The day many people had been waiting for occurred on Wednesday. The General Assembly went home, adjourned sine die. What that means is that the General Assembly went home without assigning a day for another session. “Sine die” comes from the Latin “without day,” and the General Assembly is not scheduled to be back in session during the current terms of its members. Of course, the Governor could veto a recently-passed bill in which case we could come back. Moreover, there has been some talk about the Governor bringing us back, perhaps after the November election, to work on a Medicaid reform package or economic development legislation.
Coal Ash Management Act of 2014
The session ended on a positive note because of the passage of a first-in-the-nation coal ash bill (Senate Bill 729). The House passed the bill by a vote of 84-13, with all Republicans and a majority of Democrats supporting the bill. The Senate passed the bill by a vote of 38-2. When the General Assembly recessed a few weeks ago, there was finger-pointing and lots of rhetoric about the legislature’s failure to pass a coal ash bill. Legislative leaders had said passage of a coal ash bill was a priority, but the legislature took a “time-out” when members of a conference committee could not reach agreement on a bill. It was particularly uncomfortable for Henderson County citizens, since their senator, Tom Apodaca, was the lead Senate negotiator, and I was the lead House negotiator.
The time-out obviously worked, since we were able to complete work on the bill. But I didn’t know that as late as last week, when I was advised by my leadership to go to a legislative conference since the General Assembly wasn’t going to do any substantive work — just come back and adjourn. I got surprised over the weekend when suddenly substantive matters were being considered and there was talk of further work on a coal ash bill. In the wee hours of Monday morning, I flew back to North Carolina, and two days later we passed the bill.
It shouldn’t have been any great surprise that it took a while to draft coal ash legislation. As I pointed out on the House floor, no other state has a law regulating coal ash — so there was no model legislation. Moreover, it took nearly a century to create all of the coal ash we’ve got buried, and we needed to take the time to do it right.
Critics of earlier versions of the legislation argued that there was nothing in the legislation that would ensure that more than the four sites named in the legislation would be cleaned up. While that was a pretty cynical perspective, the bill put forward by the conference committee and passed by both chambers addresses that claim by making sure that coal ash ponds sitting at or below the water table would have to be cleaned up or prove that they were not polluting a neighbor’s property. Without specifically naming other sites, the bill makes clear that many or most other sites will have to be cleaned up.
Here is how the legislation resolves the 5 significant issues outlined in the last General Assembly Bulletin:
- The Moratorium. Both bills prohibited Duke Energy from seeking to recoup costs related to coal ash by seeking higher rates from the public utility commission. The Senate’s moratorium ran until January 15, 2015, and the House’s moratorium ran through December 31, 2016. The conference bill adopted the Senate’s position.
- The Variance. The House bill provided a variance process that Duke Energy could use if it found that it couldn’t meet some of the deadlines in the bill, and the Senate bill had no comparable provision. The conference bill has a variance provision, but it is more narrowly drawn to make sure that the deadlines are continuously pushed back.
- The Location of the new Coal Ash Management Commission (CAMC). The Senate put the CAMC at the Division of Emergency Management of the Department of Public Safety and the House bill had the CAMC at the Department of Environment & Natural Resources (DENR). The conference bill adopted the Senate’s position.
- Defining Low Priority Sites. This was the issue that caused both chambers to recess. The House proposed to tighten the criteria for when a site would be considered low priority so that most or many sites would not be able to be capped-in-place. The Senate was unwilling to consider the proposal and literally went home a few weeks ago. In the ensuing weeks, various proposals were floated, but the Senate rejected them. Then, on Tuesday morning, the Senate put forth a proposal that largely adopted the House language while addressing some Senate concerns. As it turned out, I shared the concerns the Senate raised, and an agreement was quickly struck. The Senate’s new language broke the stalemate
- The Compliance Boundary. This highly technical issue, that was being litigated as the legislation was being considered, was never in real conflict as between the House and the Senate. The House took up the original bill after the Senate, and the Senate liked what the House had done in regards to the compliance boundary. Thus, the conference bill reflects the House language.
The bottom line is that Duke Energy can’t create new coal ash ponds and will soon have to stop using the ones it has. It also will have to evaluate all the coal ash ponds and come up with plans for their closure. Those plans will be evaluated by DENR and approved by the CAMC. Coal ash ponds will be cleaned up, with those ponds that threaten water supplies being given the highest priority. The cleanup is going to take years, but that work is going to begin immediately — not because Duke Energy says it will clean them up but because the law requires it.
The issue that has not been tackled in the legislation is the cost issue, in other words, who pays. If we’d had to decide that issue, there would have been no bill — because that issue was so controversial. Besides, it isn’t yet necessary to decide that issue, since Duke Energy can’t recoup costs for things it hasn’t done yet. When Duke Energy starts cleaning up and incurs substantial costs, it will seek recovery of those costs from ratepayers with the approval of the Public Utilities Commission. However, the legislature could weigh in and give direction as to how the costs should be split as between Duke Energy’s customers and its shareholders.
Economic Incentives and Capping Sales Taxes
Long-time legislative watchers say that the end of the session is the most dangerous time, because most anything is likely to happen as legislators push to get legislation passed in the waning days. That certainly was true this session when three bills were linked that would have fixed a teaching assistant funding issue, expanded the state’s economic incentive programs, and capped county sales taxes. The ploy failed when the House rejected the first of the three bills, HB1224 [Local Sales Tax Options/Econ. Devpt Changes], on by a vote of 47-54.
I’m not sure I can do a much better job of explaining what happened than a Raleigh television station (WRAL) did, so I’ll just leave you a link to the site.
What I can say is that it was crazy for legislators, since one had to balance one’s interests in fixing an issue regarding monies allocated for teaching assistants versus whether one wanted to fund economic incentives for businesses versus capping sales taxes for some large counties. I ended up voting for the bill because I wanted to fix the teaching assistant allocation, could support the economic development package sought by the McCrory Administration, and didn’t think the sales tax cap would ultimately be too painful since the NC Association of County Commissioners was okay with the bill.
The bill went down primarily because conservative Republican legislators teamed up with most Democrats to defeat it. The Republicans voting against the bill primarily opposed the economic development package. They felt the state just needed to stop giving economic incentives for industries to come to the state, including film incentives. The Democrats didn’t like the sales tax cap, but also enjoyed watching the Republicans fight among themselves and were certainly willing to help defeat the package.
In the end, after the three-bill-fix went down, the House through a fairly complex set of parliamentary procedures adopted Senate Bill 3 [JMAC Modifications], a bill that functionally cleared the way for $12 million in aid to go to Evergreen Packaging in Haywood County for some EPA-required upgrades to its plant. The bill was pushed as a jobs bill, since it would supposedly save 1,200 jobs in western North Carolina. The Senate completed its work by passing Senate Bill 42 [Confidentiality of UC Information] that was specifically drafted to address potential litigation around the confidentiality of unemployment compensation records. Both of those bills will become law if signed by Governor McCrory.
Kumor Joins The Clean Water Management Trust Fund
Former Henderson County Commissioner Renee Kumor was appointed to the NC Clean Water Management Trust Fund (CWMTF) by Speaker Thom Tillis. Her appointment was confirmed in Senate Bill 884 [2014 Appointments Bill], adopted late in the session. Kumor previously served on the CWMTF until it was reorganized in 2013.
[Note: A lot happened during the 2014 Short Session, a session that many thought was not short enough. Next week, the General Assembly Bulletin will provide an overview of all of the most important legislation, including new laws that snuck in through the budget process — like legislation regulating drones.]