North Carolina 2025-2026 Regular Session

North Carolina Senate Bill S651 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		GENERAL ASSEMBLY OF NORTH CAROLINA
2	2		SESSION 2025
3		-	S 1
4		-	SENATE BILL 651
	3	+	S D
	4	+	SENATE BILL DRS45323-MC-153
	5	+
5	6
6	7
7	8		Short Title: The Hustle Act. (Public)
8	9		Sponsors: Senators Garrett, Batch, and Salvador (Primary Sponsors).
9		-	Referred to: ~~Rules and Operations of the Senate~~
10		-	~~March 26, 2025~~
11		-	~~S651 -v-1~~
	10	+	Referred to:
	11	+
	12	+	DRS45323 -MC-153
12	13		A BILL TO BE ENTITLED 1
13	14		AN ACT HELPING UNDERSERVED SMALL -BUSINESS TRIUMPH THROUGH 2
14	15		LENDING ENHANCEMENT . 3
15	16		The General Assembly of North Carolina enacts: 4
16	17		SECTION 1. Article 10 of Chapter 143B of the General Statutes is amended by 5
17	18		adding a new Part to read: 6
18	19		"Part 20A. 7
19	20		"Small Business Capital Access. 8
20	21		"§ 143B-271.113. Small Business Capital Access Act. 9
21	22		(a) Title. – This Part shall be known and may be cited as the "North Carolina Small 10
22	23		Business Capital Access Act." 11
23	24		(b) Findings. – The General Assembly finds as follows: 12
24	25		(1) Small businesses and MWBEs are vital to North Carolina's economy, creating 13
25	26		jobs and driving innovation throughout the State. 14
26	27		(2) Despite their importance, these businesses face persistent barriers to accessing 15
27	28		capital necessary for startup, operation, and growth. 16
28	29		(3) Existing capital access programs have gaps that leave many qualified 17
29	30		businesses unable to secure necessary financing. 18
30	31		(4) Targeted interventions have proven successful in other states and countries in 19
31	32		addressing these capital access disparities. 20
32	33		(5) North Carolina has an opportunity to strengthen its economy by implementing 21
33	34		a coordinated strategy to expand capital access for small businesses and 22
34	35		MWBEs. 23
35	36		(c) Purpose. – The purpose of this Act is to establish a comprehensive framework to 24
36	37		expand access to capital for small businesses and Minority and Women-Owned Business 25
37	38		Enterprises throughout North Carolina through coordinated loan guarantees, direct investment, 26
38	39		support for community lenders, technical assistance, and incentives for private investment. 27
39	40		(d) Definitions. – The following definitions apply in this Act: 28
40	41		(1) Board. – The Small Business Capital Access Oversight Board established by 29
41	42		this Act. 30
42	43		(2) CDFI. – A Community Development Financial Institution certified by the 31
43	44		U.S. Department of the Treasury. 32
44	45		(3) Department. – The North Carolina Department of Commerce. 33
45		-	(4) Fund. – The North Carolina Small Business Capital Access Fund. 34 General Assembly Of North Carolina Session 2025
46		-	Page 2 Senate Bill 651-First Edition
	46	+	(4) Fund. – The North Carolina Small Business Capital Access Fund. 34
	47	+	FILED SENATE
	48	+	Mar 25, 2025
	49	+	S.B. 651
	50	+	PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
	51	+	Page 2 DRS45323-MC-153
47	52		(5) Growth-stage business. – A business that has established a viable product or 1
48	53		service and is seeking capital to expand operations, market reach, or product 2
49	54		offerings. 3
50	55		(6) MWBE. – A minority or women-owned business enterprise certified by the 4
51	56		North Carolina Office for Historically Underutilized Businesses. 5
52	57		(7) Office. – The Office of Small Business Capital Access. 6
53	58		(8) Program. – The North Carolina Small Business Capital Access Program. 7
54	59		(9) Small business. – A business that employs fewer than 500 full-time 8
55	60		employees. 9
56	61		(10) Technical assistance. – Professional guidance provided to business owners in 10
57	62		areas including but not limited to business planning, financial management, 11
58	63		marketing, operations, technology, and accessing capital. 12
59	64		(11) Underserved community. – A census tract that is designated as a low-income 13
60	65		community according to the most recent data from the U.S. Census Bureau or 14
61	66		is located in a rural area as defined by the North Carolina Rural Center. 15
62	67		(e) Office established, duties. – There is established within the Department of Commerce 16
63	68		the Office of Small Business Capital Access. The Office shall be headed by a Director appointed 17
64	69		by the Secretary of Commerce, who shall have substantial experience in small business financing, 18
65	70		economic development, or MWBE support. The Office shall fulfil the following duties: 19
66	71		(1) Administer all components of the North Carolina Small Business Capital 20
67	72		Access Program. 21
68	73		(2) Develop program guidelines, application procedures, and evaluation metrics. 22
69	74		(3) Coordinate with other state agencies providing services to small businesses 23
70	75		and MWBEs. 24
71	76		(4) Conduct outreach to ensure participation by businesses in all regions of the 25
72	77		State. 26
73	78		(5) Collect and analyze data on program outcomes. 27
74	79		(6) Submit annual reports to the General Assembly and the Governor. 28
75	80		(7) Seek additional funding through federal grants, philanthropic sources, and 29
76	81		other avenues. 30
77	82		(f) Board established, duties. – There is established the Small Business Capital Access 31
78	83		Oversight Board to provide strategic guidance for the Program by (i) reviewing and approving 32
79	84		program guidelines developed by the Office; (ii) monitoring program performance and outcomes; 33
80	85		(iii)) advising on strategic priorities and capital deployment strategies; (iv) ensuring the Program 34
81	86		reaches underserved communities and populations; (v) meeting at least quarterly; and (vi) 35
82	87		submitting annual recommendations to the Governor and General Assembly. Board members 36
83	88		shall serve four-year terms; provided that, initial appointments, as determined by the Board, shall 37
84	89		be staggered to ensure at least two members are appointed annually. The Board shall consist of 38
85	90		11 members as follows: 39
86	91		(1) The Secretary of Commerce or the Secretary's designee, who shall serve as 40
87	92		chair. 41
88	93		(2) The State Treasurer or the Treasurer's designee. 42
89	94		(3) The President of the North Carolina Rural Center or the President's designee. 43
90	95		(4) Two members appointed by the Governor, including one representative of a 44
91	96		certified MWBE and one representative of a financial institution active in 45
92	97		small business lending. 46
93	98		(5) Two members appointed by the General Assembly upon the recommendation 47
94	99		of President Pro Tempore of the Senate, including one representative of a 48
95	100		CDFI operating in North Carolina and one small business owner from a rural 49
96	101		county. 50 General Assembly Of North Carolina Session 2025
97		-	~~Senate Bill 651-First Edition~~ Page 3
	102	+	DRS45323-MC-153 Page 3
98	103		(6) Two members appointed by the General Assembly upon recommendation of 1
99	104		the Speaker of the House of Representatives, including one representative of 2
100	105		a chamber of commerce or business association; and one small business owner 3
101	106		from an urban county. 4
102	107		(7) One member appointed by the North Carolina Black Entrepreneurship 5
103	108		Council. 6
104	109		(8) One member appointed by the North Carolina Hispanic Chamber of 7
105	110		Commerce. 8
106	111		(g) North Carolina Small Business Capital Access Program. – There is established the 9
107	112		North Carolina Small Business Capital Access Program, which shall consist of the elements 10
108	113		listed in this subsection. The Office shall develop an application process and detailed guidelines 11
109	114		in compliance with the provisions of this section for each program component in consultation 12
110	115		with the Board and shall ensure coordination among program components to create a 13
111	116		comprehensive capital access ecosystem. The North Carolina Small Business Capital Access 14
112	117		Program includes the following components: 15
113	118		(1) The Small Business Loan Guarantee Program to increase lending to small 16
114	119		businesses and MWBEs by reducing risk for private lenders. Required 17
115	120		guidelines for the Small Business Loan Guarantee Program include, but are 18
116	121		not limited to, the following: 19
117	122		a. The Small Business Loan Guarantee Program shall function to (i) 20
118	123		provide guarantees for loans made by qualified lenders to eligible 21
119	124		small businesses and MWBEs; (ii) cover up to 90 percent of the loan 22
120	125		amount for MWBEs and up to 80 percent for other small businesses; 23
121	126		(iii) prioritize businesses that have been denied traditional financing 24
122	127		despite viable business models; (iv) establish maximum guarantee 25
123	128		amounts based on available funding; and (v) Require reasonable fees 26
124	129		to support program sustainability. 27
125	130		b. Eligible lenders are limited to (i) community banks; (ii) credit unions; 28
126	131		(iii) certified CDFIs; (iv) minority depository institutions; and (v) 29
127	132		other regulated financial institutions with small business lending 30
128	133		experience. 31
129	134		c. Eligible borrowers shall include small businesses and MWBEs that 32
130	135		meet all of the following requirements: 33
131	136		1. Are headquartered and operating in North Carolina. 34
132	137		2. Have been in operation for at least one year. 35
133	138		3. Demonstrate, to the satisfaction of the Office, sound business 36
134	139		practices and growth potential. 37
135	140		4. Have been unable to secure adequate financing through 38
136	141		conventional channels. 39
137	142		5. Will use loan proceeds for business purposes approved by the 40
138	143		Office, including working capital, equipment, inventory, or 41
139	144		expansion. 42
140	145		d. The Office shall develop a streamlined application process for lenders 43
141	146		and borrowers. 44
142	147		e. The Office shall establish a loan loss reserve to cover potential 45
143	148		defaults. 46
144	149		(2) The North Carolina MWBE Growth Fund shall function to provide equity and 47
145	150		near-equity capital to growth-stage MWBEs. Required guidelines for the Fund 48
146	151		include, but are not limited to, the following: 49
147	152		a. The Fund shall function to (i) make direct investments in qualified 50
148	153		MWBEs; (ii) focus on assisting businesses with proven business 51 General Assembly Of North Carolina Session 2025
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	154	+	Page 4 DRS45323-MC-153
150	155		models seeking growth capital; (iii) structure investments as equity, 1
151	156		convertible debt, revenue-based financing, or other flexible 2
152	157		instruments; (iv) make investments ranging from two hundred fifty 3
153	158		thousand dollars ($250,000) to two million dollars ($2,000,000); (v) 4
154	159		require co-investment from private investors on terms to be 5
155	160		determined by the Office; (vi) prioritize investments that will create 6
156	161		quality jobs in North Carolina; and (vii) Reinvest returns from 7
157	162		successful investments to ensure Fund sustainability. 8
158	163		b. The Office shall contract with an experienced fund manager selected 9
159	164		through a competitive process to manage the Fund, with oversight 10
160	165		from the Board. 11
161	166		c. The fund manager shall meet all of the following requirements: 12
162	167		1. Have demonstrated experience in MWBE investment. 13
163	168		2. Have a track record of successful investments in growth-stage 14
164	169		businesses. 15
165	170		3. Reflect the diversity of North Carolina in its leadership and 16
166	171		team. 17
167	172		4. Provide regular reports to the Office and Board on Fund 18
168	173		performance. 19
169	174		5. Provide post-investment support to portfolio companies. 20
170	175		(3) The CDFI Support Initiative to strengthen the capacity of Community 21
171	176		Development Financial Institutions serving North Carolina communities. 22
172	177		Required guidelines for the Initiative include, but are not limited to, the 23
173	178		following: 24
174	179		a. The Initiative shall function to (i) provide direct grants to certified 25
175	180		CDFIs operating in North Carolina; (ii) offer low-cost loan capital for 26
176	181		CDFI relending programs; (iii) support capacity building for CDFI 27
177	182		operations; and (iv) facilitate partnerships between CDFIs and 28
178	183		traditional financial institutions. 29
179	184		b. Grant funds may be used for (i) loan loss reserves; (ii) operating 30
180	185		support; (iii) technology improvements; (iv) product development; 31
181	186		and (v) technical assistance capacity. 32
182	187		c. Priority shall be given to CDFIs that (i) primarily serve rural areas or 33
183	188		underserved urban communities; (ii) demonstrate strong performance 34
184	189		and financial management; (iii) show substantial lending impact in 35
185	190		target communities; and (iv) leverage additional private capital. 36
186	191		d. Reporting on performance and grant funds shall be provided by 37
187	192		certified CDFIs as required by the Office. 38
188	193		(4) The Small Business Technical Assistance Network to ensure businesses 39
189	194		receiving capital are prepared to use it effectively. Required guidelines for the 40
190	195		Network include, but are not limited to, the following: 41
191	196		a. The Initiative shall function to (i) provide business development 42
192	197		services to participants in all Program components; (ii) coordinate 43
193	198		existing technical assistance providers throughout the State; (iii) fund 44
194	199		expanded capacity for high-performing providers; (iv) develop 45
195	200		specialized assistance for specific industries or business needs; and (v) 46
196	201		ensure services are accessible in all regions of the State. 47
197	202		b. Services provided shall include all of the following: 48
198	203		1. Business planning and financial management. 49
199	204		2. Market analysis and marketing strategy. 50
200	205		3. Operations and human resources support. 51 General Assembly Of North Carolina Session 2025
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	206	+	DRS45323-MC-153 Page 5
202	207		4. Technology adoption assistance. 1
203	208		5. Certification preparation for government contracting. 2
204	209		6. Capital readiness preparation. 3
205	210		c. The Office shall develop a simplified referral system to connect 4
206	211		businesses to appropriate services. 5
207	212		d. The Office shall track technical assistance outcomes and their 6
208	213		correlation with capital access program success. 7
209	214		(6) The State Procurement Financing Initiative to help small businesses and 8
210	215		MWBEs access the capital necessary to fulfill State contracts. Required 9
211	216		guidelines for the Initiative include, but are not limited to, the following: 10
212	217		a. The Initiative shall consist of the following: 11
213	218		1. A mobilization capital program providing short-term loans to 12
214	219		cover upfront costs of contract performance. 13
215	220		2. A factoring program allowing businesses to obtain immediate 14
216	221		payment on state contract invoices at favorable rates. 15
217	222		3. A bonding assistance program to help contractors secure 16
218	223		required performance and payment bonds. 17
219	224		4. A quickpay requirement mandating that all State agencies pay 18
220	225		approved invoices from small businesses and MWBEs within 19
221	226		15 days. 20
222	227		b. Eligible businesses must (i) be certified as an MWBE or qualify as a 21
223	228		small business; (ii) have been awarded a contract with a State agency 22
224	229		or institution; and (iii) demonstrate the capacity to successfully 23
225	230		complete the contract with appropriate financial support. 24
226	231		c. The Office shall coordinate with the Division of Purchase and Contract 25
227	232		and other State contracting entities to implement the Initiative. 26
228	233		d. The guidelines created by the Office shall, for each program 27
229	234		component, including application procedures, maximum assistance 28
230	235		amounts, terms, and fees. 29
231	236		(7) The Small Business Innovation Fund to support innovative small businesses 30
232	237		with high growth potential. Required guidelines for the Fund include, but are 31
233	238		not limited to, the following: 32
234	239		a. The Fund shall function to (i) provide matching grants for recipients 33
235	240		of federal Small Business Innovation Research (SBIR) and Small 34
236	241		Business Technology Transfer (STTR) awards; (2) Support university 35
237	242		technology commercialization partnerships with small businesses; (3) 36
238	243		Fund regional innovation hubs in different parts of the state; and (4) 37
239	244		Provide proof-of-concept grants for promising innovations with 38
240	245		commercial potential. 39
241	246		b. The matching grant program shall: (1) Provide supplemental funding 40
242	247		of up to 50 percent of the federal award amount, not to exceed 41
243	248		$100,000; (2) Be available to North Carolina-based recipients of Phase 42
244	249		I SBIR or STTR awards; and (3) Include technical assistance to 43
245	250		support successful Phase II applications. 44
246	251		c. Regional innovation hubs shall: (1) Be established in partnership with 45
247	252		universities, community colleges, and private sector entities; (2) 46
248	253		Provide physical space, equipment, and resources for entrepreneurs; 47
249	254		(3) Offer specialized programming for innovative businesses; and (4) 48
250	255		Connect entrepreneurs with capital sources and business development 49
251	256		resources. 50 General Assembly Of North Carolina Session 2025
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	257	+	Page 6 DRS45323-MC-153
253	258		d. The Office shall establish guidelines for each program component in 1
254	259		consultation with the North Carolina Board of Science, Technology & 2
255	260		Innovation. 3
256	261		(h) The North Carolina Small Business Capital Access Fund is established as a special 4
257	262		revenue fund in the Department of Commerce. The Fund shall consist of (i) appropriations by 5
258	263		the General Assembly; (ii) federal grant funds; (iii) private contributions and donations; (iv) loan 6
259	264		repayments and investment returns; (v) fees collected from program participants; and (vi) interest 7
260	265		earnings. The Fund shall be used exclusively for the purposes set forth in this section, including 8
261	266		reasonable administrative expenses. The Office shall establish separate accounts within the Fund 9
262	267		for different program components as necessary for proper financial management. 10
263	268		(i) The Office shall develop and implement a comprehensive evaluation framework to 11
264	269		measure the impact and effectiveness of the Program. Performance metrics shall include at least 12
265	270		(i) the number and demographics of businesses served by each program component; (ii) the 13
266	271		amount of capital deployed, by program component, geographic region, industry, and business 14
267	272		demographics; (iii) the number of jobs created and retained as a result of Program assistance; (iv) 15
268	273		business revenue growth following program participation; (v) the amount of follow-on capital 16
269	274		secured by participants; (vi) default rates and program sustainability; (vii) return on investment 17
270	275		of public funds; and (viii) the economic impact in underserved communities. The Office contract 18
271	276		for and procure an independent evaluation by a qualified external entity every three years and 19
272	277		shall submit an annual report to the Governor and General Assembly by October 1, which shall 20
273	278		include all of the following: 21
274	279		(1) Detailed information on program activities and outcomes. 22
275	280		(2) Financial statements for the Fund. 23
276	281		(3) Analysis of program effectiveness. 24
277	282		(4) Recommendations for program improvements. 25
278	283		(5) Other information requested by the Board. 26
279	284		(6) A copy of the report produced as a result of the independent evaluation 27
280	285		required by this subsection in years in which it is produced." 28
281	286		SECTION 2. Tax Credit. – Part 5 of Article 4 of Subchapter I of Chapter 105 of the 29
282	287		General Statutes is reenacted as it existed immediately before its repeal and reads as rewritten: 30
283	288		"Part 5. Tax Credits for Qualified Certain Business Investments. 31
284	289		"§ 105-163.010. Definitions. 32
285	290		The following definitions apply in this Part: 33
286	291		(1) Affiliate. – An individual or business that controls, is controlled by, or is under 34
287	292		common control with another individual or business. 35
288	293		(2) Business. – A corporation, partnership, limited liability company, association, 36
289	294		or sole proprietorship operated for profit. 37
290	295		(3) Control. – A person controls an entity if the person owns, directly or 38
291	296		indirectly, more than ten percent (10%) of the voting securities of that entity. 39
292	297		As used in this subdivision, the term "voting security" means a security that 40
293	298		(i) confers upon the holder the right to vote for the election of members of the 41
294	299		board of directors or similar governing body of the business or (ii) is 42
295	300		convertible into, or entitles the holder to receive upon its exercise, a security 43
296	301		that confers such a right to vote. A general partnership interest is a voting 44
297	302		security. 45
298	303		(3a) Eligible investor. – A person subject to one or more of the following: 46
299	304		a. The franchise tax levied in Article 3 of this Chapter. 47
300	305		b. The income taxes levied in Article 4 of this Chapter. 48
301	306		c. The gross premiums tax levied in Article 8B of this Chapter. 49
302	307		(3b) Eligible business. – A business that (i) is registered with the Secretary of State 50
303	308		under G.S. 105-163.013, (ii) has received during the current year or any of the 51 General Assembly Of North Carolina Session 2025
304		-	~~Senate Bill 651-First Edition~~ Page 7
	309	+	DRS45323-MC-153 Page 7
305	310		preceding three years assistance from the Office of Small Business Capital 1
306	311		Access pursuant to G.S. 143B-271.113, (iii) is headquartered and primarily 2
307	312		operating in this State, (iv) has been in operation at least one year, (v) during 3
308	313		its most recent fiscal year before filing an application for registration under 4
309	314		G.S. 105 163.013, it had gross revenues, as determined in accordance with 5
310	315		generally accepted accounting principles, of five million dollars ($5,000,000) 6
311	316		or less on a consolidated basis, and (vi) has 100 or fewer full-time employees. 7
312	317		(4) Equity security. – Common stock, preferred stock, or an interest in a 8
313	318		partnership, or subordinated debt that is convertible into, or entitles the holder 9
314	319		to receive upon its exercise, common stock, preferred stock, or an interest in 10
315	320		a partnership. 11
316	321		(5) Financial institution. – A business that is (i) a bank holding company, as 12
317	322		defined in the Bank Holding Company Act of 1956, 12 U.S.C. §§ 1841, et 13
318	323		seq., or its wholly owned subsidiary, (ii) registered as a broker-dealer under 14
319	324		the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a, et seq., or its wholly 15
320	325		owned subsidiary, (iii) an investment company as defined in the Investment 16
321	326		Company Act of 1940, 15 U.S.C. §§ 80a-1, et seq., whether or not it is required 17
322	327		to register under that act, (iv) a small business investment company as defined 18
323	328		in the Small Business Investment Act of 1958, 15 U.S.C. §§ 661, et seq., (v) 19
324	329		a pension or profit-sharing fund or trust, or (vi) a bank, savings institution, 20
325	330		trust company, financial services company, or insurance company. The term 21
326	331		does not include, however, a business, other than a small business investment 22
327	332		company, whose net worth, when added to the net worth of all of its affiliates, 23
328	333		is less than ten million dollars ($10,000,000). The term also does not include 24
329	334		a business that does not generally market its services to the public and is 25
330	335		controlled by a business that is not a financial institution. 26
331	336		(5a) Granting entity. – Any of the following: 27
332	337		a. A domestic or foreign corporation that (i) is tax-exempt pursuant to 28
333	338		section 501(c)(3) of the Code, (ii) has as its principal purpose the 29
334	339		stimulation of the development of the biotechnology industry, and (iii) 30
335	340		in furtherance of that purpose has received, or is a successor in interest 31
336	341		to an organization that has received, direct appropriations from the 32
337	342		State in at least three fiscal years. 33
338	343		b. A domestic or foreign corporation that meets the following three 34
339	344		conditions: 35
340	345		1. It is tax-exempt pursuant to section 501(c)(3) of the Code, is a 36
341	346		private foundation pursuant to section 509 of the Code, or is an 37
342	347		affiliate of either of the foregoing. 38
343	348		2. It has as its principal purpose one of the following: conducting 39
344	349		research and development in, or stimulating the development 40
345	350		of, electronic, photonic, information, or other technologies, 41
346	351		which may include investing in companies that provide 42
347	352		research, development, products, or services in these 43
348	353		technologies. 44
349	354		3. It meets one of the following conditions: 45
350	355		I. It received direct appropriations in furtherance of one 46
351	356		of these purposes from the State in at least three fiscal 47
352	357		years. 48
353	358		II. It was organized to perform one of these purposes for 49
354	359		an organization that meets condition I of this 50
355	360		sub-subdivision. 51 General Assembly Of North Carolina Session 2025
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357	362		III. It is an affiliate of an entity that meets condition II of 1
358	363		this sub-subdivision. 2
359	364		c. An institute that (i) is administratively located within a constituent 3
360	365		institution of The University of North Carolina, (ii) is financed in part 4
361	366		by a domestic or foreign corporation that is tax-exempt pursuant to 5
362	367		section 501(c)(3) of the Code, (iii) has as a principal purpose the 6
363	368		stimulation of economic development based on the advancement of 7
364	369		science, engineering, and technology, and (iv) funds, either directly or 8
365	370		in collaboration with other entities, small businesses engaging in 9
366	371		developing technology. 10
367	372		(6) North Carolina Enterprise Corporation. – A corporation established in 11
368	373		accordance with Article 3 of Chapter 53A of the General Statutes or a limited 12
369	374		partnership in which a North Carolina Enterprise Corporation is the only 13
370	375		general partner. 14
371	376		(7) Pass-through entity. – Defined in G.S. 105-228.90. 15
372	377		(7b) Qualified business. – A qualified business venture, a qualified grantee 16
373	378		business, or a qualified licensee business. 17
374	379		(8) Qualified business venture. – A business that (i) engages primarily in 18
375	380		manufacturing, processing, warehousing, wholesaling, research and 19
376	381		development, or a service-related industry, and (ii) is registered with the 20
377	382		Secretary of State under G.S. 105-163.013. 21
378	383		(9) Qualified grantee business. – A business that (i) is registered with the 22
379	384		Secretary of State under G.S. 105-163.013, and (ii) has received during the 23
380	385		current year or any of the preceding three years a grant, an investment, or other 24
381	386		funding from a federal agency under the Small Business Innovation Research 25
382	387		Program administered by the United States Small Business Administration or 26
383	388		from a granting entity as defined in this section. 27
384	389		(9a) Qualified licensee business. – A business that meets all of the following 28
385	390		conditions: 29
386	391		a. It is registered with the Secretary of State under G.S. 105-163.013. 30
387	392		b. During its most recent fiscal year before filing an application for 31
388	393		registration under G.S. 105-163.013, it had gross revenues, as 32
389	394		determined in accordance with generally accepted accounting 33
390	395		principles, of one million dollars ($1,000,000) or less on a 34
391	396		consolidated basis. 35
392	397		c. It has been certified by a constituent institution of The University of 36
393	398		North Carolina or a research university as currently performing under 37
394	399		a licensing agreement with the institution or university for the purpose 38
395	400		of commercializing technology developed at the institution or 39
396	401		university. For the purpose of this section, a research university is an 40
397	402		institution of higher education classified as a Doctoral/Research 41
398	403		University, Extensive or Intensive, in the most recent edition of "A 42
399	404		Classification of Institutions of Higher Education", the official report 43
400	405		of The Carnegie Foundation for the Advancement of Teaching. 44
401	406		(10) Real estate-related business. – A business that is involved in or related to the 45
402	407		brokerage, selling, purchasing, leasing, operating, or managing of hotels, 46
403	408		motels, nursing homes or other lodging facilities, golf courses, sports or social 47
404	409		clubs, restaurants, storage facilities, or commercial or residential lots or 48
405	410		buildings is a real estate-related business, except that a real estate-related 49
406	411		business does not include (i) a business that purchases or leases real estate 50
407	412		from others for the purpose of providing itself with facilities from which to 51 General Assembly Of North Carolina Session 2025
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409	414		conduct a business that is not itself a real estate-related business or (ii) a 1
410	415		business that is not otherwise a real estate-related business but that leases, 2
411	416		subleases, or otherwise provides to one or more other persons a number of 3
412	417		square feet of space which in the aggregate does not exceed fifty percent 4
413	418		(50%) of the number of square feet of space occupied by the business for its 5
414	419		other activities. 6
415	420		(10a) Related person. – A person described in one of the relationships set forth in 7
416	421		section 267(b) or 707(b) of the Code. 8
417	422		(11) Security. – A security as defined in Section 2(1) of the Securities Act of 1933, 9
418	423		15 U.S.C. § 77b(1). 10
419	424		(12) Selling or leasing at retail. – A business is selling or leasing at retail if the 11
420	425		business either (i) sells or leases any product or service of any nature from a 12
421	426		store or other location open to the public generally or (ii) sells or leases 13
422	427		products or services of any nature by means other than to or through one or 14
423	428		more other businesses. 15
424	429		(13) Service-related industry. – A business is engaged in a service-related industry, 16
425	430		whether or not it also sells a product, if it provides services to customers or 17
426	431		clients and does not as a substantial part of its business engage in a business 18
427	432		described in G.S. 105-163.013(b)(4). A business is engaged as a substantial 19
428	433		part of its business in an activity described in G.S. 105-163.013(b)(4) if (i) its 20
429	434		gross revenues derived from all activities described in that subdivision exceed 21
430	435		twenty-five percent (25%) of its gross revenues in any fiscal year or (ii) it is 22
431	436		established as one of its primary purposes to engage in any activities described 23
432	437		in that subdivision, whether or not its purposes were stated in its articles of 24
433	438		incorporation or similar organization documents. 25
434	439		(14) Subordinated debt. – Indebtedness that is not secured and is subordinated to 26
435	440		all other indebtedness of the issuer issued or to be issued to a financial 27
436	441		institution other than a financial institution described in subdivisions (5)(ii) 28
437	442		through (5)(v) of this section. Except as provided in G.S. 105-163.014(d1), 29
438	443		any portion of indebtedness that matures earlier than five three years after its 30
439	444		issuance is not subordinated debt. 31
440	445		"§ 105-163.011. Tax credits allowed. 32
441	446		(a) No Credit for Brokered Investments. – No credit is allowed under this section for a 33
442	447		purchase of equity securities or subordinated debt if a broker's fee or commission or other similar 34
443	448		remuneration is paid or given directly or indirectly for soliciting the purchase. 35
444	449		(b) Individuals. –Eligible Investors. – Subject to the limitations contained in 36
445	450		G.S. 105-163.012, an individual eligible investor who purchases the equity securities or 37
446	451		subordinated debt of a qualified businessan eligible business directly from that business is 38
447	452		allowed as a credit against the tax imposed by Part 2 of this Article for the taxable year an amount 39
448	453		equal to twenty-five percent (25%) of the amount invested. The aggregate amount of credit 40
449	454		allowed an individual eligible investor for one or more investments made in a single taxable year 41
450	455		under this Part, whether directly or indirectly as owner of a pass-through entity, may not be less 42
451	456		than ten thousand dollars ($10,000) and may not exceed fifty five hundred thousand dollars 43
452	457		($50,000).($500,000). The credit may not be taken for the year in which the investment is made 44
453	458		but may be taken for the taxable year beginning during the calendar year in which the application 45
454	459		for the credit becomes effective as provided in subsection (c) of this section. 46
455	460		(b1) Pass-Through Entities. – This subsection does not apply to a pass-through entity that 47
456	461		has committed capital under management in excess of five million dollars ($5,000,000) or to a 48
457	462		pass-through entity that is a qualified business or a North Carolina Enterprise Corporation. 49
458	463		Subject to the limitations provided in G.S. 105-163.012, a pass-through entity that purchases the 50
459	464		equity securities or subordinated debt of a qualified business directly from the business is eligible 51 General Assembly Of North Carolina Session 2025
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461	466		for a tax credit equal to twenty-five percent (25%) of the amount invested. The aggregate amount 1
462	467		of credit allowed a pass-through entity for one or more investments made in a single taxable year 2
463	468		under this Part, whether directly or indirectly as owner of another pass-through entity, may not 3
464	469		exceed seven hundred fifty thousand dollars ($750,000). The pass-through entity is not eligible 4
465	470		for the credit for the year in which the investment by the pass-through entity is made but is 5
466	471		eligible for the credit for the taxable year beginning during the calendar year in which the 6
467	472		application for the credit becomes effective as provided in subsection (c) of this section. 7
468	473		Each individual who is an owner of a pass-through entity is allowed as a credit against the 8
469	474		tax imposed by Part 2 of this Article for the taxable year an amount equal to the owner's allocated 9
470	475		share of the credits for which the pass-through entity is eligible under this subsection. The 10
471	476		aggregate amount of credit allowed an individual for one or more investments made in a single 11
472	477		taxable year under this Part, whether directly or indirectly as owner of a pass-through entity, may 12
473	478		not exceed fifty thousand dollars ($50,000). 13
474	479		If an owner's share of the pass-through entity's credit is limited due to the maximum allowable 14
475	480		credit under this section for a taxable year, the pass-through entity and its owners may not 15
476	481		reallocate the unused credit among the other owners. 16
477	482		(b2) Credit Bonus. – The credit allowed under this Part shall be increased by ten percent 17
478	483		(10%) of the credit amount if the amount generating the credit is invested in an eligible business 18
479	484		that is (i) located in a development tier one area or development tier two area, as defined in 19
480	485		G.S. 143B-437.08, (ii) an MWBE, as defined in G.S. X, or (iii) both. 20
481	486		(c) Application. – To be eligible for the tax credit provided in this section, the taxpayer 21
482	487		eligible investor must file an application for the credit with the Secretary. The application should 22
483	488		be filed on or before April 15 of the year following the calendar year in which the investment 23
484	489		was made. The Secretary may not accept an application filed after October 15 of the year 24
485	490		following the calendar year in which the investment was made. An application is effective for 25
486	491		the year in which it is timely filed. The application must be on a form prescribed by the Secretary 26
487	492		and must include any supporting documentation that the Secretary may require. If an investment 27
488	493		for which a credit is applied for was paid for other than in money, the taxpayer must include with 28
489	494		the application a certified appraisal of the value of the property used to pay for the investment. 29
490	495		The application for a credit for an investment made by a pass-through entity must be filed by the 30
491	496		pass-through entity. 31
492	497		(d) Penalties. – The penalties provided in G.S. 105-236 apply in this Part. 32
493	498		"§ 105-163.012. Limit; carry-over; ceiling; reduction in basis. 33
494	499		(a) The credit allowed a taxpayer under G.S. 105-163.011 may not exceed the amount of 34
495	500		income tax imposed by Part 2 of this Article for the taxable year reduced by the sum of all other 35
496	501		credits allowable except tax payments made by or on behalf of the taxpayer. The amount of 36
497	502		unused credit allowed under G.S. 105-163.011 may be carried forward for the next five 37
498	503		succeeding years. 38
499	504		(b) The total amount of all tax credits allowed to taxpayers under G.S. 105-163.011 for 39
500	505		investments made in a calendar year may not exceed seven million five hundred thousandten 40
501	506		million dollars ($7,500,000).($10,000,000). The Secretary of Revenue shall calculate the total 41
502	507		amount of tax credits claimed from the applications filed pursuant to G.S. 105-163.011(c). If the 42
503	508		total amount of tax credits claimed for investments made in a calendar year exceeds this 43
504	509		maximum amount, the Secretary shall allow a portion of the credits claimed by allocating the 44
505	510		maximum amount in tax credits in proportion to the size of the credit claimed by each taxpayer. 45
506	511		(c) If a credit claimed under G.S. 105-163.011 is reduced as provided in this section, the 46
507	512		Secretary shall notify the taxpayer of the amount of the reduction of the credit on or before 47
508	513		December 31 of the year following the calendar year in which the investment was made. The 48
509	514		Secretary's allocations based on applications filed pursuant to G.S. 105-163.011(c) are final and 49
510	515		shall not be adjusted to account for credits applied for but not claimed. 50 General Assembly Of North Carolina Session 2025
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512	517		(d) The taxpayer's basis in the equity securities or subordinated debt acquired as a result 1
513	518		of an investment in a qualifiedan eligible business shall be reduced for the purposes of this Article 2
514	519		by the amount of allowable credit. "Allowable credit" means the amount of credit allowed under 3
515	520		G.S. 105-163.011 reduced as provided in subsection (c) of this section. 4
516	521		"§ 105-163.013. Registration. 5
517	522		(a) Repealed by Session Laws 1993, c. 443, s. 4. 6
518	523		(b) Qualified Business Ventures. – In order to qualify as a qualified business venture 7
519	524		under this Part, a business must be registered with the Securities Division of the Department of 8
520	525		the Secretary of State. To register, the business must file with the Secretary of State an application 9
521	526		and any supporting documents the Secretary of State may require from time to time to determine 10
522	527		that the business meets the requirements for registration as a qualified business venture. A 11
523	528		business meets the requirements for registration as a qualified business venture if all of the 12
524	529		following are true as of the date the business files the required application: 13
525	530		(1) Repealed by Session Laws 1996, Second Extra Session, c. 14, s. 7. 14
526	531		(1a) Reserved for future codification purposes. 15
527	532		(1b) Either (i) it was organized after January 1 of the calendar year in which its 16
528	533		application is filed or (ii) during its most recent fiscal year before filing the 17
529	534		application, it had gross revenues, as determined in accordance with generally 18
530	535		accepted accounting principles, of five million dollars ($5,000,000) or less on 19
531	536		a consolidated basis. 20
532	537		(2) Repealed by Session Laws 1996, Second Extra Session, c. 14, s. 7. 21
533	538		(3) It is organized to engage primarily in manufacturing, processing, 22
534	539		warehousing, wholesaling, research and development, or a service-related 23
535	540		industry. 24
536	541		(4) It does not engage as a substantial part of its business in any of the following: 25
537	542		a. Providing a professional service as defined in Chapter 55B of the 26
538	543		General Statutes. 27
539	544		b. Construction or contracting. 28
540	545		c. Selling or leasing at retail. 29
541	546		d. The purchase, sale, or development, or purchasing, selling, or holding 30
542	547		for investment of commercial paper, notes, other indebtedness, 31
543	548		financial instruments, securities, or real property, or otherwise make 32
544	549		investments. 33
545	550		e. Providing personal grooming or cosmetics services. 34
546	551		f. Offering any form of entertainment, amusement, recreation, or athletic 35
547	552		or fitness activity for which an admission or a membership is charged. 36
548	553		(5) It was not formed for the primary purpose of acquiring all or part of the stock 37
549	554		or assets of one or more existing businesses. 38
550	555		(6) It is not a real estate-related business. 39
551	556		The effective date of registration for a qualified business venture whose application is 40
552	557		accepted for registration is 60 days before the date its application is filed. No credit is allowed 41
553	558		under this Part for an investment made before the effective date of the registration or after the 42
554	559		registration is revoked. For the purpose of this Article, if a taxpayer's investment is placed 43
555	560		initially in escrow conditioned upon other investors' commitment of additional funds, the date of 44
556	561		the investment is the date escrowed funds are transferred to the qualified business venture free 45
557	562		of the condition. 46
558	563		To remain qualified as a qualified business venture, the business must renew its registration 47
559	564		annually as prescribed by rule by filing a financial statement for the most recent fiscal year 48
560	565		showing gross revenues, as determined in accordance with generally accepted accounting 49
561	566		principles, of five million dollars ($5,000,000) or less on a consolidated basis and an application 50
562	567		for renewal in which the business certifies the facts required in the original application. 51 General Assembly Of North Carolina Session 2025
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564	569		Failure of a qualified business venture to renew its registration by the applicable deadline 1
565	570		shall result in revocation of its registration effective as of the next day after the renewal deadline, 2
566	571		but shall not result in forfeiture of tax credits previously allowed to taxpayers who invested in 3
567	572		the business except as provided in G.S. 105-163.014. The Secretary of State shall send the 4
568	573		qualified business venture notice of revocation within 60 days after the renewal deadline. A 5
569	574		qualified business venture may apply to have its registration reinstated by the Secretary of State 6
570	575		by filing an application for reinstatement, accompanied by the reinstatement application fee and 7
571	576		a late filing penalty of one thousand dollars ($1,000), within 30 days after receipt of the 8
572	577		revocation notice from the Secretary of State. A business that seeks approval of a new application 9
573	578		for registration after its registration has been revoked must also pay a penalty of one thousand 10
574	579		dollars ($1,000). A registration that has been reinstated is treated as if it had not been revoked. 11
575	580		If the gross revenues of a qualified business venture exceed five million dollars ($5,000,000) 12
576	581		in a fiscal year, the business must notify the Secretary of State in writing of this fact by filing a 13
577	582		financial statement showing the revenues of the business for that year. 14
578	583		(b1) Qualified Licensee Businesses. – In order to qualify as a qualified licensee business 15
579	584		under this Part, a business must be registered with the Securities Division of the Department of 16
580	585		the Secretary of State. To register, the business must file with the Secretary of State an application 17
581	586		and any supporting documents the Secretary of State may require from time to time to determine 18
582	587		that the business meets the requirements for registration as a qualified licensee business. The 19
583	588		requirements for registration as a qualified licensee business are set out in G.S. 105-163.010. 20
584	589		The effective date of registration for a qualified licensee business whose application is 21
585	590		accepted for registration is the filing date of its application. No credit is allowed under this Part 22
586	591		for an investment made before the effective date of the registration or after the registration is 23
587	592		revoked. 24
588	593		To remain qualified as a qualified licensee business, the business must renew its registration 25
589	594		annually as prescribed by rule by filing a financial statement for the most recent fiscal year 26
590	595		showing gross revenues, as determined in accordance with generally accepted accounting 27
591	596		principles, of one million dollars ($1,000,000) or less on a consolidated basis and an application 28
592	597		for renewal in which the business certifies the facts required in the original application. 29
593	598		Failure of a qualified licensee venture to renew its registration by the applicable deadline 30
594	599		results in revocation of its registration effective as of the next day after the renewal deadline, but 31
595	600		does not result in forfeiture of tax credits previously allowed to taxpayers who invested in the 32
596	601		business except as provided in G.S. 105-163.014. The Secretary of State shall send the qualified 33
597	602		licensee business notice of revocation within 60 days after the renewal deadline. A qualified 34
598	603		licensee business may apply to have its registration reinstated by the Secretary of State by filing 35
599	604		an application for reinstatement, accompanied by the reinstatement application fee and a late 36
600	605		filing penalty of one thousand dollars ($1,000), within 30 days after receipt of the revocation 37
601	606		notice from the Secretary of State. A business that seeks approval of a new application for 38
602	607		registration after its registration has been revoked must also pay a penalty of one thousand dollars 39
603	608		($1,000). A registration that has been reinstated is treated as if it had not been revoked. 40
604	609		If the gross revenues of a qualified business venture exceed one million dollars ($1,000,000) 41
605	610		in a fiscal year, the business must notify the Secretary of State in writing of this fact by filing a 42
606	611		financial statement showing the revenues of the business for that year. 43
607	612		(c) Qualified Grantee Businesses. – In order to qualify as a qualified grantee business 44
608	613		under this Part, a business must be registered with the Securities Division of the Department of 45
609	614		the Secretary of State. To register, the business must file with the Secretary of State an application 46
610	615		and any supporting documents the Secretary of State may require from time to time to determine 47
611	616		that the business meets the requirements for registration as a qualified grantee business. The 48
612	617		requirements for registration as a qualified grantee business are set out in G.S. 105-163.010. 49
613	618		The effective date of registration for a qualified grantee business whose application is 50
614	619		accepted for registration is the filing date of its application. No credit is allowed under this Part 51 General Assembly Of North Carolina Session 2025
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	620	+	DRS45323-MC-153 Page 13
616	621		for an investment made before the effective date of the registration or after the registration is 1
617	622		revoked. 2
618	623		To remain qualified as a qualified grantee business, the business must renew its registration 3
619	624		annually as prescribed by rule by filing an application for renewal in which the business certifies 4
620	625		the facts demonstrating that it continues to meet the applicable requirements for qualification. 5
621	626		(d) Application Forms; Rules; Fees. – Applications for registration, renewal of 6
622	627		registration, and reinstatement of registration under this section shall be in the form required by 7
623	628		the Secretary of State. The Secretary of State may, by rule, require applicants to furnish 8
624	629		supporting information in addition to the information required by subsections (b), (b1), and (c) 9
625	630		of this section. The Secretary of State may adopt rules in accordance with Chapter 150B of the 10
626	631		General Statutes that are needed to carry out the Secretary's responsibilities under this Part. The 11
627	632		Secretary of State shall prepare blank forms for the applications and shall distribute them 12
628	633		throughout the State and furnish them on request. Each application shall be signed by the owners 13
629	634		of the business or, in the case of a corporation, by its president, vice-president, treasurer, or 14
630	635		secretary. There shall be annexed to the application the affirmation of the person making the 15
631	636		application in the following form: "Under penalties prescribed by law, I certify and affirm that 16
632	637		to the best of my knowledge and belief this application is true and complete." A person who 17
633	638		submits a false application is guilty of a Class 1 misdemeanor. 18
634	639		The fee for filing an application for registration under this section is one hundred dollars 19
635	640		($100.00). The fee for filing an application for renewal of registration under this section is fifty 20
636	641		dollars ($50.00). The fee for filing an application for reinstatement of registration under this 21
637	642		section is fifty dollars ($50.00). 22
638	643		An application for renewal of registration under this section must indicate whether the 23
639	644		applicant is a minority business, as defined in G.S. 143-128, and include a report of the number 24
640	645		of jobs the business created during the preceding year that are attributable to investments that 25
641	646		qualify under this section for a tax credit and the average wages paid by each job. An application 26
642	647		that does not contain this information is incomplete and the applicant's registration may not be 27
643	648		renewed until the information is provided. 28
644	649		(e) Revocation of Registration. – If the Securities Division of the Department of the 29
645	650		Secretary of State finds that any of the information contained in an application of a business 30
646	651		registered under this section is false, it shall revoke the registration of the business. The Secretary 31
647	652		of State shall not revoke the registration of a business solely because it ceases business operations 32
648	653		for an indefinite period of time, as long as the business renews its registration each year as 33
649	654		required under this section. 34
650	655		(f) Transfer of Registration. – A registration as a qualified business may not be sold or 35
651	656		otherwise transferred, except that if a qualified business enters into a merger, conversion, 36
652	657		consolidation, or other similar transaction with another business and the surviving company 37
653	658		would otherwise meet the criteria for being a qualified business, the surviving company retains 38
654	659		the registration without further application to the Secretary of State. In such a case, the qualified 39
655	660		business must provide the Secretary of State with written notice of the merger, conversion, 40
656	661		consolidation, or similar transaction and the name, address, and jurisdiction of incorporation or 41
657	662		organization of the surviving company. 42
658	663		(g) Report by Secretary of State. – The Secretary of State shall report to the Revenue 43
659	664		Laws Study Committee by October 1 of each year all of the businesses that have registered with 44
660	665		the Secretary of State as qualified business ventures, qualified licensee businesses, and qualified 45
661	666		grantee businesses. The report shall include the name and address of each business, the location 46
662	667		of its headquarters and principal place of business, a detailed description of the types of business 47
663	668		in which it engages, whether the business is a minority business as defined in G.S. 143-128, the 48
664	669		number of jobs created by the business during the period covered by the report, and the average 49
665	670		wages paid by these jobs. 50
666	671		"§ 105-163.014. Forfeiture of credit. 51 General Assembly Of North Carolina Session 2025
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	672	+	Page 14 DRS45323-MC-153
668	673		(a) Participation in Business. – A taxpayer who has received a credit under this Part for 1
669	674		an investment in a qualifiedan eligible business forfeits the credit if, within three years after the 2
670	675		investment was made, the taxpayer participates in the operation of the qualified eligible business. 3
671	676		For the purpose of this section, a taxpayer participates in the operation of a qualifiedan eligible 4
672	677		business if the taxpayer, the taxpayer's spouse, parent, sibling, or child, or an employee of any of 5
673	678		these individuals or of a business controlled by any of these individuals, provides services of any 6
674	679		nature to the qualified eligible business for compensation, whether as an employee, a contractor, 7
675	680		or otherwise. However, a person who provides services to a qualifiedan eligible business, whether 8
676	681		as an officer, a member of the board of directors, or otherwise does not participate in its operation 9
677	682		if the person receives as compensation only reasonable reimbursement of expenses incurred in 10
678	683		providing the services, participation in a stock option or stock bonus plan, or both. 11
679	684		(b) False Application. – A taxpayer who has received a credit under this Part for an 12
680	685		investment in a qualified an eligible business forfeits the credit if the registration of the qualified 13
681	686		business is revoked because information in the registration application was false at the time the 14
682	687		application was filed with the Secretary of State.eligible business received assistance pursuant to 15
683	688		G.S. X as a result of providing false information to the Office and assistance was withdrawn as 16
684	689		a result. 17
685	690		(c) Repealed by Session Laws 1996, Second Extra Session, c. 14, s. 7. 18
686	691		(d) Transfer or Redemption of Investment. – A taxpayer who has received a credit under 19
687	692		this Part for an investment in a qualifiedan eligible business forfeits the credit in the following 20
688	693		cases: 21
689	694		(1) Within one yearthree years after the investment was made, the taxpayer 22
690	695		transfers any of the securities received in the investment that qualified for the 23
691	696		tax credit to another person or entity, other than in a transfer resulting from 24
692	697		one of the following: 25
693	698		a. The death of the taxpayer. 26
694	699		b. A final distribution in liquidation to the owners of a taxpayer that is a 27
695	700		corporation or other entity. 28
696	701		c. A merger, conversion, consolidation, or similar transaction requiring 29
697	702		approval by the owners of the qualified eligible business under 30
698	703		applicable State law, to the extent the taxpayer does not receive cash 31
699	704		or tangible property in the merger, conversion, consolidation, or other 32
700	705		similar transaction. 33
701	706		(2) Except as provided in subsection (d1) of this section, within five three years 34
702	707		after the investment was made, the qualified eligible business in which the 35
703	708		investment was made makes a redemption with respect to the securities 36
704	709		received in the investment. 37
705	710		In the event the taxpayer transfers fewer than all the securities in a manner that would result 38
706	711		in a forfeiture, the amount of the credit that is forfeited is the product obtained by multiplying 39
707	712		the aggregate credit attributable to the investment by a fraction whose numerator equals the 40
708	713		number of securities transferred and whose denominator equals the number of securities received 41
709	714		on account of the investment to which the credit was attributable. In addition, if the redemption 42
710	715		amount is less than the amount invested by the taxpayer in the securities to which the redemption 43
711	716		is attributable, the amount of the credit that is forfeited is further reduced by multiplying it by a 44
712	717		fraction whose numerator equals the redemption amount and whose denominator equals the 45
713	718		aggregate amount invested by the taxpayer in the securities involved in the redemption. The term 46
714	719		"redemption amount" means all amounts paid that are treated as a distribution in part or full 47
715	720		payment in exchange for securities under section 302(a) of the Code. 48
716	721		(d1) Certain Redemptions Allowed. – Forfeiture of a credit does not occur under this 49
717	722		section if a qualified business venture that engages primarily in motion picture film production 50 General Assembly Of North Carolina Session 2025
718		-	~~Senate Bill 651-First Edition~~ Page 15
	723	+	DRS45323-MC-153 Page 15
719	724		makes a redemption with respect to securities received in an investment and the following 1
720	725		conditions are met: 2
721	726		(1) The redemption occurred because the qualified business venture completed 3
722	727		production of a film, sold the film, and was liquidated. 4
723	728		(2) Neither the qualified business venture nor a related person continues to engage 5
724	729		in business with respect to the film produced by the qualified business venture. 6
725	730		(e) Effect of Forfeiture. – A taxpayer who forfeits a credit under this section is liable for 7
726	731		all past taxes avoided as a result of the credit plus interest at the rate established under 8
727	732		G.S. 105-241.21, computed from the date the taxes would have been due if the credit had not 9
728	733		been allowed. The past taxes and interest are due 30 days after the date the credit is forfeited; a 10
729	734		taxpayer who fails to pay the past taxes and interest by the due date is subject to the penalties 11
730	735		provided in G.S. 105-236. 12
731	736		"§ 105-163.015. Sunset. 13
732	737		This Part is repealed effective for investments made on or after January 1, 2014." 14
733	738		SECTION 3. Appropriations. – There is appropriated from the General Fund to the 15
734	739		Department of Commerce the recurring sum of $50,000,000 for the 2025-2026 fiscal year to 16
735	740		establish and implement the North Carolina Small Business Capital Access Program. Funds 17
736	741		appropriated by this act shall not revert but shall remain available until expended. The 18
737	742		Department shall allocate the funds as follows: 19
738	743		(1) $20,000,000 to the Small Business Loan Guarantee Program. 20
739	744		(2) $10,000,000 to the North Carolina MWBE Growth Fund. 21
740	745		(3) $5,000,000 to the CDFI Support Initiative. 22
741	746		(4) $5,000,000 to the Small Business Technical Assistance Network. 23
742	747		(5) $5,000,000 to the State Procurement Financing Initiative. 24
743	748		(6) $4,000,000 to the Small Business Innovation Fund. 25
744	749		(7) $1,000,000 for administrative costs. 26
745	750		SECTION 4. Rulemaking. – The Department of Commerce shall adopt rules 27
746	751		necessary to implement the provisions of this Act. 28
747	752		SECTION 5. Severability. – If any provision of this act or its application is held 29
748	753		invalid, the invalidity does not affect other provisions or applications of this act that can be given 30
749	754		effect without the invalid provisions or application, and to this end the provisions of this act are 31
750	755		severable. 32
751	756		SECTION 6. Effective Date. – This act becomes effective July 1, 2026. Within 60 33
752	757		days of the effective date of this act, the Secretary of Commerce shall appoint the Director of the 34
753	758		Office of Small Business Capital Access. Within 90 days of the effective date of this act, all 35
754	759		appointments to the Board shall be completed, and the Board shall hold its first meeting. Within 36
755	760		180 days of the effective date of this act, the Office shall develop and publish program guidelines 37
756	761		for all program components. Within one year of the effective date of this act, the Office shall 38
757	762		implement the Small Business Loan Guarantee Program, the CDFI Support Initiative, the Small 39
758	763		Business Technical Assistance Network; and a unified application system for all components. 40
759	764		Within two years of the effective date of this act, the Office shall implement the North Carolina 41
760	765		MWBE Growth Fund, the State Procurement Financing Initiative, and the initial regional 42
761	766		innovation hubs. 43