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RALEIGH (AP) — State lawmakers returned to Raleigh on Monday to decide whether to hand Gov. Mike Easley a historic defeat and veto a $40 million economic incentives bill aimed at helping the Goodyear Tire & Rubber Co.'s plant in Fayetteville.

The state Legislature has never overridden a governor's veto. North Carolina became the last state in the country to give its governor such authority 10 years ago, and Easley, who has issued eight during his tenure, is the only governor to have used the power. Easley's aides worked through the weekend to try an avoid a showdown with the governor's fellow Democrats.

"The discussions are continuing and I guess you could say intensifying this morning," House Speaker Joe Hackney, D-Orange, said Monday. "Some progress has been made, but there's been no agreement."

Three-fifths of the House and Senate members present would have to agree to override the veto.

Easley rejected legislation that could give Goodyear up to $40 million over 10 years to upgrade its operations. It was passed by large margins in the final days of the regular legislative session, which ended in early August.

Along with an unusual alliance of conservative and liberal lawmakers and interest groups, Easley has urged legislators to sustain the veto. They argue the bill would set a bad precedent for the state by allowing Goodyear to reduce its work force and still qualify for cash grants.

Supporters argue the Fayetteville area would be devastated financially if the Goodyear plant closed, since it employs about 2,750 workers in high-paying jobs. Akron, Ohio-based Goodyear has said the vetoed bill is a key component in the company's plans to retool the plant and produce high-grade tires.

"I'm not looking to hand the governor any defeats," Hackney said. "I'm looking to be fair to the Cumberland County community."

Easley has suggested a broader incentives proposal that would set more restrictions on companies before they could obtain the grants and require local governments to provide more incentives money. To consider such an alternative, lawmakers would have to adjourn the veto session and reconvene, possibly later Monday.