-term lease agreement to rent space to a tenant at Coastal Carolina Regional Airport (Airport), appropriates $10.4 million from the Stabilization and Inflation Reserve to the Coastal Carolina Regional Airport Authority for 2025-26 for site improvement and infrastructure needs at the Airport necessary to accommodate the tenant subject to the lease required by this section. Specifies that funds appropriated do not revert but remain available until completion of the improvements or infrastructure projects.

Part X.

Specifies that the headings of the parts of the act are a convenience to the act and are for reference only. Instructs that the headings do not limit or define the text of the act. Directs that, except where expressly repealed or amended by the act, any legislation enacted during the 2025 Regular Session expressly appropriating funds to an agency, a department, or an institution covered under this act, remains in effect. Specifies that if any of the act’s provisions are in conflict with GS 143C-5-4, the act’s provisions prevail. Instructs that the appropriations and the authorizations to allocate and spend funds set out in the act remain in effect until the Current Operations Appropriations Act for the applicable fiscal year becomes law, at which time that act will become effective and govern appropriations and expenditures. When the Current Operations Appropriations Act for that fiscal year becomes law, directs the Director of the Budget to adjust allotments to give effect to that act from July 1 of the fiscal year.

Contains a severability clause.

Specifies that the act is effective retroactive to July 1, 2025, except as otherwise provided.