A BILL TO BE ENTITLED
AN ACT to encourage and promote the aquaculture and oyster cultivation industries.
The General Assembly of North Carolina enacts:

PART I. CREATE SHELLFISH PLANNING AND PROMOTION ENTITY WITHIN NC ECONOMIC DEVELOPMENT PARTNERSHIP
SECTION 1.1.  G.S. 143B‑431.01 reads as rewritten:
"§ 143B‑431.01.  Department of Commerce – contracting of functions.
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(d)	Limitations. – Prior to contracting with a North Carolina nonprofit corporation pursuant to this section and in order for the North Carolina nonprofit corporation to receive State funds, the following conditions shall be met:
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(2)	The nonprofit corporation adheres to the following governance provisions related to its governing board:
a.	The board shall be composed of 17 voting members as follows: eight members and the chair appointed by the Governor, four members appointed by the Speaker of the House of Representatives, and four members appointed by the President Pro Tempore of the Senate. The Governor, the Speaker of the House of Representatives, and the President Pro Tempore of the Senate shall each use best efforts to select members so as to reflect the diversity of the State's geography. The Speaker of the House and the President Pro Tempore shall each select their appointed members so that one‑fourth come from a development tier one area, one‑fourth come from a development tier two area, and no two members come from the same Collaboration for Prosperity Zone. The Governor shall select appointed members so that two‑ninths come from a development tier one area, two‑ninths come from a development tier two area, and no more than two members come from the same Collaboration for Prosperity Zone. The Governor shall use best efforts to ensure that each member appointed by the Governor has expertise in one or more of the following areas:
1.	Agribusiness, as recommended by the Commissioner of Agriculture.
1a.	Shellfish or other aquaculture.
2.	Financial services.
3.	Information technology.
4.	Biotechnology or life sciences.
5.	Energy.
6.	Manufacturing.
7.	Military or defense.
8.	Tourism, as recommended by the North Carolina Travel and Tourism Coalition.
9.	Tourism, as recommended by the North Carolina Travel Industry Association.
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(e)	Mandatory Contract Terms. – Any contract entered into under this section must include all of the following:
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(17)	A provision requiring the nonprofit corporation to create an entity within the corporation responsible for developing a strategic plan to further economic development of and otherwise providing continuing assistance to the shellfish and other aquaculture industries in the State.
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SECTION 1.2.  The Department of Commerce shall take all necessary steps to ensure the contract required under G.S. 143B‑431.01(e) is amended to comply with the requirements of Section 1.1 of this act.

PART II. REGULATORY REFORM FOR SHELLFISH CULTIVATION LEASES
SECTION 2.1.  G.S. 113‑201.1(5) reads as rewritten:
"(5)	"Water column" means the vertical extent of water, including the surface above a designated area of submerged bottom land."
SECTION 2.2.  G.S. 113‑202 reads as rewritten:
"§ 113‑202.  New and renewal leases for shellfish cultivation; termination of leases issued prior to January 1, 1966.
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(i)	After a lease application is approved by the Secretary, the applicant shall submit to the Secretary information sufficient to define the bounds of the area approved for leasing with markers in accordance with the rules of the Commission. The information shall conform to standards prescribed by the Secretary concerning accuracy and the amount of detail to be shown. When information is submitted, the boundaries are marked and all fees and rents due in advance are paid, the Secretary shall execute the lease on forms approved by the Attorney General. The Secretary is authorized, with the approval of the lessee, to amend an existing lease by reducing the area under lease or by combining contiguous leases without increasing the total area leased. The information required by this subsection may be based on coordinate information produced using a device equipped to receive global positioning system data.
(j)	Initial leases begin upon the issuance of the lease by the Secretary and expire at noon on the first day of July following the tenth anniversary of the granting of the lease. Renewal leases are issued for a period of 10 years from the time of expiration of the previous lease. At the time of making application for renewal of a lease, the applicant must pay a filing fee of fifty dollars ($50.00). The rental for initial leases is fifty cents ($0.50) per acre until the first day of July following the first anniversary of the lease, and five dollars ($5.00) per acre thereafter. Rental must be paid annually in advance prior to the first day of April each year. Upon initial granting of a lease, the pro rata amount for the portion of the year left until the first day of July must be paid in advance at the rate of five dollars ($5.00) per acre per year; then, on or before the first day of April next, the lessee must pay the rental for the next full year at the rate specified in this subsection.
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(r)	A lease under this section shall include the right to place devices or equipment related to the cultivation or harvesting of marine resources on or within 18 inches of the leased bottom. Devices or equipment not resting on the bottom or extending more than 18 inches above the bottom will require a water column lease under G.S. 113‑202.1."
SECTION 2.3.  G.S. 113‑202.1 reads as rewritten:
"§ 113‑202.1.  Water column leases for aquaculture.
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(c)	The Secretary shall not amend shellfish cultivation leases to authorize uses of the water column involving devices or equipment not resting on the bottom or that extend more than 18 inches above the bottom unless:
(1)	The leaseholder submits an application, accompanied by a nonrefundable application fee of fifty dollars ($50.00), which conforms to the standards for lease applications in G.S. 113‑202(d) and the duly adopted rules of the Commission;
(2)	The proposed amendment has been noticed consistent with G.S. 113‑202(f);
(3)	Public hearings have been conducted consistent with G.S. 113‑202(g);
(4)	The aspects of the proposals which require use and dedication of the water column have been documented and are recognized by the Secretary as commercially feasible forms of aquaculture which will enhance shellfish production on the leased area;
(5)	It is not feasible to undertake the aquaculture activity outside of coastal fishing waters; and
(6)	The authorized water column use has the least disruptive effect on other public trust uses of the waters of any available technology to produce the shellfish identified in the proposal.
(d)	Amendments of shellfish cultivation leases to authorize use of the water column are issued for a period of five years or the remainder of the term of the lease, whichever is shorter. The annual rental for a new or renewal water column amendment is fifty dollars ($50.00) an acre. If a water column amendment is issued for less than a 12‑month period, the rental shall be prorated based on the number of months remaining in the year. The annual rental for an amendment is payable at the beginning of the year. The rental is in addition to that required in G.S. 113‑202.
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SECTION 2.4.  Sections 2.1, 2.2, and 2.3 of this act are effective July 1, 2015, and apply to applications for shellfish lease applications received by the Department of Environment and Natural Resources on or after that date.

PART III. DEVELOP PROPOSAL TO END CORE SOUND SHELLFISH LEASING MORATORIUM
SECTION 3.  The Division of Marine Fisheries of the Department of Environment and Natural Resources shall, in consultation with representatives of the commercial fishing industry, representatives of the shellfish aquaculture industry, and relevant federal agencies, create a proposal to open to shellfish cultivation leasing certain areas of Core Sound that are currently subject to a moratorium on shellfish leasing. The Division will report regarding the plan no later than May 1, 2016, to the Joint Legislative Commission on Governmental Operations.

PART IV. AMEND SENATOR JEAN PRESTON MARINE SHELLFISH SANCTUARY LEGISLATION
SECTION 4.  Section 44 of S.L. 2014‑120 reads as rewritten:
"SENATOR JEAN PRESTON MARINE OYSTER SANCTUARY PROGRAM
"SECTION 44.(a)  It is the intent of the General Assembly to enhance shellfish habitat within the Albemarle and Pamlico Sounds and their tributaries to benefit fisheries, water quality, and the economy. This will be achieved through the establishment of a network of oyster sanctuaries, harvestable enhancement sites, and coordinated support for the development of shellfish aquaculture. The network of oyster sanctuaries is to be named in honor of Senator Jean Preston and will be called the "Senator Jean Preston Oyster Sanctuary Network."
"SECTION 44.(b)  The Division of Marine Fisheries of the Department of Environment and Natural Resources shall develop a plan to construct and manage additional oyster habitat. The new sanctuaries, along with selected existing oyster sanctuaries, will be included in the Senator Jean Preston Oyster Sanctuary Network. The plan will include the following components:
(1)	Location and delineation of oyster sanctuaries. – The plan should include locations for sanctuary network components that minimize the impact on commercial trawling. The location of sanctuaries shall take into account connectivity to existing oyster sanctuaries and proposed oyster enhancement sites. New oyster sanctuaries shall be designed to provide hook‑and‑line fishing while allowing the development of complex fish habitat and brood‑stock oysters that will enhance recruitment in the surrounding reefs. The plan should outline a 10‑year development project to accomplish the expansion.
	
(3)	Enhancement of oyster habitat restoration. – The General Assembly finds that the lack of a reliable State‑based supply of oyster seed and inadequate funding for cultch planting are limitations to the expansion of oyster harvesting and the restoration of wild oyster habitat in North Carolina. Therefore, the plan should include the following:
a.	Provisions and recommendations to facilitate the availability of oyster seed produced in North Carolina for wild oyster habitat restoration projects as well as oyster aquaculture and to reduce potential negative impacts from importation of nonnative oyster seed.
b.	Plans, where feasible, for public‑private partnerships for State‑based production of viable oyster seed through the creation of one or more production hatcheries and recommendations for increased support of the existing research hatchery at UNC‑Wilmington.
c.	Plans and cost estimates for an expansion of cultch planting in suitable areas of the State's coastal waters in order to expand areas suitable for development of wild oyster habitat.
(4)	Economic relief. – The plan should consider a waiver of application fees and yearly rental fees for new shellfish leases for an established period of time to further promote and support shellfish aquaculture in North Carolina. The new leasing fee waiver program should include measures to discourage speculation and target persons with a genuine interest in starting a shellfish aquaculture business, such as a requirement that the lease be nontransferable for a five‑year period.
(5)	Outreach. – The plan should include outreach and education that promotes, whenever possible, public‑private partnerships utilizing the Sea Grant College Program, local colleges, and other nongovernmental organizations to (i) encourage shellfish aquaculture and provide technical assistance to broaden cost‑effective technologies available to leaseholders; (ii) encourage best management practices to leaseholders; and (iii) inform fishermen and the public on the benefits provided by the Senator Jean Preston Oyster Sanctuary Network.
(6)	Monitoring. – The plan should include a monitoring plan designed to (i) determine the success of oyster reef construction and (ii) evaluate the cost benefit of the oyster sanctuary network and harvestable enhancement sites.
(7)	Funding. – The plan should include a request for appropriations sufficient for Division staff to expand oyster restoration and monitoring activities for 10 years. The plan should provide that, whenever possible, public‑private partnerships are employed to meet the construction, seeding, and outreach requirements of the plan.
	
(8)	Recommendations. – The plan shall include recommendations for statutory or regulatory changes needed to expedite the expansion of shellfish restoration and harvesting in order to improve water quality, restore ecological habitats, provide enhanced recreational and commercial fishing opportunities, and expand the coastal economy.
(9)	No Funding for sanctuaries in closed areas. – The plan shall provide that no funding or other resources shall be available in water bodies where a moratorium or other legal prohibition on shellfish leasing under Article 16 of Chapter 113 of the General Statutes is currently in effect. This subdivision does not apply to leasing moratoria imposed because the area is closed to shellfish harvesting or recommended for closure by the State Health Director due to pollution.
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PART V. SIMPLIFY OYSTER RESTORATION PROJECT PERMITTING
SECTION 5.(a)  The Division of Marine Fisheries and Division of Coastal Management of the Department of Environment and Natural Resources shall, in consultation with representatives of nongovernmental conservation organizations working on oyster restoration, create a new permitting process specifically designed for oyster restoration projects that would apply to oyster restoration projects instead of a major development permit under G.S. 113A‑118. The Department will submit its report, including recommended legislation, to the Environmental Review Commission no later than May 1, 2016.
SECTION 5.(b)  Until the effective date of the revised permanent rule that the Coastal Resources Commission is required to adopt pursuant to Section 5(d) of this act, the Commission and the Department of Environment and Natural Resources shall implement 15A NCAC 03O .0503(g) (Scientific or Educational Activity Permit) as provided in Section 5(c) of this act.
SECTION 5.(c)  Notwithstanding 15A NCAC 03O .0503(g) (Scientific or Educational Activity Permit), the Division of Marine Fisheries may issue a scientific or educational activity permit for approved activities conducted by or under the direction of a nongovernmental conservation organization in addition to a scientific or educational institution. For purposes of this section, a nongovernmental conservation organization is defined as an organization whose primary mission is the conservation of natural resources.
SECTION 5.(d)  The Environmental Management Commission shall adopt rules to amend 15A NCAC 03O .0503(g) and any other cross‑referenced rules consistent with Section 5(c) of this act. Notwithstanding G.S. 150B‑19(4), the rule adopted by the Commission pursuant to this subsection shall be substantively identical to the provisions of Section 5(c) of this act. Rules adopted pursuant to this subsection are not subject to Part 3 of Article 2A of Chapter 150B of the General Statutes. Rules adopted pursuant to this subsection shall become effective as provided in G.S. 150B‑21.3(b1) as though 10 or more written objections had been received as provided by G.S. 150B‑21.3(b2).
SECTION 5.(e)  This section is effective when it becomes law. Section 5(c) of this act expires on the date that rules adopted pursuant to Section 5(d) of this act become effective.

PART VI. SCFL EXEMPTION FOR EMPLOYEES OF LEASEHOLDER
SECTION 6.  G.S. 113‑169.2 reads as rewritten:
"§ 113‑169.2.  Shellfish license for North Carolina residents without a SCFL.
(a)	License or Endorsement Necessary to Take or Sell Shellfish Taken by Hand Methods. – It is unlawful for an individual to take shellfish from the public or private grounds of the State as part of a commercial fishing operation by hand methods without holding either a shellfish license or a shellfish endorsement of a SCFL. A North Carolina resident who seeks only to take shellfish by hand methods and sell such shellfish shall be eligible to obtain a shellfish license without holding a SCFL. The shellfish license authorizes the licensee to sell shellfish.
(a1)	License Necessary to Take or Sell Shellfish Taken by Mechanical Means. – With the exceptions set forth in subsection (i) of this section, an individual who takes shellfish from the public or private grounds of the State by mechanical means must obtain an SCFL under the provisions of G.S. 113‑168.2.
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(i)	Taking Shellfish Without a License for Personal Use or as Employee of Certain License Holders. – Shellfish may be taken without a license under the following circumstances:
(1)	For personal use in quantities established by rules of the Marine Fisheries Commission.
(2)	When the taking is from an area leased for the cultivation of shellfish under Article 16 of this Chapter by a person who is an employee of a leaseholder holding a valid SCFL issued under the provisions of G.S. 113‑168.2."

PART VII. EFFECTIVE DATE
SECTION 7.  Except as otherwise noted, the remainder of this act is effective when it becomes law.