North Carolina allows recovery funds to move among eligible projects

The Budget Director may reclassify some unspent recovery funds and make matching, one-time General Fund adjustments between agencies. This applies to unspent State Fiscal Recovery Fund balances for government services categorized as revenue loss. The receiving service must have previously received recovery funding, receive a net General Fund appropriation in fiscal year 2025–2026, and qualify under federal rules. Only funds obligated by December 31, 2024, may be reclassified. The adjustments must leave total General Fund appropriations unchanged. Replacement funding cannot exceed the project's unspent recovery balance. It is available only for that project until it is complete or June 30, 2027, whichever comes first. Reclassification may occur in fiscal year 2025–2026 or, if needed to meet federal requirements, during the applicable federal performance period.

The Pandemic Recovery Office may reallocate certain recovery funds to previously funded work. This covers State Fiscal Recovery Funds appropriated by this act or the listed state laws. Officials must reasonably expect the funds will not be spent by the federal deadline. Funds may support only previously funded activities authorized by the listed laws and allowed under federal rules for water, sewer, or broadband projects. They cannot support a new activity, purpose, or program. The Budget Director must transfer matching General Fund amounts between agencies, without changing the original purposes. Remaining funds may go to the State Treasurer only up to the State Health Plan's unreimbursed COVID-19 expenses from March 3, 2021, through December 31, 2024, and if federal rules allow. The Office of State Budget and Management must report on reallocations by January 15, 2027.

The Office of State Budget and Management may use interest from specified funds for pandemic recovery operations. The listed funds include the Local Fiscal Recovery Fund, Homeowner Assistance Fund, economic development and tourism grant funds, and Project Fund. Interest from the Homeowner Assistance Fund, economic development and tourism grant funds, and Project Fund is included only to the extent the State may retain it. Use must follow the requirements in Section 6.9 of S.L. 2025-97.

The Burke Partnership must hold specified megasite grant money while a federal grant decision is pending; if the grant is not awarded by the deadline, it must distribute the money and interest to two counties. This applies to funds allocated for water and wastewater at the Western NC Megasite that remain unspent and uncommitted when this section takes effect. The funds must be identified in an application as matching money for a grant applied for from the U.S. Department of Commerce's Economic Development Administration. The Partnership must not spend or commit those funds before the grant decision. If the grant is not awarded on or before October 1, 2026, the Partnership must distribute 80% to Burke County and 20% to McDowell County. The counties must use the money for water or sewer infrastructure. The Partnership must wait for a grant decision before spending or committing application funds. If no grant is awarded on or before October 1, 2026, it must distribute the funds and interest as specified.

The Pandemic Recovery Office is authorized to operate until May 1, 2027, and must submit a final report before it closes. This applies to the temporary North Carolina Pandemic Recovery Office, which coordinates and tracks federal recovery funds received by state agencies and local governments. The final report must cover staffing, personnel and other spending, the Office's 2026 activities, and remaining Fund matters, including any money returned to the U.S. Treasury. The Office's authorization expires May 1, 2027. It must submit its final report no later than one week before it ceases operating.