July 31, 2014 (8:00 p.m.) At this point in the legislative session it’s a minute to minute situation. Last night, the General Assembly released budget documents providing more detail on the House and Senate budget deal announced on Tuesday. The budget conference report still must be approved by each chamber in two votes on successive days. The budget gives with one hand and takes away with the other — providing additional earmarked appropriations to DENR and funds for (very small) state employee pay raises, while making additional reductions in DENR programs. Some of the more significant budget decisions affecting environment and natural resource programs:
Coal Ash – The budget provides no additional resources for response to the environmental threat posed by 33 coal ash impoundments across the state. An appropriation for coal ash regulation and oversight ($1.7 million and authorization for 23 positions in DENR) had been one area of agreement between the House and Senate budget bills, but the appropriation does not appear in budget documents coming out of the conference committee. The General Assembly could add an appropriation once the House and Senate resolve their differences on the substantive coal ash bill (Senate Bill 729) that is still in a conference committee. Given significant cuts to DENR’s water quality program over the last year, additional resources will be needed to respond to groundwater contamination; illegal discharges of wastewater to rivers and streams; and structural concerns associated with the coal ash impoundments with or without new coal ash legislation.
Diversion of Monies from Environmental Cleanup and Conservation Funds — The budget transfers interest earned by a number of DENR special funds to the state’s General Fund. Conservation funds affected include the Clean Water Management Trust Fund; the Marine Conservation Fund; and the Parks and Recreation Trust Fund. The transfer also affects a number of environmental cleanup funds including the Dry-Cleaning Solvent Cleanup Fund (remediation of sites contaminated by dry-cleaning solvents); the Commercial Underground Storage Tank Fund (remediation of petroleum contamination from underground storage tanks); the Non-Commercial Underground Storage Tank Fund (remediation of petroleum contamination from smaller USTs, including home heating oil tanks); the Inactive Hazardous Sites Fund (assessment and remediation of sites contaminated by hazardous substances); the Bernard Allen Emergency Drinking Water Fund (funding alternative water supplies for low income homeowners whose drinking water wells have become contaminated); and the Brownfields fund (supporting redevelopment of contaminated sites).
The Dry-Cleaning Solvent Cleanup Fund and the Commercial UST Trust Fund receive funding from fees and taxes on the commercial activities associated with past contamination problems. The Brownfields program operates entirely on federal funds and fees paid by prospective developers of contaminated sites; the program receives no state appropriations, so the special fund provides the only source of state operating funds. A number of the environmental cleanup funds (including the Commercial UST Fund) have been chronically underfunded and transfer of the interest income will only further reduce the resources available for assessment and cleanup of contamination. The transfer of interest income from these funds allows the legislature to appropriate those funds for unrelated purposes as part of the General Fund budget.
Fisheries Enforcement — The budget bill authorizes the state Division of Marine Fisheries to enter into a joint enforcement agreement with the National Marine Fisheries Service. Commercial fishing interests successfully opposed a joint state-federal enforcement agreement for a number of years. Under the agreement, state marine patrol officers will enforce federal fisheries regulations and DMF will receive federal funding for those enforcement activities.
Fee Increases — The budget raises several license fees for commercial fishermen. Some of the fees will be used to replace General Fund appropriations for the At-Sea Observer Program. (The program monitors the deaths of endangered species, such as sea turtles, associated with the use of gill nets. Federal regulators have required the observers as a condition for continued use of gill nets, which incidentally cause sea turtle deaths, by N.C. fishermen.) The budget also authorizes new fees for access to GIS information collected by the Natural Heritage Program.
Missing from the compromise budget —
No new state funds are appropriated for analysis of the state’s shale basins and existing gas wells, digitizing shale gas data and marketing the state’s shale gas resources. (The Senate had proposed appropriating $1.17 million.)
The budget does not include a special fund for acquisition of federal lands around Oregon Inlet and Highway 12 on Hatteras Island. (The Senate had set aside $15 million for land acquisition and legal fees.) The compromise budget still directs the Department of Administration to attempt to negotiate acquisition of those lands and begin proceedings to condemn the lands in 2015 if negotiations fail. (State condemnation of federal lands should set up an interesting constitutional issue.) The budget bill also has special provisions authorizing the Governor, by executive order, to waive both Coastal Area Management Act permits and environmental impact statements for projects to reconstruct or relocate Highway 12. For more on the content of the executive order provision, see an earlier post.