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 September 1, 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 March 8, 2006.  The Commission shall 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 may be permitted 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 September 1, 2007, that employ anaerobic lagoons as the primary method of treatment to innovative animal waste management systems. Grants under the Program may also be used to:
(1)	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.
(2)	Establish centralized waste collection and treatment systems that serve innovative animal waste management systems.
SECTION 2.(c)  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 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.
SECTION 2.(d)  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 subject to all of the following limitations and requirements:
a.	For grants approved on or before June 30, 2012, State funding shall be limited to:
1.	Ninety percent (90%) of the average cost for each practice with the assisted person 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 grants approved on or after July 1, 2012, and on or before June 30, 2017, State funding shall be limited to:
1.	Eighty percent (80%) of the average cost for each practice with the assisted person 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 grants approved on or after July 1, 2017, State funding shall be limited to:
1.	Seventy‑five percent (75%) of the average cost for each practice with the assisted person 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, as modified by this section.
(2)	Establish criteria to prioritize the installation of innovative animal waste management systems that serve swine farms. Priority shall be given to systems that are affordable, easily maintained, produce marketable by‑products, reduce or eliminate the emission of ammonia and greenhouse gases, and are capable of being connected to a centralized waste collection and treatment.
(3)	Establish criteria for the selection of applicants who are eligible for participation in the Program. Priority shall be given to applicants whose participation in the program will result in the removal of animal waste management systems from floodplains; 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 or finance an innovative swine waste management system through private or cooperative credit at reasonable rates and terms.
(4)	Develop a process for soliciting and reviewing applications and for selecting persons 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 modifications of waste management systems and facilitate the timely transfer of technology among participating persons.
SECTION 2.(e)  The Director of the Division of Soil and Water Conservation may establish an advisory committee to assist the Division with the implementation of this act.  If the Director establishes an advisory committee, the Director may direct the advisory committee to evaluate:
(1)	Markets for by‑products derived from swine waste and make recommendations for development of the markets, including identification of regulatory obstacles.
(2)	Methods to encourage growers, integrators, and electric power suppliers to cooperate in the production and use of renewable energy or other marketable by‑products derived from swine waste, including an examination of tax incentives, carbon sequestration credits, and trading mechanisms.
SECTION 2.(f)  Report. – No later than November 1 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 November 1, 2007.
SECTION 3.  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 as provided in subsection (b) of Section 2 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.
SECTION 4.  Effective Dates. – Section 1 of this act becomes effective September 1, 2007.  All other sections of this act become effective July 1, 2007.