Last week was a busy one at the North Carolina General Assembly.  Important legislation was approved in the House and in the Senate, and negotiations on the state budget continued.  The House approved a major economic development incentives package.  The Senate approved an overhaul to the state purchase and contract laws and a variety of other proposals.  Meanwhile, legislative leaders and chief budget writers are working to produce a compromise version of the state budget amidst doubts about federal funding that could cost the State $450 million.  The action last week sets up a critical week this week as lawmakers push to finalize the state budget by June 30 and adjourn the 2010 session shortly thereafter.  In other news, North Carolina will hold run-off elections in the second Primary on Tuesday. 

Budget negotiations are close to producing a compromise between the House and Senate.  Last week, budget conferees met and reported to chief negotiators on agreements reached between the House and the Senate.  The top budget writers and legislative leaders then worked to produce the final targets for spending.  A key unanswered question looms over the negotiations:  will Congress enact legislation that is expected to bring $450 million in Medicaid funding to North Carolina?  This question threatens to stall budget negotiations and the entire legislative session because lawmakers are content to pass a budget that assumes the funds are coming while Governor Perdue is quietly insisting on a bill that makes cuts if the money doesn’t come.  Whether Governor Perdue will grow louder in her objections, or issue a veto threat, is not yet clear.  For now, it appears that budget negotiations are on track and a bill will be approved before the end of the fiscal year on June 30. 

On Thursday last week the House of Representatives approved legislation (House Bill 1973) containing package of significant economic development incentives.  House Bill 1973 contains provisions that extend tax credits for growing businesses, modify the film incentive tax credit, and amending economic development laws to attract to North Carolina two computer data centers, a turbine manufacturer and a wood pulp to paper factory.  Estimates show that these and other proposed tax benefits included in the bill would cost the State roughly $300 million in forgone tax revenue over the next five years.  The total cost and the provisions related to film credits were criticized sharply during the House debate on the bill.  The legislation was ultimately approved by a vote of 76-28, with progressive Democratic members and conservative Republicans voting against and a bipartisan coalition of House legislators supporting passage.  A final House vote on the bill is scheduled for Monday. 

In other action, the House advanced a number of important legislative proposals.  In a unanimous vote, the House approved legislation (House Bill 1429) that would extend the authority for the Commissioner of Insurance to waive the minimum policyholders position requirement for mortgage guaranty insurers.  House Bill 1429 now heads to Governor Perdue’s desk.  The House also advanced a pair of bills (House Bill 1746 and 1747) related to water resource planning.  A study commission recommended these bills after completing work prior to the legislative session. 

Also in the House last week, lawmakers unanimously approved a resolution (House Joint Resolution 1907) that would confirm the appointment of former Representative Lucy Allen as a member of the State Utilities Commission.  Representative Allen was appointed to the Commission before the current legislative session began and has already begun work pending her formal confirmation.  During her legislative career, Representative Allen chaired the House Environment Committee and was a champion for local governments.  Prior to being elected to the House, Mrs. Allen was the Mayor of Louisburg, NC and was President of the NC League of Municipalities. 

Last week the Senate was also working on economic development incentive laws.  The Senate approved legislation (Senate Bill 1215) that would streamline the reporting requirements for economic development incentives and repeal tax credits that were enacted but are no longer used. 

In other action, the Senate approved legislation (Senate Bill 1213) that makes significant changes to the State Purchase and Contract laws.  The Purchase and Contract laws detail the process of soliciting and reviewing bids from outside contractors and ultimately how the bids are awarded and overseen.  Senate Bill 1213 would enact new authority for the Secretary of Administration to oversee contracts, require the Attorney General to review certain contracts and prohibit the use of cost plus percentage of cost contracts.  Senate Bill 1213 passed the Senate on the first of two votes last week. 

Outside of the legislative building, voting in the runoff for primary elections is coming to an end on Tuesday.  North Carolina voters in the Democratic Primary will decide between Cal Cunningham and Elaine Marshall in the contest to be the nominee facing US Senator Richard Burr.  2010 is Burr’s first reelection effort to hold a US Senate seat he won in 2004.  Voters in the Republican Primary will choose nominees in several Congressional districts that went to runoffs.  Also, Cumberland County voters in North Carolina Senate District 21 are selecting a nominee who will be heavily favored to win the seat in November.  Early voting closed on Saturday and traditional voting in the Primary Election will be held on Tuesday.