Helene Rev. Replace./Locals; Prop Tax Relief.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 671

Short Title: Helene Rev. Replace./Locals; Prop Tax Relief. (Public)
Sponsors: Senators Hise, Moffitt, and Daniel (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S671-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ESTABLISH A GRANT PROGRAM TO P ROVIDE GRANTS AS REV ENUE 2
REPLACEMENT TO LOCAL GOVERNMENTS THAT EX PERIENCED REVENUE 3
LOSS FROM PROPERTY T AXES, SALES AND USE TAXES, AND WATER AND 4
SEWER RECEIPTS AS TH E RESULT OF HURRICAN E HELENE AND TO PROV IDE 5
INTEREST RELIEF ON PROPERTY TAXES FOR PROPERTY O WNERS WHO 6
SUSTAINED A CERTAIN LEVEL OF PROPERTY DA MAGE AS THE RESULT O F 7
HURRICANE HELENE. 8
The General Assembly of North Carolina enacts: 9
SECTION 1.(a) Program; Purpose; Use. – The Department of Revenue is authorized 10
to create and administer the Helene Local Government Revenue Replacement Grant Program 11
(Program). The purpose of the Program is to provide grants to local governments in western 12
North Carolina that experienced revenue loss from property taxes, sales and use taxes, and water 13
and sewer receipts as a result of Hurricane Helene. A local government that is awarded a grant 14
under this section may use the funds for any public purpose. 15
SECTION 1.(b) Definitions. – The following definitions apply in this section: 16
(1) Eligible applicant. – A local government that can show qualified revenue loss. 17
Notwithstanding G.S. 105-472, a county is not eligible for a grant for sales 18
and use tax revenue loss if it changes the method of distribution for the fiscal 19
year beginning July 1, 2025. 20
(2) Local government. – Either of the following: 21
a. A county that qualified for individual and public assistance under 22
FEMA-4827-DR federal major disaster declaration as of September 23
28, 2024. 24
b. A mun icipality located, in part or in whole, in one of the counties 25
described in sub-subdivision a. of this subdivision. 26
(3) Non-Helene local governments. – All counties, and municipalities within 27
those counties, exclusive of those counties that qualified for i ndividual and 28
public assistance under FEMA-4827-DR federal major disaster declaration as 29
of September 28, 2024. 30
(4) Property tax revenue loss. – The difference, if negative, between the estimated 31
real property tax revenue from storm -damaged property based on the 32
appraised value of the storm-damaged property as of January 1 multiplied by 33
the property tax rate in effect for the taxable year beginning July 1, 2024, and 34
the estimated real property tax revenue for taxable year beginning July 1, 35
2024, from storm -damaged property based on the appraised value of the 36
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 671-First Edition
storm-damaged property as of January 1, 2024, multiplied by the property tax 1
rate in effect for the taxable year beginning July 1, 2024. This term applies to 2
property tax revenue losses for each taxable year, beginning on July 1, 2025, 3
until the county's next scheduled reappraisal under G.S. 105-286 as of January 4
1, 2025. 5
(5) Qualified revenue loss. – The sum of all of the following: 6
a. Property tax revenue loss. 7
b. Sales and use tax revenue loss. 8
c. Water and sewer fee revenue loss. 9
(6) Sales and use tax revenue loss. – The difference, if negative, between (i) the 10
local government's total amount of sales and use tax distributions for a quarter, 11
adjusted by the percentage change in total sales and use dist ributions to 12
non-Helene local governments for the same quarter, and (ii) the local 13
government's total amount of sales and use tax distributions for the same 14
quarter of the prior year, except for the fourth quarter of 2025. For the fourth 15
quarter of 2025, the difference, if negative, between (i) the local government's 16
total amount of sales and use tax distributions for that quarter, adjusted by the 17
percentage change in total sales and use distributions to non -Helene local 18
governments for the same quarter, and (ii) the local government's total amount 19
of sales and use tax distributions for the same quarter of 2023. This term 20
applies to sales and use tax revenue losses beginning with the fourth quarter 21
of 2024 and through the fourth quarter of 2025. 22
(7) Storm-damaged property. – Any real property that was revalued in accordance 23
with G.S. 105-287 and was determined to have a decrease in value, as of 24
January 1, 2025, due to the impact of Hurricane Helene. 25
(8) Water and sewer fee revenue loss. – To the extent the local government 26
operates a water and sewer system, the difference, if negative, between (i) the 27
water and sewer revenue collected for a quarter from customers that 28
experienced a service disruption due to Hurricane Helene, and (ii) the revenue 29
collected for the same quarter of the prior year from those same customers, 30
except for the fourth quarter of 2025. For the fourth quarter of 2025, the 31
difference, if negative, between that quarter and the same quarter of 2023. 32
This term applies to water and sewer fee revenue losses beginning with the 33
fourth quarter of 2024 and through the fourth quarter of 2025. 34
SECTION 1.(c) Grant Amount; Application Process; Application Periods. – An 35
eligible applicant may apply for a grant in the amount of the eligible applicant's qualified revenue 36
loss for the applicable application period. To receive a grant, a local government must timely file 37
an application with the Department of Revenue in accordance with the application periods 38
described below on a form and in the method prescribed by the Department and must include any 39
supporting documentation required by the Department. The Department may accept applications 40
until the funds available under this program have been fully awarded. The application periods 41
are as follows: 42
(1) First application period. – The first application period is for a grant for 43
qualified revenue loss that includes (i) property tax revenue loss for the 44
taxable year beginning July 1, 2025, (ii) sales and use tax revenue loss for the 45
fourth quarter of 2024, and (iii) water and sewer fee revenue loss for the fourth 46
quarter of 2024. To apply for a grant for qualified revenue loss for this period, 47
an eligible applicant must file an application within 60 days of the effective 48
date of this section. 49
(2) Second application period. – The second application period is for a grant for 50
qualified revenue loss that includes (i) sales and use tax revenue loss for the 51
General Assembly Of North Carolina Session 2025
Senate Bill 671-First Edition Page 3
second quarter of 2025 and (ii) water and sewer fee revenue loss for the second 1
quarter of 2025. To apply for a grant for qualified revenue loss for this period, 2
an eligible applicant must file an application by August 31, 2025. 3
(3) Third application period. – The third application period is for a grant for 4
qualified revenue loss that includes (i) sales and use tax revenue loss for the 5
third quarter of 2025 and (ii) water and sewer fee revenue loss for the third 6
quarter of 2025. To apply for a grant for qualified revenue loss for this period, 7
an eligible applicant must file an application by November 30, 2025. 8
(4) Fourth application period. – The fourth application period for a grant is for 9
qualified revenue loss that includes (i) property tax revenue loss for the 10
taxable year beginning July 1, 2026, (ii) sales and use tax revenue loss for the 11
fourth quarter of 2025, and (iii) water and sewer fee revenue loss for the fourth 12
quarter of 2025. To apply for a grant for qualified revenue loss for this period, 13
an eligible applicant must file an application by February 28, 2026. 14
(5) Subsequent application period. – A subseq uent application period is for a 15
grant for qualified revenue loss that includes property tax revenue loss for a 16
taxable year beginning on or after July 1, 2027. An eligible applicant must file 17
an application by the last day of February prior to the beginning of the taxable 18
year for which the grant is sought. 19
SECTION 1.(d) Allocation of Funds for the Helene Local Government Revenue 20
Replacement Grant Program. – There is appropriated from the General Fund to the Department 21
of Revenue the sum of forty million dollars ($40,000,000) in nonrecurring funds for the 22
2025-2026 fiscal year to be allocated for the Helene Local Government Revenue Replacement 23
Grant Program and to be used as provided in this section. The Department of Revenue may use 24
up to eight hundred thousand dollars ($800,000) of the funds allocated in this subsection for the 25
administration of this section, including the outreach described in subsection (e) of this section. 26
The Department shall remit any funds remaining after disposition of all timely filed applications 27
under this section to the Office of State Budget and Management which shall deposit the funds 28
into the General Fund. Amounts deposited into the Reserve under this section are receipts that 29
do not constitute an "appropriation made by law," as that phrase is used in Section 7(1) of Article 30
V of the North Carolina Constitution. 31
SECTION 1.(e) Outreach. – The Department of Revenue, in consultation with the 32
North Carolina Association of County Commissioners and the League of Municipalities, is 33
directed to inform and educate local governments that may be eligible to apply for the grants 34
provided by this section as soon as practicable to facilitate the awareness of access to the grants 35
provided by this section. 36
SECTION 1.(f) Report. – The Department must report annually by March 1 of each 37
year to the chairs of the House and Senate Appropriations Committee and the Fiscal Research 38
Division of the General Assembly the following information: 39
(1) The local governments that applied for and received grants under this section. 40
(2) The total amount of each grant awarded and the amount awarded for each type 41
of revenue loss covered by the grant. 42
SECTION 2.(a) Relief from Interest on Property Tax. – Real and personal property 43
that both (i) is located in the af fected area, as defined in Section 1A.4 of S.L. 2024 -57, and (ii) 44
sustained damage as a result of Hurricane Helene for which the property owner received 45
compensation in excess of forty -two thousand dollars ($42,000) in the form of State or federal 46
disaster relief or insurance proceeds, or a combination thereof, is designated a special class of 47
property under Article V, Section 2(2) of the North Carolina Constitution and is eligible to have 48
interest accruing on the property administered in accordance with th is section. Notwithstanding 49
G.S. 105-360, interest that (i) accrues for the period of January 7, 2025, through December 31, 50
2026, and (ii) is attributable to an underpayment of property tax on qualifying real or personal 51
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 671-First Edition
property due on September 1, 2024, shall not be collected or, to the extent it is collected, shall be 1
carried forward as a credit against the property tax due the following year. This section does not 2
apply to classified motor vehicles. 3
SECTION 2.(b) Application for Relief. – A property owner claiming eligibility for 4
interest relief in accordance with this section must file an application with the assessor of the 5
county in which the property is situated. The application must contain a complete and accurate 6
statement of the facts that entitl e the property to the interest relief and must include 7
documentation substantiating the minimum compensation required as payment or reimbursement 8
for property damage. Application forms must be made available by the assessor. A property 9
owner has the burden of establishing that the property is entitled to the relief provided under this 10
section. In order to be considered, an application must be filed no later than October 1, 2026. 11
Untimely applications shall not be considered. 12
SECTION 3. This act is effective when it becomes law. 13