NC General Assembly Passes COVID-19 Relief Bill that Includes Help for Local Governments

Tuesday, May 5, 2020

Photo of NC legislative buildingOne of the General Assembly’s first two coronavirus pandemic response bills, SB 704 in Section 2.3, establishes the “Local Government Coronavirus Relief Reserve” (Local Reserve). The new law then transfers the sum of $300 million derived from the federal CARES Act, P.L. 116-136, to the new Local Reserve. The General Assembly implicitly allows $150 million to be spent for responses to the pandemic as allowed by the original federal act.   

Per the US Treasury website, the CARES Act requires that the payments from the Coronavirus Relief Fund only be used to cover expenses that—

  1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19);
  2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and
  3. were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020.

The new state law also specifies that it is the intent of the General Assembly to appropriate the remaining $150 million to local governments that experience a revenue shortfalls provided that the federal CARES Act, P.L. 116-136, is amended to allow the use of federal funds to address the shortfalls. The state is monitoring the efforts at the federal level to change the CARES act restrictions.

We will keep you updated on this legislation and how it will be implemented. Please contact us at (919) 814-4300 or with questions.