In a sign that legislators remain at odds on incentives and corporate tax policy, House Republicans on Tuesday began work on a third substantial economic development bill – with many of the same elements as an earlier House bill that Senate Republicans don’t like.
The House Finance Committee on Tuesday modified a bill initially filed by Democrats. The proposal includes more funding for the state’s main incentives program, called the Job Development Investment Grants program. It would also extend tax breaks for jet fuel, motorsports and technology data centers.
The committee’s chairman, Rep. Jason Saine, said the proposal will ultimately become a separate bill with sponsors from both parties.
Asked why the House plans to run another economic development bill, Saine’s response was, “I say, why not? We’ve sent over one bill that they don’t want to take a look at.”
That bill is House Bill 117, which has many of the same elements. It passed the House earlier this month with bipartisan approval, but hasn’t gathered interest in the Senate. Senate Republicans introduced a much different economic development bill last week, with a heavy emphasis on corporate tax cuts and tweaks to the JDIG program intended to direct funding to rural counties.
Saine noted that Senate rules Chairman Tom Apodaca said the House proposal needed a “lot of look-see.” When the Senate’s version of a jobs bill moves to the House, Saine said “it’ll have a look-see.”
Rep. Susi Hamilton of Wilmington, who sponsored the Democrats’ bill, said the House plan would serve “as the starting point for a third bill.”
The revised version of the Democrats’ bill features several tax credits that weren’t included in House Bill 117, including:
▪ Historic preservation credits, which passed the House Finance Committee Tuesday as a stand-alone bill.
▪ A tax credit program for film production, which expired last year and was replaced by a smaller grant program – prompting film boosters to complain that productions have left North Carolina.
▪ Credits for construction of low-income housing and for users of state-owned ports.
The addition of tax credits is causing heartburn among some Republicans who fear it would gut a GOP-led tax reform. Thanks to reform, Rep. John Blust said, “North Carolina has done better than other states. That’s just a fact I think we need to think about as we move forward.”
Some Democrats voiced concern about provisions stripped from the party’s original bill – namely the earned income tax credit aimed at lower income families.
As House members discussed the new proposal, a Senate committee advanced a bill that would immediately raise the JDIG cap by $5 million – a stopgap measure that was immediately criticized by the administration of Gov. Pat McCrory as a “Band-Aid” approach.