A BILL TO BE ENTITLED
AN ACT to improve Drought preparedness and response in north carolina, as recommended by the Environmental review commission.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 143‑215.22H reads as rewritten:
"§ 143‑215.22H.  Registration of water withdrawals and transfers required.
(a)	Any person who withdraws 100,000 gallons per day or more of water from the surface or groundwaters of the State or who transfers 100,000 gallons per day or more of water from one river basin to another shall register the withdrawal or transfer with the Commission. A person registering a water withdrawal or transfer shall provide the Commission with the following information:
(1)	The maximum daily amount of the water withdrawal or transfer expressed in thousands of gallons per day.
(1a)	The monthly average withdrawal or transfer expressed in thousands of gallons per day.
(2)	The location of the points of withdrawal and discharge and the capacity of each facility used to make the withdrawal or transfer.
(3)	The monthly average discharge expressed in thousands of gallons per day.
(b)	Any person initiating a new water withdrawal or transfer of 100,000 gallons per day or more shall register the withdrawal or transfer with the Commission not later than two months after the initiation of the withdrawal or transfer. The information required under subsection (a) of this section shall be submitted with respect to the new withdrawal or transfer.
(b1)	Subsections (a) and (b) of this section shall not apply to a person who withdraws or transfers less than 1,000,000 gallons per day of water for activities directly related or incidental to the production of crops, fruits, vegetables, ornamental and flowering plants, dairy products, livestock, poultry, and other agricultural products.
(c)	A unit of local government that has completed a local water supply plan that meets the requirements of G.S. 143‑355(l) and that has periodically revised and updated its plan as required by the Department has satisfied the requirements of this section and is not required to separately register a water withdrawal or transfer or to update a registration under this section.
(d)	Any person who is required to register a water withdrawal or transfer under this section shall update the registration by providing the Commission with a current version of the information required by subsection (a) of this section at five‑year intervals following the initial registration. A person who submits information to update a registration of a water withdrawal or transfer is not required to pay an additional registration fee under G.S. 143‑215.3(a)(1a) and G.S. 143‑215.3(a)(1b), but is subject to the late registration fee established under this section in the event that updated information is not submitted as required by this subsection.
(e)	Any person who is required to register a water transfer or withdrawal under this section and fails to do so shall pay, in addition to the registration fee required under G.S. 143‑215.3(a)(1a) and G.S. 143‑215.3(a)(1b), a civil penalty of one hundred dollars ($100.00). A person who is required to update a registration under this section and fails to do so shall pay a civil penalty of fifty dollars ($50.00). For each willful action or failure to act for which a penalty may be assessed under this subsection, the Commission may consider each day the action or inaction continues after notice is given of the violation as a separate violation. A separate penalty may be assessed for each separate violation."
SECTION 2.(a)  G.S. 106‑24 reads as rewritten:
"§ 106‑24.  Collection and publication of information relating to agriculture; cooperation.
(a)	The Department of Agriculture and Consumer Services shall collect, compile, systematize, tabulate, and publish statistical information relating to agriculture. The Department is authorized to use sample surveys to collect primary data relating to agriculture. The Department is authorized to cooperate with the United States Department of Agriculture and the several boards of county commissioners of the State, to accomplish the purpose of this Part.
(b)	The Department of Agriculture and Consumer Services shall annually collect information on water use by persons who withdraw 10,000 gallons per day or more of water from the surface or groundwater sources of the State for activities directly related or incidental to the production of crops, fruits, vegetables, ornamental and flowering plants, dairy products, livestock, poultry, and other agricultural products. The information shall be collected by survey conducted pursuant to subsection (a) of this section and in accordance with Title 7 United States Code Section 2276 (Confidential Information Protection and Statistical Efficiency Act). The Department shall develop the survey form in consultation with the Department of Environment and Natural Resources. The Department shall report the results of the water use survey to the Environmental Review Commission no later than 1 July of each year and shall provide a copy of the report to the Department of Environment and Natural Resources. The report shall include recommendations about modifications to the survey, including changes in the gallons per day threshold for water use data collection. The report shall provide agricultural water use data by county. If the county is located in more than one river basin, the report shall separate the county data to show agricultural water use by river basin within the county. If publication of county or watershed data would result in disclosure of an individual operation's water use, the data will be combined with data from another county or watershed."
SECTION 2.(b)  The first report required by subsection (a) of this section shall be submitted on or before 1 July 2009.
SECTION 3.  G.S. 143‑350 reads as rewritten:
"§ 143‑350.  Definitions.
As used in this Article:
(1)	"Commission" means the Environmental Management Commission.
(2)	"Department" means the Department of Environment and Natural Resources.
(3)	"Essential water use" means the use of water necessary for firefighting, health, and safety; water needed to sustain human and animal life; and water necessary to satisfy federal, State, and local laws for the protection of public health, safety, welfare, the environment, and natural resources; and a minimum amount of water necessary to maintain the economy of the State, region, or area.
(4)	"Large community water system" means a community water system, as defined in G.S. 130A‑313(10), that regularly serves 1,000 or more service connections or 3,000 or more individuals.
(5)	"Unit of local government" means a county, city, consolidated city‑county, sanitary district, or other local political subdivision or authority or agency or local government.
(6)	"U.S. Drought Monitor" means the national drought map that designates areas of drought using the following categories D0‑Abnormally Dry, D1‑Moderate, D2‑Severe, D3‑Extreme, and D4‑Exceptional. The U.S. Drought Monitor is developed and maintained by the  Joint Agricultural Weather Facility, the Climate Prediction Center, the National Climatic Data Center, and the National Drought Mitigation Center with input from the United States Geological Survey, the National Water and Climate Center, the Climate Diagnostics Center, the National Weather Service, state climatologists, and state water resource agencies.
(7)	"Water shortage emergency" means a water shortage resulting from prolonged drought, contamination of the water supply, damage to water infrastructure, or other unforeseen causes that presents an imminent threat to public health, safety, and welfare or to the environment."
SECTION 4.  G.S. 143‑354 reads as rewritten:
"§ 143‑354.  Ordinary powers and duties of the Commission.
(a)	Powers and Duties in General. – Except as otherwise specified in this Article, the powers and duties of the Commission shall be as follows:
(1)	The Commission shall carry out a program of planning and education concerning the most beneficial long‑range conservation and use of the water resources of the State. It shall investigate the long‑range needs of counties and municipalities and other local governments for water supply storage available in federal projects.
(2)	The Commission shall advise the Governor as to how the State's present water research activities might be coordinated.
	(4)	The Commission is authorized to call upon the Attorney General for such legal advice as is necessary to the functioning of the Commission.
(5)	Recognizing the complexity and difficulties attendant upon the recommendation of the General Assembly of fair and beneficial legislation affecting the use and conservation of water, the Commission shall solicit from the various water interests of the State their suggestions thereon.
(6)	The Commission may hold public hearings for the purpose of obtaining evidence and information and permitting discussion relative to water resources legislation and shall have the power to subpoena witnesses therefor.
(7)	All recommendations for proposed legislation made by the Commission shall be available to the public.
(8)	The Commission shall adopt such rules and regulations as may be necessary to carry out the purposes of this Article.
(9)	Any member of the Commission or any person authorized by it, shall have the right to enter upon any private or public lands or waters for the purpose of making investigations and studies reasonably necessary in the gathering of facts concerning streams and watersheds, subject to responsibility for any damage done to property entered.
(10)	The Commission is authorized to provide to federal agencies the required assurances, subject to availability of appropriations by the General Assembly or applicable funds or assurances from local governments, of nonfederal cooperation for water supply storage and other congressionally authorized purposes in federal projects.
(11)	The Commission is authorized to assign or transfer to any county or municipality or other local government having a need for water supply storage in federal projects any interest held by the State in such storage, upon the assumption of repayment obligation therefor, or compensation to the State, by such local government. The Commission shall also have the authority to reassign or transfer interests in such storage held by local governments, if indicated by the investigation of needs made pursuant to subdivision (1) of subsection (a) of this section, subject to equitable adjustment of financial responsibility.
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SECTION 5.  Article 38 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143‑355.2.  Water conservation measures for  drought.
(a)	Each unit of local government that provides public water service and each large community water system shall develop and implement water conservation measures to respond to drought or other water shortage conditions as provided in this section. Pursuant to G.S. 143‑355(l), water conservation measures to respond to drought or other water shortage conditions shall be set out in a water shortage response plan and submitted to the Department for review and approval. The Department shall approve the water shortage response plan if the plan meets all of the following criteria:
(1)	The plan includes tiered levels of water conservation measures or other response actions based on the severity of water shortage conditions.
(2)	Each tier of water conservation measures shall be based on increased severity of drought or water shortage conditions and will result in more stringent water conservation measures.
(3)	All other requirements of rules adopted by the Commission pursuant to S.L. 2002‑167.
(b)	The Department may require each unit of local government that provides public water service and each large community water system to implement the more stringent water conservation measures described in subsection (d) of this section if the Department makes written findings that any county, as determined by subsection (e) of this section, in which the source of water for the public water system operated by the unit of local government or by a large community water system is in:
(1)	Severe, extreme, or exceptional drought, and the Department finds all of the following:
a.	The unit of local government that provides water service or large community water system has not begun implementation of any level of water conservation measures set out in the water shortage response plan.
b.	Implementation of measures is necessary to minimize the harmful impacts of drought on public health, safety, and the environment, including the potential impacts of drought or other water shortage on interconnected water systems and other water systems withdrawing from the same water source, or
(2)	Extreme or exceptional drought, and the Department finds that the unit of local government that provides water service or large community water system has implemented the measures required under the water shortage response plan for the appropriate tier of water conservation measure for 30 days or more and that implementation of the measures required has not reduced water use in an amount sufficient to minimize the harmful impacts of drought on public health, safety, and the environment, including the potential impact of drought or other water shortage on interconnected water systems and other water systems withdrawing from the same water source.
(c)	In making the findings required under subsection (b) of this section, the Department shall consider the:
(1)	Hydrological drought conditions.
(2)	Drought forecast.
(3)	Reductions in water use achieved under water conservation measures in effect.
(4)	Availability of other water supply sources and other indicators of the extent and severity of drought impacts.
(5)	Economic impacts on the community to implement more stringent water conservation measures.
(6)	Conservation measures of all registered water withdrawals within the same 8 digit hydrologic unit code established by the U.S. Geological Survey to the extent the Department is able to document those measures.
(d)	Based on the findings required under subsection (b) of this section, the Department may require the unit of local government that provides public water service or the large community water system to begin implementation of its plan or to implement the next tier of water shortage response measures. If, after consultation with the unit of local government or the large community water system, the Department makes a written finding that the next tier of measures set out in the plan, together with any other reasonable steps that may be available to reduce water use, will not reduce water use in an amount sufficient to minimize the harmful impacts of drought on public health, safety, and the environment, including the potential impact of drought or other water shortage on interconnected water systems and other water systems drawing from the same water source, then the Department may require implementation of the tier that is two levels more stringent than the tier being implemented.
(e)	For purposes of this section, the drought designation for an area shall be the U.S. Drought Monitor designation for the county in which the water source is located as published by the Drought Management Advisory Council. If the Secretary approves a county drought designation that is different from the U.S. Drought Monitor designation pursuant to G.S. 143‑355.1(f1), the level of water conservation shall correspond to the designation approved by the Secretary. If the water source is located in more than one county and the counties have different drought designations, the Council shall recommend to the Secretary the level of water conservation measures to be implemented under this section by water systems that withdraw water from the water source. The recommendation of the Council shall be based on the drought indicators identified in G.S. 143‑355.1(f) as applied to the water source.
(f)	A unit of local government that provides public water service or large community water system that does not have a water shortage response plan shall implement the default water conservation measures for extreme and exceptional drought set out in the rules adopted by the Commission pursuant to S.L. 2002‑167.
(g)	A unit of local government that provides water service or a large community water system that does not have an approved water shortage response plan shall implement the default water conservation measures specified in subsection (f) of this section within 10 days following a drought designation that requires implementation of water conservation measures. A water shortage response plan is presumed to be approved until the Department notifies the unit of local government or large community water system that the plan has been disapproved. A unit of local government that provides water service and a large community water system shall be deemed to be in compliance with this section if, within 10 days after water shortage conditions identified in the plan require implementation of water conservation measures, the water system begins implementation of the water conservation measures required by the plan.
(h)	Water conservation measures imposed by a unit of local government that provides public water service or by a large community water system may be more stringent than the minimum water conservation measures required under this section. Except for a well that is a water supply source for a water system, this subsection shall not be construed to authorize the regulation of deepwater wells that do not impact surface water. This subsection shall not be construed to authorize a unit of government, public water supply system, or private water supply system to regulate water use from a well located outside of its jurisdiction, a well not connected to its water system, or any other private well.
(i)	A unit of local government that provides water service and a large community water system shall report that the water system has begun implementation of water conservation measures set out in the water system's water shortage response plan or the default water conservation measures to the Department within 72 hours after beginning implementation.
(j)	This section shall not be construed to authorize or require the implementation of water conservation management measures that conflict with or are superseded by the provisions of any order of a federal or State court or administrative agency, any interstate agreement governing the allocation of water to which the State is a party, or any license for a hydroelectric generating facility issued by the Federal Energy Regulatory Commission; including, without limitation, any protocol or subsidiary agreement that may be part of or incorporated in any such order, interstate agreement, or operating license."
SECTION 6.(a)  The Environmental Review Commission, as part of its ongoing study of the allocation of water resources in the State required by Section 1 of S.L. 2007‑518, shall study whether and to what extent private groundwater wells and the use of water produced by private groundwater wells should be regulated by the State or units of local government.  The Environmental Review Commission shall report its findings and recommendations, including any legislative proposals, to the General Assembly as provided by Section 1 of S.L. 2007‑518, as amended.
SECTION 6.(b)  The Environmental Review Commission, as part of its ongoing study of the allocation of water resources in the State required by Section 1 of S.L. 2007‑518, shall study issues related to increasing water supply, including issues related to reservoir construction and State laws and rules governing reservoir construction.  The Environmental Review Commission shall report its findings and recommendations, including any legislative proposals, to the General Assembly as provided by Section 1 of S.L. 2007‑518, as amended.
SECTION 7.  G.S. 143‑355 reads as rewritten:
"§ 143‑355.  Powers and duties of the Department.
(a)	Repealed by Session Laws 1989, c. 603, s. 1.
(b)	Functions to Be Performed. – The Department shall:
(1)	Request the North Carolina Congressional Delegation to apply to the Congress of the United States whenever deemed necessary for appropriations for protecting and improving any harbor or waterway in the State and for accomplishing needed flood control, shore‑erosion prevention, and water‑resources development for water supply, water quality control, and other purposes.
(2)	Initiate, plan, and execute a long‑range program for the preservation, development and improvement of rivers, harbors, and inland ports, and to promote the public interest therein.
(3)	Prepare and recommend to the Governor and the General Assembly any legislation which may be deemed proper for the preservation and improvement of rivers, harbors, dredging of small inlets, provision for safe harbor facilities, and public tidewaters of the State.
(4)	Make engineering studies, hydraulic computations, hydrographic surveys, and reports regarding shore‑erosion projects, dams, reservoirs, and river‑channel improvements; to develop, for budget and planning purposes, estimates of the costs of proposed new projects; to prepare bidding documents, plans, and specifications for harbor, coastal, and river projects, and to inspect materials, workmanship, and practices of contractors to assure compliance with plans and specifications.
(5)	Cooperate with the United States Army Corps of Engineers in causing to be removed any wrecked, sunken or abandoned vessel or unauthorized obstructions and encroachments in public harbors, channels, waterways, and tidewaters of the State.
(6)	Cooperate with the United States Coast Guard in marking out and establishing harbor lines and in placing buoys and structures for marking navigable channels.
(7)	Cooperate with federal and interstate agencies in planning and developing water‑resource projects for navigation, flood control, hurricane protection, shore‑erosion prevention, and other purposes.
(8)	Provide professional advice to public and private agencies, and to citizens of the State, on matters relating to tidewater development, river works, and watershed development.
(9)	Discuss with federal, State, and municipal officials and other interested persons a program of development of rivers, harbors, and related resources.
(10)	Make investigations and render reports requested by the Governor and the General Assembly.
(11)	Participate in activity of the National Rivers and Harbors Congress, the American Shore and Beach Preservation Association, the American Watershed Council, the American Water Works Association, the American Society of Civil Engineers, the Council of State Governments, the Conservation Foundation, and other national agencies concerned with conservation and development of water resources.
(12)	Prepare and maintain climatological and water‑resources records and files as a source of information easily accessible to the citizens of the State and to the public generally.
(13)	Formulate and administer a program of dune rebuilding, hurricane protection, and shore‑erosion prevention.
(14)	Include in the biennial budget the cost of performing the additional functions indicated above.
(15)	Initiate, plan, study, and execute a long‑range floodplain management program for the promotion of health, safety, and welfare of the public. In carrying out the purposes of this subsection, the primary responsibility of floodplain management rests with the local levels of government and it is, therefore, the policy of this State and of this Department to provide guidance, coordination, and other means of assistance, along with the other agencies of this State and with the local levels of government, to effectuate adequate floodplain management programs.
(b1)	The Department is directed to pursue an active educational program of floodplain management measures, to include in each biennial report a statement of flood damages, location where floodplain management is desirable, and suggested legislation, if deemed desirable, and within its capacities to provide advice and assistance to State agencies and local levels of government.
(c)	Repealed by Session Laws 1961, c. 315.
(d)	Investigation of Coasts, Ports and Waterways of State. – The Department is designated as the official State agency to investigate and cause investigations to be made of the coasts, ports and waterways of North Carolina and to cooperate with agencies of the federal and State government and other political subdivisions in making such investigations. The provisions of this section shall not be construed as in any way interfering with the powers and duties of the Utilities Commission, relating to the acquiring of rights‑of‑way for the Intra‑Coastal Waterway; or to authorize the Department to represent the State in connection with such duties.
(e)	Repealed by Session Laws 1998‑129, s. 1, effective January 1, 2000.
(f)	Samples of Cuttings to Be Furnished the Department When Requested. – Every person, firm or corporation engaged in the business of drilling, boring, coring or constructing wells in any manner by the use of power machinery shall furnish the Department samples of cuttings from such depths as the Department may require from all wells constructed by such person, firm or corporation, when such samples are requested by the Department. The Department shall bear the expense of delivering such samples. The Department shall, after an analysis of the samples submitted, furnish a copy of such analysis to the owner of the property on which the well was constructed; the Department shall not report the results of any such analysis to any other person whatsoever until the person legally authorized to do so authorizes in writing the release of the results of the analysis.
(g)	Reports of Each Well Required. – Every person, firm or corporation engaged in the business of drilling, boring, coring, or constructing wells with power machinery within the State of North Carolina shall, within 30 days of the completion of each well, report to the Department on forms furnished by the Department the location, size, depth, number of feet of casing used, method of finishing, and formation log information of each such well. In addition such person, firm or corporation shall report any tests made of each such well including the method of testing, length of test, draw‑down in feet and yield in gallons per minute. The person, firm or corporation making such report to the Department shall at the time such report is made also furnish a copy thereof to the owner of the property on which the well was constructed.
(h)	Drilling for Petroleum and Minerals Excepted. – The provisions of this Article shall not apply to drillings for petroleum and minerals.
(i)	Penalty for Violation. – Any person violating the provisions of subsections (e), (f) and (g) of G.S. 143‑355 shall be guilty of a Class 3 misdemeanor and, upon conviction, shall only be punished by a fine of fifty dollars ($50.00). Each violation shall constitute a separate offense.
(j)	Miscellaneous Duties. – The Department shall make investigations of water supplies and water powers, prepare and maintain a general inventory of the water resources of the State and take such measures as it may consider necessary to promote their development; and to supervise, guide, and control the performance of the duties set forth in subsection (b) of this section and to hold hearings with regard thereto. In connection with administration of the well‑drilling law the Department may prepare analyses of well cuttings for mineral and petroleum content.
(k)	Water Use Information. – Any person using, withdrawing, diverting or obtaining water from surface streams, lakes and underground water sources shall, upon the request of the Department, file a monthly report with the Department showing the amount of water used, withdrawn, diverted or obtained from such sources. Such report shall be on a form supplied by the Department and shall show the identification of the water well or other withdrawal facility, location, withdrawal rate (measured in gallons per minute), and total gallons withdrawn during the month. Reports required to be filed under this subsection shall be filed on or before the fifteenth day of the month succeeding the month during which the using, withdrawing, diverting or obtaining water required to be reported occurred. This subsection does not apply to withdrawals or uses by individuals or families for household, livestock, or gardens. All reports required under this subsection are provided solely for the purpose of the Department. Within the meaning of this subsection the term "person" means any and all persons, including individuals, firms, partnerships, associations, public or private institutions, municipalities or political subdivisions, governmental agencies, and private or public corporations organized or existing under the laws of this State or any other state or country. In the event of extreme or exceptional drought or other water shortage, the Department may require each local government water system and each large community water system in the affected area to report the amount of water used, withdrawn, diverted, or obtained on a weekly basis and may require the reporting of additional information necessary to assess and manage the drought or water shortage.
(l)	Local Water Supply Plans. – Each unit of local government that provides public water service or that plans to provide public water service and each large community water system shall, either individually or together with other units of local government and large community water systems, prepare a local water supply plan and submit it to the Department for approval. The Department shall provide technical assistance with the preparation of plans to units of local government and large community water systems upon request and to the extent that the Department has resources available to provide assistance. At a minimum, each unit of local government and large community water system shall include in local water supply plans all information that is readily available to it. Plans shall include present and projected population, industrial development, and water use within the service area; present and future water supplies; an estimate of the technical assistance that may be needed at the local level to address projected water needs; current and future water conservation and water reuse programs; a description of how the local government or large community water system will respond to drought and other water shortage emergencies and continue to meet essential public water supply needs during the emergency; and any other related information as the Department may require in the preparation of a State water supply plan. Local plans shall be revised to reflect changes in relevant data and projections at least once each five years unless the Department requests more frequent revisions. The revised plan shall include the current and anticipated reliance by the local government unit or large community water system on surface water transfers as defined by G.S. 143‑215.22G. Local plans and revised plans shall be submitted to the Department once they have been approved by each unit of local government and large community water system that participated in the preparation of the plan.
(m)	In order to assure the availability of adequate supplies of good quality water to protect the public health and to support desirable economic growth, the Department shall develop a State water supply plan. The State water supply plan shall include the information and projections required to be included in local plans, a summary of water conservation and water reuse programs described in local plans, a summary of the technical assistance needs indicated by local plans, and shall indicate the extent to which the various local plans are compatible. The State plan shall identify potential conflicts among the various local plans and ways in which local water supply programs could be better coordinated.
(n)	The Department of Environment and Natural Resources shall report to the Environmental Review Commission on the implementation of this section and the development of the State water supply plan on or before 1 September of each year."
SECTION 8.  Article 38 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143‑355.3.  Water shortage emergency powers.
(a)	Declaration of Water Shortage Emergency. – If, after consultation with the affected water system and the unit of local government with jurisdiction over the area served by the water system, the Secretary determines that the needs of human consumption, necessary sanitation, and public safety require emergency action, the Secretary shall provide the Governor with written findings setting out the basis for declaration of a water shortage emergency. The Governor shall have the authority to declare a water shortage emergency in the area affected by the water shortage emergency, which may include both the water system experiencing a water shortage emergency and the area served by a water system required under subdivision (1) of subsection (b) of this section to provide water in response to the water shortage emergency. No emergency period shall exceed 30 days, but the Governor may declare successive emergencies based upon the written findings of the Secretary.
(b)	Water Shortage Emergency Powers and Duties. – Whenever, pursuant to this Article, the Governor declares the existence of a water shortage emergency within a particular area of the State, the Secretary shall have the powers and duties set out in subdivisions (1), (2), and (3) of this subsection. These powers may only be exercised within the designated water shortage emergency area, after the Secretary has consulted with the affected water systems and determined that the water shortage emergency cannot be effectively managed in the absence of exercising these powers, and only for the period of the water shortage emergency. Under these circumstances, the Secretary has the power and duty to:
(1)	Require any water system that has water supply in excess of that required to meet the essential water uses of its customers to provide water to a water system experiencing a water shortage emergency. The Secretary shall give preference to diversion of water from a water system within the same river basin as the water system that is experiencing a water shortage emergency. A diversion of water that requires a certificate under G.S. 143‑215.22L shall meet the requirements of that section. The amount required to be supplied shall be limited to the amount necessary to supply essential water uses within the receiving system.  The required diversion of waters shall cease upon the termination of the water shortage emergency.
(2)	Adopt rules governing the conservation and use of water within the water shortage emergency area as shall be necessary to maintain essential water use within the water shortage emergency area. Before such rules and regulations shall become effective, they shall be published in two consecutive issues of a daily newspaper generally circulated in the emergency area.  This subdivision shall not be construed to authorize a unit of government, public water supply system, or private water supply system to regulate water use from a well located outside of its jurisdiction, a well not connected to its water system, or any other private well.
(3)	Adopt rules governing conservation and use of water within the service area of the water system from which water is being diverted as shall be necessary to maintain essential water uses in the system while supplying water to the water shortage emergency area.  This subdivision shall not be construed to authorize a unit of government, public water supply system, or private water supply system to regulate water use from a well located outside of its jurisdiction, a well not connected to its water system, or any other private well.
(c)	Temporary Rights‑of‑Way. – A water system that is affected by a water shortage emergency is authorized to lay necessary temporary waterlines for the period of a declared water shortage emergency across, under, or above any and all properties to connect the water system experiencing a water shortage emergency to an emergency intake in a new water source or to interconnect the water system to a supplying water or wastewater system without first acquiring right‑of‑way.  The Department shall expedite the approval of temporary waterlines needed to provide emergency water supply under this section. Temporary waterlines installed under this section shall be removed within 90 days following the end of the emergency period except that the Secretary may, for good cause, authorize a 30‑day extension.
(d)	Compensation for Water Allocated During Water Shortage Emergency and Temporary Rights‑of‑Way. – Whenever the Secretary, pursuant to this Article, has ordered any diversion of water, the receiving water or wastewater system shall reimburse the supplying water system for the cost of the water. The cost charged to the receiving system shall not exceed one hundred ten percent (110%) of the retail cost that would be charged to a customer of the supplying system for an equivalent amount of water and any additional costs incurred by the supplying system for alterations to its infrastructure or water treatment to effectuate the diversion except as provided under an interlocal agreement. Unless liability is otherwise assigned in an interlocal agreement, the receiving water system shall be liable to all persons suffering any loss or damage caused by or resulting from the laying of temporary waterlines to effectuate the diversion. Within 10 days of placing the temporary waterlines, the water system that is liable shall institute a civil action in accordance with the procedures set out under Article 9 of Chapter 136 of the General Statutes to compensate the property owners for any taking caused by or resulting from the laying of temporary waterlines, with the water system that is liable having the role of the Department of Transportation and the governing board of the water system that is liable having the role of the Secretary of Transportation under Article 9 of Chapter 136 of the General Statutes.
(e)	This section shall not be construed to authorize or require any actions that conflict with or are superseded by the provisions of any order of a federal or State court or administrative agency, any interstate agreement governing the allocation of water to which the State is a party, or any license for a hydroelectric generating facility issued by the Federal Energy Regulatory Commission; including, without limitation, any protocol or subsidiary agreement that may be part of or incorporated in any such order, interstate agreement, or operating license."
SECTION 9.  Article 38 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143‑355.4.  Water system efficiency.
(a)	Local government water systems and large community water systems may require separate meters for new in‑ground irrigation systems.
(b)	To be eligible for State water infrastructure funds from the Drinking Water Revolving Fund or the Drinking Water Reserve Fund or any other grant or loan of funds allocated by the General Assembly whether the allocation of funds is to a State agency or to a nonprofit organization for the purpose of extending waterlines or expanding water treatment capacity, a local government or large community water system must demonstrate that the system:
(1)	Has established a water rate structure that is adequate to pay the cost of maintaining, repairing, and operating the system, including reserves for payment of principal and interest on indebtedness incurred for maintenance or improvement of the water system during periods of normal use and periods of reduced water use due to implementation of water conservation measures. The funding agency shall apply guidelines developed by the State Water Infrastructure Commission in determining the adequacy of the water rate structure to support operation and maintenance of the system.
(2)	Has implemented a leak detection and repair program.
(3)	Has an approved water supply plan pursuant to G.S. 143‑355.
(4)	Meters all water use except for water use that is impractical to meter, including, but not limited to, use of water for firefighting and to flush waterlines.
(5)	Does not use a rate structure that gives residential water customers a lower per‑unit water rate as water use increases.
(6)	Has evaluated the extent to which the future water needs of the water 
system can be met by reclaimed water.
(7)	Has implemented a consumer education program that emphasizes the importance of water conservation."
SECTION 10.  Article 38 of Chapter 143 is amended by adding a new section to read:
"§ 143‑355.5.  Water reuse; policy; rule making.
(a)	Water Reuse Policy. – It is the public policy of the State that the reuse of treated wastewater or reclaimed water is critical to meeting the existing and future water supply needs of the State. The General Assembly finds that reclaimed water systems permitted and operated under G.S. 143‑215.1(d2) in an approved wastewater reuse program can provide water for many beneficial purposes in a way that is both environmentally acceptable and protective of public health.
(b)	Rule Making. – The Commission shall encourage and promote safe and beneficial reuse of treated wastewater as an alternative to surface water discharge. The Commission shall adopt rules to:
(1)	Identify acceptable uses of reclaimed water, including toilet flushing, fire protection, decorative water features, and landscape irrigation.
(2)	Facilitate the permitting of reclaimed water systems.
(3)	Establish standards for reclaimed water systems that are adequate to prevent the direct distribution of reclaimed water as potable water."
SECTION 11.  Article 38 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143‑355.6.  Enforcement.
(a)	The Secretary may assess a civil penalty of not less than one hundred dollars ($100.00) nor more than five hundred dollars ($500.00) against any person who:
(1)	Fails to report water use or other information required under G.S. 143‑355(k).
(2)	Fails to act in accordance with the terms, conditions, or requirements of an order issued by the Secretary under G.S. 143‑355.3.
(3)	Violates any provision of this Article or any rule adopted by the Commission, the Department, or the Secretary implementing this Article.
(b)	For each willful action or failure to act for which a penalty may be assessed under this section, the Secretary may consider each day the action or inaction continues after notice is given of the violation as a separate violation. A separate penalty may be assessed for each separate violation.
(c)	The Secretary may assess a civil penalty of not more than ten thousand dollars ($10,000) per month against a unit of local government that provides water service or a large community water system that fails to implement the water conservation measures set out in the water shortage response plan approved by the Department under G.S. 143‑355.2, measures required by the Department under subsections (b) and (d) of G.S. 143‑355.2, or the default measures required under rules adopted by the Commission under S.L. 2002‑167. The amount of the civil penalty shall be based on the factors set out in G.S. 143B‑282.1(b). The Secretary may remit a civil penalty based on the factors set out in G.S. 143B‑282.1(c)(1).
(d)	The violation of emergency water conservation rules adopted by the Secretary pursuant to G.S. 143‑355.3(b) is a Class 1 misdemeanor.
(e)	The Secretary shall notify any person assessed a civil penalty of the assessment and the specific reasons for the assessment by registered or certified mail or by any means authorized by G.S. 1A‑1, Rule 4. Contested case petitions shall be filed within 30 days of receipt of the notice of assessment."
SECTION 12.  Article 10 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 130A‑329.  Reporting.
Reports required to be submitted under this Article or under rules adopted by the Commission shall be submitted electronically on a form specified by the Department. The Department may waive the requirement for electronic submission of a report if the water system demonstrates that it lacks the technical capability to report electronically."
SECTION 13.  G.S. 130A‑335(a) reads as rewritten:
"(a)	A person owning or controlling a residence, place of business or a place of public assembly shall provide an approved wastewater system. Except as may be allowed under another provision of law, all wastewater from water‑using fixtures and appliances connected to a water supply source shall discharge to the approved wastewater system. A wastewater system may include components for collection, treatment and disposal of wastewater."
SECTION 14.(a)  For purposes of this section, "gray water" means wastewater removed from household wash basins, bathtubs, and showers.
SECTION 14.(b)  The Commission for Health Services shall adopt rules to authorize the use of gray water during periods of drought to hand water trees, shrubs, and inedible plants on single‑family residential property.  The rules shall encourage the use of gray water as provided in this section while protecting public health, safety, welfare, and the environment.  In developing the rules, the Commission shall review the provisions set out in subsection (c) of this section
SECTION 14.(c)  Notwithstanding G.S. 130A‑335(a), untreated gray water may be used in periods of drought to hand water trees, shrubs, and inedible plants on single‑family residential property under the following conditions:
(1)	Gray water shall be applied as soon as practicable. Untreated gray water should not be stored for later use.
(2)	Gray water containing hazardous chemicals including, but not limited to, residue from solvents shall not be used.
(3)	Use of untreated gray water is restricted to the residential property where the gray water originates. Untreated gray water shall not be allowed to run off onto adjoining property, roadways, or into drainage features such as ditches and storm drains.
(4)	Untreated gray water shall be applied using buckets, watering cans, or other handheld containers. Gray water may not be used in an irrigation system unless the gray water has been treated in accordance with standards set out in the State Plumbing Code.
(5)	Gray water shall not be applied closer than 100 feet to surface waters or a water supply well.
SECTION 15.  G.S. 159G‑23 reads as rewritten:
"§ 159G‑23.  Common criteria for loan or grant from Wastewater Reserve or Drinking Water Reserve.
The criteria in this section apply to a loan or grant from the Wastewater Reserve or the Drinking Water Reserve. The Division of Water Quality and the Division of Environmental Health must each establish a system of assigning points to applications based on the following criteria:
(1)	Public necessity. – An applicant must explain how the project promotes public health and protects the environment. A project that improves a system that is not in compliance with permit requirements or is under orders from the Department, enables a moratorium to be lifted, or replaces failing septic tanks with a wastewater collection system has priority.
(2)	Effect on impaired waters. – A project that improves designated impaired waters of the State has priority.
(3)	Efficiency. – A project that achieves efficiencies in meeting the State's water infrastructure needs or reduces vulnerability to drought consistent with Part 2A of Article 21 of Chapter 143 of the General Statutes by one of the following methods has priority:
a.	The combination of two or more wastewater or public water systems into a regional wastewater or public water system by merger, consolidation, or another means.
b.	Conservation or reuse of water, including bulk water reuse facilities and waterlines to supply reuse water for irrigation and other approved uses.
c.	Construction of an interconnection between water systems intended for use in drought or other water shortage emergency.
d.	Repair or replacement of leaking waterlines.
e.	Replacement of meters and installation of new metering systems.
(4)	Comprehensive land‑use plan. – A project that is located in a city or county that has adopted or has taken significant steps to adopt a comprehensive land‑use plan under Article 18 of Chapter 153A of the General Statutes or Article 19 of Chapter 160A of the General Statutes has priority over a project located in a city or county that has not adopted a plan or has not taken steps to do so. The existence of a plan has more priority than steps taken to adopt a plan, such as adoption of a zoning ordinance. A plan that exceeds the minimum State standards for protection of water resources has more priority than one that does not. A project is considered to be located in a city or county if it is located in whole or in part in that unit. A land‑use plan is not considered a comprehensive land‑use plan unless it has provisions that protect existing water uses and ensure compliance with water quality standards and classifications in all waters of the State affected by the plan.
(5)	Flood hazard ordinance. – A project that is located in a city or county that has adopted a flood hazard prevention ordinance under G.S. 143‑215.54A has priority over a project located in a city or county that has not adopted an ordinance. A plan that exceeds the minimum standards under G.S. 143‑215.54A for a flood hazard prevention ordinance has more priority than one that does not. A project is considered to be located in a city or county if it is located in whole or in part in that unit. If no part of the service area of a project is located within the 100‑year floodplain, the project has the same priority under this subdivision as if it were located in a city or county that has adopted a flood hazard prevention ordinance. The most recent maps prepared pursuant to the National Flood Insurance Program or approved by the Department determine whether an area is within the 100‑year floodplain.
(6)	Sound management. – A project submitted by a local government unit that has demonstrated a willingness and ability to meet its responsibilities through sound fiscal policies and efficient operation and management has priority.
(7)	Capital improvement plan. – A project that implements the applicant's capital improvement plan for the wastewater system or public water system it manages has priority over a project that does not implement a capital improvement plan. To receive priority, a capital improvement plan must set out the applicant's expected water infrastructure needs for at least 10 years.
(8)	Coastal habitat protection. – A project that implements a recommendation of a Coastal Habitat Protection Plan adopted by the Environmental Management Commission, the Coastal Resources Commission, and the Marine Fisheries Commission pursuant to G.S. 143B‑279.8 has priority over other projects that affect counties subject to that Plan."
SECTION 16.  G.S. 143‑355.1 reads as rewritten:
"§ 143‑355.1.  Drought Management Advisory Council; drought advisories.
(a)	The Department shall establish a Drought Management Advisory Council. The purposes of the Council are:
(1)	To improve coordination among local, State, and federal agencies; public water systems, as defined in G.S. 130A‑313(10); and water users to improve the management and mitigation of the harmful effects of drought.
(2)	To provide consistent and accurate information on drought conditions in the State to the U.S. Drought Monitor, the Environmental Management Commission, the Secretary, the Environmental Review Commission, and the public.
(b)	The Department shall invite each of the following organizations to designate a representative to serve on the Council:
(1)	North Carolina Cooperative Extension Service.
(2)	State Climate Office at North Carolina State University.
(3)	Public Staff of the Utilities Commission.
(4)	Wildlife Resources Commission.
(5)	Department of Agriculture and Consumer Services.
(6)	Department of Commerce.
(7)	Department of Crime Control and Public Safety.
(8)	National Weather Service of the National Oceanic and Atmospheric Administration of the United States Department of Commerce.
(9)	United States Geological Survey of the United States Department of the Interior.
(10)	United States Army Corps of Engineers.
(11)	United States Department of Agriculture.
(12)	Federal Emergency Management Agency of the United States Department of Homeland Security.
(13)	North Carolina League of Municipalities.
(14)	North Carolina Association of County Commissioners.
(15)	North Carolina Utilities Commission.
(16)	North Carolina Ground Water Association.
(17)	North Carolina Farm Bureau.
(18)	The Conservation Council of North Carolina.
(19)	The North Carolina Environmental Defense Fund.
(20)	The North Carolina Chapter of the Sierra Club.
(b1)	Representatives designated under subsection (b) of this section shall have expertise or responsibility in meteorology, groundwater and surface water hydrology, water system operation and management, reservoir management, emergency response, or another subject area related to assessment and management of drought impacts.
(c)	The Department shall also invite other agencies and organizations that represent water users, including local governments, agriculture, agribusiness, forestry, manufacturing, investor‑owned water utilities regulated by the North Carolina Utilities Commission, and others as appropriate, to participate in the work of the Council with respect to particular drought related issues.
(d)	The Department shall designate an employee of the Department to serve as Chair of the Council. The Council shall meet at least once in each calendar year in order to maintain appropriate agency readiness and participation. In addition, the Council shall meet on the call of the Chair to respond to drought conditions. The provisions of Article 33C of this Chapter apply to meetings of the Council.
(e)	In order to provide accurate and consistent information to assist State agencies, local governments, and other water users in taking appropriate drought response actions, the Council may issue drought advisories that designate:
(1)	Specific areas of the State in which drought conditions are impending.
(2)	Specific areas of the State that are suffering from drought conditions.
(3)	The level of severity of drought conditions based on the drought categories used in the U.S. Drought Monitor or the drought designation approved by the Secretary under subsection (f) of this section.
(f)	Drought designations by the U.S. Drought Monitor shall be the default designations for drought advisories issued under subsection (e) of this section. The Council shall publish those drought designations for each county. If more than one drought designation applies to a county, the drought designation for the county shall be the highest drought designation that applies to at least twenty‑five percent (25%) of the land area of the county. The Council may recommend a drought designation for a county that is different from the designation based on the U.S. Drought Monitor if the U.S. Drought Monitor does not accurately reflect localized conditions because of differences in scale or because the U.S. Drought Monitor does not consider one or more of the indicators of drought identified in this subsection. In recommending a drought designation that differs from the U.S. Drought Monitor designation, the Council shall consider stream flows, ground water levels, the amount of water stored in reservoirs, weather forecasts, the time of year, and other factors that are relevant to determining the location and severity of drought conditions.
(f1)	The Secretary shall accept the Council's recommendation to adopt a drought designation for a county that is different from the designation based on the U.S. Drought Monitor if the Secretary finds that the indicators of drought identified by the Council under subsection (f) of this section support the designation recommended by the Council.
(g)	The Council shall report on the implementation of this section to the Secretary, the Governor, and the Environmental Review Commission no later than 1 October of each year. The report shall include a review of drought advisories issued by the Council and any recommendations to improve coordination among local, State, and federal agencies; public water systems; and water users to improve the management and mitigation of the harmful effects of drought."
SECTION 17.  The State Water Infrastructure Commission, in consultation with the Department of Environment and Natural Resources, the School of Government at the University of North Carolina at Chapel Hill, the North Carolina Utilities Commission, the Public Staff of the North Carolina Utilities Commission, and the Local Government Commission, shall develop guidelines for water rate structures that are adequate to pay the cost of maintaining, repairing, and operating the system, including payment of principal and interest on indebtedness incurred for maintenance or improvement of the water system. The guidelines shall also consider the effect of water rates on water conservation and recommend rate structures that support water conservation. Copies of the guidelines shall be made available to the Department of Environment and Natural Resources, the North Carolina Utilities Commission, and to all local government water systems and large community water systems, as defined in G.S. 143‑350. The Commission shall report to the Environmental Review Commission on its progress in developing the guidelines no later than January 1, 2009.
SECTION 18.  The Department of Environment and Natural Resources shall develop recommendations, in consultation with the technical working group that consists of scientists from the University of North Carolina and industry experts, for water efficiency standards for water‑using fixtures in residential and commercial building and in‑ground irrigation systems. The Department shall also develop recommendations for efficient metering of water use by local government and large community water systems. The Department shall submit its recommendations to the Commissioner of Insurance, the Chair of the Building Code Council, and the Environmental Review Commission no later than January 1, 2009.
SECTION 19.(a)  Article 1 of Chapter 47C of the General Statutes is amended by adding a new section to read:
"§ 47C‑3‑122.  Irrigation of landscaping.
Notwithstanding any provision in any declaration of covenants, no requirement to irrigate landscaping shall be construed to:
(1)	Require the irrigation of landscaping, during any period in which the U.S. Drought Monitor, as defined in G.S. 143‑350, or the Secretary of Environment and Natural Resources has designated an area in which the association is located as an area of severe, extreme, or exceptional drought and the Governor, a State agency, or unit of local government has imposed water conservation measures applicable to the area unless:
a.	For covenants registered prior to October 1, 2008, the covenant specifically requires the irrigation of landscaping notwithstanding water conservation measures imposed by the Governor, a State agency, or unit of local government. The association may not fine or otherwise penalize an owner of land for violation of an irrigation requirement during a period of drought as designated under this subdivision, unless the covenant specifically authorizes fines or other penalties.
b.	For covenants registered on or after October 1, 2008, the covenant must specifically state that any requirement to irrigate landscaping is suspended to the extent the requirement would otherwise be prohibited during any period in which the Governor, a State agency, or unit of local government has imposed water conservation measures. The association may not fine or otherwise penalize an owner of land for violation of an irrigation requirement during a drought designated under this subdivision, unless the covenant authorizes the fines or other penalties. This authorization must be written on the first page of the covenant in print that is in boldface type, capital letters, and no smaller than the largest print used elsewhere in the declarations of covenants.
(2)	For purposes of this section, the term "landscaping" includes lawns, trees, shrubbery, and other ornamental or decorative plants."
SECTION 19.(b)  Article 3 of Chapter 47F of the General Statutes is amended by adding a new section to read:
"§ 47F‑3‑122.  Irrigation of landscaping.
Notwithstanding any provision in any declaration of covenants, no requirement to irrigate landscaping shall be construed to:
(1)	Require the irrigation of landscaping, during any period in which the U.S. Drought Monitor, as defined in G.S. 143‑350, or the Secretary of Environment and Natural Resources has designated an area in which the association is located as an area of severe, extreme, or exceptional drought and the Governor, a State agency, or unit of local government has imposed water conservation measures applicable to the area unless:
a.	For declarations of covenants registered prior to October 1, 2008, the covenant specifically requires the irrigation of landscaping notwithstanding water conservation measures imposed by the Governor, a State agency, or unit of local government. The association may not fine or otherwise penalize an owner of land for violation of an irrigation requirement during a period of a drought as designated under this subdivision, unless the covenant specifically authorizes fines or other penalties.
b.	For covenants registered on or after October 1, 2008, the covenant must specifically state that any requirement to irrigate landscaping is suspended to the extent the requirement would otherwise be prohibited during any period in which the Governor, a State agency, or unit of local government has imposed water conservation measures. The association may not fine or otherwise penalize an owner of land for violation of an irrigation requirement during a drought designated under this subdivision, unless the covenant authorizes the fines or other penalties. This authorization must be written on the first page of the covenant in print that is in boldface type, capital letters, and no smaller than the largest print used elsewhere in the declarations of covenants.
(2)	For purposes of this section, the term "landscaping" includes lawns, trees, shrubbery, and other ornamental or decorative plants."
SECTION 19.1.  For purposes of this section, "contamination of drinking water" means any exceedance of the drinking water standards adopted by the United States Environmental Protection Agency pursuant to the federal Safe Drinking Water Act or by the drinking water standards adopted by the Commission for Health Services pursuant to Article 10 of Chapter 130A of the General Statutes. It is the intent of the General Assembly that the Department of Environment and Natural Resources aggressively compel persons who are responsible for contamination of groundwater that results in contamination of drinking water to assess and remediate the groundwater contamination as required by law.
SECTION 20.  Sections 3, 4, 5, 6, 7, 8, 10, 12, 13, 14, 15, 16, 17, 18, and 20 of this act are effective when this act becomes law.  Water Shortage Response Plans revised to comply with G.S. 143‑355.2, as enacted by Section 5 of this act, shall be submitted no later than 1 July 2009.  Subsection (c) of Section 14 of this act expires when rules adopted pursuant to subsection (b) of Section 14 of this act become effective.  Sections 1, 2, and 19 of this act become effective 1 October 2008.  Section 11 of this act becomes effective 1 December 2008 and applies to offenses committed on or after that date.  Section 9 of this act becomes effective 1 July 2009.