The Senate advanced two bills in a Monday night session in an attempt to defuse two issues that had helped clog up the budget process.
The bills had both been passed through the Senate Appropriations Committee earlier that day. But it is by no means clear that the General Assembly will have a budget passed by its deadline.
The second reading of the NC Competes Act, House Bill 117, passed the Senate Monday in a 36-12 vote after two amendments were brought to the bill on the floor. On its third reading, the bill passed 34-1o Tuesday afternoon. The bill now will go back to the House for concurrence.
The bill is a trimmed-down version of the House bill passed in March, but this newest version includes provisions for the formation of a Job Development Investment Grant (JDIG) fund that will be used to funnel money to private companies that investment in the state.
The Senate had balked at JDIG, which some call corporate welfare.
Under the program, the state would have $20 million annually to dispense to eligible projects, except in the case of a high-yield project, which activates another $15 million eligible to award in that year.
Earlier versions allocated $15 million a year instead of $20 million.
A high-yield project requires $75 million of investment from the private entity as well as the creation of at least 2,000 jobs.
The section is crafted attract a large-scale automobile manufacturing plant, which the governor has made a priority.
The bill extends the program to January 1, 2019; under previous plans, JDIG was only cleared to January 1, 2016.
Eligibility for projects is based on the number of positions created.
And all positions in the count are based on net job growth, meaning that positions pulled from existing industry in the area would not count towards the final amount.
In the state’s most well-off regions, tier three areas, a project would require the creation of 50 positions. Legislators had discussed raising that threshold to 200 positions.
In a tier-two area, 20 jobs would have to be created to be eligible; 10 jobs would have to be added in tier-one areas.
The push for a JDIG program has been a priority for Gov. Pat McCrory, who has been asking the legislature for JDIG as a tool to attract corporations to the state.
An effort to come to an agreement on an economic incentives bill failed at the end of the 2014 short session, as opponents said the bill was stuffed with extra pork and a number of incentive proposals in one package.
Included in the Senate bill is language to change the way sales tax revenue is distributed in the state.
Sales tax reform
Under the plan, half of sales tax revenues collected in the state would be distributed back to the area from which it was collected and the other half would head out to the rest of the state on a per capita basis.
Currently 75 percent of the sales tax revenue stays where it is collected and 25 percent is distributed to all of the 100 counties, and by extension the municipalities, based on a per capita basis.
The Senate had advocated for turning that system in its head, but the latest version represents a compromise to come to rest in the middle between the two proposals.
Possible continuing resolution through the fiscal year end
The plan to shake up state sales tax distribution was originally included in the Senate budget proposal, but that section was stripped from the latest version as legislators try to come to an agreement in the face of the impending end to the continuing resolution (CR) passed on the eve of the new fiscal year June 30.
The CR is set to run out this Friday, meaning legislators will have to pass a new CR, or ratify a budget, or the government will shut down.
Word in the General Assembly says that either CR will be passed to get the state through the end of the current fiscal year, June 30, 2016, or a CR will be passed to give the state time to solve the budget issues, with an expected timeline of October or so.
One North Carolina Fund
The bill also provides a framework for another fund meant to lure business to the state, the One North Carolina Fund (ONCF), which would require $1 of local money to $1 of state money for the state’s wealthiest counties, $1 to $2 for tier-two counties, and, for the 40 poorest counties, a $1 of local funding for every $3 of state money.
The bill is due for a third reading vote Tuesday.
Medicaid reform passed in Senate
The Senate also passed a bill to revamp the state’s struggling Medicaid system.
The bill passed in a 38-10 vote and will see a third reading in the Senate Tuesday.
The reforms would utilize both managed care and provider-led entities to push the risk off of the state and stabilize Medicaid spending.
Lawmakers in both chambers expressed their determination to reach an agreement on Medicaid reforms after years of failing to agree on concrete solutions to the issue.
According to the bill, the state would contract with up to three managed care companies to provide coverage across the state while healthcare professionals would be invited to form their own entities to act as both insurer and provider.
The idea is that the state’s expenses will be better controlled because the state will pay a flat fee for each Medicaid patient instead of paying for each service provided.
The legislation also calls for the creation of a Medicaid department and a secretary for that department, who would be confirmed by the General Assembly.
The bill is due for a third reading vote in the Senate Tuesday.