Chamber’s Legislative Agenda addresses dredging and beach nourishment concerns

Part 4 or a 4 part series

Several of the Chamber’s legislative priorities relate to waterways and beach issues.  Here is another installment in the series to highlight elements of the Chamber’s 2016 Legislative Agenda:

Support for North Carolina’s Ports: 

The North Carolina State Ports Authority is a catalyst for economic growth and development throughout the entire state.  The deepwater seaports in Morehead City and Wilmington provide jobs, payrolls and tax revenues.

The Carteret County Chamber supports adequate funding of the state ports as an investment that will ensure that our ports are able to compete in the global economy and attract and retain business for North Carolina.

The Chamber is an advocate for business growth and expansion at the Port of Morehead City.  The Chamber supports projects that are compatible with our tourism and water-based industries, are environmentally friendly and present no risk to human health and safety.




Create a State Dedicated Funding Source for Morehead City Harbor Dredging:

Shoaling of sand from Shackleford Banks into the federal channel has increased significantly the past few years, and federal funds to aggressively dredge to remedy the shoaling problem have simply not been forthcoming.

Although the President’s budget for federal FY 2016 included $8,796,000 for Morehead City Harbor Dredging, this total fell well short of covering the actual cost to dredge/dispose 1,000,000 cubic yards from the Outer Harbor.  (This also does not include maintenance costs for the Inner Harbor.)

Furthermore, the President’s proposed FY 2017 budget allocates $5,950,000 to Morehead City Harbor, not nearly enough in what is supposed to be a “beach nourishment” year for Fort Macon State Park and Atlantic Beach.

The Carteret County Chamber appreciates efforts by U.S. Representative Walter Jones to secure an additional $5 million in dredging funds for the Morehead City Harbor, as was announced February 10, 2016.

Additionally, the Chamber supports the proposal issued February 4, 2016, by the Army Corps of Engineers to relocate the channel farther away from Shackleford Banks in Beaufort Inlet as a potential solution to the most serious shoaling problem.

The Chamber supports active conversations at the state level, including participation by the North Carolina State Ports Authority, to include state-port funding for future dredging.  Carteret County’s Shore Protection Office/Beach Commission has also expressed interest in contributing, if the dredged material is to be placed on the beach, which is also a legal requirement of the commission’s source of revenue (occupancy tax).

With the state-port-local participation in funding, this could provide a greater capacity to maximize dredging of the Morehead City Harbor, and the Chamber is in full support of these efforts for both economic and safety concerns.

To this effect, the Chamber urges the state to start endowing the new Deep Draft Navigation Channel Dredging & Maintenance Fund created in 2015 to fund these types of efforts as well as other approaches that minimize shoaling and combat erosion along open beaches and inlet shorelines; including jetties.

The General Assembly should act to enable local governments to partner with the state (both administratively and financially) to ensure sandy resources are dredged and disposed in a manner that sustains reliable navigation, replicates the sand budget for adjacent shorelines and provides additional opportunities for beneficial use.

Create a Dedicated Funding Source for Beach Nourishment:

North Carolina beaches are important economic drivers for the coastal region, the entire state and the United States.  Similar to the “Shallow Draft Navigation Channel and Lake Dredging Fund” established by the General Assembly in recent years (with dedicated funding sources), a new fund earmarked specifically for state contributions toward beach nourishment projects is needed to assist coastal communities.

The State’s 2011 Beach and Inlet Management Plan estimated a total annual funding need of $19.1 million for beach nourishment projects in North Carolina.  In order to generate the necessary funds, the Carteret County Chamber supports the creation of a new “Storm Protection and Beach Preservation Fund” by the State of North Carolina, with dedicated revenues derived from a portion of the existing state sales tax (4.75 percent) paid on transactions in North Carolina Department of Revenue Business Category 708:  Hotels, Motels, Cottage Rentals, Etc., applicable to the eight oceanfront counties ONLY.

The total amount of state sales tax collected from Business Category 708 in Brunswick, Carteret, Currituck, Dare, Hyde, New Hanover, Onslow and Pender counties during FY 2014-15 was $48.44 million.

The Chamber supports a plan whereby the proceeds of 2 percent of the sales tax collected (some $20 million) would be statutorily earmarked for the new “Storm Protection and Beach Preservation Fund” for distribution by the appropriate state agency to coastal communities engaging in beach nourishment projects.  (The remaining 2.75 percent of the sales tax would continue to be retained by the state for general purposes.)

The proposed “Storm Protection and Beach Preservation Fund” follows the same template successfully used by the “Shallow Draft Navigation Channel and Lake Dredging Fund” by earmarking a small portion of the existing state revenues generated by the users of the resource.

Shallow-Draft Waterway Dredging Funding:

The Carteret County Chamber recommends that the General Assembly re-examine the formula for generating revenue into the Shallow Draft Navigation Channel and Lake Dredging Fund and for distributing these funds.  Revenues come from boat registration fees and boat fuel taxes.  Distributions are presently tied to the state’s economic development tier system.  (As previously reported, the Chamber supports legislation toeliminate the economic development tier system.)

However, this fund is the state cost-share source for shallow draft waterways in Carteret County, such as Bulkhead Channel, East Channel, Morgan Creek, Taylors Creek, Atlantic Beach channels, Bogue Inlet, Atlantic Harbor Channel and others.  The fund been already been utilized by some of the local governments.

Carteret County placed a 0.25 percent sales tax referendum on the November 2014 ballot to provide the local cost-share source for waterway projects.  (This would have raised the overall sales tax rate from 6.75 percent to 7.0 percent and generate approximately $2.5 million annually to leverage with the Shallow Draft Navigation Channel and Lake Dredging Fund.)  Although the referendum failed, the Chamber would be supportive of Carteret County, if a waterway sales tax referendum is pursued again.

Flood Insurance Rate Maps (FIRMs)

New Flood Insurance Rate Maps (FIRMs) for Carteret County will be released publicly in June or July 2016, triggering a statutory 90-day appeal period.  The preliminary maps become effective usually within 18-24 months of their official release.

The status of new buildings/properties that will be conveyed into the floodplain with the new maps, or removed from the floodplain altogether, is a major source of uncertainty and is coupled with recent changes to the National Flood Insurance program, namely BW-12 (Biggert-Waters Flood Insurance Reform Act of 2012) and HFIAA (Homeowner Flood Insurance Affordability Act of 2014).

Under the guise of this legislation, surcharges are going up, deductibles are going up and grandfathering of polices will be sunsetted – i.e., annual rates will be gradually increased until the actual rate is achieved.  This represents a potential and significant economic impediment to residents, property owners and businesses alike.  The Chamber will monitor developments associated with the FIRMs and interface with the General Assembly as needed.