Raleigh -- May 13, 2026: Governor Josh Stein signed House Bill 433 into law Tuesday, a move that functions as a critical financial "safety valve" to protect hundreds of millions of dollars earmarked for North Carolina’s rural infrastructure.
While the legislation—now Session Law 2026-3—bears the technical title of "SFRF/NCPRO Revisions," its impact is far more tangible: ensuring that federal pandemic recovery money stays in the state to build water lines and expand high-speed internet rather than being returned to the U.S. Treasury.
Protecting the Clock
The primary driver behind HB 433 is a looming federal deadline. Under the American Rescue Plan Act (ARPA), North Carolina received billions in State Fiscal Recovery Funds. However, these funds come with a strict "use it or lose it" clause: all money must be fully spent by December 31, 2026.
For complex infrastructure projects—such as laying miles of fiber-optic cable in remote mountain coves or replacing aging water mains in small towns—unforeseen delays in permitting or supply chains can put that deadline at risk.
The "Fund Swap" Strategy
To prevent a federal "clawback," the new law empowers the North Carolina Pandemic Recovery Office (NCPRO) to perform what is essentially a high-stakes accounting swap.
The Problem: A rural broadband project is moving slower than expected and may not finish by the end of 2026.
The Solution: The state can now "swap" the federal ARPA money allocated for that project with state General Fund money already earmarked for other, more immediate expenses (like state employee payroll or existing operations).
The Result: The federal money is "spent" immediately on current obligations, meeting the deadline. Meanwhile, the state’s own money—which has no expiration date—is moved to the broadband or water project, allowing work to continue without the threat of the funding vanishing.
Strengthening the Rural Backbone
In a statement following the signing, Governor Stein emphasized that the move is vital for the state's most underserved areas.
"North Carolina is home to the second-largest rural population in the country," Stein said. "This bill strengthens rural North Carolina by enabling the Department of Information Technology to continue building critical rural broadband capacity and supporting the Department of Environmental Quality’s work to build more resilient water infrastructure."
Accountability and Oversight
Beyond the financial maneuvering, HB 433 extends the life of the NCPRO through May 1, 2027. This extension ensures that a dedicated office remains in place to oversee the final closeout of these massive federal investments and provides a final layer of transparency for taxpayers.
By creating this flexibility, North Carolina leaders estimate they are protecting between $200 million and $300 million that would have otherwise been sent back to Washington. Instead, that capital will remain in the state, flowing into the pipes and cables that form the foundation of North Carolina's rural economy.