Politics & Government

McCrory signs major tax bill, fracking next

Hours after the Senate and House gave final approval to a major tax bill, Gov. Pat McCrory signed it.

Republican leaders fast-tracked a wide-ranging measure that eliminates the ability of cities and towns to charge local businesses privilege taxes and levy a new tax on e-cigarettes. The Senate gave it a final vote Thursday morning and the House agreed to the amended measure in the afternoon.

House Democrats objected to the quick pace but Republicans said the measure was urgent. It includes a provision to adjust the occupancy tax ahead of the U.S. Open golf tournament in Pinehurst in June.

The part of the bill revoking local authority to levy privilege taxes drew the most attention. As mayor, McCrory defended Charlotte’s use of the tax and even supported increases. But now as governor, McCrory said a change was needed.

“There’s no debate that the privilege tax has been applied inconsistently, creating confusion and expense for our businesses,” he said in a statement after signing the bill. “Therefore, I support needed reform.”

The state’s municipalities will lose a collective $62 million when it takes effect July 1, 2015. Republican lawmakers pledge to find ways to offset the loss in the next legislative session, leaving cities such as Raleigh and Charlotte that raise millions from the taxes on a fiscal cliff.

McCrory said he received a commitment from House and Senate leaders to address the funding issue in the next year.

“Legitimate concerns have been expressed by the North Carolina Metropolitan Mayors Coalition, North Carolina League of Municipalities and other stakeholders about the provision which sunsets this tax next year. It should be noted that if this bill wasn’t signed into law, it could result in the immediate elimination of the local privilege tax option.

“With their assurances, I look forward to working with municipalities and the General Assembly to seek long-term resolution,” he said. John Frank

Fracking bill going to McCrory

In a fast flurry Thursday, lawmakers approved a bill that fast tracks the state’s issuing of permits for fracking for natural gas.

Turning down a string of Democratic amendments, the House gave the bill final approval on a 64-50 vote. Hours later the Senate agreed to the House changes, 33-12, without debate.

With McCrory’s expected signature, the state could begin issuing permits next spring.

House members voted to deny debate on five amendments. They started with Charlotte Democrat Becky Carney’s attempt to remove provisions that allow the state to start issuing permits 61 days after fracking rules are approved.

Carney said the provisions reneged on lawmakers’ promises two years ago to take legislative action on fracking rules, which are still being developed, before permits start going out.

“We made a promise. Now let’s stand up for that promise that we made,” Carney said.

Republican leaders say the two-year moratorium on permits won’t be lifted until rules are in place, fulfilling their promise. The bill allows the state Department of Environment and Natural Resources to begin issuing permits 61 days after drilling rules are approved, unless lawmakers take the unlikely step of blocking the rules.

Democrats fought in vain to add provisions on air emissions, drilling-worker housing, disposal of fracking wastes and public disclosure of fracking chemicals.

McCrory praised the bill.

“We have sat on the sidelines as a state for far too long on gas exploration and having North Carolina create jobs and also help with our country’s energy independence. Instead we are pumping in natural gas from other states,” he said in a statement.

“So we are all using that natural gas but for whatever reason we are thinking if we do it here, it’s wrong but if we take it from someplace else it’s right. That’s very hypocritical.”

The Environmental Defense Fund, an advocacy group, said legislators jumped the gun in allowing fracking.

“Some of the rules are strong, like those on well construction. Others miss the mark,” said senior analyst David Kelly. “The proposed wastewater rules mistakenly allow treated wastewater from oil and gas operations to be discharged into rivers and streams. What’s troubling is that the state has no water quality standards for many of the contaminants in the wastewater. Bruce Henderson, The Charlotte Observer

Democrats offer aggressive coal ash bills

Duke Energy would have to move the coal ash in its 33 ponds to lined landfills, without billing customers, under a measure introduced this week by House Democrats.

The bill is far more aggressive than an ash-management plan Gov. Pat McCrory introduced in April, two months after a Duke ash pond dumped up to 39,000 tons of ash into the Dan River.

The measure closes four “high-risk” ash ponds at Duke’s Riverbend, Dan River, Asheville and Sutton plants by 2017. Other ponds would be closed, depending on their risk levels, between 2019 and 2029. Ash would be buried in lined landfills on the same power plant sites where the ponds are located.

The state Utilities Commission would be barred from allowing Duke to recover from customers the ash-pond costs it incurred after Jan. 1.

Duke has said the company will pay to clean up the Dan River spill, which is now underway. But the company has said it will ask the state utilities commission to pass the cost of closing other ash ponds – estimated by Duke to cost up to $10 billion – to consumers.

The bill bans construction of new ash ponds. Newly-generated ash has to be buried in lined landfills or used for “beneficial” purposes such as making concrete.

“If (Duke) had not spent the last five years fighting every measure I introduced, or that came down from the federal level, I would have more sympathy with their plight,” said Rep. Pricey Harrison, one of the bill’s sponsors. The Greensboro Democrat has for years sought stricter standards for ash.

A Republican leader on environmental issues, Rep. Chuck McGrady of Hendersonville, said a bill expanding on Gov. Pat McCrory’s ash plan is expected to be introduced within the next two weeks.

McGrady called the governor’s proposal “pretty liberal” in allowing Duke options on how to close most of its ash ponds, including leaving the ash in place but capped to keep out water. It’s likely the Republican bill would ban new ash ponds, seek quick closure of those identified as high risk and set priorities for dealing with others, he said.

Bruce Henderson, The Charlotte Observer