Last week the General Assembly passed the state budget and Governor Perdue signed the bill into law on the final day of the State Fiscal Year.  Lawmakers quickly turned their attention to ethics legislation and to economic incentives bills that are pending in the House and in the Senate.  Also, lawmakers are working to pass the one hundred or so proposals that are pending and still eligible for consideration in the 2010 short session.  Legislative leaders have agreed on a tentative date of adjournment of July 9, 2010. 

The General Assembly approved a $19 billion state budget last week and Governor Perdue signed the bill into law on Wednesday outside of the historic State Capitol.  The budget legislation (House Bill 897) cuts over $800 from state government spending, on top of roughly $1.5 billion in cuts made last year.  The budget makes contingency plans if Congress fails to send North Carolina $500 million in Medicaid money by directing use of other state funds, including pension funds set aside for state employees.  That provision drew sharp criticism from State Treasurer Janet Cowell (D-Wake) and from Republican legislators, most of whom voted against the bill.  Republicans more generally criticized the budget legislation as spending too much and as creating a potential $3 billion budget shortfall next year when federal stimulus funding will have run out and debt service and pension contributions will have come due.  Democratic lawmakers defended the budget as protecting school teachers and as creating new jobs through tax credits and transportation funding.  In her remarks, Governor Perdue praised lawmakers for the work put into the budget legislation but quickly moved to urge legislators to pass ethics reform before the 2010 session ends. 

Ethics legislation is one of the two most high profile issues pending before the 2010 General Assembly.  Last week the House and Senate were each producing proposals aimed at enacting “pay-to-play” regulations, extending the “cooling off’ period in which state government employees and legislators must wait to register as lobbyists, and changing the way that lobbyists’ compensation is reported.  The House and Senate were simultaneously working on their respective proposals this week (Senate Bill 716 and House Bill 916).  These proposals contain minor differences throughout and major differences over publicly financed elections.  The Senate has signaled no desire to vote on public campaign financing this year, while the House is moving legislation to allow public financing in local elections and for certain statewide offices.  These proposals are in doubt as the adjournment date approaches, but the House and Senate seem to agree that an ethics bill is “must-pass” legislation this year. 

Economic development incentives legislation is the other high profile issue pending before the General Assembly, and this issue is also contained in two competing proposals.  Earlier this session, the Senate passed legislation (Senate Bill 1171) with tax credits aimed at attracting to North Carolina two data centers, a turbine manufacturer, and a wood-pulp-to-paper facility.  Later in the session, the House passed a very similar proposal (House Bill 1973) containing those tax credits and others.  Because Senate Bill 1171 passed first, Senate lawmakers are insisting that the House take up Senate Bill 1171 and are moving to use House Bill 1973 for other related purposes.  Last week, the Senate Finance Committee re-wrote House Bill 1973 to include a variety of new or extended tax credits plus the highly controversial provisions related to establishing a Yadkin River Trust (more on this below).  Both of the bills are complex and detailed, and because the bills affect tax law they are subject to procedural rules that require votes on separate days.  These procedural requirements and the expected four legislative days remaining in the session set up a daunting task for lawmakers and parties interested in seeing these proposals become law. 

Issues surrounding the Yadkin River Trust and the non-operational aluminum plant owned by Alcoa resurfaced with surprising impact last week.  The Senate Judiciary II Committee has issued subpoenas to two public television employees involved in making a documentary about Alcoa’s operations on the Yadkin River.  The Committee’s subpoena power is statutorily authorized although it has almost never been used.  Senator Fletcher Hartsell (R-Cabarrus), the Republican Judiciary II Chairman in the Democratic-controlled Senate, proposed legislation last year to create the Yadkin River Trust as a public entity empowered to pursue a hydroelectric license issued by the Federal Energy Regulatory Commission (FERC).  The current 50-year license, held by Alcoa Inc., has run out, and Senator Hartsell wants to see a state entity take control of the license and the hydroelectric dam that once powered an aluminum plant because of environmental damage caused by the company.  The legislation passed the Senate but was defeated on the floor of the House last year, raising questions of whether the provisions in House Bill 1973 are eligible this year.  Senator Hartsell hopes that evidence produced at a hearing this week will push House lawmakers to act on the bill. 

A great number of other legislative proposals are awaiting action by the General Assembly in what will likely be the final week of the 2010 legislative session.  New protections for homebuyers (Senate Bill 1015) passed the House last week on the first of two votes.  A related extension of mortgage lending protections (Senate Bill 1216) is scheduled for a final vote by the Senate on Tuesday.  The Senate has already passed legislation (House Bill 80) to ban Internet gambling or sweepstakes operations and the bill is awaiting action by the House. 

Among the environmental law changes still pending are requirements for river basin modeling (Senate Bill 1170) and for applicants for an Interbasin Transfer to pay costs of public hearings (House Bill 1765), and a number of other water resource related proposals (House Bills 1744, 1746, 1747 and 1748).  Revisions to the tax laws that encourage renewable energy investments (House Bill 1829) passed the Senate and are going back to the House for final action, while amendments to the electronics recycling laws (Senate Bill 887) are headed to Governor Perdue’s desk.  

A constitutional amendment to prohibit felons from becoming sheriffs will be placed on the ballot this fall after the General Assembly approved House Bill 1307.  Separate legislation (House Bill 1659) calling for a constitutional amendment to curb government takings of private property for economic development purposes passed the House last week, but Senate action is doubtful this year.  All of these bills and the dozens of technical corrections, study bills or other proposals must all be enacted before the General Assembly adjourns or else be reintroduced next year during a new legislative session.