A BILL TO BE ENTITLED
AN ACT to Withdraw from the Federal Pandemic Unemployment Compensation (FPUC) Agreement; to eliminate the addback for business expenses deducted to the extent the payment results in forgiveness of a covered loan under the Federal CARES act for the 2020 and 2021 taxable years; TO APPROPRIATE TO THE DEPARTMENT OF HEALTH AND HUMAN SERVICES THE SUM OF TWO HUNDRED FIFTY MILLION DOLLARS FROM THE CHILD CARE AND DEVELOPMENT BLOCK GRANT UNDER THE AMERICAN RESCUE PLAN ACT; and to exclude unemployment compensation from State taxable income to the same extent as federal law.
The General Assembly of North Carolina enacts:
SECTION 1.(a)  Purpose. – The purpose of this section is to withdraw from the FPUC agreement that provides additional payments to unemployment insurance claimants through September 6, 2021.
SECTION 1.(b)  Limit Authority. – Notwithstanding G.S. 96‑17(d)(1)a. and any other provision of law, the Division of Employment Security, Department of Commerce, is not authorized to administer payments under the FPUC program after the effective date of this section.
SECTION 1.(c)  FPUC. – For purposes of this section, "FPUC" is the Federal Pandemic Unemployment Compensation program authorized by section 2104, Emergency Increase in Unemployment Compensation Benefits of the CARES Act of 2020 (P.L. 116‑136), as amended.
SECTION 1.(d)  This section is effective 30 days after it becomes law.
SECTION 2.(a)  G.S. 105‑228.90(b)(7) reads as rewritten:
"(7)	Code. – The Internal Revenue Code as enacted as of May 1, 2020, including any provisions enacted as of that date that become effective either before or after that date; however, for the purpose of the amount of any expense deducted under the Code to the extent that payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the CARES Act, the term "Code" means the Internal Revenue Code as enacted as of January 1, 2021, including any provisions enacted as of that date that become effective either before or after that date. The term "covered loan" has the same meaning as defined in section 1106 of the CARES Act."
SECTION 2.(b)  This section is effective for taxable years beginning on or after January 1, 2020, and expires for taxable years beginning on or after January 1, 2022.
SECTION 3.(a)  G.S. 105‑130.5(a)(32) is repealed.
SECTION 3.(b)  Effective for taxable years beginning on or after January 1, 2022, G.S. 105‑130.5(a)(32) is reenacted as it existed immediately before its repeal.
SECTION 4.(a)  G.S. 105‑153.5(c2)(20) is repealed.
SECTION 4.(b)  Effective for taxable years beginning on or after January 1, 2022, G.S. 105‑153.5(c2)(20) is reenacted as it existed immediately before its repeal.
SECTION 5.  G.S. 105‑153.5(b) is amended by adding a new subdivision to read:
"(15)	The amount excluded from the taxpayer's gross income for unemployment compensation received by the taxpayer under section 9042 of the American Rescue Plan Act of 2021."
SECTION 6.  There is appropriated from federal Child Care and Development Block Grant funds received pursuant to the American Rescue Plan Act of 2021, P.L. 117-2, to the Department of Health and Human Services, Division of Child Development and Early Education, the sum of two hundred fifty million dollars ($250,000,000) in nonrecurring funds to be used for subsidized child care for eligible children.
SECTION 7.  Except as otherwise provided, this act is effective for taxable years beginning on or after January 1, 2020.