A BILL TO BE ENTITLED
AN ACT to codify and make permanent the swine farm animal waste management system performance standards that the general assembly enacted in 1998 and to assist farmers to voluntarily convert to innovative animal waste management systems.
The General Assembly of North Carolina enacts:
SECTION 1.(a)  Part 1A of Article 21 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143‑215.10I.  Performance standards for animal waste management systems that serve swine farms; lagoon and sprayfield systems prohibited.
(a)	As used in this section:
(1)	'Anaerobic lagoon' means a lagoon that treats waste by converting it into carbon dioxide, methane, ammonia, and other gaseous compounds; organic acids; and cell tissue through an anaerobic process.
(2)	'Anaerobic process' means a biological treatment process that occurs in the absence of dissolved oxygen.
(3)	'Lagoon' has the same meaning as in G.S. 106‑802.
(4)	'Swine farm' has the same meaning as in G.S. 106‑802.
(b)	The Commission shall not issue or modify a permit to authorize the construction, operation, or expansion of an animal waste management system that serves a swine farm that employs an anaerobic lagoon as the primary method of treatment and land application of waste by means of a sprayfield as the primary method of waste disposal. The Commission may issue a permit for the construction, operation, or expansion of an animal waste management system that serves a swine farm under this Article only if the Commission determines that the animal waste management system will meet or exceed all of the following performance standards:
(1)	Eliminate the discharge of animal waste to surface water and groundwater through direct discharge, seepage, or runoff.
(2)	Substantially eliminate atmospheric emission of ammonia.
(3)	Substantially eliminate the emission of odor that is detectable beyond the boundaries of the parcel or tract of land on which the swine farm is located.
(4)	Substantially eliminate the release of disease‑transmitting vectors and airborne pathogens.
(5)	Substantially eliminate nutrient and heavy metal contamination of soil and groundwater."
SECTION 1.(b)  Continued Operation. – An animal waste management system that serves a swine farm for which a permit was issued prior to 1 September 2007 and that does not meet the requirements of G.S. 143‑215.10I, as enacted by subsection (a) of this section, may continue to operate under, and shall operate in compliance with, that permit, including any renewal of the permit.
SECTION 1.(c)  Rule Making. – The Environmental Management Commission shall adopt rules to implement G.S. 143‑215.10I, as enacted by subsection (a) of this section.  Until rules to implement G.S. 143‑215.10I become effective, the Commission, in implementing G.S. 143‑215.10I, shall refer to the report entitled, "Development of Environmentally Superior Technologies – Phase 3 Report:  for Technology Determinations per Agreements Between the Attorney General of North Carolina and Smithfield Foods, Premium Standard Farms, and Frontline Farmers" dated 8 March 2006.  The Commission may consult with the Animal and Poultry Waste Management Center of North Carolina State University regarding the application and modification of technical standards required to implement G.S. 143‑215.10I.
SECTION 2.(a)  Definitions. – The definitions set out in G.S. 143‑215.10I(a), as enacted by Section 1 of this act, apply to this section.  As used in this section, an "innovative animal waste management system" means an animal waste management system that serves a swine farm that is permittable under G.S. 143‑215.10I(b), as enacted by Section 1 of this act.
SECTION 2.(b)  Lagoon Conversion Program. – The Lagoon Conversion Program is hereby established.  The Program shall provide grants to assist in the conversion of animal waste management systems that serve swine farms in operation on or before 1 September 2007 that employ anaerobic lagoons as the primary method of treatment to innovative animal waste management systems. Grants under the Program may be used to assist in the closure of sprayfield and lagoon systems that are replaced by innovative animal waste management systems if the closure is performed in accordance with applicable federal and State laws, regulations, and rules. 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 established pursuant to G.S. 143‑215.74.  The Division shall administer the Program as provided in this section and Part 9 of Article 21 of Chapter 143 of the General Statutes as modified by this section.
SECTION 2.(c)  Program Functions. – Under the Lagoon Conversion Program, 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 shall:
(1)	Within available funds, provide grants for conversion to innovative animal waste management systems subject to all of the following limitations and requirements:
a.	For cost share contracts approved on or before 30 June 2012 State funding shall be limited to:
1.	Ninety percent (90%) of the average cost for each practice with the assisted farmer providing ten percent (10%) of the cost, which may include in‑kind support of the practice.
2.	A maximum of five hundred thousand dollars ($500,000) per year to each applicant.
b.	For cost share contracts approved on or after 1 July 2012 and on or before 30 June 2017 State funding shall be limited to:
1.	Eighty percent (80%) of the average cost for each practice with the assisted farmer providing twenty percent (20%) of the cost, which may include in‑kind support of the practice.
2.	A maximum of four hundred fifty thousand dollars ($450,000) per year to each applicant.
c.	For cost share contracts approved on or after 1 July 2017 State funding shall be limited to:
1.	Seventy‑five percent (75%) of the average cost for each practice with the assisted farmer providing twenty‑five percent (25%) of the cost, which may include in‑kind support of the practice.
2.	A maximum of four hundred thousand dollars ($400,000) per year to each applicant.
d.	All other limitations and requirements set out in Part 9 of Article 21 of Chapter 143 of the General Statutes.
(2)	Establish criteria to prioritize installation of innovative swine waste management systems, including the cost of purchasing and maintaining the systems, potential markets for by‑products generated from the systems, and appropriateness for centralization of waste collection and treatment.
(3)	Establish priorities to guide the selection of swine farms that are eligible for participation in the Program, including the swine farm's geographic location and the grower's compliance history.
(4)	Develop a process for soliciting and reviewing applications from growers and for selecting growers 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 growers to assist with modifications of waste management systems and facilitate the timely transfer of technology among participating growers.
SECTION 2.(d)  Report. – No later than 1 November of each year, the Division of Soil and Water Conservation in the Department of Environment and Natural Resources shall report to the Environmental Review Commission on the implementation of the Lagoon Conversion Program.  The first report required by this subsection shall be submitted no later than 1 November 2007.
SECTION 3.(a)  Account. – There is hereby established the Swine Farm Waste Management System Conversion Account within the Division of Soil and Water Conservation of the Department of Environment and Natural Resources.  Funds in the Account shall be used only for installation of innovative swine waste management systems on swine farms in operation on or before 1 September 2007, as provided in 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.
SECTION 3.(b)  Appropriation. – There is appropriated from the General Fund to the Swine Farm Waste Management System Conversion Account within the Division of Soil and Water Conservation of the Department of Environment and Natural Resources the sum of ten million dollars ($10,000,000) for the 2007‑2008 fiscal year and the sum of ten million dollars ($10,000,000) for the 2008‑2009 fiscal year.  It is the intent of the General Assembly that this appropriation be a recurring appropriation through the 2011‑2012 fiscal year.
SECTION 3.(c)  Limit on Operating and Administrative Expenses. – No more than five percent (5%) of the annual balance of the Fund on 1 July or a total sum of two hundred fifty thousand dollars ($250,000), whichever is greater, may be used each fiscal year for administrative and operating expenses of the Task Force and the Program.
SECTION 4.  Effective Dates. – Section 1 of this act becomes effective 1 September 2007.  All other sections of this act become effective 1 July 2007.