SENATE BUDGET TIME: The state Senate released a $20.58 billion proposed budget late Sunday night that would eliminate class-size limits for the youngest public school students, move the State Bureau of Investigation to a department the governor’s appointee controls and puts various environmental programs under the control of a state agency. The proposal represents a 2.3 percent increase over the current budget and is about $17 million short of the budget Gov. Pat McCrory proposed in March.

Senate budget writers will hold a press conference at 10:30 a.m. to discuss it in more detail. Full Senate votes are expected later this week. More here.

NCGA PROTESTERS CHALLENGE CHARGES: As protesters gear up to assemble again Monday to highlight concerns about welfare cuts, health care funding, voting rights, racial justice, tax reform, environmental deregulation, workers rights and more, legal analysts are raising questions about whether the General Assembly police are within their power to arrest the nonviolent demonstrators. Irv Joyner, a law professor at N.C. Central University who has observed the demonstrations, said legal challenges of the arrests are being drafted. “We think we have clear-cut First Amendment issues,” Joyner said. Full story.

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The N.C. Senate's budget proposal will clock in at $20.58 billion, just short of Gov. Pat McCrory's $20.6 billion proposal, according to Senate leader Phil Berger's office.

The full budget is expected to be made public later tonight. According to a press release, the budget includes $10.2 million in the second year for a "pay for excellence" system for teachers, and eliminates the "flex cut" to local schools, a budget practice that had districts returning money to the state each year.

The budget adds $1.2 billion in state money for Medicaid, establishes a Rural Economic Development Division within the state Department of Commerce that will have its own assistant secretary, and puts $1.25 million toward fracking.

The Senate is expected to approve its budget this week and send it to the House.

Raleigh’s Jim Cain, former ambassador to Denmark and one-time president of the Carolina Hurricanes hockey team, tells Roll Call he is taking a serious look at running in the Republican primary next year to challenge U.S. Sen. Kay Hagan, D-N.C.

“The race is indeed something that I am considering,” Cain told the Washington, D.C. publication. “Many friends and supporters around the state are encouraging me to challenge Senator Hagan.”

Cain was ambassador under President George W. Bush. A corporate attorney by profession, he works with Kilpatrick Townsend.

That race is getting crowded quickly.

Former state Rep. Stephen LaRoque will go on trial in federal court in Greenville on Monday on charges that he enriched himself with U.S. Department of Agriculture money that he loaned to struggling rural business owners.

The trial is expected to be protracted because it involves complex financial transactions that the government contends amounted to theft and money laundering. LaRoque, who is represented by Raleigh attorneys Joseph Cheshire V and Elliot Abrams, says he used the money legally.

U.S. District Court Judge Malcolm Howard recently denied LaRoque’s motions to dismiss the charges.

A side note to one of the controversial bills that sped through crossover week this week.

SB515, which would repeal current environmental protections at Jordan Lake so that new ones could be written, is a GOP-promoted idea. But not all Republicans are on board.

The three Republican senators whose districts include parts of Jordan Lake voted against it, although they didn’t take part in the floor debate. That would be Sens. Neil Hunt, Tamara Barringer and Chad Barefoot.

The bill could run into similar opposition in the House, which has several members whose districts also lap up against the shores of the lake, which provides drinking water for about 300,000 people and is a popular recreation site.

House Speaker Pro Tem Paul “Skip” Stam, Republican from Apex, said Friday he is against the bill, but allowed that it could be amended to address his concerns.

The top three Republican politicians in the state announced Friday they are all together when it comes to Medicaid reform.

Gov. Pat McCrory, Senate Leader Phil Berger and House Speaker Thom Tillis sent out a joint news release emphasizing that – despite criticism of the move toward privatization – the state is proceeding with plans to reign in costs in the $13 billion program.

Their joint announcement said the state Senate’s budget will require the state Department of Health and Human Services submit a waiver application to the federal government. The budget, which will be released Sunday evening, will have to be approved by both chambers in the General Assembly.

A federal waiver would allow the state flexibility in operating and paying for its Medicaid programs. McCrory has said he wants to privatize some of Medicaid as a way to reduce cost overruns.

Guiding principles in the state’s reform plan include focusing on behavior as a way to improve health, making it easier on providers, and developing a reliable estimate of costs.

On Thursday, the House approved spending $400 million through next month to close the current shortfall and repay the federal government other debts.

Gov. Pat McCrory signed five bills into law on Friday:

HB484 – Establishes a permit program to place and operate wind energy plants. DENR will both help wind developers get started and deny permits when necessary.

“This is a great law because it shows that we are serious about our responsibility for balancing our environmental and economic interests, including North Carolina’s strong military presence,” DENR Secretary John Skvarla said in a statement the governor's office released. “We can and will protect the environment and our citizens, while also creating a clear regulatory path for the development of wind energy in North Carolina.”

HB149 – Titled “Caylee’s Law,” the bill makes it a crime to fail to report the disappearance of a child to law enforcement. It also increases the penalty for concealing a child’s death, for making a false report to law enforcement to interfere with a missing-child investigation, and a misdemeanor for failing to report abuse, neglect or death of a juvenile due to maltreatment. The bill was inspired by the death of Caylee Anthony in Florida.

SB91 – Protects people whose criminal records have been expunged from having to disclose that information to employers, licensing boards and educational institutions.

HB706 – Exempts from landfill permit requirements the disposal of debris from decommissioned manufacturing buildings, including electric generating stations.

HB119 – Authorizes the state Utilities Commission to set rates for natural gas local distribution companies.

EDWARDS REGROUPS: Former presidential contender John Edwards has reactivated his license to practice law and is setting out on the speaking circuit, the Associated Press reports. The former U.S. senator and 2004 Democratic vice-presidential nominee is scheduled to appear June 6 at a private retreat in Orlando, Fla., for lawyer clients of the marketing firm PMP.

Edwards has remained largely out of public view since his acquittal in May 2012 on one charge of campaign finance fraud. A judge declared a mistrial on five other criminal counts after jurors couldn’t agree whether Edwards had illegally used campaign money to hide his pregnant mistress as he ran for president in 2008. An itinerary says Edwards will speak for about 45 minutes as part of a program titled “Historic Trials of the Century.” Edwards earned millions as a personal injury lawyer before entering politics.

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What North Carolina company wanted to use Islamic Sharia law? A: The private military contractor Blackwater.

On Thursday, the state House has passed a bill to eliminate the use of Sharia law in North Carolina. Opponents of Sharia like Rep. John Blust of Greensboro say Islamic law threatens to how North Carolinians marry, divorce and determine child custody: “It’s creeping, but it is stated within those who are pushing it, that is their goal: to have this type of law rule the world."

The former North Carolina company Blackwater had a different aim in mind back in 2006. They wanted to use Sharia to escape responsibility for a botched flight that killed three soldiers and the flight crew. Under Sharia law, employers are not liable for harm done by their employees. Federal judges opted to stick with U.S. law, despite the company's entreaties. Blackwater and its insurers settled the lawsuit for an undisclosed amount. --Joseph Neff, staff writer

The divide between legislative Republicans about how to revamp the state’s tax code became clear Thursday, as House leaders unveiled a dueling plan, calling it a more measured approach.

The House legislation (Read it here.) offers smaller income tax cuts in exchange for fewer new taxes on services. Supporters pledged it would give a break to all taxpayers but the numbers remain unclear. It contrasts greatly with a sweeping Senate proposal that some experts believe could leave many people with a tax hike, a point its supporters dispute.

“We think our tax plan is a lot simpler in terms of the expansion of the sales tax base,” said state Rep. David Lewis, a Dunn Republican leading the effort. “We think it makes sense to people.”

For the past few years there has been a widespread fear among some conservatives that Islamic law is a threat to the constitutional rights of Americans. A number of state legislatures began passing bills outlawing Sharia law.

North Carolina’s House of Representatives became the latest on Thursday, passing a bill prohibiting the application of foreign laws in this state. The bill specifies foreign law cannot be considered in divorce, child custody or support, alimony or equitable distribution cases, if that would violate any party’s constitutional rights.

Democrats scoffed at the bill, but Republicans – who carried the bill with a 69-42 vote – said it was a serious matter. Veteran GOP Rep. John Blust of Greensboro said it was time to “nip it in the bud.”

“It’s creeping, but it is stated within those who are pushing it, that is their goal: to have this type of law rule the world,” Blust said.

The bill goes to the Senate now.

The House gave its final blessing Thursday to the bill prohibiting insurance coverage for abortions in the state health exchange and local government plans – with a fair amount of rancor over the divisive issue.

The final vote was 73-39, with Rep. William Brisson, a Democrat representing Johnston, Sampson and Bladen counties, breaking ranks with his party again.

In a unanimous vote Thursday, the House agreed to let the state collect tolls to help pay for the addition of new lanes on I-95 and other interstate highways -- but only if drivers retain the option to drive toll-free in the old lanes.

Eastern North Carolina political leaders and residents of the eight I-95 counties have opposed a state Department of Transportation proposal to collect tolls on both new and old lanes to finance a $4.4 billion widening and overhaul for I-95.

The aging interstate would be expanded from four to eight lanes on the busiest 50 miles between I-40 in Johnston County and St. Pauls in Robeson County, and six lanes on the remainder of its 182 miles between the South Carolina and Virginia borders. Under the original proposal, drivers would begin paying tolls in all lanes before the project is finished.

Bruce Siceloff, The N&O's transportation reporter, brings us up to speed on key legislation on our highways and byways in his Crosstown Traffic blog. He's in a musical mood today:

Raleigh's Tift Merritt has a lovely song that comes to mind on the General Assembly's frantic "Crossover Day." Any bill that didn't clear one chamber by the end of the day Thursday was eliminated from consideration by the other chamber.

In a weary voice, Merritt sings:

I don't want to talk to nobody,

Don't want to make no plans,

I'm so tired of this party,

I've had all my laughs.

I'll send you something when I cross over,

Something when I cross over.

Check out Bruce's rundown on where transportation bills stand.

The legislature will jump right from crossover into budget debates. The Senate budget is set to be released online Sunday evening, said Sen. Pete Brunstetter, a chief budget writer.

Budget subcommittees will talk about the proposal in Monday meetings. On Tuesday, the budget proposal will go to the Senate Appropriations Committee and come to the floor on Wednesday and Thursday.

Brunstetter, a Winston-Salem Republican, wouldn't give details on the budget, such as a bottom line. "We'll tell you after it gets released," he said.

UPDATE: Senate leader Phil Berger says the budget proposes to spend $20.4 billion, less than Gov. Pat McCrory's $20.6 billion proposal.

The budget does reflect proposed tax changes that have not yet been approved. The Senate tax proposal assumes a reduction in state revenue.

"The fiscal impact of tax reform will be reflected in the budget," Brunstetter said.