Revitalizing, Uplifting Regions and Access Local (RURAL) Care Act.

HB 1090 (RURAL Care Act) — North Carolina, Session 2025

Overview
- Purpose: Create a dedicated Rural Healthcare Infrastructure Fund and a Rural Healthcare Infrastructure Program to finance construction, renovation, and modernization of rural health infrastructure. Repeals the existing Rural Health Care Stabilization Program and reorganizes the North Carolina State Health Coordinating Council (SCHCC) to administer the new framework, with updated composition and oversight provisions.

Key Provisions

1) Rural Healthcare Infrastructure Fund (new)
- Establishment: A nonreverting special fund within the Office of State Budget and Management to support rural healthcare infrastructure.
- Administration: Managed by the North Carolina State Health Coordinating Council (SCHCC); custodianship by the State Treasurer, with investments per state law. Fund used exclusively for loans and grants to rural facilities.
- Financing mechanism: Fund operates as a revolving fund. Principal and interest repayments flow back to the Fund.
- Debt service priority: Monies in the Fund first cover debt service obligations supported by the General Fund.
- Eligible uses (via SCHCC discretion):
- New capital projects for facilities licensed in North Carolina (state health law licensed facilities) located in rural areas.
- Repair/renovation of existing rural facilities.
- Other rural healthcare infrastructure projects aligned with the act’s intent.
- Administrative costs for administering the Fund (capped at $100,000 per fiscal year).
- Unspent funds: Unencumbered project funds revert back to the Fund.
- Reporting: Annual report due March 1 to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division, detailing fund receipts, expenditures, project descriptions, reimbursements, and administrative costs, plus future expenditure plans.

2) Plan for Rural Healthcare Infrastructure Program
- Timeline: SCHCC must develop and submit a plan by January 15, 2027.
- Plan contents: Application process, eligibility criteria, definitions of “rural healthcare infrastructure,” project evaluation criteria, fund oversight, contract compliance and performance indicators, long-term financial sustainability, potential funding sources, and any necessary legislative changes.
- Condition for funding: SCHCC may only begin awarding financial assistance after the General Assembly approves a plan via act.

3) Revisions to SCHCC
- Composition and duties amended to reflect new program responsibilities, including administration of the Rural Healthcare Infrastructure Fund.
- Legislative changes to member appointments: To minimize disruption, the bill prescribes staggered replacement terms and new appointment processes for certain seats, with the General Assembly appointing a subset of members as the transition occurs.
- Lobbyist restriction: Prohibits lobbyists from serving on the SCHCC and restricts appointments of individuals previously registered as lobbyists.

4) Repeal and Transfers
- Repeals the Rural Health Care Stabilization Program (with specific statutory exceptions preserved in transition).
- Transfers unrestricted cash from the Rural Health Care Stabilization Fund (Budget Code 23018) to the new Rural Healthcare Infrastructure Fund, effective July 1, 2026. Remaining principal/interest due transfers to the new Fund.
- One-time nonrecurring funding: $1,000,000 to fund a contract with Rural Healthcare Initiative, Inc., to advance sustainable rural healthcare models and support plan development.

Effective Date
- General effective date: July 1, 2026, with various components taking effect as specified (plan due by Jan 15, 2027; fund operations contingent on legislative approval of the plan).

Impact and Implications
- Aims to provide stable, below-market financing for rural healthcare infrastructure, reducing capital barriers for rural facilities.
- Creates formal planning, governance, and accountability through SCHCC oversight and annual reporting.
- Replaces the stabilization fund with a revolving fund model intended to sustain ongoing investments in rural facilities.
- Expected to influence rural hospital systems, clinics, home care, and related local health departments by expanding capital capacity and modernization opportunities.