NC Senate Expected to Vote on State Budget Next Week

Last month, the NC House of Representatives passed its version of the state budget for FY2023-25 (H.B. 259). The proposed House budget would include $29.8 billion in total state spending in FY2023-24 and $30.9 billion in FY 2024-25. Now that the House has approved its budget, Senate leaders are completing work on their own version. The Senate plans to release its version of the budget early next week and pass it by next Thursday. Once the Senate approves its version, House and Senate leaders will negotiate on a final version to send to Governor Cooper. Legislators expect to have a state budget in place before the start of the new fiscal year on July 1, 2023. The Center has prepared an analysis of the nonprofit provisions and appropriations in the House budget.

The Center has also prepared a tutorial video on the state budget to help your nonprofit better understand the state budget process and how to navigate through the budget documents when they are released next week.

Learn About Possible Next Steps for State Legislation After Crossover Deadline

Last Thursday was the NC General Assembly’s “crossover” deadline. Officially, most legislation needed to pass at least one chamber prior to the crossover deadline to be eligible to become a law in 2023 or 2024. Legislation affecting state spending, taxes, election laws, and redrawing congressional or state legislative districts aren’t subject to the crossover deadline. This week, the General Assembly posted a list of the 406 bills that have passed one chamber prior to the crossover deadline and remain eligible for consideration this year or next year. Many of these bills are relevant for the operations and missions of some or all charitable nonprofits. The Center has prepared a short tutorial video to help your nonprofit understand potential next steps in the legislative process for: (1) bills that have passed one chamber; (2) legislation that isn’t subject to the crossover deadline; and (3) other policy proposals that legislators may still consider even if they aren’t included in legislation that has passed either chamber of the General Assembly this year.

Several Center-Recommended Nonprofit Bills Remain Eligible for Consideration This Year

Several Center-recommended bills are not subject to the crossover deadline and remain eligible for consideration this legislative session. These include:

• A Senate bill (S.429) that would make three important reforms to the state charitable solicitation licensing statute: (1) Making automatic extensions of charitable solicitation filings identical to those for IRS Form 990; (2) exempting more small nonprofits from needing charitable solicitation licenses; and (3) counting charitable solicitation forms as timely filed if they are postmarked by the filing deadline. The Senate passed the bill unanimously last week, and the Center is working on getting it heard in the House this year.
• House (H.B. 882) and Senate (S.397) bills that would exempt most 501(c)(3) nonprofits from paying sales tax on their purchases. Under existing law, nonprofits must pay sales tax when they buy goods and services in North Carolina, but they can apply for semi-annual refunds from the NC Department of Revenue. Thanks to your advocacy, 28% of House members have joined as sponsors or cosponsors of the House version, increasing the likelihood that legislators will give the proposal serious consideration this year. Currently, the Senate bill has been referred to the Senate Rules Committee, and the House bill has been referred to the House Finance and Rules committees. The Senate version would also exempt nonprofits from charging sales tax on most fundraising events; otherwise, the two bills are identical.
• A Senate bill (S.449) that would create a new state income tax credit for charitable contributions by taxpayers who use the standard deduction. This tax credit would be a significant fundraising tool for nonprofits since it would create a tax incentive for more than 90% of North Carolinians – including most low-income and middle-income individuals and families – to donate to charitable nonprofits or to increase the amount of their charitable contributions. Currently, this bill has been referred to the Senate Rules Committee. 
• House (H.B. 741) and Senate (S.529) bills that would make a variety of changes to modernize the NC Nonprofit Corporation Act to bring it into closer alignment with best practices for nonprofits and with nonprofit corporation laws in other states. Currently, the Senate bill has been referred to the Senate Rules Committee, and the House bill has been referred to the House Judiciary 1, Finance, and Rules committees. The House bill also includes the provision of the Senate-approved charitable solicitation legislation; otherwise, the bills are identical.

The Center will let you know when there are opportunities to take action on these bills and other legislation that could help (or harm) charitable nonprofits.

Federal Debt Limit Could Include Provisions Affecting Some Nonprofits

Earlier this week, the U.S. Treasury Department announced that the nation could default on its debts by early June if Congress doesn’t pass legislation to increase the federal debt limit. This could cause a global economic crisis. To prevent the federal government from defaulting on its debts, Congress and the White House must agree on a plan to increase the debt limit in the next two or three weeks. 

Last month, the U.S. House of Representatives narrowly approved the Limit, Save, Grow Act of 2023 (H.R. 2911), the House plan to raise the federal debt limit and limit federal spending. That bill serves as the House’s starting point in debt limit negotiations. Several of the spending provisions in the bill could affect nonprofits and the people they serve, including:

1. Language to claw back unappropriated funds from the American Rescue Act Plan and other COVID relief programs; some of these unappropriated funds in North Carolina could still be used by the state and by local governments to support the work of nonprofits;
2. A provision prohibiting executive actions to forgive student debt or make changes to income-driven repayment plans;
3. Repeal of a variety of green tax credits that were passed into law last year, some of which benefit nonprofits making energy-efficient upgrades to their facilities; and
4. Provisions extending the work requirements for the Supplemental Nutrition Assistance Program (SNAP) from the current age range of 18-49 to an age range of 18-55 and adding work requirements for Medicaid recipients.

Those provisions, along with spending cuts for federal programs and services, are likely to be part of the debt limit negotiations in the coming weeks.

Nonprofits Provide Helpful Resources on Medicaid Eligibility Determinations

During the COVID-19 pandemic, Congress created a temporary exemption (known as continuous coverage) from annual Medicaid recertification rules that normally require Medicaid recipients to provide verification of their income, family size, and other information to ensure they remain qualified. The Medicaid continuous coverage provision ended on April 1, and the NC Department of Health and Human Services (DHHS) is now starting the process of recertifying Medicaid beneficiaries in North Carolina. As many as 300,000 North Carolinians could lose their Medicaid benefits if they don’t recertify. Many of these North Carolinians may have begun participation in Medicaid during the pandemic and may be unfamiliar with the recertification process.

NC Child has helpful information that other nonprofits can share with the people they serve to help ensure they don’t lose their Medicaid coverage, noting: “The recently launched NCMedHelp.org is here to help answer questions about NC Medicaid services, including eligibility determination. NCMedHelp is a collaboration of three nonprofits – The Charlotte Center for Legal Advocacy, Pisgah Legal Services, and Legal Aid of North Carolina. The project is generously funded by Kate B. Reynolds Charitable Trust.”

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Nonprofit Policy Update is North Carolina Center for Nonprofits' weekly newsletter of state and federal policy issues that affect all 501(c)(3) nonprofits. Learn about the Center's public policy priorities and agenda, or contact David Heinen, Vice President for Public Policy and Advocacy, for more information.