public policy advocacy for the professional engineer                                                 June 20, 2014    


Budget Update

The significant differences between the House and Senate budgets led to a stalemate this week as both chambers failed to appoint conferees to work out the differences – at least until now.  Wednesday, the Senate appointed budget conferee committee members and yesterday, the House followed suit.  As the media has reported, the major differences are with how each chamber funds teacher pay increases and pays for Medicaid and the two sides are far apart. 

Most of this week has been spent with the Senate reviewing the House budget and their recently released Coal Ash plan (more on this later) while the House has taken up a couple of controversial pieces of legislation dealing with environmental rules and regulatory reform. 

Last Friday, PENC reported on the differences between the two chambers on the Transportation budget and asked you to reach out to appropriations chairs on both sides urging support for our recommendations.  To recap, PENC is working to ensure that there is more funding appropriated for system preservation and maintenance, that increased outsourcing is continued and that the Highway Use Tax fee increases proposed by the Senate are included in the final budget.  PENC is also opposed to the very prescriptive language used in the House version of the budget related to the engineering specifications to be used in the pavement preservation process. 

PENC has now reviewed the differences in the Environment and Natural Resources, Commerce and capital budgets.  The following includes a list of the most significant differences that could affect our members.  Amounts not in parentheses are expansion items and those in parentheses signify reducations.  NR = non-recurring. 

Natural and Economic Resources






Transfer of On-site Water Protection Branch from Division of Public Health to Division of Water Resources in NCDENR



Creates the Outer Banks Land Management Fund to be used to restore the Oregon Inlet shallow draft navigation channel


$15 m

Shale Gas development funds      


$1 m

Language that provides grant priority for water infrastructure projects to 1) Tier 1 counties 2) Compliance with EPA Administrative Order 3) Requires minimum requirements of the program are met



Requires local government to certify that no grant funds for water or wastewater purposes be transferred to GF or be used to supplement GF



Grants to municipalities in Tier 1 and II for water and sewer infrastructure improvements



Provides funds for Coal Ash Management Program

$1.75  m

$1.75 m

Appropriates funds for Water line extension in Forest City



Additional funding for Clean Water Management Trust Fund for a total of $14.6 million      

$1 m (NR)


Reduces funding for the DWSRF state match by $600,000 due to a decrease in federal funds and transfers $800,000 in unused matching funds to the General Fund.     



Agriculture Water Resource Assistance Fund                 

Reduces recurring funds but provides additional nonrecurring funds  

($300 k)

$1 m







Economic Development Competitive Grant Program for Underserved Communities 

$1.25 m


CDBG grant fund match.

House reduced Rural Economic Development Division Funds to meet match requirement.  Senate eliminated

FTEs from Community Assistance and Office of Urban Development.



Rural Economic Development Division grant programs

$2.2 m (NR)

($200 k)

Language giving priority for Rural Economic Development Division loans and grants to reuse or demolish buildings           



Rural Economic Development Division funds to be used for grants only          



Establishes LIDAR Reserve/Topographical Reserve Fund           

$3.2 m (NR)

$3.2 m (NR)

Agriculture Gas Expansion Fund to support natural gas and propane gas pilot projects


$5 m

NC Biotechnology Center Expansion

Total funding will total $16.2 million

$3.6 m


Research Triangle Institute Grant              

Department of energy grant match requirements

$500 K (NR)

$250K (NR)





Appalachian State Health Sciences Building

$4 m (NR)

$2 m (NR)

UNCG Public Private Partnership


$2 m (NR)

Western NC Ag Center – Roof Repair      


$2 m (NR)

Museum of History Expansion

$1.8 m


$1 m (NR)

U.S.S. NC Battleship

$3 m (NR)

$3 m (NR)

Water Resources Development Projects 

$5.8 m (NR)

$5.8 m (NR)

Authorizes bonds for Albemarle building authorized at $42.2 million



Authorizes bonds for Western Crime Lab authorized at $15.4 million




PENC will be advocating specifically for more funding for water/sewer projects, capital facility needs and the Senate’s Agricultural Gas Expansion Fund and Oregon Inlet fund.  If you have questions about any other items in the budget, please let me know immediately.   You are also encouraged to contact the House and Senate appropriations chairs listed below.


Rep. Nelson Dollar – House Appropriations Senior Chair

Rep. Justin. Burr – House Appropriations Chair

Rep. Bryan Holloway – House Appropriations Chair

Rep. Linda  Johnson– House Appropriations Chair

Rep. Pat McElraft – House Appropriations Chair


Senator Harry Brown – Senate Appropriations Chair

Senator Kathy Harrington – Senate Appropriations Chair

Senator Neal Hunt – Senate Appropriations Chair

Senator Brent Jackson – Senate Appropriations Chair

Regulatory Reform – SB 493 – PE Clarification Section

Wednesday, Rep. Tom Murry presented the House’s version of regulatory reform to both the Finance and Regulatory Reform committees.  After much criticism from his own Republican colleagues, Murry stated “this ain’t my dog, I’m just wagging it”.  The original piece of legislation was crafted by Rep. Tim Moffitt who is out of town on a Boy Scout trip with his son.


The bill has many local government provisions including Dot Condemnation changes/corridor map changes, a study of the authority of building inspectors and an ethics provision for local government officials that only applies to cities over 75,000. 


The most important section of the bill for PENC was the section that both PENC and NCBELS worked on with Rep. Arp that would clarify the government and industry exemptions allowed in 89C.  Currently, there are seven exemptions allowed in the engineering practice laws – most notably in manufacturing, utilities and government.  This amendment simply clarifies that where there is direct public safety involved, the practice of engineering is prohibited except by a licensed professional engineer as defined in statute.  This will not prohibit any of these entities from practicing engineering internal to their operations where there is no direct impact on the public. 


In drafting this language, PENC and Rep. Arp consulted with local and state agencies, the NC Manufacturing Council, Duke Energy and Electricities.  There is no known opposition to this provision and no legislative objections were raised in committee. 


However, when the full bill was brought to the floor for debate later in the day, objections were raised and the bill was sent back to the Regulatory Reform committee.  The bill will likely be stripped of its controversial items (not the PE exemption) and sent back to the floor for approval.


Environmental Regulatory Reform – SB 38, PENC Amendment sails through

The second of the two regulatory reform bills was brought before the House Environmental committee Wednesday as well.  This bill includes provisions on isolated wetlands regulations (one of the more contentious), a repeal on the moratorium on local environmental ordinances, prohibits local governments from regulating fertilizer, requires a study of local government ordinances in areas subject to regulation, allows local governments to lease renewable energy facilities, reforms on-site wastewater regulation, clarifies gravel under stormwater laws, and includes a host of other items.  View the bill HereThe bill also repealed the energy audit requirements for state and university facilities. 


The repeal of the energy audit requirements was of particular concern to PENC because this data will be needed by the Blue Ribbon Infrastructure Study Commission that is being authorized in HB 1043 (Rep. Dean Arp’s Prequalifications bill).  PENC asked Rep. Arp to introduce an amendment removing the repeal and the amendment was successful.


After being withdrawn from the calendar, the bill passed on the floor yesterday with the PENC amendment.


HB 1043 – Requalifications Update, Blue Ribbon Study Commission and QBS

After approval from the House last week, this bill was approved by the Senate with minor modifications.  It will be sent back to the House where they are expected to concur.


Most notable for PENC is our work on adding the Blue Ribbon Study Commission that will study our state building and water/sewer infrastructure needs (a PE will have a seat on this Commission and Rep. Arp will likely be one of the co-chairs) and language that further strengthens QBS by prohibiting the public owner from requesting a fee schedule.


Senate’s Coal Ash Bill

The Senate presented its Coal Ash Management plan this week that provides hard, aggressive deadlines for coal ash pond clean-up and establishment of a Coal Ash Commission to oversee the process.  More information on this bill will be reported in the next legislative update.


Historic Preservation Tax Credit

With PENC’s intervention, the Historic Preservation Tax credit that was left out of the Senate budget was added to the House budget through an amendment made by Rep. Dean Arp, PE.  Since their creation in 1998, the NC Rehabilitation Tax Credits have stimulated $1.6 billion of private investment in NC’s heritage, creating an estimated 23,000 jobs, boosting local economies and communities and out of state investments.  To date, 90 of NC’s 100 counties have benefited from this investment from rural to urban, income producing properties to owner-occupied homes.

The credit allowance has been restructured to conform with the Governor’s proposed budget.

Please contact Appropriation chairs in the Senate to encourage them to adopt the House budget proposal for this item.

In Other News

Councilors Agree on $91.7 Million Parks Bond

On Tuesday, Councilors approved the placement of a parks bond totaling about $91.7 million.  This would fund about one-third of the city’s proposed park projects.  Voters could see the bond on the November ballot. Approving it means agreeing to a 1.72-cent tax increase to fund the proposed projects and associated operating costs.


If there are questions or you need additional information, please feel free to contact me at or phone 919-834-1144, ext. 1.


Betsy Bailey
Professional Engineers of North Carolina



What's In This Edition:

Budget Update

Regulatory Reform – SB 493 – PE Clarification Section

Environmental Regulatory Reform – SB 38, PENC Amendment sails through

HB 1043 – Requalifications Update, Blue Ribbon Study Commission and QBS

Senate’s Coal Ash Bill

Historic Preservation Tax Credit

Councilors Agree on $91.7 Million Parks Bond


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