GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2009

S                                                                                                                                                    3

SENATE BILL 831

Commerce Committee Substitute Adopted 5/11/09

House Committee Substitute Favorable 5/25/09

Short Title:        Extend Permits Regarding Land Development.	(Public)
Sponsors:
Referred to:

March 25, 2009

A BILL TO BE ENTITLED

AN ACT to extend certain permits and approvals affecting the physical development of real property located within the State of North carolina, thereby superseding all statutory and regulatory requirements to the contrary.

The General Assembly of North Carolina enacts:

SECTION 1.  This act shall be known and may be cited as the "Permit Extension Act of 2009."

SECTION 2.  The General Assembly makes the following findings:

(1)        There exists a state of economic emergency in the State of North Carolina and the nation, which has drastically affected various segments of the North Carolina economy, but none as severely as the State's banking, real estate, and construction sectors.

(2)        The real estate finance sector of the economy is in severe decline due to the creation, bundling, and widespread selling of leveraged securities, such as credit default swaps, and due to excessive defaults on sub-prime mortgages and the resultant foreclosures on a vast scale, thereby widening the mortgage finance crisis. The extreme tightening of lending standards for home buyers and other real estate borrowers has reduced access to the capital markets.

(3)        As a result of the crisis in the real estate finance sector of the economy, real estate developers and redevelopers, including homebuilders, and commercial, office, and industrial developers, have experienced an industry-wide decline, including reduced demand, cancelled orders, declining sales and rentals, price reductions, increased inventory, fewer buyers who qualify to purchase homes, layoffs, and scaled back growth plans.

(4)        The process of obtaining planning board and zoning board of adjustment approvals for subdivisions, site plans, and variances can be  difficult, time consuming, and expensive, both for private applicants and government bodies.

(5)        The process of obtaining the myriad other government approvals, such as wetlands permits, treatment works approvals, on-site wastewater disposal permits, stream encroachment permits, flood hazard area permits, highway access permits, and numerous waivers and variances, can be difficult and expensive; further, changes in the law can render these approvals, if expired or lapsed, difficult to renew or reobtain.

(6)        County and municipal governments, including local sewer and water authorities, obtain permits and approvals from State government agencies, particularly the Department of Environment and Natural Resources, which permits and approvals may expire or lapse due to the state of the economy and the inability of both the public sector and the private sector to proceed with projects authorized by the permit or approval.

(7)        County and municipal governments also obtain determinations of master plan consistency, conformance, or endorsement with State or regional plans, from State and regional government entities that may expire or lapse without implementation due to the state of the economy.

(8)        The current national recession has severely weakened the building industry, and many landowners and developers are seeing their life's work destroyed by the lack of credit and dearth of buyers and tenants due to the crisis in real estate financing and the building industry, uncertainty over the state of the economy, and increasing levels of unemployment in the construction industry.

(9)        The construction industry and related trades are sustaining severe economic losses, and the lapsing of government development approvals would exacerbate, if not addressed, those losses.

(10)      Financial institutions that lent money to property owners, builders, and developers are experiencing erosion of collateral and depreciation of their assets as permits and approvals expire, and the extension of these permits and approvals is necessary to maintain the value of the collateral and the solvency of financial institutions throughout the State.

(11)      Due to the current inability of builders and their purchasers to obtain financing under existing economic conditions, more and more once-approved permits are expiring or lapsing, and, as these approvals lapse, lenders must reappraise and thereafter substantially lower real estate valuations established in conjunction with approved projects, thereby requiring the reclassification of numerous loans, which, in turn, affects the stability of the banking system and reduces the funds available for future lending, thus creating more severe restrictions on credit and leading to a vicious cycle of default.

(12)      As a result of the continued downturn of the economy and the continued expiration of approvals that were granted by State and local governments, it is possible that thousands of government actions will be undone by the passage of time.

(13)      Obtaining an extension of an approval pursuant to existing statutory or regulatory provisions can be both costly in terms of time and financial resources and insufficient to cope with the extent of the present financial conditions; moreover, the costs imposed fall on the public as well as the private sector.

(14)      Obtaining extensions of approvals granted by State government is frequently impossible, always difficult, and always expensive, and no policy reason is served by the expiration of these permits, which were approved only after thorough review of the application.

(15)      It is the purpose of this act to prevent the wholesale abandonment of already approved projects and activities due to the present unfavorable economic conditions by tolling the term of these approvals for a finite period of time as the economy improves, thereby preventing a waste of public and private resources.

SECTION 3.  Definitions. - As used in this act, the following definitions apply:

(1)        Approval. - Except as otherwise provided in Section 4 of this act, any detailed statement by a State agency under G.S. 113A-4; any detailed statement submitted by a special purpose unit of government or a private developer of a major development project under G.S. 113A-8; any finding of no significant impact prepared by a State agency under Article 1 of Chapter 113A of the General Statutes; any approval of an erosion and sedimentation control plan granted by a local government or by the North Carolina Sedimentation Control Commission under Article 4 of Chapter 113A of the General Statutes; any permit for major development or minor development, as defined in G.S. 113A-118, or any other permit issued under the Coastal Area Management Act (CAMA), Part 4 of Article 7 of Chapter 113A of the General Statutes; any water or wastewater permit issued under Article 10 or Article 11 of Chapter 130A of the General Statutes; any building permit issued under Article 9 of Chapter 143 of the General Statutes; any discharge, nondischarge, or extension permit issued under Part 1 of Article 21 of Chapter 143 of the General Statutes; any stream origination certifications issued under Article 21 of Chapter 143 of the General Statutes; any water quality certification under Article 21 of Chapter 143 of the General Statutes; any air quality permit issued by the Environmental Management Commission under Article 21B of the General Statutes; any approval by a county of sketch plans, preliminary plats, plats regarding a subdivision of land, a site specific development plan or a phased development plan, a development permit, or a building permit under Article 18 of Chapter 153A of the General Statutes; any approval by a city of sketch plans, preliminary plats, or plats regarding a subdivision of land, a site specific development plan or a phased development plan, a development agreement, or a building permit under Article 19 of Chapter 160A of the General Statutes; any certificate of appropriateness issued by a preservation commission of a city under Part 3C of Article 19 of Chapter 160A of the General Statutes; when the approval under this subdivision pertains to the development of land or to the provision of water or wastewater services by a government entity and whether the approval under this subdivision is in the form of a permit, approval, license, certification, permission, determination, interpretation, exemption, variance, exception, waiver, letter of interpretation, no further action letter, agreement, or any other executive or administrative decision that allows the development or provision of services to proceed.

(2)        Area of environmental concern. - An area designated under G.S. 113A-113 by the Coastal Resources Commission.

(3)        Development. - The division of a parcel of land into two or more parcels, the construction, reconstruction, conversion, structural alteration, relocation, or enlargement of any building or other structure or facility, or of any grading, soil removal or relocation, excavation or landfill, or any use or change in the use of any building or other structure or land or extension of the use of land.

(4)        Extension period. - The period beginning January 1, 2007, and continuing through December 31, 2010.

(5)        Government. - Any municipal, county, regional, or State government, or any agency, department, commission, or other instrumentality thereof.

SECTION 4.(a)  For any government approval in existence during the extension period, the running of the period of approval is automatically suspended for the extension period, except as otherwise provided hereunder; however, the tolling provided for herein shall not extend the government approval more than six months beyond the conclusion of the extension period. Nothing in this act shall shorten the duration that any approval would have had in the absence of this act, nor shall this act prohibit the granting of such additional extensions as are provided by law when the tolling granted by this act expires.

SECTION 4.(b)  Nothing in this act shall be deemed to extend or purport to extend:

(1)        Any permit or approval under Section 3 of this act when the permit or approval is for a development project that has been substantially altered since the permit or approval was granted, as determined by the government entity that granted the permit or approval.

(2)        Any permit or approval issued by the government of the United States or any agency or instrumentality thereof, or to any permit or approval by whatever authority issued of which the duration of effect or the date or terms of its expiration are specified or determined by or pursuant to law or regulation of the federal government or any of its agencies or instrumentalities.

(3)        Any Department of Transportation permit other than a right-of-way permit.

SECTION 4.(c)  This act shall not affect any administrative consent order issued by the Department of Environment and Natural Resources in effect or issued during the extension period.

SECTION 4.(d)  Nothing in this act shall affect the ability of the Secretary of Environment and Natural Resources to revoke or modify a specific permit or approval, or extension thereof pursuant to this act, when that specific permit or approval contains language authorizing the modification or revocation of the permit or approval by the Department of Environment and Natural Resources. Nothing in this act shall affect the ability of the Environmental Management Commission to revoke or modify a specific permit or approval, or extension thereof pursuant to this act, when that specific permit or approval contains language authorizing the modification or revocation of the permit or approval by the Environmental Management Commission.

SECTION 4.(e)  In the event that any approval tolled pursuant to this act is based upon the connection to a sanitary sewer system, the approval's extension shall be contingent upon the availability of sufficient capacity, on the part of the treatment facility, to accommodate the development whose approval has been extended. If sufficient capacity is not available, those permit holders whose approvals have been extended shall have priority with regard to the further allocation of gallonage over those approval holders who have not received approval of a hookup prior to the effective date of this act. Priority regarding the distribution of further gallonage to any permit holder who has received the extension of an approval pursuant to this act shall be allocated in order of the granting of the original approval of the connection.

SECTION 4.(f)  Nothing in this act shall be construed or implemented in such a way as to modify any requirement of law that is necessary to retain federal delegation to, or assumption by, the State of the authority to implement a federal law or program.

SECTION 5.  Each State agency shall, within 30 days after the effective date of this act, place a notice in the North Carolina Register tolling all approvals in conformance with this act.

SECTION 6.  The provisions of this act shall be liberally construed to effectuate the purposes of this act.

SECTION 7.  This act is effective when it becomes law.