Davie State Rep. Howard Stripped Of Chairmanship Amid Relief Loan Spat

The current longest-serving member of the North Carolina House was stripped Tuesday of her chairmanship on the powerful House Finance Committee.

Speaker Tim Moore removed 17-term Rep. Julia Howard of Mocksville from the tax-policy committee and placed her on the Appropriations Committee, according to a document from the House Clerk's Office initialed by Moore.

Howard and Moore, both Republicans, have been in an unusually public feud in recent days over tax legislation. In an emailed statement, Moore and two other House Republican leaders said Howard was removed because she had failed to move the measure "expeditiously" through the committee against the will of the chamber's GOP caucus, even though she opposed the bill. 

"While we respect different viewpoints, committee chairs must be willing to put personal agendas aside and move forward with the will of the caucus," Moore, Speaker Pro Tempore Sarah Stevens, and Majority Leader John Bell said in the statement. Howard didn't immediately respond Tuesday to a phone call or text seeking comment.

Howard had criticized Moore and other House Republicans for backing the measure, which would give additional state tax breaks to businesses that took federal loans to weather the COVID-19 pandemic. Many House members from both parties received the Payroll Protection Program loans as well, including Moore.

Howard, one of four senior co-chairs of the committee until Tuesday, said last week she was pressured by House Republicans to hear the bill in the committee. She told The News & Observer of Raleigh that the measure was an ethical conflict because her colleagues' businesses would benefit if the measure became law.

"I told the boys in the (Republican) caucus meeting, 'I am concerned that you should not be filing bills if you took the money,'" Howard told the newspaper.

Moore and other top Republicans disagreed and defended their legislative actions. They said longstanding General Assembly ethics rules generally allow them to participate in legislative action because the bill would apply equally to all PPP loan recipients. More than 129,000 loans to North Carolina entities had been approved by last August.

Before the removal was made public, Moore told reporters Tuesday he had no comment on Howard's allegations that she had been pressured to act.

"The caucus saw this as tax relief for small businesses," he said, adding that voting for it "is no different than voting on ... child tax credits if you have children."

The legislation would align more closely North Carolina tax laws with federal rules on proceeds from PPP loans.

Businesses that received the money and spent it according to certain conditions saw their loans canceled.

Current state law would exempt forgiven loan proceeds from taxable income but does not allow a business to deduct expenses paid for with the proceeds. The bill would provide for a state tax expense deduction.

Howard was one of two House members who voted against the bill on the House floor last week.

On Tuesday, the measure was amended on the floor to include loans received in 2020 and 2021 — not just 2020 — and to direct that some unemployment benefits received by jobless recipients also would be exempt from taxes. Howard said she had wanted those items to be considered. The bill is expected to come up for another floor vote later this week.