public policy advocacy for the professional engineer                                       February 26, 2013

Last week the Governor made his State of the State speech continuing to stress the same themes he campaigned on: building the economy, reforming education and promoting government efficiency. In addition to tax reform, the governor called for a more aggressive energy plan, noting the royalties from oil and natural gas production could be used to finance infrastructure, education and other needs. He also called for an infrastructure plan to address North Carolina's transportation, communication, water and energy needs. Read More

It is widely expected that the Governor’s budget, scheduled for release in March, will include funding for repair and renovation for public buildings with a specific focus on community college facilities.

McCrory also signed major legislation affecting unemployment insurance.  The new law will reduce benefit payments and increase contributions from employers in order to pay back NC’s debt to the federal government within three years instead of five. 

Legislative committees have spent much of their time the last two weeks receiving budget briefings in joint appropriation committee meetings.  These briefings will continue through this week as well.

New Bills Filed Last Week:

SB 127 (Brown) – Customer Service, Economic Development Transportation - AN ACT to establish uniform geographical administrative divisions for the state and to create the commission on Regionalization Conformity to develop recommendations on (i) conforming the existing regional divisions of the Department of Transportation, the Department of Environment and Natural Resources, and the seven regional commissions and partnerships to these uniform divisions, and (ii) a schedule for conforming regional divisions of other state agencies that have regional offices. Read More

HB 134 (Bumgardner)Repeal Garden Parkway Authorization/Funding - AN ACT to remove the Garden Parkway in Gaston County from the list of Turnpike authority projects and to prevent the expenditure of any further state funds on the project. Read More

SB 112 (Jackson) H94 (Samuelson, McGrady, McElraft) -  Amend Environmental Laws 2013 - AN ACT to amend certain environmental and natural resources laws to (1) allow 10-year landfill developments to apply for a permit to operate; and (2) clarify the process for appeals from civil penalties assessed by a local government that has established and administers an erosion and sedimentation control program approved under G.S. 113A-60 and provide that civil penalties assessed by a local government pursuant to the sedimentation pollution control act of 1973 shall be remitted to the civil penalty and forfeiture fund, as recommended by the Environmental Review Commission. Read More

SB 108 (Apodaca, Hunt, Ford) HB 120 (Hager, Brawley, Arp)Building Inspections/Local Consistency -AN ACT to require approval from the North Carolina Building Code Council before a unit of local government may require building inspections in addition to those required by the building Code and to specify the frequency and effective dates of Code updates. Read More

SB 113 (Jackson) HB 89 (McGrady, McElraft, Samuelson) - AN ACT to require the department of environment and natural resources to support the application of a regional water supply system for all required federal approvals, as recommended by the environmental review commission. Read More

SB 111 ( Jackson) HB 133 (Bell, Brisson) - AN ACT to allow the city of Clinton to use the design build method of construction. Read More

SB 102 (Hartsell) - AN ACT to establish the joint legislative public infrastructure oversight commission. Read More

Bills Continuing to Follow:

SB 10 (Rabon) - AN ACT establishing the government reduction and efficiency act of 2013 (State Board and Commission appointments bill) PENC has requested that the House amend SB 10 by adding a provision that would require one member of the EMC to be a registered engineer as the existing legislation requires.  Similarly, a request that one member of the Coastal Resources Commission be a registered engineer has also been made.  Speaker Tills has indicated that SB 10 would likely be split into two bills and that some amendments would be made but that this bill, in some form, would be passed in the House.

SB 76 (Newton) – Domestic Energy Jobs Act This bill has been given a favorable report in two Senate committees and is scheduled for a vote on the Senate floor today.  House leadership is not as eager to make changes to the initial legislation passed last year by only 1 vote and has signaled their intention to slow down this bill. 

HB 74 (Murray) - Periodic Review and Expiration of Rules. This bill would provide for a resubmission of all rules 10 years after implementation.  The bill has been referred to the Regulatory Reform Committee.

News Summary

Business 40 Work Accelerated
There’s no doubt that the Business 40 improvement project will be a major pain, state transportation officials concede, but drivers can perhaps find some comfort in learning that it will all be over a year sooner than originally planned. Read More

Lawmakers mull options for highway funding
Lawmakers are looking at various options to address the growing shortfall in road-building funds in the state Department of Transportation.

The state gas tax generates much of the money for DOT, but with more fuel-efficient cars and an increasing number of hybrids and electric vehicles, the gas tax isn't getting the job done. Read More

Fracking Regulation
A sponsor of the latest round of legislation intended to allow hydraulic fracturing for natural gas in North Carolina made clear Thursday that he does not see the legislation as rushed. Sen. Buck Newton, R-Wilson, said he believes the state missed an opportunity to have the legislation, and the industry, in place during the height of the Great Recession, alleviating job losses. "It is unfortunate we weren't able to do this four or five years ago," Newton said. His comment came as the Senate Commerce Committee became the second to approve the legislation, which now goes to the Senate floor. The bill would allow the issuing of permits for hydraulic fracturing drilling as early as March 2015. It would also set up a tax system for the extracted shale gas, allowing for a low, 1-percent rate early on but rising to as much as 6-percent by 2020.

At Thursday's committee meeting, the legislation was amended to reiterate language from the 2012 hydraulic fracturing law that no permits would be issued until the state Mining and Energy Commission has put regulations in place. Another change sought to clarify that wastewater, and not hydraulic fracturing chemicals, could be permanently stored underground. That provision prompted worries from Sen. Angela Bryant, D-Nash, that it might allow wastewater from fracking operations in other states to be pumped underground in this state. Newton, though, pledged that he would work on a change before the bill was heard on the Senate floor to ensure that practice was not allowed.

Environmental groups say that any pumping of the salty wastewater back underground can create environmental problems, including drinking water contamination. Committee members indicated that further changes may also come related to bonding requirements for drilling companies. The bill is expected to be taken up by the full Senate next week.(Scott Mooneyham, THE INSIDER, 2/22/13).

Green Investment
Investment in renewable energy and efficiency has grown rapidly over the last five years, totaling $1.4 billion, according to an analysis commissioned by the N.C. Sustainable Energy Commission. The analysis shows investments growing by five-fold during the period and that state policies driving the growth helped to contribute $1.7 billion to the gross state product, including secondary benefits. That figure includes the costs of construction and state incentives, the impact on utility customers, energy efficiency benefits and the reduced energy generated by traditional technology. The analysis was done by RTI International, a nonprofit research institute based in Research Triangle Park, and Boston energy consulting firm La Capra Associates. The analysis comes as state legislators consider changes to policies credited with helping create markets in solar and wind power, and energy efficiency.(Bruce Henderson, THE CHARLOTTE OBSERVER, 2/18/13).

Drilling Coalition
Gov. Pat McCrory said Friday that he has joined the Outer Continental Shelf Governors Coalition, a group of coastal governors that advocates for offshore energy production. "Pursuing responsible exploration and development of our offshore resources will help us reach our shared goal of greater energy independence and will create thousands of jobs," McCrory said in the release. The coalition provides a discussion and policy platform for offshore energy issues shared by coastal states and the federal government. The coalition includes governors from Alaska, Louisiana, Texas, Virginia, Mississippi, Alabama, South Carolina and now North Carolina. Gov. Nikki Haley of South Carolina and Gov. Bob McDonnell of Virginia sent a letter supporting offshore drilling to President Barack Obama's new Interior Secretary designate, Sally Jewell.(NEWS RELEASE, 2/22/13).

I-26 Connector
Asheville business and government leaders are hopeful the long-delayed I-26 Connector project may start moving forward under Gov. Pat McCrory. The Asheville Area Chamber of Commerce hopes to get two members of the new governor's cabinet – Transportation Secretary Tony Tata and Commerce Secretary Sharon Decker – to visit in May to discuss ways to accelerate work on the roughly $500 million project, which aims to siphon traffic from Bowen Bridge and revamp Interstate 240 in West Asheville. Freshman Rep. Nathan Ramsey, R-Buncombe, has been appointed to the transportation subcommittee of the House Appropriations Committee and says getting action on the project is one of his top three priorities. City Councilman Jan Davis, chairman of the group of area government officials that works with the state on transportation priorities for Buncombe and adjoining counties, said the group has been working for months to build support for movement on the project. "We’re not just sitting back waiting for something to happen," Davis said. "We’ve got to elevate this" as a priority.

Area residents have been debating the I-26 Connector since the General Assembly passed legislation in 1989 that dramatically increased highway funding and identified the project as one of a handful of urban "loop" roads the new money would pay for. The project would involve adding bridges connecting to U.S. 19-23 north of Bowen Bridge, widening I-240 in West Asheville and building a new I-40/I-26/I-240 interchange on the eastern side of town. Environmentalists and many West Asheville residents have criticized plans to widen I-240 in that area to eight lanes, arguing that would harm neighborhoods and would be overkill. There have been lengthy debates over just how the bypass of the Bowen Bridge over the French Broad River should be routed and whether plans should include a new way for bicyclists and pedestrians to use the existing bridge. The lack of consensus on those questions slowed the project, Ramsey said. "It’s not the state government’s blame entirely that I-26 hasn’t happened," he said. "Some of it has to come back to our community. When the money was available, we weren’t ready." In the meantime, higher gas prices, increased fuel efficiency and limits on the gas tax have weakened the state’s ability to pay for new roads. (Mark Barrett, ASHEVILLE CITIZEN-TIMES, 2/23/13).

Sequester to Cut $309 Million from NC
Ratcheting up its PR war to avoid automatic March 1 federal budget cuts, the White House on Monday released a list of $309 million in funding reductions that would hit North Carolina if the budget action actually happens. Read More

Tax Reform
A top adviser to Gov. Pat McCrory said Monday that the governor's office is in the beginning stages of talks with lawmakers on an "evolutionary" tax reform plan, as opposed to some of the "rather revolutionary" concepts that have been discussed. Tony Almeida, senior adviser to McCrory for jobs and the economy, told a gathering of nonprofit representatives from across the state that recent discussions between the governor's office and House and Senate leaders have focused on a plan that would reduce the corporate and personal income tax rates over three or four years, while closing tax loopholes and eliminating some tax exemptions. The plan, Almeida said at a forum of the N.C. Center for Nonprofits at N.C. State University, would be revenue neutral. He didn't mention sales taxes in his talk, although most tax reform proposals have included some increase or broadening of the sales tax to offset income tax losses. Almeida said the state has an opportunity to create a more pro-growth, simple tax code that is more competitive with neighboring states. 

At the same meeting, Rep. David Lewis, R-Harnett, a key House player in tax reform, said House members have mixed feelings about the plan circulated by Sen. Bob Rucho, R-Mecklenburg, in recent months that would eliminate personal and corporate income taxes in favor of a broader and higher sales tax. "Certainly the leadership that Sen. Rucho has shown on this has definitely not gone unnoticed and is appreciated and is a good starting point for us," Lewis said. He said House members are taking a "strong look" at Rucho's plan. "There are some parts of the plan that have broad support in the House … and there are some parts of the plan, like any other piece of legislation, that some folks in the House think they have a little bit better idea," Lewis said.

Lewis added that he hopes a plan will emerge in early April that is agreed upon by the House, Senate and governor. "We are in serious talks to try to have one tax plan," he said. "I very, very much want to avoid competing tax plans. And if the Senate goes first, hopefully it will be with a plan that we've all agreed that we can support, and the same thing would be for the House or even the governor."(Patrick Gannon, THE INSIDER, 2/26/13).

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

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