With legislators nowhere close to hashing out a state budget, the North Carolina Senate voted unanimously Monday to send the House an updated version of the most recent Helene relief package.
The Senate scrapped much of House Bill 1012, rewriting it to bear many similarities to the Helene provisions that were included in the Senate's state budget proposal. Those changes also included scrapping, at least for now, a House proposal to provide storm-battered small businesses with grants to support their ongoing operation.
In total, the bill would move more than $2.5 billion in funds to the recovery effort from last September's storm.
That includes shifting $700 million to the Helene fund, with $634 million coming from elsewhere in state government and $66 million in unspent money from previous Helene relief efforts. If passed, the bill would appropriate $480 million from that fund to a slew of disaster relief projects.
The bill would reallocate about $560 million in transportation funds to rebuild roads and bridges in Western North Carolina and appropriate $685 million in federal water and sewer infrastructure funds to facilities damaged during Helene.
And it directs state agencies to prioritize grants in Western North Carolina for $750 million in programs ranging from school capital needs to rural health centers to parks programs.
Small business grants go against state constitution?
Unlike the House, the Senate’s version doesn't offer grants for small businesses that suffered damage from or lost revenue because of the storm.
When it left the House, the legislation included $60 million to provide grants of as much as $75,000 to businesses that had lost at least $25,000 as a result of Helene.
The Senate believes that giving money to small businesses would violate a section of the North Carolina Constitution that says nobody should receive funds from the state government without providing a public benefit.
"We cannot give something to a private individual or a private business without something in return to the state," Sen. Ralph Hise, R-Mitchell, told reporters. Hise introduced the revamped bill.
Hise said he's working with legislative staff to draft a bill that would propose a constitutional amendment creating an exemption to that clause of the state constitution. Ideally, Hise said, voters would consider that amendment on their ballots during next spring's primary elections.
Another option on the table, Hise said, would be for the federal government to approve a program providing grants to small businesses with a state match.
"Aid to private businesses is one of the largest needs we have in Western North Carolina. It is extremely important that we support these small businesses (if) they are ever going to be able to reopen or rebuild. We just, the oath we took to the Constitution prohibits private emoluments," Hise said.
Asked how the same legislation could provide $75 million for repairs to private roads and bridges damaged by Helene, Hise said providing emergency services via those roads and bridges is a role of the state.
On the Senate floor, Sen. Julie Mayfield, D-Buncombe, pointed out that the Helene relief bill provides $1 million to fund repairs to the Great Smoky Mountains Railroad, LLC, a privately owned railroad.
"So the business to which we are making an appropriation is a private business, is that correct?" Mayfield said in a question directed to Hise.
"That's correct," Hise said.
"So I just want to be clear that we are now allocating state dollars to a private business in western North Carolina for Helene relief, which is something that this body has refused to do since last October," Mayfield said.
Senate President Pro Tempore Phil Berger told reporters the $1 million Mayfield asked about will actually go to the N.C. Department of Transportation and argued that the repair will help everyone in the region.
"We are fixing roads, we are dealing with situations with water and sewer. I don't think there's any difference with that than what we've been dealing with all along," said Berger, R-Rockingham.
Powell Bill controversy
As in the Senate's budget proposal, the revamped Helene legislation pulls from transportation maintenance funds to support the rebuilding of storm-damaged infrastructure in Western North Carolina.
Over each of the next two years, $50 million from a program to help municipalities with more than 150,000 people to maintain roads will head to western North Carolina. That reallocation of funds caught the attention of several Democrats in the Senate's Base Budget Committee on Monday.
Sen. Natalie Murdock, D-Durham, said removing the Powell Bill funds is unfair to residents of North Carolina's seven largest cities. Those include Charlotte, Raleigh, Greensboro, Durham, Winston-Salem, Fayetteville and Cary, the N.C. Newsroom has previously reported.
"To have that funding pause for two years, we're essentially not getting the benefit," Murdock said.
The Powell Bill allocates funds largely based on road miles maintained by a municipality and partially on population.
Pulling from the Powell Bill was borne out of an effort to provide $600 million to repair infrastructure throughout the region, said Sen. Bill Rabon, R-Brunswick, a chair of the Senate Transportation Appropriations Committee.
"We basically robbed Peter and paid Paul to come up with $600 million to put into western North Carolina," Rabon said, adding Senators intend to only interrupt the funding effort for two years.
Among other provisions, the bill also provides:
- $75 million to N.C. Emergency Management for the repair of private roads and bridges.
- $70 million to provide necessary matches to Federal Emergency Management Agency programs.
- $25 million to local governments to help pay for needs not covered by insurance or federal assistance.
- $15 million to the N.C. Forest Service for assets to prepare for and fight wildfires.
- $10 million to the N.C. Department of Environmental Quality to modify, repair or remove dams damaged by Hurricane Helene.
House Bill 1012 now heads back to the House, which could either concur with the changes or elect to reject them and appoint a conference committee to negotiate with the Senate.
The General Assembly is set to adjourn later this week, returning occasionally throughout the summer to take up pressing matters.
