Last week, the North Carolina Senate laid out its 2021 Senate budget. This proposed budget focuses on finance and spending for North Carolina. Under the proposed budget, state employees including teachers and UNC system and community college employees would receive a 3 percent raise over the next two years. The budget also includes tax provisions found in House Bill 334.
Additionally, the proposed budget includes a $5 billion rainy day fund for any natural disasters or occurrences. The budget would spend $25.7 billion in 2021-22 and $26.6billion in 2022-23 and $4.3billion will be allocated to the State Capital Infrastructure fund over the next two years. The House begins their budget negotiations this week and ultimately a conference committee will be appointed to resolve the differences between the two chambers before the bill goes to the Governor for his consideration.
House Bill 680: Reenact Qualified Business Venture Credit also saw movement this week. The bill provides income tax credits for qualified business investments that are headquartered in a tier one or two county; or are in an opportunity zone. Additionally, the legislation increases the total amount of tax credits in a calendar year to $10 million (up from $7.5 million). The bill would become effective on Jan. 1 and contains an expiration date of Jan. 1, 2025. As of June 22, the bill was re-referred to the House Committee on Rules, Calendar, and Operations. The PCS for HB 680 maintains the former law's credit amount that was equal to 25% of investment with a maximum of $50,000 per individual. However, the PCS increases the statewide maximum to $10 million per year and increases the credit by 10 percent of the credit if the investment is a diversity business.
The following types of investments are defined as qualified business:
- Qualified business venture
- Qualified grantee business that has received during the current year or prior 3 years funding from the Small Business Innovation Research Program administered by the US Small Business Administration or from a granting entity (i.e., certain tax-exempt corporations and universities)
- Qualified licensee business that meets all of the following conditions:
- Gross revenues below $1 million
- Certified by a research university as currently performing under a licensing agreement with the university for the purpose of commercializing technology developed at the university
Governor Cooper issued Executive Order No. 216, which reinstated work search requirements for individuals receiving unemployment insurance. One proposal debated by the General Assembly that offered additional incentives for returning to work was Senate Bill 116: Putting North Carolina Back to Work Act . Senate Bill 116 would end the extra $300 weekly benefit payments to unemployed insurance claimants through September 6, 2021. Common ground was not met at the General Assembly. A conference report was filed to resolve the differences between the Senate and the House of Representatives on Senate Bill 116. The conference report has been adopted and is headed to the Governor’s office.
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