North Carolina SB 521: Lincoln & Wayne Counties/911 Fund Uses.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 521

Short Title: Community Infra. and Resilience Tax Credit. (Public)
Sponsors: Senators Theodros, Salvador, and Garrett (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S521-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO CREATE THE QUALIFIED INVESTMENT ENTITY TAX CREDIT. 2
The General Assembly of North Carolina enacts: 3
SECTION 1. Article 4 of Chapter 105 of the General Statutes is amended by adding 4
a new section to read: 5
"§ 105-153.12. Qualified investment entity tax credit. 6
(a) Definitions. – The following definitions apply in this section: 7
(1) Accredited investor. – As defined in 17 C.F.R. § 230.501(a). 8
(2) Contribution to community infrastructure and resilience. – Services 9
performed by an eligible business that have a demonstrable positive impact 10
on the physical and economic stability of one or more communities in the 11
State. Contribution to community infrastructure and resilience includes 12
services related to projects that enhance critical infrastructure such as 13
transportation networks, communications systems, or utilities, as well as 14
initiatives that improve community resilience such as disaster preparedness, 15
sustainable energy projects, and other efforts that support long-term public 16
safety and economic vitality. 17
(3) Eligible business. – A registered business that (i) was organized no more than 18
five years prior to receipt of the first qualifying investment received by the 19
business under this section, (ii) employs 25 or fewer people in this State at the 20
time it is registered as an eligible business, (iii) generates two million dollars 21
($2,000,000) or less in gross annual revenue, and (iv) has contribution to 22
community infrastructure and resilience as its primary business purpose. 23
(4) Pass-through entity. – A partnership, an S-corporation, or a limited liability 24
company subject to income tax under Part 1A or Part 2 of Article 4 of this 25
Chapter. 26
(5) Qualified investment. – An investment of cash by a qualified investment entity 27
in an eligible business in exchange for common or preferred stock or an equity 28
interest or a purchase for cash of subordinated debt in an eligible business. 29
Investment of common or preferred stock or an equity interest or purchase of 30
subordinated debt does not qualify as a qualified investment if a broker fee or 31
commission or a similar remuneration is paid or given directly or indirectly 32
for soliciting an investment or a purchase. 33
(6) Qualified investment entity. – A registered business that (i) is a pass-through 34
entity, (ii) is an accredited investor, (iii) makes qualified investments, and (iv) 35

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 521-First Edition
is formed solely for investment purposes and does not engage in traditional 1
non-investment business operations. 2
(7) Registered or registration. – A business that has been certified by the Secretary 3
as an eligible business at the time of application to the Secretary. 4
(8) Secretary. – The Secretary of State. 5
(b) Credit. – A qualified investment entity is entitled to a nonrefundable income tax credit 6
of thirty-five percent (35%) of its qualified investment made pursuant to this section. Fifty 7
percent (50%) of the allowed credit may be applied to the qualified investment entity's net income 8
tax liability in the tax year during which the qualified investment is made, and the remainder may 9
be applied to the qualified investment entity's net income tax liability in the tax years after the 10
qualified investment is made and may be carried forward for a period not to exceed 10 years. 11
(c) Allocation. – Each individual who is a shareholder, partner, or member of the 12
qualified investment entity must be allocated the credit allowed the entity in an amount 13
determined in the same manner as the proportionate shares of income or loss of such entity would 14
be determined. The qualified investment entity must make an irrevocable election with the 15
Department of Revenue as to the manner in which the credit is allocated. If an individual's share 16
of the pass-through entity's credit is limited due to the maximum allowable credit under this 17
section for a taxable year, the entity and its owners may not reallocate the unused credit among 18
the other owners. 19
(d) Limitations. – The credit allowed under this section is subject to the following 20
limitations: 21
(1) The total amount of credits allowed pursuant to this section may not exceed 22
in the aggregate five million dollars ($5,000,000) for all taxpayers for any one 23
calendar year. 24
(2) The aggregate amount of credit allowed an individual for one or more 25
qualified investments in a single taxable year under this section, whether made 26
directly or by a pass-through entity and allocated to an individual, shall not 27
exceed one hundred thousand dollars