By Zac Ezzone and Lauren Ohnesorge for the Triangle Business Journal

State lawmakers, including a powerful committee chairman, want to claw back funding the North Carolina General Assembly had allocated to a nonprofit focused on advancing research at UNC system schools into commercial opportunities.

Nearly a dozen lawmakers are sponsoring legislation, House Bill 154, that would require NCInnovation to return all state funding the organization has received. This comes only a few years after lawmakers directed $500 million to establish an endowment to support the organization’s grant programs.

The new bill would “dissolve the relationship between the state and NCInnovation” and “require NCInnovation to return state funds and assets.” This would require the nonprofit to transfer back to the state all funds “other than excluded amounts and interest earned on excluded amounts,” and “all assets acquired with state funds.”

After being returned, the funds would be deposited in the state’s general fund and remain there unless the General Assembly subsequently directs the funds elsewhere.

In an emailed statement to TBJ, Republican state Rep. Harry Warren — chairman of the House Oversight Committee and one of the bill’s sponsors — said that “North Carolina is confronted with challenges that were unforeseen when the arrangement with NCInnovation was made.”

“Considering the devastation created by Hurricane Helene in our western counties and the mismanagement of the eastern coastal recoveries by (the state Office of Recovery and Resiliency) under the (Gov. Roy Cooper) administration, it is prudent to reconsider the relationship and recall the funding to be applied to the priorities of the citizens in the affected areas,” Warren said.

Warren said that although NCInnovation “is a good concept,” it should be funded by the private sector.

“Conditions in the economy and within the state can change suddenly and dramatically,” Warren said in his statement. “It is critical to have the financial fluidity to address these concerns quickly as they arise.”

State lawmakers in 2023 earmarked $500 million in state funding for NCInnovation, which was allocated in two tranches of $250 million across fiscal years 2023-24 and 2024-25, dependent on the organization meeting certain requirements. This created an endowment fund that would generate interest for NCInnovation to use for its grant programs, while not drawing directly from the $500 million in state funds.

NCInnovation also previously secured $25 million in private commitments from some of North Carolina’s largest companies.

In response to the proposed legislation, NCInnovation says it will “continue its work on its core mission as mandated by state lawmakers in the 2023-25 budget, and the organization remains committed to working with the General Assembly.”

“If and how policymakers wish for NCInnovation to support North Carolina’s worldclass applied research is and always has been entirely up to policymakers,” NCInnovation said in a statement.

The nonprofit is focused on advancing university research into commercial opportunities through a grant process that targets an area of development where funding is often lacking. The organization has established hubs at universities across the state, beginning with East Carolina, UNC-Charlotte, N.C. A&T State and Western Carolina before adding Appalachian State, Fayetteville State and UNC-Wilmington last year.

In a pilot grant program last year, NCInnovation directed about $5.2 million to eight university research projects. This includes research at East Carolina focused on developing a cancer immunotherapy for melanoma patients and a project at UNC-Charlotte focused on developing materials to remove per-and polyfluoroalkyl substances (PFAS) from drinking water.

The organization says that grant review panels are going through the next round of applications, which includes proposals from more than 150 UNC system researchers who have submitted funding requests totaling $90 million.

Related: State lawmakers file bill to reclaim $500 million in taxpayer funds from NCInnovation

The preceding article originally appeared on February 19, 2025 at the Triangle Business Journal’s website and is made available here for educational purposes only. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 106A-117 of the U.S. Copyright Law. Any views or opinions expressed here are those of the authors and do not necessarily reflect the official policy or position of the Carolina Leadership Coalition. Photo above: The Legislative Building in Raleigh by David Purtell for the Triangle Business Journal.