Out of Raleigh – Legislative Updates

Before adjourning for the year, budget negotiations in Raleigh continue, as well as work on other outstanding legislation.

Part of the budget negotiations are the Film Incentives, which appear to be headed headed towards a grant program. A $20 million grant program is included in recent budget offers. The proposal is to create a discretionary grant program under the Department of Commerce. To be eligible, a feature film would have to spend at least $10 million in North Carolina. TV series would have to spend $1 million per episode, and commercials spending $500,000. Grants would be capped at $5 million per film and or TV series and $250,000 for commercials. The current cap is $20 million per production.

The Senate Finance committee passed a revised version of HB 1224, Local Sales Tax for Education/Economic Development Changes, which prevents counties from raising sales taxes to pay for both public education and public transportation. The legislation says that counties can raise taxes specifically for transit or for education, but not for both. It caps local sales tax rates at 2.5 cents per dollar. Though it spells out the amount eligible for use on education and transit, the bill allows for more flexibility on how to use sales tax revenue overall.  The bill has stirred controversy in Mecklenburg and Wake counties, where proposals for a referendum in November would raise both counties’ tax rates by ¼ cent to fund education. Although HB 1224 already passed the Senate Finance committee this week, it was re-referred back to committee. The bill also still needs full House and Senate approval, along with the Governor’s signature.

Just in last month's newsletter, we told you about a crowd funding bill becoming reality. Well, it is here: HB 680, Start-Ups Act/New Markets Tax Credit Act, passed the Senate Commerce Committee. The legislation allows NC residents to invest small amounts in new in-state ventures through crowd funding. It paves the way for companies to raise up to $1 million in capital, and $2 million if they have undergone a financial audit, through “unregistered securities.” These companies would have the ability to sell shares, mainly online, directly to small investors, rather than through the stock market. The bill caps each investor’s purchase to $2,000 in “unregistered securities” unless that person is an “accredited investor.” Accredited investor implies a level of financial savvy and stability of funds to have enough money to risk.