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The House Finance Committee heard H 1721: HELP Small Business Act authored by Rep. Hugh Holliman this morning. It is mainly a package of tax breaks for small businesses that create new jobs or offer health care for workers. It looks a lot like the package of tax breaks that Gov. Bev Perdue was pitching earlier this year. (Click here and here for that background.)

You can get bill information by clicking here.

The bill is a prelude to the House budget. The Senate, when it passed its budget, did a different package of tax cuts, so expect this to be a point of negotiations during the reconciliation process.

There were a couple points of discussion during the hearing, both involving Greensboro lawmakers.

“I don’t see any provision … that allows for funding of minority business enterprise,” said Rep. Earl Jones, a Greensboro Democrat, asking if there was anything in the bill that would target minorities.

“I think that minority business would qualify for any of these,” Holliman said, allowing that there was no specific language regarding small businesses.

Rep. Deborah Ross said that a higher percentage of small businesses were minority businesses so they would benefit from the bill disproportionately.

Next, Rep. John Blust, a Greensboro Republican offered an amendment to the bill that would have cap the corporate tax rate for limited liability corporations and other businesses that report their income on personal tax forms at 5 percent.

Blust criticized the Holliman bill as being too small.

“This bill as it exists now is almost a band-aid on a gushing artery…We have to do something bigger if we’re going to help these businesses,” Blust said.

Oddly enough, the Blust amendment looks a lot like something the Senate did in their budget. The Senate capped liability for small businesses at the corporate tax rate. But they limited the benefit to small businesses with receipts of $850,000 or less. Blust did not cap the affect of his amendment and his rate would be lower than what the Senate did.

Legislative staff estimated it would cost $125 million to $150 million, which pretty much spelled its doom in the committee.

“I don’t know where we’d find $125-150 million this year … this is just too expensive for our current financial situation,” Holliman said.

The Blust amendment failed on a pretty much party line vote.

Republicans kept up their criticism of the bill, which continued along the theme that the tax breaks were too small and too targeted.

"No employer in his or her right mind would hire somebody (based on) the posibility of getting $330," said Rep. Paul "Skip" Stam.

The measure itself passed. Interestingly, Ross called for the ayes and nos. All of the committee's Republicans, including Blust, voted FOR the bill. It would be a difficult vote to go against a bill that purports to cut taxes and helps small businesses. And now Democrats have Republicans on the record as supporting the bill. Clever.

Click below for audio of the committee hearing.