public policy advocacy for the professional engineer                                      June 19, 2013

Tax Reform
HB 998 - House and Senate leaders continue to try to hammer out a compromise on tax reform.  Last week, the Senate significantly scaled back their more aggressive initial proposal to tax all services to get closer to the proposal offered by the House.   Yesterday, the Senate delayed a final vote on their revised plan in an effort to continue to compromise with the House and the Governor’s office before a final vote in the Senate.  The plan would still need to go back to the House for concurrence.

The Senate Plan will eliminate the food tax, privilege license tax, and sales tax refund for cities. Click here to see the impact of the Senate tax plan on Metro Mayors cities as estimated by the League of Municipalities.  This will force cities to either cut services or raise property taxes. 

Neither the House nor Senate plans include a tax on professional services i.e., engineering services. Both plans create more than a billion dollar revenue deficit.  The Governor had asked for any tax reform package to be revenue neutral as he is worried about the effect on state services

HB 201 – Reinstate 2009 Energy Conservation Code
The Senate Commerce Committee has given its OK to a bill that would scale back energy efficiency standards for commercial buildings adopted last year. The legislation, a version already having House approval, would mean that energy efficiency standards for new commercial buildings would go back to 2009 requirements. Rep. John Torbett, R-Gaston, a sponsor of the bill, said he continues to hear from builders that the 2012 North Carolina Energy Conservation Code is increasing building costs. Senate Majority Leader Harry Brown, R-Onslow, said he had also heard complaints, particularly regarding the application of the standards to metal storage buildings where energy usage is not an issue. "There just is no common sense," Brown said. But opponents of the bill include manufacturers of energy efficient building materials. Representatives of those firms told committee members that the energy efficient standards help create jobs and do not always cost more money. Committee staffers cited a Appalachian State University study which found that the standards would cost $900 million in additional construction costs over the next 30 years while saving roughly $2 billion in energy costs. "I remain concerned about moving backwards on energy efficiency," said Sen. Josh Stein, D-Wake. The measure appears to have split commercial building contractors themselves. Dave Simpson, a lobbyist for the Carolinas Association of General Contractors, told legislators that members of the group have different opinions, but that many are worried about the lack of construction activity. The bill now goes to the full Senate for consideration. (Scott Mooneyham, THE INSIDER, 6/19/13).

Although PENC opposed this bill, we did not actively speak against it after determining the impact on the engineering industry was manageable and knowing the votes were not there to defeat it.  However, in preparation for its passage, Stanford White prepared a code comparison cheat sheet for designers to use and has agreed to let us share this with our members.  Click Here to access the Memo and Comparison Sheet prepared by Herb Stanford, PE.   

This bill will be heard by the full Senate today so if you would like to express your concerns/opposition please contact your Senator by phone or e-mail as soon as possible and definitely before 2:00 p.m. when they go into session.  You can find a list here.

SB 76 – Domestic Energy Jobs Act (Fracking Push)
The Senate voted Wednesday not to accept House changes to legislation that would allow hydraulic fracturing for natural gas to proceed in North Carolina by early 2015. The vote means that the two sides will have to form a conference committee to work out a compromise bill in order for the legislation to pass this year. The House bill, passed last week, had represented a more cautious approach than the Senate plan, although Democrats had criticized both plans as premature with rules still being developed by a new state commission.(THE INSIDER, 6/13/13).

HB 120 – Building Codes/Local Consistency
A bill that supporters say will hold down building costs by limiting changes to the state building code has cleared the Senate and is headed to the Governor’s office.  Last week, the Senate gave its approval to a House bill, which would extend the time for routine changes to the building code from a three-year cycle to a six-year cycle. The bill would also prohibit local governments from conducting building code inspections for homes beyond those required under the state building code unless those local governments receive permission from the state Building Code Council. Rep. Mike Hager, R-Rutherford, said the changes will promote the availability of affordable housing. Environmental groups, including the state chapter of the Sierra Club, say the bill will cause North Carolina homes to lag behind national standards for energy efficiency and storm readiness. (Scott Mooneyham, THE INSIDER, 6/12/13).

House Budget
The North Carolina House gave final approval last week to a budget plan through mid-2015 that Republicans contend advances reform and responsibility but that Democrats say harms citizens recklessly. The Republican-led House voted 77-41 to adopt the proposal written mostly by its leaders. The vote followed seven hours of debate and votes on more than 25 amendments, which in the end made few adjustments to the measure. An amendment to remove a provision that would create private school grants for thousands of school children starting this fall was defeated after impassioned debate on the condition of the public schools. Speaker Thom Tillis, R-Mecklenburg, gave a rare floor speech to preserve the "opportunity scholarship" program within the budget. A final House vote on the full budget was expected Thursday, three weeks after the Republican-controlled Senate approved its proposal, which spends almost exactly the same amount as the House, or nearly $20.6 billion. But the two chambers differ in dozens of ways on how to spend the money. The two chambers will begin negotiations in earnest this week with the aim of getting a compromise by the end of the month to Republican Gov. Pat McCrory, who will have a role in negotiations.

The final House budget retained many of the items that PENC preferred over the Senate budget i.e., funding for Rural Center, Clean Water Management Trust Fund grants, etc. 

Because the House, Senate and Governor’s budget differ significantly the Governor is doubtful a spending plan can be achieved by July 1. Read more here.

Bad News for Rural Center
The timing couldn’t have been worse for the Rural Center – and maybe that was the intention.  In the midst of budget negotiations between the House and Senate where significant differences exist, the Rural Center is getting some very unfavorable press.

Click below for the series of articles:

NC Rural Agency Claims Jobs

Politician’s Powerful Touch

Debate Forms Around Rural Centers

Please find the below workshop announcement from DENR we thought may interest you:

Workshop Announcement

The Infrastructure Finance Section (IFS) of the DENR Division of Water Quality (DWQ) will be holding a Clean Water State Revolving Fund (CWSRF) Application Workshop on Tuesday July 16, 2013 from 1 PM to 4 PM in the Ground Floor Hearing Room of the Archdale Building in Raleigh.

The purpose of the Workshop is to work with units of local government and consulting firms who intend to apply to IFS for CWSRF funds by September 3, 2013, which is the next deadline for funding applications to be received. It is anticipated that the amount of funds available for the September application cycle will be approximately $35 million.  IFS staff will present an overview of the funding application process including types of loans available, changes to the project schedule, priority rating system with recent changes, and components of the application package.  IFS staff will also meet individually (as time allows) with attendees to discuss their potential projects.

Important Changes to the September 3, 2013 Application

DWQ has proposed several changes to the 2013 CWSRF Intended Use Plan (IUP*), resulting in changes to the application. The primary anticipated changes to the application are:

1.      Loan Maximum:  Changed maximum amount of loan to of funds available (was previously $50 million)

2.      Resolution by Governing Body of Applicant: Resolution must be submitted with the application package (was previously allowed to be submitted 30 days after the application package)

3.      Schedule Allows More time: 24 months are scheduled from Notice of Intent to Fund letter to submitting executed construction contracts (was previously 21 months)

4.      Priority Point Rating System Changes

a.      Energy Efficiency Line Item:  Points for energy efficiency measures are now added as bonus points for WWTP replacement/ rehab and Collection System replacement/rehab project types; energy efficiency measures are still eligible for 0% loans

b.      Asset Management Plan:  Plan must be adopted prior to submitting the application for funding (previously allowed to be developed during project execution); points reduced to 5 (from 10)

c.      Financial Situation:  Category points available increased and formulas modified

                                     i.     Maximum points increased to 20 (from 15)

                                    ii.     Qualifications for Principal Forgiveness and 0% Loan:  Increased threshold to qualify – must score 10 points based on poverty rate, monthly utility bill and median household income (previously was 6 points)


1.   Space is available on a first come, first serve basis.   To make your reservation for the July 16, 2013 Workshop, please RSVP – by email only – before 5 PM on July 9, 2013 to:

Ms. Sharon Davis
DWQ/Infrastructure Finance Section

2.      In your email RSVP, please provide the following information:

Name of Attendee:

Unit of Local Government or Consulting Firm:

Attendee email address:

Attendee telephone number:

Indicate the type of project you may be pursuing for the September 3 CWSRF application submittal:

a.      WWTP – new construction or expansion project

b.      WWTP replacement/rehabilitation that does not increase capacity

c.      New sewer line extension that serves areas with failing septic systems

d.      Expansion of existing sewer lines or new sewer lines

e.      Collection system replacement/rehabilitation that does not increase capacity

f.        Stream restoration project (includes wetlands restoration)

g.      Stormwater project that treats existing sources of pollution

h.      Reclaimed water project

i.         Rainwater harvesting/utilization project

j.         Energy efficiency project at a WWTP


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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Professional Engineers
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