NC Legislative Update 5/4/20

By Connie Wilson & Lexi Arthur

Legislators convened on Tuesday, April 28 for the 2020 legislative short session to consider bills in response to COVID-19. The House and Senate voted on their respective packages within just a few days. Leadership from both chambers spent most of Thursday and Friday negotiating the differences and determining the final spending level of nearly $1.5 billion. On Saturday, lawmakers passed both the policy (SB 704) and budget (HB 1043) bills with bipartisan support. Speaker Moore announced plans to come back into session during the week of May 18th. Until then, the House Select Committee on COVID-19 will resume meeting. When they return later this month, they’ll continue to work on allocating more of the $3.5 billion in federal money that was given to the state for COVID-19 relief. The state has nearly $2 billion remaining, which must be spent by December 31, 2020 to avoid losing it. Legislators hope to receive more federal guidance on how funds from the CARES Act can be used.

Relevant items in the COVID-19 response legislation include:

  • $300M for DOT shortfall if the guidelines change at the federal level to allow for replacement of lost revenues – Only federal funds were allocated this session, the DOT shortfall was an issue before COVID, legislators that CRMCA have talked with say that $300M is not near enough and realize there is a need to look at the funding issue. For the Senate, accountability will be a big component of any solution.
  • Not in final bill was a provision to lower from $300M to $125M the available cash balance at DOT so no further transportation project contract commitments can be made. Rep. John Torbett says DOT’s reserves dropped below the cash floor about a week ago. And thanks to declining gas tax receipts and other revenue, “they’ll be broke in a month and a half.”
  • Not in the final bill was $100M from the General Fund split between the DOT and the DOT Emergency fund
  • Limited business immunity for essential businesses
  • Unemployment benefits changes for benefits payable in response to COVID-19
  • No waiting week for a claim for unemployment due to COVID-19
  • Standard work search requirements do not apply
  • Benefits paid to an individual are not charged to employer account
  • An employer may file an attached claim for these benefits
  • An employer may file attached claims for employees through the use of automation in the case of unemployment due directly to a disaster covered by a federal disaster declaration.
  • An employer is allowed a tax credit for a contribution to the Unemployment Insurance Fund for contributions due for the calendar year 2020.
    • The amount of the credit is equal to the amount of contributions payable on the report filed by the employer on or before April 30, 2020.
  • Franchise, corporate income, and individual income tax payment deadline is extended from April 15, 2020 to July 15, 2020
    • No penalty for failure to file a return or pay a tax due as long as the return is filed and the tax due is paid by July 15, 2020
    • Accrual of interest is waived from April 15, 2020 through July 15, 2020 on an underpayment of tax imposed on a franchise, corporate income, or individual tax return (including partnership and estate and trust tax return)
  • $125,000,000 for Golden LEAF loans to assist small businesses with business needs during periods of economic hardship occasioned by the COVID-19 epidemic