A section of the bill dealing with income tax changes would require taxpayers to count as income any portion of their mortgage indebtedness forgiven by a lender.
Take somebody who owed $200,000 on a home and had been caught up in the mortgage meltdown. Say the lender forgave $50,000 of the loan. Under the bill, that $50,000 would be counted as taxable income in North Carolina. The Internal Revenue Service would not count it.
Democratic Sen. Joel Ford of Charlotte tried to remove it from the bill, and leave state law conform to federal law.
"We should provide the same tax relief to North Carolina taxpayers and put more money in pockets," he said. "Not conforming to the federal law on this amounts to kicking a person when they're down.”
For procedural reasons, Ford's proposed amendment never came up for a vote.
Democrats say up to 4,000 people could be affected. Legislative staffers estimate the change would result in $14 million in revenue for the state.
The Senate tentatively passed the bill 36-14 along part lines. Final approval is expected Thursday before it would head to the House.
Republicans say the gas tax bill, by the way, would ensure money for road building and maintenance. By setting a floor for the tax (35-cents a gallon) it would result in another $352 million for roads over five years.