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Senate | April 1, 2015 | Committee Room | Base Budget

Full MP3 Audio File

First I'd like to recognize our pages, Elijah Ellison from Durham, North Carolina, that's Senator Woodard, Nathan Oakley from Durham, also Senator Woodard, Jensen Slade from Durham, Senator McKissick, Kyla Childress from Jacksonville, she's with me, Kylan Miller from Chandler, Senator Van Damme, Annabel Webb from Henderson, and that's Senator Brian. Our Sergeant at Arms, Charles Jeffrey and Charles Massalas, and I think today is Charles' 18th year birthday as a Sergeant at Arms for us, so Charles we appreciate your long service. Senator Brown could you ask Massalas, he's pretty famous really, he was playing with the Cleveland Browns, and ask him if he really did knock out the great running back Jim Brown I've heard that and it's been recorded in certain places, we'll talk to them after Senator Brown. Senator Taylor it's my understanding it happened several times. I've heard that, but he never once about how many times he was knocked out, he told me he could hit you a 95 mile on a fastball any day. Alright we got one bill, senate bill 160, Senator Cook and I think we do have a PCS, I need a motion to accept PCS. Senator Wade, all in favor say I, Alright Senator Cook. Thank you sir. Michael, you want to come up as well. ports and inlets or avenues of car mass for the state. When a port is allowed to begum too shallow ships are forced to light load which means I can't get sufficient qualities of their products to market senator Lee can tell you more about this sport problem, when an inlet is closed the same way to closing a major road, it means no product can get the market, that means fishermen in both buildings[sp?] cannot get to the ocean [xx] bridge in the other banks it was officially closed a few days ago, but the [xx] it has been closed for the last five months, organ inlet is closed because it is too shallow for vessels to transit, it should have depth of at least 14ft, but it's been allowed to fill in, such that the US Coast Guard prohibits boats drawing more than 2ft in depth from using the inlet, in fact the [xx] has been closed more than 25% of the time in [xx] year a recent May 2014, Economic Study indicated an Annual Economic impact of an open [xx] of 4348 jobs and $548.4 million to the state of North Carolina annually. Additionally the studies showed that of the inlet was passable 365 days a year the total Annual Economic Impact could reach $1.5 billion. This bill wasn't enable North Carolina to keep inlet open. I believe Senator Lee has some comments or remarks Senator Lee? Thank you very much, I'm really just speak to the deep draft portion. We do have some issues in Morehead City and what this deep draft fund does because we don't currently have a fund is it really does enable not just the establishment of fund by which we can utilize to have dredging, but it also has a part of it where you can have non state funds whether it's a public private partnerships. So if you've got a particular user of the port that is having significant issues because of shelling they can actually contribute to the fund, and that can be the non state match. So it's almost a conduit where we can have public private partnerships that benefit not just the port authority generally, but also will benefit certain businesses so they can continue doing business with the port. Senator [xx] I would like to, if I may have the staff give us the particulars of the bill

OK before we do that, I would just like to add to this too. At one time Micheal you might want to help me, Senator Lee help me with this. At one time the federal government was giving the state some point at 7, $8 million dollar a year range for dredging. Well those dollars are pretty much gone away and those dollars were in place for many many years I don't even know how far back it goes but a long time, and so it's really put us in a position as a state to have to deal with this issue, and we tried to deal with it, some of it last year and I appreciated the support that we got to get a fund established for dredging these inlets, but as you can see from the comments from Senator cook and Lee that up in organ if you've got a major boat manufacturer that uses that inlet that's ready to move out of North Carolina because they can't get the boats out in the inlet any longer. And that's what's happening on the coast because of these inlets, and it is a huge economic impact on the coast. It is like a highway and it's something that we've got to figure out how to fix and again I appreciate the support that this body has given to help us fix this problem. Because it is a big problem and the port such as more as Morehead city ports are about 45 feet deep roughly. Morehead city is built in about 35 feet you got a major company that can't they were having to go out of that inlet what a half load costing them $2 million a month basically it is a huge economic impact and it's something we got to fix [xx] I also didn't say much about it but I wanted to point out that also a Harvard it's dangerous place just a week or so ago two boats bounced off the bridge there trying to get out that inlet and it happens from time to time, somebody is going to get hurt bad there the worst place is in the ground is in an inlet that I can promise you before I start taking questions let me get the stuff to go and explain the bill then I will wind it up for questions, let me do that. Jeffery you had one? Yes sir. Thank you senator Brown so you do have a this years [xx] 160 before you, it does several things related to dredging[sp?] of inlets and maintenance of water ways, we divided that into parts to make it easier to follow, the first part it makes ammendments to the shallow draft navigation channel dredging and lake maintenance fund, the general simply establishes funds a couple of years years ago, on the first page there are several clear fine changes, the substantive changes, really began on the second page of the bill, at the top of the bill, the changes allow The Secretary of Environment Natural Resources to wave or modify the non state culture requirement for dredging projects, that would either alleviate on a navigation emergency, or represent opportunity to leverage, funding from the U. S. Army Corps  engineers,  also sub-section, either at the top of page two, as related to non-state entity funds as Senator Lee mentioned, there's opportunities for non-State entity funding, but this provides that if such an entity gives funding to the Dredging Fund, that those funds aren't used within,  a certain amount of time, and there is written agreement then those funds will be returned to the non-state entity. Those are the main cha [xx] changes to the statue for the shower draft[sp?] fund. Then at the bottom page two there are several specific budgeting provisions related to the shower draft fund section 1B says the funds appropriate to the department of commerce job catalyst fund for the 2014/2015 fiscal year, $6 million shall be transferred to the shower draft fund within 10 days of the effective day of the act. Section 1C says beginning on June 30th 2015 and every year thereafter, permit transportation shall at the end of each phase for year transfer any incumbent funds remaining in the economic development fund to the shower draft fund. Section 1D provides that specific expenditure from the funds, so notwithstanding the purposes generally the funds can be used for certain amounts of money are directed to be spent according to section 1D [xx] at the top of page three so four million dollars shall be organ inlet dredging needs, 150, 000 dollars to as reserved to permitted administration for certain costs related to organ inlet and finally a sum of one million dollars is reserved to permit of administration that is associated with the implementation of provision from the 2014 budget also related to organ inlet dredging. And part 2 is been in page 3 this is establishes a

D draft navigation shun dredging in menace fund that is an elegance to the child's draft found that we're just went over this fund consists of funds from the general fund, gifts or grants and money from non state entities and would be used for cost associated with projects providing safe and efficient navigation access to a state port. There are a lot of similar provisions to the shallow draft fund in the deep trust fund as far as cost sharing, instead of non-state entities for the deep draft fund because to a state ports, the culcia[sp?] has to come from the state ports authority. Again this culcia[sp?] maybe waved under certain circumstances, and then over on page four, there is a specific budgeting provision related to the Deep-Draft Fund as well, Section 2b, about the middle of the page, provides as to the fund's appropriate to the palm of comer's job talent's fun for the 2014/15 physical year one million dollars shall be transferred to the deep trust fund, within 10 days of the effective date of the act so this is the existing Child Raft Fund in the new D Draft Fund. Several parts also related to dredging of inlets and maintenance of water ways. Part three the middle of page four parts of memorandum of understanding Section 3A directs the State Ports Authority to negotiate with the US Army Corps Engineers our memorandum of agreement regarding dredging for the safe ports at Wellington and Morehead city and section 3B directs department environment natural resources to negotiate with the core regarding dredging at Oregon inlet. Part four, acquisition of federal and for protection of navigation of safety and commerce acquisition agreement directors department administration to start negotiations with appropriate federal agencies to require federal on property necessary the navigation channels providing access to the state port Morehead City then there are several other provisions and this part four related to that, ironing out the terms of the agreement, how to execute the D's, those details part 5 of the top page 5 removal of navigational instructions for ecosystem restoration and protection And the first part of that sections 5.1, A through E are about moving certain states. Properties from the coastal reserve and the subsequent portions 5.1C says I'm not withstanding reserve components rule which is a rule of cost of resource commission. Directs the commission to adjust the boundary [xx] island by moving the boundary 200 feet above c word and removing the area that lies between the current boundary and the new boundary from the reserve, this is to allow what happens in the next section 5.2 at this park which is the removal over a particular break water that couldn't have happened if that property remained in the coastal reserve, so basically what 5.2 does is make several findings relative to what's called the new inlet dam or the rocks which is the break water built by the tour back in the 1800s that was designed to address issues that was created by the new inlet that existed at the time. this directs the Department of Environment and Natural Resources to let the core know that it's the intent of the state to remove the southern component of this break water. And to issue an RFP for a firm that's capable of doing the work, to remove the break water, and in Section 5.2E, on the top, page six, authorizes the department to use funds from the deep graph navigation funds to implement that part. And finally there's the severability clause in the effective date is when the act becomes law. OK. Thank you, Jeff and everything's clear as a bell, ain't it? That's, nothing complicated in this Bill. Before that, Senator Raven, I think has got an amendment act, Senator Raymond I'm going to recognize you for that first. Thank you, Mr. Chairman, I would like to send forth an amendment, I believe the members have copied that. OK, everybody got copies of the amendment go ahead. So I will explain thank you, my amendment moves to strike lines 44 through 48 on page two, this is, if you look in your Bill, Summary Section 1C. Section 1C was entered certainly put into the Bill. We had discussion about another matter, but this matter never came up, and it was just one of those miss ups that happen sometimes when Bills are written and some confusion, and we would like

to have that section stricken please And it's my understanding there's little any money in there in anyway.   Your correct Okay, now any question's or comment's on the amendment. High of the most approval on the amendment all in favor say aye. Aye. Any opposed. Okay the name is there. Senator Payne Thank you Mr chair I know all of this is very critical to our comers, but I have just a question or two about when when all of this will take place, how long is it going to take? What will we do if we run out of money again? And does this have anything to do with the sea rise? you may want to tackle that one. I'll try. Sea rise no I don't think so. This has been a problem, this inlet has been a problem for I don't know 30, 40 years off and on. It worse than the last few years because the feds have decided that they want to spend the money to help us out although they had signed a letter of agreement many years ago, be that as it my, it's now up to us to take care of that inlet What was the rest of your question? I'll try to answer some of it if I could senator Cook. Senator Bade, I think the court is well aware of this issue too, and I think the core is scheduled to be at Oregon Inlet in the next week or so, next few days maybe, and remember that there's a marcher that's associated with some of this dredging dollars so their county is matching this dollars and its about four million dollars I take it at Oregon inlet so it's a big project but, of course, pretty much aware of this issue and I think that it will be there in the next few days. Any follow up, Just a follow up, I remember just a few years back, we'll take a ferry boat and go out there and rip it up and dig in a kind of channel we wanted. They'll put you in jail for that right now. Senator Tailor. Thank you Mr. Chairman, those [xx] it's rising, it's rising an inch every a hundred years and that sand is rising 10 foot an hour feels like. If you try to going through that inlet, on good days with water on underneath you it's hazardous, and right now it's impossible, but folks a lot of the comers is coming from down there, if you bill these million dollar plus votes, you can get them out, after you bill them and go North. You can't get them in, they've had a big repair business this is a big business folks, and they are ready to walk, because they can't get the votes and after [xx] they can't get them out, so they're killed on both hands.commercial fishermen some of them are, one of them is huge. He can't go North with anything. So he's got to work out of Virginia, and out of New York, while he's got some deep water where he can get and where he is up North. So he's had to move some of his operations and headquarters to Virginia and New York already because of this our ongoing folk this is our problem the field's are doing very little, the core of engineer's, are now about to stop helping us, with any significant amount because they don't have the money but it's a North Carolina problem, and I think this is a great bill, that affect's that, and certainly make a motion for, the favorite report when the time comes. We'll hold that in the fine now if you count that's 32 pounds of $500 so I suppose you verify it also in that but here that I'm at my county they've already pulled the boys out of giving our how desperate this issue is. I just like to make this clear, I don't see this this is a problem yes, but it's an opportunity. It's a big opportunity, look at it's talking about dredge costing I don't know $6-7 million, but u'll be able to get $548 million, if this is an economic I don't know what is. Cirrhosis Thank you Mr. Chairman and I would say from the mountain's this probably my least area of expertise in dealing with coming through, but it's kind of the quest I'm trying to get at. We've had some conversation's in the previous year's about terminal growing's, and jetting's, and those kind of things, but it seem's to me that dredging is a temporary solution. It's something your going to pull it out, and it's going to fill it up right back up, and you pull it out and it fill's right back up, what is the permanent solutions we can do here or investment we can move towards, so that we can get out of this business and have a water way that we know is secure for the future? Senator Lee new tackle.

I'm at the best at knowledge I can have certainly we're going to look at ways where we can have permanent assistance to keep this from being a recurring problem to the degree that it is. However I'd say that our center is kind of your snow. Mother nature is going to continue to give us a hard time in order to keep our in a stake kama, moving we need to clear the center out of those channels, so whether we term at the porch the challenge the draft and let's I think that it's always going to be recurring problem. You know when the devil led swords of fibrual fun and analyze it, this slowing down and drying up but you know when our volume is reduced at our port are priority for federal funding goes down, so if we we don't do things to help ourselves from a volume perspective we continue to fall further down the list as far as federal funding is concern because it's based and part of on Bayerms and Stolkholm and criteria like that so I think that there are a lot of studies going on to see what we can do to make this nut such a problem. But again life snow it's going to be be recurring periodically. And senator Heiss I would just say I think Zachariah right in the growing bills of house struggle to get I think we got some replacers I see growing been built now I think that will be a good model to see how well they work but whether it jaydees or going's or whatever. We've got several, that have done a great job for many year's in the state, but they've been prohibited, and I think it's something we've got to take a hard look at, because they're it's the best fix in my opinion long term Senator Ford Thank you Mr Chairman. I'm trying to follow Mr Chairman the money flow here as best as I can tell in this PCS there is a shallow draft[sp?] on a deep draft[sp?] what I'm trying to get from staff is with the actions that were taken last session with increasing boat registration fees to go into a marching fund for dredging what is the total allocation for dredging in the state as a relation to the contribution that North Carolina has. It's 67 million is a braffic,  Jenifer, you want a tackle on this. Thank you Mr. Tear Jenifer Hawkins with fiscal research and in annual basis the shallow drenching fund ground will receive about 7 million dollars. The deep draft drenching fund that's the establishment the bill is new so it does not have a permanent funding source as of right now. Follow up. Follow up, yes, I think I saw that that's a million dollars for dig draft. As of now, that's right, that's in the feds [xx] has stated that [xx] has just put four million in to that issue I think it was number, is that right senator William? I think it was four million to fix that problem in Mohhat city last follow up. Yes. Thank you again Mr. Chairman and thank you for your patience. I'm at a disadvantage with information. Looking at this PCS you're going to direct to the department of commerce to use funds that they're not using. One the question that I have is somebody here from the department of commerce who can speak on this because what I want to know and I don't know is in terms what is the highest and best use for this unused money and is the money unused based upon wedding on a future project but if this legislation goes through and the money is unused all we tie my hand with the department of commerce from doing what they need to do with their plan. overly in cover research. This fund's are more appropriated to the job catalyst fund in the 2014 appropriations act but that's appropriations and is used with contingent on the passage of bill 1224 which was not authorized by the general assembly so those funds are sitting follow and are available for redirection. the help. Little bit last follow up is anybody here form the department of commerce? The department of commerce let's speak to this issue Alright, senator Robins. Thank you Mr. Chair and senator Ford got it my questions in terms of what those funds are intended for, but let me follow up with another one, senator cook mentioned that we're investing 6 million but we remain 548 million coming in and I don't see that anywhere so can I ask him to clarify what did he mean that and how do we generate the 548 million. Or is it state?

I don't that's sacred. Go ahead, senator There's a study that was done, paid for by Jeri county that looked at economic impact keeping the Oregon Inlet open on a consistent basis, and that study indicated about $548 million worth of economic impact that includes boat building, fishing, sport fishing all kinds of commerce through that area. Senator Robinson I think he's referring to the economic impact that that inlet would have yes.  OK, the long terms in terms of doing this work, just to follow up for our staff Mr chair on the back page and it kind of follow ups from Senator Payne question. It talks about re-establishing the natural ecosystem. Can we ask Jeff to clarify because this is not my area as well. In terms of what is the environment impact of doing this, positive, negative, whatever. What is the environmental impact? I don't know that I can really answer that, this great water was built over the cost of a couple of decades in the end of the 1800 so I'm not sure that anybody is even aware of what the natural Eco system was I think the idea those if you remove the break water whatever the natural Eco system would be their would return senator [xx] thank you Mr. Chairman I would like to see if any environmental he was planning on suing us on this issue because I want to tell you whats happened senator Robinson It costs the state 39 million dollars for the water bridge Oregon inlet 39 million dollars and attorney is called tax payers dollars going to fund attorney's suing us over this issue and in that time  we've had commercial fishermen go out of business, we also lost lot's of opportunities for boat building for these people that their lifestyle is gone and has cost us 39 million  dollars in legal fees to deal with this issue. I think it's about time we move forward and hopefully these groups won't sue us and they will start caring more for about the people North Carolina than sand. Alright, any other? Robinson. I don't know if senator Mr Chair I don't know because senator Black was looking for a response but since he was helping me I was asking about environmental impact you are talking about cost of soup and I think those are two different things so my question was then I am concerned about that so I didn't say I was against or for the bill but you need to clarify those too. Alright, any other comment? I'd have a motion for approval unfavorable report to the raise of bill favorable as to the committee substitute is amended when the amendment is being rolled to a new proposed committee substitute and we leave for senate to make technical correction and sent that one for motion. Isn't that what you said Senator Harmon? Okay, Alright so all in favor say aye. Aye  Alright. Any opposed? Thanks so much, summarily adjourned