HB 1080 — Revenue Laws Recommendations.
Last action — Signed by Gov. 6/30/2020
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✓Introduced
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✓In Committee
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✓Passed House
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✓Passed Senate
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✓To Executive
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6Enacted
This bill has been enacted into law. Introduced May 14, 2020. Enacted.
Odds of enactment
High chanceBased on the sponsor, cosponsors, and committee posture, this bill has a high chance of becoming law.
Upgrade to see the exact probability and what's driving it.
A statistical estimate from our own model of past outcomes — an insight, not a guarantee. Policymaking is volatile.
Prognosis
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Enacted
Current position in the legislative process.
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10 sponsors
3 primary, 7 co-sponsors signed on.
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Single-party support
Sponsorship is currently within one party (7 R).
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Cleared a recorded vote
Passed 2 recorded votes so far.
Based on stage, sponsorship breadth, committee status, recorded votes, and cross-state momentum — a description of the observable signals, not a prediction.
Bill Text
What changed in the latest version
735 added · 755 removedPlain-language change summary
The updated version of Bill HB 1080 clarifies that taxpayers can only carry forward charitable contributions from the 2020 tax year that exceed certain limits, as determined by the Internal Revenue Code. This change is important because it separates North Carolina’s tax rules from those temporarily altered by the federal CARES Act during 2020, maintaining consistency in state tax regulations. Additionally, the section on mortgage and property tax deductions has been amended to specify which tax years are included, ensuring clearer guidance for taxpayers.
GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2019 H 21 HOUSE BILL 1080* Committee Substitute Favorable 5/19/20 Short Title:
Representatives Howard, Ross, Setzer, and Szoka (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Finance, if favorable, Rules, Calendar, and Operations of the House May 14, 2020 A BILL TO BE ENTITLED AN ACT TO MAKE VARIOUS CHANGES TO THE REVENUE LAWS.
105-228.90(b)105-228.90(b)(1b) reads as rewritten:
"(b)"(1b) Definitions.Code.
– The followingInternal definitionsRevenue applyCode inas thisenacted Article:as of January 1, 2019, May 1, 2020, including any provisions enacted as of that date that become effective either before or after that date." SECTION 1.(b) G.S.
(#) CARES Act.
– The Coronavirus Aid, Relief, and Economic Security Act, P.
L.
116-136, Mar.
27, 2020, 134 Stat.
359.
… (1b) Code.
– The Internal Revenue Code as enacted as of January 1, 2019, May 1, 2020, including any provisions enacted as of that date that become effective either before or after that date.
…." SECTION 1.(b) The Revisor of Statutes is authorized to renumber the subdivisions of G.S.
105-228.90(b) to ensure that the subdivisions are listed in alphabetical order and in a manner that reduces the current use of alphanumeric designations, to make conforming changes, and to reserve sufficient space to accommodate future additions to the statutory subsection.
SECTION 1.(c) G.S.
… (31) For taxable years 2019 and 2020, a taxpayer must add an amount equal to the amount by which the taxpayer's interest expense deduction under section 163(j) of the Code exceeds the interest expense deduction that would have been allowed under the Internal Revenue Code as enacted as of January 1, 2020, as calculated on a separate entity basis.
(32) TheA amounttaxpayer ofmust anyadd expense deducted under the Codeamount to the extent that payment of theany expense results in forgiveness of indebtedness on a covered loanloan. pursuant to section 1106(b) of the CARES Act and the income associated with the forgiveness is excluded from gross income pursuant to section 1106(i) of the CARES Act.
The term "covered loan" has the same meaning as defined in section 1106 of the CARES Act."Act. SECTION 1.(d) G.S.
The purpose of this subdivision is to decouple from the loan forgiveness allowedundersection1106of theCARES Act." SECTION 1.(c) G.S.
*H1080-v-2* General Assembly Of North Carolina Session 2019 "a.
For taxable year 2020, notwithstanding *H1080-v-1* General Assembly Of North Carolina Session 2019 G.S.
105-228.90(b)(1b), fortheterm purposes"Code"is of this sub-subdivision the term "Code" means the Internal RevenueRevenueCode Code as enacted as of January 1, 2020.
For taxable years beginning on or afterafterJanuary1,2021,ataxpayermayonlycarryforwardthe January 1, 2021, a taxpayer may only carry forward the charitable contributions from taxable year 2020 that exceed the applicable percentage limitation for the 2020 taxable year allowed under this sub-subdivision.
The purpose fordefiningthefor Internaldefining RevenueCodedifferentlyforthe2020taxablethe Code differently for the 2020 taxable year is to decouple from the modification of limitations on charitable contributions during 2020 allowed under section 2205 of the CARES Act." SECTION 1.(e)1.(d) G.S.
Forjoint obligations paid from joint accounts,the proration is based on the income reported by each spouse for that taxable year." SECTION 1.(f)1.(e) G.S.
If the taxpayer is insolvent, as Page 2 House Bill 1080*-Second Edition General Assembly Of North Carolina Session 2019 defined in section 108(d)(3) of the Code, then the addition required under this subdivision is limited to the amount of discharge of qualified principal residence indebtedness excluded from adjusted gross income under section 108(a)(1)(E)oftheCodethatexceedstheamountofdischargeofindebtedness that would have been excluded under section 108(a)(1)(B) of the Code.
Page 2 House Bill 1080*-First Edition General Assembly Of North Carolina Session 2019 … (8) For taxable years 2013, 2014, 2015, 2016, or 2017, the taxpayer must add the amount of any 2018 net operating loss deducted and absorbed on a federal return under section 172 of the Code.
(11) For taxable years 2013, 2014, 2015, 2016, 2017, 2018, or 2019, and 2020, the taxpayer must add thean amount ofequal anyto 2018,the 2019,taxpayer's orexcess 2020business netloss, operatingas lossdefined carriedunder backthe andprovisions deductedof on a federal return pursuant to section 2303(b)461(l) of the CARESCode Actas butenacted notas absorbedof inJanuary that1, year2019. and carried forward to a subsequent year.
The addition under this subsection is not required to the extent an addition is required under G.S.
105-153.5(c)(6).
The purpose of the adjustments made under this subdivision is to decouple from the net operating loss carryback provision of section 2303 of the CARES Act.
(12) For taxable years 2018, 2019, and 2020, the taxpayer must add an amount equal to the taxpayer's excess business loss, as defined under the provisions of section 461(l) of the Internal Revenue Code as enacted as of January 1, 2019.
(13)(12) The taxpayer must add the amount by which the taxpayer's net operating loss carryforward deduction exceeds the amount allowed under the provisions of section 172(a)(2)(B) of the Internal Revenue Code as enacted as of January 1, 2019.
This add-backonlyappliesadd-back only applies to net operatinglossesarisingoperating duringtaxablelosses arising during taxable years 2018, 2019, and 2020.
House(13) Bill 1080*-Second Edition Page 3 General Assembly Of North Carolina Session 2019 (14) For taxable years 2021 through 2025, a taxpayer who made an addition under subdivision (8), (9), or (10) of this subsection may deduct twenty percent (20%) per tax year of the sum of the amount added under subdivisions (8), (9), and (10) of this subsection.
(15)(14) A taxpayer who made an addition under subdivision (12)(11) of this subsection may deduct twenty percent (20%) of the addition in each of the taxable years 2021 through 2025.
(16)(15) A taxpayer who made an addition under subdivision (13)(12) of this subsection may deduct twentypercent (20%) of the add-back in each of the taxable years 2021 through 2025.
Show all 71 changed lines (31 more)
(17)(16) For taxable years 2019 and 2020, a taxpayer must add an amount equal to the amount by which the taxpayer's interest expense deduction under section 163(j) of the Code exceeds the interest expense deduction that would have been allowed under the Internal Revenue Code as enacted as of January 1, 2020.
(18)(17) For taxable year 2020, a taxpayer must add the amount excluded from the taxpayer's gross income for payment by an employer, whether paid to the taxpayer orto alender,of principalor interest on anyqualifiededucationloan, House Bill 1080*-First Edition Page 3 General Assembly Of North Carolina Session 2019 as defined in section 221(d)(1) of the Code, incurred by the taxpayer for education of the taxpayer.
(19)(18) For taxable year 2020, a taxpayer must add the amount excluded from the taxpayer's gross income under section 62(a)(22) of the Code.
(20)(19) A taxpayer must add the amount of any expenseforgiveness deducted under the Code to the extent that payment of theindebtedness expenseon results in forgiveness of a covered loanloan. pursuant to section 1106(b) of the CARES Act andthe income associated with the forgiveness is excluded from gross income pursuant to section 1106(i) of the CARES Act.
The term "covered loan" has the same meaning as defined in section 1106 of the CARES Act."Act. PART II.
The purpose of this subdivision is to decouple from the loan forgiveness allowedundersection1106of theCARES Act." PART II.
– TheSecretarymust providemake available thelist required undersubdivision (3) of subsection (g) of this section upon request of a manufacturer that is a licensee under this Page 4 House Bill 1080*-Second Edition General Assembly Of North Carolina Session 2019 Article.
The Secretary must send an annual update of a list to each licensee, as appropriate.the lists required under this section annually." Page 4 House Bill 1080*-First Edition General Assembly Of North Carolina Session 2019 SECTION 2.3.(a) G.S.
If the licensee's request does not House Bill 1080*-Second Edition Page 5 General Assembly Of North Carolina Session 2019 include a proposed effective date of cancellation, the license is cancelled 15 days after the Department receives the written request.
House Bill 1080*-First Edition Page 5 General Assembly Of North Carolina Session 2019 … (c) Substantiation.
Every person required to be licensed under this Article and every person required to make reports under this Article shall keep complete and accurate records of all purchases, inventories, sales, shipments, and deliveries of tobacco products, and other information as required under this Page 6 House Bill 1080*-Second Edition General Assembly Of North Carolina Session 2019 Article.
The amount of the bond is two times the licensed distributor's average expected monthly tax liability under this Article, as determined bythe Secretary, provided the amount of the bond maymaynot not be less than two thousand dollars ($2,000) and may not be more than two million dollars ($2,000,000).
The letter of credit must be issued by a commercial bank acceptableto theSecretaryandavailableto the Stateas abeneficiary.Theletter Page 6 House Bill 1080*-First Edition General Assembly Of North Carolina Session 2019 of credit must be in a form acceptable to the Secretary, conditioned upon compliance with this Article, and in the amounts stipulated in this section." SECTION 2.6.(b) G.S.
House Bill 1080*-Second Edition Page 7 General Assembly Of North Carolina Session 2019 "(h) Commission Determination.
A decal must be affixed to the qualified motor vehicle for which it was issued in the place and manner designated by the authority that issued it." House Bill 1080*-First Edition Page 7 General Assembly Of North Carolina Session 2019 SECTION 2.10.(b) G.S.
Page 8 House Bill 1080*-Second Edition General Assembly Of North Carolina Session 2019 (b) Requirements.
The application must be filed priorwhen toa the termination of the state of emergency or a disaster declaration is in effect and must include all of the following information:
SALES AND USE TAX CHANGES Page 8 House Bill 1080*-First Edition General Assembly Of North Carolina Session 2019 SECTION 3.1.(a) G.S.
Sales and use tax liability indirectly incurred House Bill 1080*-Second Edition Page 9 General Assembly Of North Carolina Session 2019 by a governmental entity on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure that is owned or leased bythe governmental entity and is being erected, altered, or repaired for use by the governmental entity is considered a sales or use tax liabilityincurred on direct purchases bythe governmental entity for the purpose of this subsection.
For an individual who is required to file an individual income tax return, the annual reporting period ends on the last day of the House Bill 1080*-First Edition Page 9 General Assembly Of North Carolina Session 2019 individual's income tax year, and the use tax must be paid on the income tax return as provided in G.S.
Page 10 House Bill 1080*-Second Edition General Assembly Of North Carolina Session 2019 "§ 153A-154.1.
Page 10 House Bill 1080*-First Edition General Assembly Of North Carolina Session 2019 (b) Scope.
105-160.4, each resident shareholder is considered to have paid a tax imposed on the shareholder in an amount equal to the shareholder's pro rata share of any net income tax paid by the S Corporation to a state that House Bill 1080*-Second Edition Page 11 General Assembly Of North Carolina Session 2019 does not measure the income of S Corporation shareholders by the income of the S Corporation.
In this case, the manager shall include a copy House Bill 1080*-First Edition Page 11 General Assembly Of North Carolina Session 2019 of the affirmation with the report required by this subsection.
… Page 12 House Bill 1080*-Second Edition General Assembly Of North Carolina Session 2019 (b) Conference.
Page 12 House Bill 1080*-First Edition General Assembly Of North Carolina Session 2019 (c) After Conference.
In no event may the amount of income House Bill 1080*-Second Edition Page 13 General Assembly Of North Carolina Session 2019 apportioned receipts sourced to this State be less than the amount determined under this subsection.
The apportionment method set out in this subdivision is considered the statutory method of apportionment and is presumed to be the best method of determining the amount of a corporation's net worth attributable to the corporation's business in this State." House Bill 1080*-First Edition Page 13 General Assembly Of North Carolina Session 2019 SECTION 5.2.(c) This section is effective for taxable years beginning on or after January 1, 2020.
Page 14 House Bill 1080*-Second Edition General Assembly Of North Carolina Session 2019 (a) Definitions.
Page 14 House Bill 1080*-First Edition General Assembly Of North Carolina Session 2019 The amount of the collection assistance fee is twenty percent (20%) of the amount of the overdue tax debt.
House Bill 1080*-Second1080*-First Edition Page 15
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Action History
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Signed by Gov. 6/30/2020
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Ch. SL 2020-58
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Passed 3rd Reading
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Engrossed
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Special Message Sent To House
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Special Message Received For Concurrence in S Com Sub
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Cal Pursuant Rule 36(b)
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Added to Calendar
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Concurred In S Com Sub
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Ordered Enrolled
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Ratified
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Pres. To Gov. 6/25/2020
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Amend Adopted A1
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Passed 2nd Reading
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Reptd Fav Com Substitute
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Com Substitute Adopted
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Re-ref Com On Rules and Operations of the Senate
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Reptd Fav
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Passed 3rd Reading
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Special Message Sent To Senate
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Special Message Received From House
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Passed 1st Reading
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Ref to Finance. If fav, re-ref to Rules and Operations of the Senate
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Amend Failed A1
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Passed 2nd Reading
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Placed On Cal For 06/22/2020
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Ruled Material
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Reptd Fav Com Sub 2
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Re-ref Com On Rules, Calendar, and Operations of the House
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Reptd Fav
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Cal Pursuant Rule 36(b)
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Placed On Cal For 06/18/2020
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Withdrawn From Com
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Re-ref to the Com on Finance, if favorable, Rules, Calendar, and Operations of the House
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Reptd Fav Com Substitute
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Re-ref Com On Rules, Calendar, and Operations of the House
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Filed
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Passed 1st Reading
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Ref to the Com on Finance, if favorable, Rules, Calendar, and Operations of the House
Sponsors
- Julia C. Howard · Primary
- Mitchell S. Setzer · Primary
- Szoka · Cosponsor
- Faircloth · Cosponsor
- Jeffrey C. McNeely · Cosponsor
- Sasser · Cosponsor
- John Sauls · Cosponsor
- Harry Warren · Cosponsor
- Chris Humphrey · Cosponsor
- Stephen M. Ross · Primary
Sponsorship breakdown
Export CSV (upgrade) →3 sponsors · 7 co-sponsors · 169 not signed on · 7 voted No
Sponsors (3)
- Julia C. Howard Republican
- Mitchell S. Setzer Republican
- Stephen M. Ross Republican
Co-sponsors (7)
- Szoka
- Faircloth
- Jeffrey C. McNeely Republican
- Sasser
- John Sauls Republican
- Harry Warren Republican
- Chris Humphrey Republican
Not signed on (169)
169 members have not signed on to this bill.
Show all 169 →"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.
Votes
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Democratic | 19 | 5 | 0 | 1 |
| Republican | 32 | 1 | 0 | 2 |
| Unaffiliated | 49 | 3 | 0 | 6 |
| U | 1 | 0 | 0 | 1 |
| Total | 101 | 9 | 0 | 10 |
| % of votes cast | 84% | 8% | 0% | 8% |
How each member voted (120)
| Member | Party | Vote |
|---|---|---|
| Beasley | — | Yea |
| Brewer | — | Yea |
| Clemmons | — | Yea |
| Farmer-Butterfield | — | Yea |
| Floyd | — | Yea |
| Gailliard | — | Yea |
| Garrison | — | Yea |
| Gill | — | Yea |
| Graham | — | Yea |
| Harris | — | Yea |
| Holley | — | Yea |
| Hunt | — | Yea |
| Hunter | — | Yea |
| Jackson | — | Yea |
| Martin | — | Yea |
| Montgomery | — | Yea |
| Queen | — | Yea |
| Richardson | — | Yea |
| Russell | — | Yea |
| vonHaefen | — | Yea |
| Wray | — | Yea |
| Boles | — | Yea |
| Bumgardner | — | Yea |
| Carter | — | Yea |
| Conrad | — | Yea |
| Dobson | — | Yea |
| Elmore | — | Yea |
| Faircloth | — | Yea |
| Fraley | — | Yea |
| Grange | — | Yea |
| Hardister | — | Yea |
| Horn | — | Yea |
| Hurley | — | Yea |
| P. Jones | — | Yea |
| Lewis | — | Yea |
| McElraft | — | Yea |
| McGrady | — | Yea |
| McNeill | — | Yea |
| Moore | — | Yea |
| Presnell | — | Yea |
| Saine | — | Yea |
| Sasser | — | Yea |
| Speciale | — | Yea |
| Szoka | — | Yea |
| Zachary | — | Yea |
| Autry | — | Nay |
| Cleveland | — | Nay |
| Rogers | — | Nay |
| Yarborough | — | Not Voting |
| Fisher | — | Not Voting |
| Insko | — | Not Voting |
| Lucas | — | Not Voting |
| Terry | — | Not Voting |
| Davis | — | Not Voting |
| C. Smith | — | Yea |
| K. Baker | — | Yea |
| K. Smith | — | Yea |
| R. Smith | — | Yea |
| Allison A. Dahle | Democratic | Yea |
| Amos L. Quick, III | Democratic | Yea |
| Becky Carney | Democratic | Yea |
| Brandon Lofton | Democratic | Yea |
| Brian Turner | Democratic | Yea |
| Carolyn G. Logan | Democratic | Yea |
| Cecil Brockman | Democratic | Not Voting |
| Cynthia Ball | Democratic | Yea |
| Dante Pittman | Democratic | Nay |
| Deb Butler | Democratic | Yea |
| Eric Ager | Democratic | Yea |
| Gale Adcock | Democratic | Yea |
| Garland E. Pierce | Democratic | Yea |
| Graig Meyer | Democratic | Yea |
| Joe John | Democratic | Yea |
| Marcia Morey | Democratic | Nay |
| Mary Belk | Democratic | Yea |
| Pricey Harrison | Democratic | Nay |
| Robert T. Reives, II | Democratic | Yea |
| Shelly Willingham | Democratic | Yea |
| Sydney Batch | Democratic | Yea |
| Terence Everitt | Democratic | Nay |
| Tracy Clark | Democratic | Yea |
| Vernetta Alston | Democratic | Nay |
| Zack Hawkins | Democratic | Yea |
| Bobby Hanig | Republican | Yea |
| Brenden H. Jones | Republican | Yea |
| Chris Humphrey | Republican | Yea |
| Dean Arp | Republican | Yea |
| Dennis Riddell | Republican | Yea |
| Destin Hall | Republican | Yea |
| Donna McDowell White | Republican | Yea |
| Donny Lambeth | Republican | Yea |
| Edward C. Goodwin | Republican | Yea |
| Frank Iler | Republican | Yea |
| Harry Warren | Republican | Yea |
| Hugh Blackwell | Republican | Yea |
| Jake Johnson | Republican | Yea |
| Jay Adams | Republican | Yea |
| Jeffrey C. McNeely | Republican | Yea |
| Jimmy Dixon | Republican | Yea |
| John A. Torbett | Republican | Yea |
| John R. Bell, IV | Republican | Yea |
| John Sauls | Republican | Yea |
| Julia C. Howard | Republican | Yea |
| Keith Kidwell | Republican | Nay |
| Kelly E. Hastings | Republican | Not Voting |
| Kevin Corbin | Republican | Yea |
| Kyle Hall | Republican | Yea |
| Larry C. Strickland | Republican | Yea |
| Larry W. Potts | Republican | Yea |
| Lisa S. Barnes | Republican | Yea |
| Mark Brody | Republican | Yea |
| Mitchell S. Setzer | Republican | Yea |
| Phil Shepard | Republican | Not Voting |
| Sarah Stevens | Republican | Yea |
| Stephen M. Ross | Republican | Yea |
| Steve Jarvis | Republican | Yea |
| W. Ted Alexander | Republican | Yea |
| William D. Brisson | Republican | Yea |
| Carla D. Cunningham | U | Not Voting |
| Nasif Majeed | U | Yea |
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Democratic | 7 | 1 | 0 | 1 |
| Unaffiliated | 27 | 0 | 0 | 1 |
| Republican | 13 | 0 | 0 | 0 |
| Total | 47 | 1 | 0 | 2 |
| % of votes cast | 94% | 2% | 0% | 4% |
How each member voted (50)
| Member | Party | Vote |
|---|---|---|
| deViere | — | Yea |
| Fitch | — | Yea |
| Foushee | — | Yea |
| Marcus | — | Yea |
| Nickel | — | Yea |
| Peterson | — | Yea |
| Searcy | — | Yea |
| Smith | — | Yea |
| VanDuyn | — | Yea |
| Woodard | — | Yea |
| Ballard | — | Yea |
| Brown | — | Yea |
| Bryan | — | Yea |
| J. Davis | — | Yea |
| Edwards | — | Yea |
| Gallimore | — | Yea |
| Gunn | — | Yea |
| Harrington | — | Yea |
| Horner | — | Yea |
| Krawiec | — | Yea |
| Newton | — | Yea |
| Perry | — | Yea |
| Steinburg | — | Yea |
| Tillman | — | Yea |
| Wells | — | Yea |
| Johnson | — | Not Voting |
| D. Davis | — | Yea |
| J. Jackson | — | Yea |
| Dan Blue | Democratic | Not Voting |
| Gladys A. Robinson | Democratic | Yea |
| Jay J. Chaudhuri | Democratic | Yea |
| Joyce Waddell | Democratic | Yea |
| Michael Garrett | Democratic | Yea |
| Mujtaba A. Mohammed | Democratic | Yea |
| Natalie S. Murdock | Democratic | Yea |
| Paul A. Lowe, Jr. | Democratic | Yea |
| Tracy Clark | Democratic | Nay |
| Bill Rabon | Republican | Yea |
| Brent Jackson | Republican | Yea |
| Carl Ford | Republican | Yea |
| Danny Earl Britt, Jr. | Republican | Yea |
| Jim Burgin | Republican | Yea |
| Norman W. Sanderson | Republican | Yea |
| Phil Berger | Republican | Yea |
| Ralph Hise | Republican | Yea |
| Tom McInnis | Republican | Yea |
| Vickie Sawyer | Republican | Yea |
| W. Ted Alexander | Republican | Yea |
| W. Ted Alexander | Republican | Yea |
| Warren Daniel | Republican | Yea |
Subjects
Frequently asked questions
- Who sponsors HB 1080?
- HB 1080 is sponsored by Julia C. Howard (Republican), Mitchell S. Setzer (Republican), Szoka, Faircloth, Jeffrey C. McNeely (Republican), Sasser, John Sauls (Republican), Harry Warren (Republican), Chris Humphrey (Republican), and Stephen M. Ross (Republican).
- What is the current status of HB 1080?
- This bill has been enacted into law. Introduced May 14, 2020. Enacted.
- Where can I track HB 1080?
- Track HB 1080 free on One Click Politics — get push/email alerts when it moves.
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