Final House budget tune-up tweaks renewable energy, venture fund provisions
Posted May 20, 2015
Raleigh, N.C. — The $22.1 billion state budget proposal got a final tune-up in the House Rules Committee on Wednesday afternoon, where lawmakers changed provisions dealing with renewable energy, university fundraising and a new venture capital fund before giving the entire budget plan their blessing.
House leaders expect to take up the bill for debate and the first of two floor votes late Wednesday.
Lawmakers have already vetted the budget in the House Appropriations and House Finance committees. The unusual stop in the Rules Committee was pitched as a technical cleanup, and, in fact, some of the provisions the panel signed off on were uncontroversial. For example, earlier drafts of the budget would have limited schools in the University of North Carolina systems to spending $1 million of taxpayer money each on fundraising every year. An amendment lifted that cap, according to Rules Chairman David Lewis, R-Harnett.
Two measures sparked more debate.
Renewing the renewables debate
The future of tax credits for industries that produce industry from renewable energy sources such as wind and solar have been the subject of a running battle in the House and the Senate over the past two weeks, with no fewer than four bills actively making their way through either chamber carrying changes to the state's renewable energy programs.
House Bill 97, the budget proposal, is now on that list.
An amendment put forward by Rep. John Bell, R-Wayne, would extend the state's renewable energy tax credit until Jan. 1, 2018, beyond the Jan. 1, 2016, expiration date currently enshrined in law but a year less generous than earlier versions of the budget. The same amendment also reduced the value of the credit from 35 percent of a project's value to 20 percent.
The future of the amendment has split the Republican House caucus, with renewable skeptics such as Majority Leader Mike Hager, R-Rutherford, pushing for provisions that limit the industry and a group of more moderate Republicans, which includes Rep. Jason Saine, R-Lincoln, seeking to preserve boosts for the industry.
Saine joked about the ongoing conflict, as well as stumbling over verbiage earlier in the meeting, saying, "One of the reasons I can't pronounce words is Mike Hager has been punching me in the mouth all morning."
The amendment, Saine said among laughs, represented a compromise between the two sides.
Although the new language is less generous than the current credit, it gives companies more time to work with the credits that earlier plans that have been debated.
"The idea was to provide a little bit of certainty and a softer landing for the industry," Bell said.
The provision passed on a voice vote.
Changing the venture fund
A final change heard in committee had less history than the renewable provision but provoked more debate.
In the original draft of the budget, House lawmakers would have set aside $40 million in taxpayer money for a new venture capital fund favored by Gov. Pat McCrory. Changes approved Wednesday say that, instead of tax dollars, that fund will now be fueled by North Carolina's escheats fund.
The escheats manages property that is held by the state when it is lost by, or abandoned by, its original owner. These are bank accounts, utility refunds, tax refunds and the like for which a company or government agency can't find the rightful owner. The money is held in trust until that owner is identified. The interest earned on escheats goes to fund scholarships for low-income students.
Language calling for the use of the escheats fund was approved by McCrory's office as well as the Office of the State Treasurer, but some members of the committee objected both to how the money was being used as well as where it comes from.
Rep. Paul "Skip" Stam, R-Wake, said the escheats fund should be managed for the sole benefit of needy students and the owners of lost property. Instead, he pointed out, $40 million would be taken to use in a venture capital fund.
That $40 million investment would attract $80 million in private capital, all of which would be managed by a new nonprofit committee. Some of the directors of that committee would be appointed by the governor, the treasurer and lawmakers.
Stam said that amounted to the government "picking winners and losers." Others also objected to state government getting into the investment business.
"Venture capitalists are in the business of making money. If they could make money doing a thing in North Carolina, they'd be here already," Rep. Darren Jackson, D-Wake, said.
Others on the committee said that there are hundreds of North Carolina entrepreneurs waiting to get new businesses off the ground who just need the investment to do so.
"This is an absolute job creator," House Appropriations Chairman Nelson Dollar, R-Wake, said, pointing to a similar program in Georgia that has earned returns in that state.
Members of the committee voted 14-11 to make the change. The newly amended bill was approved on a voice vote and sent to the House floor.