May 15, 2015

Legislative update: New taxes for fishermen
and new purpose for occupancy taxes


The surface appeared calm, but there was a definite undercurrent this week as North Carolina General Assembly House committees began their work on the state’s 2015-16 fiscal year budget.

A draft budget bill that includes the various committee offerings is expected to be published online either on the evening of Sunday, May 17, or early on Monday, May 18. The bill will subject to debate and a final version is expected to be ready to send to the Senate for confirmation by the end of the week.

If that body does not concur, further changes will be made and then the budget bill will be sent back to the House. If the House doesn’t agree with the changes made in the Senate, the bill will then go to conference committee made up of legislators from both chambers.

If agreement is reached in conference committee, it will then go back to both chambers for approval, which may or may not be forthcoming. And then there is the needed approval by the governor, who has his own wish list, much of which has not yet been included in the draft budget.

In other words, the finish line is getting closer but there could be some stumbles that slow down the process.

But while House members added, deleted, and tweaked what is to become its version of the budget, on the Senate side, other bills went under committee scrutiny.

Senate Bill 160, sponsored by Sen. Bill Cook, R-Beaufort, morphed from five pages when first introduced on March 3 to 11 pages when it was replaced with a committee substitute on May 14 while in front of the Senate Finance Committee.

The official title of the proposed legislation is “An Act to Provide for the Dredging and Maintenance of the State’s Waterways in Order to Enhance Safety and Commerce” and it includes major implications for Dare County.

The act, if passed into law, in part, sets up a program to pay for dredging shallow-draft channels – those with a maximum of 18-foot depth -- based on a 50-50 match between state and local governments. Affected Dare County waterways included in the legislation  are Oregon Inlet and Rodanthe and Rollinson channels. Silver Lake Harbor on Ocracoke also is included.

Part of Rollinson channel is owned by the federal government and the remainder of the channel is owned by the state. Combined, the two separately-owned portions of the channel are called Hatteras Inlet channel. To include the entire inlet channel that is now impassable and forcing boats and ferries to use a new, longer route, Dare County commissioners had requested that the term "Hatteras Inlet" be added to the legislation but that request was not met.

Because of the severe shoaling in Oregon Inlet, the bill proposes immediately appropriating $4 million. The funds are to be included in a transfer of $6 million from the Department of Commerce Job Catalyst Fund for the 2014-2015 fiscal year, to the Shallow Draft Navigation Channel Dredging and Lake Maintenance Fund within 10 days of the effective date of legislation if it becomes law.

The $6 million transfer also is to provide $150,000 to reimburse the Department of Administration for its costs associated with exploring options for acquiring Oregon Inlet and the adjacent real property.

And $750,000 is reserved to reimburse the Department of Administration for its costs associated with prioritizing condemnation of all 15 existing and future transportation corridors on the Outer Banks, “a right retained by the State and recorded in a deed executed on August 7, 1958, when these lands were conveyed to the federal government.”

In addition, the Department of Environment and Natural Resources is to receive $250,000 to update the Beach and Inlet Management Plan. The updated plan is to include a recommended schedule for ongoing inlet maintenance. No later than Dec. 1, 2016, the department is mandated to report to the Environmental Review Commission on the updated plan.

If the funds for Oregon Inlet are not spent or encumbered by June 30, 2016, the state funds revert and may be spent for other uses.

In addition to the transfer of funds from the Department of Commerce, a new vessel registration tax will be used to fund the Shallow Draft Navigation Channel Dredging and Lake Maintenance Fund. All boats that are used for recreational or commercial fishing that are at least 24-feet long will be required to pay the tax.

The formula for determining the tax is dividing the length of the boat – rounded down to the nearest foot – by eight and then multiplying that number by the length of the boat. A 24-foot vessel would pay $72.

The tax will be required for all boat owners who hold a coastal recreational fishing license, standard commercial fishing license, retired standard commercial fishing license, shellfish license, recreational commercial gear license, or for-hire license.

And then there is the matter of the county’s needed matching funds.

To dredge Oregon Inlet on a year-round basis, the county must match the state funds. It is estimated that the price tag for the proactive dredging will be approximately $7 million annually.

The bill includes a provision that the county may use up to $3 million per fiscal year from the 2 percent occupancy tax currently designated for beach nourishment until the fiscal year that begins on July 1, 2021. The proposed use of the revenues is designated as “maintenance of waterways.”

This provision was not at the request of the Dare County Board of Commissioners. The board had requested a quarter-cent sales tax designated to be used for matching funds for dredging. Rep. Paul Tine, U-Dare, sponsored the bill in the House and it was approved in lightning-swift time and sent to the Senate where Cook refused to push it forward.

The bill has not yet been on the floor of the Senate for its second and third readings. That is expected next week.

(Sandy Semans is a retired newspaper editor and reporter who now works as a free-lance writer.  She lives in Stumpy Point. Her update on the goings-on in this session of the General Assembly will appear weekly in The Island Free Press, usually on Friday.)


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Legislative Update Most Bills Moving At Snails Pace But One Achieves Warp Speed

Legislative Update: Humor unleashed in the General Assembly
Legislative Update: Lawmakers made hay while the sun was shining
Legislative Update: Bill on dredging causes local turmoil
Legislative Update:  156 new bills filed this week
Legislative Update: Lawmakers keeping busy in Raleigh
Legislative Update:  It was raining bills all week

Legislative Update: Occupancy tax provision is out of dredging bill
Legislative Update: Lawmakers take aim at N.C. Constitution
Legislative Update: More taxes and Constitutional amendments proposed
Legislative Update: Lawmakers racing the clock to get bills moved
Legislative Update: Rushing to meet the 'crossover' deadline
Legislative Update:  A week of committee work in Raleigh

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