A BILL TO BE ENTITLED
AN ACT to appropriate funds to establish a cost share program to assist north carolina farmers who suffered damage from the severe and extreme drought conditions in north carolina in 2007 and, in further response to the 2007 drought, to appropriate funds to the department of agriculture and consumer services to assist the green industries and to establish and support a position to coordinate a statewide agriculture response team, as recommended by the Joint Select Committee on the agricultural drought response.
The General Assembly of North Carolina enacts:
SECTION 1.(a)  Agricultural Drought Response Cost Share Program. – The Agricultural Drought Response Cost Share Program is established.  The Program shall provide grants to assist North Carolina farmers who suffered damage from the severe and extreme drought conditions in North Carolina in 2007. These grants shall be used to assist farmers with the following projects:
(1)	To redrill damaged wells or to drill new wells to be used as a water supply for livestock or for irrigation.
(2)	To renovate damaged or inadequate farm ponds or construct new farm ponds to be used as a water supply for livestock or for irrigation.
(3)	To renovate pastures depleted by the drought.
SECTION 1.(b)  Program Administration. – The Program shall be administered by the Division of Soil and Water Conservation in the Department of Environment and Natural Resources through the Agriculture Cost Share Program for Nonpoint Source Pollution Control.  The Division shall administer this Program as provided in this section and in Part 9 of Article 21 of Chapter 143 of the General Statutes.
SECTION 1.(c)  Program Functions. – Under the Agricultural Drought Response Cost Share Program, the Division shall:
(1)	Within funds available to the Agricultural Drought Response Account established by Section 2 of this act, provide grants subject to all of the following limitations and requirements:
a.	Except as provided in G.S. 143‑215.74(b)(9), State funding shall be limited to:
1.	Seventy‑five percent (75%) of the average cost for each project with the assisted person providing twenty‑five percent (25%) of the project cost, which may include in‑kind support of the project.
2.	A maximum of one hundred thousand dollars ($100,000) per year to each applicant.
b.	Applicants shall be limited to farmers who have an adjusted gross income in each of the previous two years that is at or below two hundred fifty thousand dollars ($250,000), unless at least seventy‑five percent (75%) of this adjusted gross income is derived directly from farming, ranching, or forestry operations. 
c.	To be eligible for grant funds under subdivision (1) or subdivision (2) of subsection (a) of this section, applicants must demonstrate that their existing water supplies are insufficient to provide reliable water to meet current needs for livestock watering or irrigation.
d.	Applicants may apply for grant funds for projects under subsection (a) of this section that were installed as of August 1, 2007, so long as the costs of installation are documented to the satisfaction of the Division.
e.	The term of the grant contract shall be one year, but the contract may include an option to extend the grant beyond the one‑year period to a farmer who needs additional funds to achieve the purpose of the initial grant.
f.	The requirements and limitations under subdivisions (1), (2), (5), (7), and (8) of subsection (b) of G.S. 143‑215.74 do not apply. All other limitations and requirements set out in Part 9 of Article 21 of Chapter 143 of the General Statutes, as modified by this section, apply.
(2)	Establish criteria to prioritize the redrilling of damaged wells and the drilling of new wells, the renovation of damaged or inadequate farm ponds and the construction of new farm ponds, the renovation of pastures depleted by the drought, and retrofiting existing spray irrigation systems to drip or low‑volume stake emitters for the purpose of improving the efficiency of the system. 
(3)	Establish criteria for the selection of applicants who are eligible for participation in the Program. Priority shall be given to applicants who have substantially complied with federal and State laws, regulations, and rules for the protection of the environment, natural resources, and public health and who have a limited ability to pay for the projects that are eligible for grants under subsection (a) of this section.
(4)	Develop a process for soliciting and reviewing applications and for selecting farmers to participate in the Program.
(5)	Investigate and pursue other funding sources to supplement State funds, including federal, local, and private funding sources.
(6)	Provide technical assistance to participating persons to assist with the projects that are eligible for grants under subsection (a) of this section and to facilitate the timely transfer of technology among participating persons.
SECTION 1.(d)  Advisory Committee. – The Department may establish an advisory committee to assist the Division with the implementation of this act.  
SECTION 1.(e)  Report. – No later than 1 October of each year, the Division shall prepare a comprehensive report on the implementation of Sections 1 through 4 of this act.  The report shall be submitted to the Environmental Review Commission as a part of the report required by G.S. 143‑215.10M.  The first report required by this subsection shall be submitted to the Environmental Review Commission no later than 1 October 2009.
SECTION 2.  Account. –The Agricultural Drought Response Account within the Department of Environment and Natural Resources is established. Funds in the Account shall be used only as provided in Section 1 of this act.  The Account shall consist of funds appropriated to the Account by the General Assembly; any federal funds available for this purpose; and any grants, gifts, or contributions to the State for this purpose.  Funds in the Account shall not revert. Further, twenty‑five percent (25%) of the funds in the Account shall not be allocated during the initial funding cycle, but shall be retained to be allocated by the Division of Soil and Water Conservation consistent with the limitations under this act, for the purposes under this act, and to address future drought emergencies or to allocate to farmers who received a grant under this act who need additional funds to achieve the purpose of the initial grant.
SECTION 3.  There is appropriated from the General Fund to the Agricultural Drought Response Account the sum of five million two hundred fifty thousand dollars ($5,250,000) for the 2008‑2009 fiscal year to implement the Agricultural Drought Response Cost Share Program. Notwithstanding the provisions of G.S. 143‑215.74 regarding the permissible uses of funds under the Agriculture Cost Share Program for Nonpoint Source Pollution Program, these funds shall be allocated as follows:
(1)	$750,000 shall be used to assist farmers in redrilling damaged wells or drilling new wells to be used as a water supply for livestock or for irrigation.
(2)	$500,000 shall be used to assist farmers with the renovation of damaged or inadequate farm ponds or the construction of new farm ponds to be used as a water supply for livestock or for irrigation.
(3)	$4,000,000 shall be used to assist farmers with the renovations of pastures that were depleted by the 2007 drought conditions.
SECTION 4.  There is appropriated from the General Fund to the Department of Environment and Natural Resources the sum of three hundred thousand dollars ($300,000) for the 2008‑2009 fiscal year for the Division of Soil and Water Conservation for the Division's costs of implementing Section 1 through Section 3 of this act.
SECTION 5.  There is appropriated from the General Fund to the Department of Agriculture and Consumer Services the sum of one million one hundred forty‑one thousand dollars ($1,141,000) for the 2008‑2009 fiscal year to be allocated as follows:
(1)	$1,000,000 shall be used to assist the industries that are related to lawns, gardens, horticulture, turfgrass, or other similar Green Industries as follows:
a.	$400,000 shall be used to develop and implement a program to educate consumers on water conservation.
b.	$600,000 shall be used to develop and implement the Disaster Recovery Marketing and Promotion Campaign, a campaign to promote water conservation and to preserve the economic viability of the Green Industries.
(2)	$141,000 shall be used to establish and support a position within the Department to develop and coordinate an agricultural emergency response team.
SECTION 6.  This act becomes effective July 1, 2008.