Cape Fear IBT Moratorium/EMC IBT Reductions.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 1136

Short Title: Cape Fear IBT Moratorium/EMC IBT Reductions. (Public)
Sponsors: Representative Davis.
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Agriculture and Environment, if favorable, Appropriations, if favorable, Rules,
Calendar, and Operations of the House
May 4, 2026
*H1136-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO IMPOSE A LIMITED MORATORIUM ON INITIATING CERTAIN SURFACE 2
WATER TRANSFERS FROM THE CAPE FEAR RIVER BASIN, TO DIRECT TH E 3
NORTH CAROLINA COLLA BORATORY TO STUDY TH E CAPE FEAR RIVER 4
BASIN, AND TO MAKE C ERTAIN REVISIONS TO THE ENVIRONMENTAL 5
MANAGEMENT COMMISSIO N'S AUTHORITY TO REQ UIRE REDUCTIONS TO 6
EXISTING SURFACE WAT ER TRANSFERS FROM AN Y RIVER BASIN IN THE 7
STATE. 8
The General Assembly of North Carolina enacts: 9
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PART I. CAPE FEAR WATER RESOURCES 11
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LEGISLATIVE PURPOSE AND FINDINGS 13
SECTION 1.(a) Title. ‒ This Part shall be known as the Cape Fear Water Resources 14
Modernization and Regionalization Act of 2026. 15
SECTION 1.(b) Legislative Findings. – The General Assembly finds that the State's 16
laws regulating surface water transfers, or iginally enacted more than 30 years ago, should be 17
comprehensively reviewed and evaluated for updates in light of the State's and, in particular, the 18
Cape Fear River Basin's tremendous economic and population growth and the impacts of drought 19
and natural d isasters on riverine and water reservoir systems over that period. The General 20
Assembly finds that the approval of new or modified transfers that substantially diminish the 21
overall hydrologic flow, current and future water storage capacity, and water quality of the Cape 22
Fear River Basin should be temporarily paused while this review and evaluation is ongoing. 23
SECTION 1.(c) Legislative Purpose. – The purpose of this Part is to ensure the 24
sustainable use and protection of the Cape Fear River Basin's water re sources by temporarily 25
pausing new surface water transfers from the upper reaches of the Cape Fear River Basin while 26
a comprehensive review is conducted. 27
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MORATORIUM ON NEW OR INCREASED INTERBASIN TRANSFERS FROM THE 29
UPPER REACHES OF THE CAPE FEAR RIVER BASIN 30
SECTION 2.(a) Definitions. – The definitions set forth in G.S. 143-215.22G apply 31
to this section. 32
SECTION 2.(b) Moratorium on New or Increased Interbasin Transfers. – There is 33
hereby established a moratorium on the initiation of new surface water tran sfers or increases in 34
General Assembly Of North Carolina Session 2025
Page 2 House Bill 1136-First Edition
existing surface water transfers from any source in the Cape Fear River Basin located upstream 1
of Cape Fear Lock and Dam #2 in Bladen County. The Environmental Management Commission 2
shall not issue a certificate authorizing a new surface water transfer or an increase in an existing 3
surface water transfer from any source in the Cape Fear River Basin located upstream of Cape 4
Fear Lock and Dam #2. 5
SECTION 2.(c) Exceptions. – The moratorium established by subsection (b) of this 6
section shall not prohibit the following surface water transfers from the Cape Fear River Basin: 7
(1) Any existing transfers authorized by the Environmental Management 8
Commission or else lawfully initiated prior to the effective date of this act. No 9
person who maintains an existing transfer under this subdivision shall increase 10
the amount of surface water transferred to another river basin. 11
(2) Any emergency transfer of surface water authorized by the Secretary of 12
Environmental Quality under G.S. 143-215.22L(q) or G.S. 143-355.3. 13
SECTION 2.(d) Moratorium Duration. – This section is effective when it becomes 14
law and expires June 1, 2030. 15
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CAPE FEAR RIVER BASIN STUDY 17
SECTION 3.(a) Study. – The North Carolina Collaboratory at the University of 18
North Carolina at Chapel Hill (Collaboratory) shall study the Cape Fear River Basin to determine 19
its reliable yield of water supply and make recommendations for any legislative changes 20
necessary to ensure the sustainability of existing and future in -basin water uses. The 21
Collaboratory shall include all of the following in its study: 22
(1) A catalog of the existing water uses and users of the Cape Fear River Basin. 23
(2) An assessment of the reliable yield of water supply of the Cape Fear River 24
Basin, including an assessment for each of its subbasins and major tributaries. 25
This assessment shall include a scientific evaluation of the quantity of water 26
that can be dependably withdrawn or transferred under current and projected 27
future hydrologic conditions without causing unacceptable enviro nmental or 28
economic impacts to in-basin uses. 29
(3) An analysis of the adequacy of the environmental impact study requirements 30
for interbasin transfers from sources in the Cape Fear River Basin located 31
upstream of Cape Fear Lock and Dam #2. 32
(4) An assessment of the economic equity of interbasin transfers for affected 33
communities within the Cape Fear River Basin. 34
(5) An examination of any anticipated water quality and ecological impacts from 35
approved and proposed interbasin transfers from the Cape Fear River Basin. 36
SECTION 3.(b) Consultation. – In collecting and analyzing data relevant to 37
determining reliable yield of water supply from the Cape Fear River Basin, the Collaboratory 38
shall consult with the United States Army Corps of Engineers, the Department of Environmental 39
Quality, the Environmental Management Commission, the State Water Infrastructure Authority, 40
the North Carolina League of Municipalities, and other relevant public and private entities 41
responsible for impoundments and water supply infrastructure in the Cape Fear River Basin. 42
SECTION 3.(c) Report. – The Collaboratory shall report its findings, together with 43
any proposed legislation, to the General Assembly no later than July 1, 2029. 44
SECTION 3.(d) Appropriation. – There is appropriated from th e General Fund to 45
the Board of Governors of The University of North Carolina the sum of one million five hundred 46
thousand dollars ($1,500,000) in nonrecurring funds for the 2026-2027 fiscal year to be allocated 47
to the North Carolina Collaboratory to fund the study of the Cape Fear River Basin described in 48
subsection (a) of this section. These funds shall not revert to the General Fund at the end of the 49
2026-2027 fiscal year but shall remain available until the end of the 2028-2029 fiscal year. 50
SECTION 3.(e) Effective Date. – This section becomes effective July 1, 2026. 51
General Assembly Of North Carolina Session 2025
House Bill 1136-First Edition Page 3
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PART II. EMC AUTHORI TY TO REQUIRE REDUCT IONS TO EXISTING 2
INTERBASIN TRANSFERS 3
SECTION 4. G.S. 143-215.13(d) reads as rewritten: 4
"(d) The Commission may conduct a public hearing pursuant to the provisions of this 5
subsection in any area of the State, whether or not a capacity use area has been declared, when it 6
has reason to believe that the withdrawal of water from or the discharge of water pollutants to 7
the waters in such area is having an u nreasonably adverse effect upon such waters. If the 8
Commission determines that withdrawals of water from or discharge of water pollutants to the 9
waters within such area has resulted or probably will result in a generalized condition of water 10
depletion or water pollution within the area to the extent that the availability or fitness for use of 11
such water has been impaired for existing or proposed uses and that injury to the public health, 12
safety or welfare will result if increased or additional withdrawals o r discharges occur, the 13
Commission may issue a rule: 14
(1) Prohibiting any person withdrawing waters in excess of 100,000 gallons per 15
day from increasing the amount of the withdrawal above such limit as may be 16
established in the rule. 17
(2) Prohibiting any person from constructing, installing or operating any new well 18
or withdrawal facilities having a capacity in excess of a rate established in the 19
rule; but such prohibition shall not extend to any new well or facility having 20
a capacity of less than 10,000 gallons per day. 21
(3) Prohibiting any person discharging water pollutants to the waters from 22
increasing the rate of discharge in excess of the rate established in the rule. 23
(4) Prohibiting any person from constructing, installing or operating any facility 24
that will or may result in the discharge of water pollutants to the waters in 25
excess of the rate established in the rule. 26
(5) Prohibiting any agency or political subdivision of the State from issuing any 27
permit or similar document for the construction, installa tion, or operation of 28
any new or existing facilities for withdrawing water from or discharging water 29
pollutants to the waters in such area in excess of the rates established in the 30
rule. 31
(6) Requiring any person who maintains an existing surface water tran sfer from 32
one river basin to another to reduce the amount of transfer to such rates 33
established in the rule. 34
The determination of the Commission shall be based upon the record of the public hearing 35
and other information considered by the Commission in the rulemaking proceeding. The rule 36
shall describe the geographical area of the State affected thereby with particularity and shall 37
provide that the prohibitions set forth therein shall continue pending a determination by the 38
Commission that the generalized condition of water depletion or water pollution within the area 39
has ceased. 40
…." 41
SECTION 5.(a) G.S. 143-215.22L(n) reads as rewritten: 42
"(n) Final Determination: Certificate Conditions and Limitations. – The Commission may 43
grant the certificate in whole or in part, or deny the certificate. The Commission may impose any 44
conditions or limitations on a certificate that the Commission finds necessary to achieve the 45
purposes of this Part including a limit on the period for which the certificate is valid. The 46
conditions and limitations shall include any mitigation measures proposed by the applicant to 47
minimize any detrimental effects within the source and receiving river basins. In addition, the 48
certificate shall require all of the following conditions and limitations: 49
(1) A water conservation plan that specifies the water conservation measures that 50
will be implemented by the applicant in the receiving river basin to ensure the 51
General Assembly Of North Carolina Session 2025
Page 4 House Bill 1136-First Edition
efficient use of the transferred water. Except in circumstances of technical or 1
economic in feasibility or adverse environmental impact, the water 2
conservation plan shall provide for the mandatory implementation of water 3
conservation measures by the applicant that equal or exceed the most stringent 4
water conservation plan implemented by a public water system that withdraws 5
water from the source river basin. 6
(2) A drought management plan that specifies how the transfer shall be managed 7
to protect the source river basin during drought conditions or other 8
emergencies that occur within the source river basin. Except in circumstances 9
of technical or economic infeasibility or adverse environmental impact, this 10
drought management plan shall include mandatory reductions in the permitted 11
amount of the transfer based on the severity and duration of a drought 12
occurring within the source river basin and shall provide for the mandatory 13
implementation of a drought management plan by the applicant that equals or 14
exceeds the most stringent water conservation plan implemented by a public 15
water system that withdraws water from the source river basin. 16
(3) The maximum amount of water that may be transferred, calculated as a daily 17
average of a calendar month, and methods or devices required to be installed 18
and operated that measure the amount of water that is transferred. 19
(4) A provision that the Commission may amend a certificate to reduce the 20
maximum amount of water authorized to be transferred whenever it appears 21
that an alternative source of water is available to the certificate holder from 22
within the receiving river basin, including, but not limited to, the purchase of 23
water from another water supplier within the receiving basin or to the transfer 24
of water from another sub-basin within the receiving major river basin. 25
(5) A provision that the Commission shall amend th e certificate to reduce the 26
maximum amount of water authorized to be transferred if the Commission 27
finds that the applicant's current projected water needs are significantly less 28
than the applicant's projected water needs at the time the certificate was 29
granted. 30
(5a) A provision that the Commission shall amend the certificate to reduce the 31
maximum amount of water authorized to be transferred if the Commission 32
finds that a reduction is necessary to avoid detrimental effects on the source 33
river basin, includi ng present and future effects on public, industrial, 34
economic, recreational, and agricultural water supply needs, wastewater 35
assimilation, water quality, fish and wildlife habitat, electric power 36
generation, navigation, and recreation. 37
(6) A requirement th at the certificate holder report the quantity of water 38
transferred during each calendar quarter. The report required by this 39
subdivision shall be submitted to the Commission no later than 30 days after 40
the end of the quarter. 41
(7) Except as provided in this subdivision, a provision that the applicant will not 42
resell the water that would be transferred pursuant to the certificate to another 43
public water system. This limitation shall not apply in the case of a proposed 44
resale or transfer among public water systems within the receiving river basin 45
as part of an interlocal agreement or other regional water supply arrangement, 46
provided that each participant in the interlocal agreement or regional water 47
supply arrangement is a co-applicant for the certificate and will be subject to 48
all the terms, conditions, and limitations made applicable to any lead or 49
primary applicant." 50
General Assembly Of North Carolina Session 2025
House Bill 1136-First Edition Page 5
SECTION 5.(b) No later than 60 days after the effective date of this act, any person 1
issued a certificate for an interbasin transfer by the Environmental Management Commission on 2
or before the effective date of this section shall submit a request to the Commission to modify 3
the certificate to incorporate the provision required by G.S. 143-215.22L(n)(5a), as enacted by 4
subsection (a) of this section. 5
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PART III. SEVERABILITY CLAUSE AND EFFECTIVE DATE 7
SECTION 6. Severability. – If any provision of this act or its application is held 8
invalid, the invalidity does not affect other provisions or applications of this act that can be given 9
effect without the invalid provisions or application and, to this end, the provisions of this act are 10
severable. 11
SECTION 7. Effective Date. – Except as otherwise provided, this act is effective 12
when it becomes law. 13