Legislators outline life sciences priorities for 2027 long session at forum 

Three co-chairs of the N.C. General Assembly's bipartisan Life Sciences Caucus told industry leaders Oct. 19 they plan to revisit state tax treatment of research and development costs, expand workforce training and address water and wastewater capacity during the 2027 long session. 

Sen. Benton Sawrey (R-Johnston), Sen. Jay Chaudhuri (D-Wake) and House Democratic Leader Rep. Robert Reives (D-Chatham), spoke at the NC Life Sciences Organization's Legislative Luncheon and Forum at the NC Biotechnology Center in Research Triangle Park. The caucus brings together House and Senate members from both parties to work on policy affecting the state's life sciences industry. NCLifeSci President Laura Gunter and Joe Lanier, principal at Milestone Strategies, moderated the discussion. Rep. Donna White (R-Johnston) the caucus's fourth co-chair, could not attend. 

AbbVie, Bristol Myers Squibb and PhRMA sponsored the event. 

The General Assembly holds a long session in odd-numbered years, when lawmakers write the state's two-year budget, and a shorter session in even-numbered years. 

Life sciences omnibus bill 

Lanier asked the legislators to assess the life sciences omnibus bill, the caucus's first effort to combine several industry priorities in a single piece of legislation. The bill did not pass on its own, but lawmakers included three of its priorities in the state budget: recurring funding for the NC Biotechnology Center, a move of the Rare Disease Advisory Board from UNC-Chapel Hill to the N.C. Department of Health and Human Services, and a provision authorizing the state to reimburse qualifying manufacturers for costs incurred on eligible water and sewer infrastructure projects at manufacturing sites. 

The One North Carolina Small Business Program awards matching grants to small companies in any industry that win federal Small Business Innovation Research or Small Business Technology Transfer awards. The omnibus bill proposed increasing the state's investment to $10 million, but that was not included in the final budget. 

Chaudhuri said the state currently invests about $2 million in the program but should invest about $10 million. He said the program has supported about 500 companies in rural and urban communities and has produced a 250% return on investment. 

"I do think we underinvest in the space," Chaudhuri said. 

Sawrey compared the omnibus bill to the farm bill and finance package lawmakers consider each year. A single bill gave caucus members in both chambers one set of proposals to promote, he said. Sawrey called the effort a success and said the caucus plans to pursue pieces left out of the budget. 

Reives said an annual life sciences bill, like the farm bill, would get legislators used to seeing industry priorities and show them the industry has vetted the proposals. He said other states watch North Carolina closely. 

"No matter how well we do, somebody's looking at us, copying what we're doing and trying to improve upon it," Reives said. 

Research and development tax deduction 

Gunter asked about the state's tax treatment of research and development costs. The 2017 federal Tax Cuts and Jobs Act required companies, starting in 2022, to spread deductions for domestic research costs over five years rather than deduct the full amount in the year they spent the money. North Carolina tax law followed the federal rule. The One Big Beautiful Bill Act, signed in July 2025, restored the immediate federal deduction. North Carolina usually matches its tax code to federal changes, but Senate Bill 595, a revenue bill enacted this year, kept the five-year schedule for state taxes. 

Chaudhuri said the state rule hurts startups, which rely on cash flow, and puts North Carolina behind other Southern states offering the immediate deduction. He said he spoke against the provision on the Senate floor and discussed the issue with Gov. Josh Stein, who considered vetoing the bill. 

Sawrey said North Carolina is on track to eliminate its corporate income tax, and Senate Republicans prefer lowering the overall rate to offering credits and special deductions. He said the decision on research costs came down to revenue, about $158 million over two years. 

Sawrey said many startups operate as S corporations, partnerships or limited liability companies. These businesses pay individual income tax on profits rather than corporate income tax, so the corporate tax phaseout does not help them. Lawmakers have discussed offering the immediate deduction to small startups or shortening the five-year schedule, he said. 

Lanier said the provision appeared in a bill with 13 parts, which prevented a focused debate on the issue. Sawrey said he voted for the bill because he considered the overall package acceptable and lawmakers agreed to revisit the provision. 

Workforce training 

Reives said companies opening or expanding facilities need trained workers right away, and the state should send money to community colleges faster. He cited the training facility Johnston Community College built for Grifols and Novo Nordisk, two of the county's largest employers. 

Sawrey, a former Johnston Community College trustee, said the previous state funding model made college transfer courses less costly to offer than BioWork, a certificate program for entry-level biomanufacturing technicians. The legislature this year funded Propel NC, a new community college funding model tied to high-demand jobs. He said the model gives colleges the money and incentive to offer specialized programs. 

Chaudhuri said Propel NC includes funding for community college instructors in high-demand fields. He called for more apprenticeships and more STEM teachers in public schools. 

"Education is economic development," Chaudhuri said. 

Water and wastewater 

Lanier asked whether legislators would support regional planning, in which several local governments share water and wastewater plants and costs. 

Sawrey said a 6 million-gallon-per-day water facility in Johnston County would cost about $200 million, or about half the county's budget. He said the Neuse River, which many area manufacturers rely on, faces more state regulation than any other body of water in North Carolina and has reached its limit. Lawmakers have discussed applying the model of the State Transportation Improvement Program, which ranks and schedules road projects statewide, to water and wastewater projects, he said. 

Chaudhuri said local governments lack the money to address the problem alone and warned the state risks losing company expansions without new infrastructure. 

Reives said lawmakers should plan for companies not yet in existence. He cited a 1960s decision in Sanford to build a water system with about three and a half times the capacity the city needed. The system now serves parts of Chatham and Harnett counties. 

Federal research funding 

Chaudhuri said reductions in National Institutes of Health funding affect universities in the Triangle. He urged the state to pursue more Department of Defense research funding, an area where North Carolina trails other states. 

Sawrey said a new legislative caucus focused on national security plans to model its work on the Life Sciences Caucus. The two caucuses share a co-chair. 

Gunter closed the forum by urging industry members to stay in contact with caucus members ahead of the long session.