@NCCapitol

@NCCapitol

House bill funds incentives but leaves out crowd-funding

Posted February 24, 2015

Commerce Sec. John Skvarla speaks to the Seante Commerce Committee on Feb. 23, 2015.

— North Carolina House leaders have filed a long-expected economic development bill that would put more money into luring companies to the state, but it leaves out two key programs avidly sought by the administration. 

House Bill 117, the N.C. Competes Act, would put $45 million into what has been known as the JDIG program, which gives back to companies a portion of what they would have paid in payroll taxes. The measure renames the program "Job Growth Reimbursement." 

It contains a previously discussed change in how manufacturers are taxed and a change to lure more data centers to the state. It also contains a provision extending until 2020 a break on jet fuel purchased by commercial airlines. 

However, the measure does not include a crowd-funding provision nor a historic redevelopment tax credit sought by Gov. Pat McCrory's administration. 

House Speaker Tim Moore said the crowd-funding measure may show up in another bill but that it was holding up the drafting of the current bill, which both McCrory and Commerce Secretary John Skvarla have said is urgently needed. 

"That actually caused about a week delay in the bill," Moore, R-Cleveland, said of the crowd-funding component. "There's still debate on the language. So, in consultation with the bill sponsors, they said just pull it out and run it as a separate bill. We don't want to see the economic development bill held up over that one component." 

Both McCrory and Skvarla have made the case that North Carolina is at a competitive disadvantage with others states in terms of landing a "big fish," particularly an automaker or other manufacturer. That's because the state has all but used up its existing economic development programs that provide incentives to companies to relocate. 

So, a new $45 million infusion into incentive grants is likely welcome news, although snow-throttled sessions have meant the bill is moving much more slowly than McCrory had hoped. 

"Our greatest competition are the Southeast states, all of which are ... controlled by Republican General Assemblies. They use incentives, and candidly, as a rule, they use incentives more aggressively than we do," Skvarla told the Senate Commerce Committee on Tuesday morning.

While there is opposition to incentive expansion in both chambers, the most stringent opposition is believed to be in the Senate. 

However, Skvarla told the committee that other parts of the bill would be just as important to spurring economic growth. Crowd-funding, he argued, would provide needed capital to help home-grown startup companies. Renewing the historic preservation tax credit, which expired at the end of 2014, would allow cities to renew aging factory buildings in their downtown areas, putting them back on the tax rolls and making center cities more attractive to companies considering relocation.

"In my humble opinion, it is absolutely necessary that we give some motivation and some incentive to people to restore those downtowns," Skvarla told senators.

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