General Assembly acts on building codes, building re-use, reclaimed water, and shale gas development

By Jim Joyce and Marissa Farrell, with Alan Peterson, K&L Gates LLP

During the 2014 Short Legislative Session, over 1,000 bills were filed in the North Carolina General Assembly.  Among those that made it through the legislative gauntlet, the following four bills (now Session Laws) should have the greatest impact on land use and land development.  These bills cover building codes, building re-use for economic development, reclaimed water use, and oil and gas development.

As initially filed, House Bill 120 / S.L. 2014-118, would have limited the North Carolina Building Code Council to revising the State Building Code and several associated codes to every six years.  However, this provision was lost along the bill’s contested and tortuous legislative path, and the ratified bill only makes one significant change — any local government must obtain approval from the North Carolina Building Code Council before adopting requirements that go over and above the State Building Code.

Another much-debated (and much-amended) bill, House Bill 201 / S.L. 2014-90, excludes from Energy Conservation Code requirements any commercial building (or addition of less than 150% of the prior structure in size) constructed before January 1, 2012. Additionally, it alters the calculation of built-upon area for impervious surface calculations for redevelopment, creates an exemption from the North Carolina Environmental Protection Act for the reoccupation of an existing building or facility, and permits economically disadvantaged (tier one or two) and rural (tier one, two, or three) areas to access Rural Economic Development Division building re-use funds.

A third bill, Senate Bill 163 / S.L. 2014-113, permits and promotes the use of reclaimed and recycled water for drinking and other uses.

Finally, what has been the most covered bill of the legislative session, Senate Bill 786 / S.L. 2014-4 (the “Energy Modernization Act”) makes a variety of changes to North Carolina’s oil and gas exploration and development statutes. Among the more significant changes, the Energy Modernization Act requires the Mining and Energy Commission (the “Commission”) to adopt a comprehensive set of regulations governing oil and gas development by January 1, 2015, after which the General Assembly will have a 60-day window to review and disapprove any of these regulations before the Department of Environment and Natural Resources (“DENR”) and the Commission are authorized to begin issuing permits for natural gas exploration and development in North Carolina.  Among its other changes, the bill splits the Commission into a Mining Commission and a separate Oil and Gas Commission; establishes procedures for protection and disclosure of certain trade secret information regarding hydraulic fracturing fluid; pre-empts any local ordinance that would have the effect of prohibiting oil and gas exploration, development, or production; and creates a severance tax structure on the production of oil and gas.

Laws affecting land use and land development are passed in each session of the General Assembly, and 2014 was no different.  2015 is a Long Session year for the General Assembly, so next year figures to provide at least as much new law as the 2014 Short Session.  Stay tuned.