Senate committee substitute makes the following changes to the 1st edition.

Deletes the content of the previous edition and replaces it with the following.

Part I. 

Amends GS 113-202, modifying several provisions relating to shellfish cultivation leases. Defines natural shellfish bed as an area containing at least 10 bushels of shellfish per acre that does not include a previously leased area terminated by the Secretary of Environmental Quality (Secretary) for failure to meet the requirements of this section within the 12 months directly preceding the date of the lease application. Requires that the cultivation of shellfish in the leased area need only be compatible with the public use of other marine and estuarine resources near the leased area. Previously required compatibility with public use generally, with no provision for proximity. Requires that the cultivation of shellfish in the leased area does not unreasonably conflict with the riparian rights of adjacent property owners. Previously required that cultivation would not impinge upon the rights of riparian owners at all. Adds new standard requiring that the leased area be located a minimum of 100 feet from the shoreline of any private property, unless the private property is owned by the lessee or the owner provides written and notarized consent. Requires that the area leased not include waters that have been classified as prohibited, restricted, or conditionally approved closed with respect to shellfish harvesting at the time of the filing of the lease application. Previously only required that the area was not closed for shellfish harvest because of pollution. Adds new standard requiring that the area leased under a single lease be: (1) for coastal fishing waters in and south of Core Sound, the area mus not be less than one-half acre or exceed 10 acres, except in designated areas; (2) for other coastal fishing waters, the area must not be less than one-half acre or exceed 50 acres, except in designated areas. Sets limits on the acreage of a lease at 50 acres for coastal fishing waters located in and south of Core Sound and 300 acres for other coastal fishing waters. Allows a lease applicant to commence a contested case by filing a petition within 30 days (was, 20 days) after receiving notice of the Secretary's decision. Limits the ability of a person other than the applicant who is aggrieved by the Secretary's decision to file a petition for a contested case to only when the Shellfish Cultivation Lease Review Committee (established in this act) determines that a hearing is appropriate. Sets out the procedure for deciding whether a contested case hearing is appropriate, including establishing deadlines and setting the basis for determining whether the hearing is appropriate. Sets out the process for the contested case once it is determined to be appropriate, including a 30-day filing deadline and an appeals process. Allows the Secretary, upon termination of any leasehold, to either re-lease the area to the first qualified applicant to file an application, or to designate the area as a Shellfish Aquaculture Enterprise Area. Adds requirement that the former leaseholder remove all abandoned gear in addition to markers. Allows the State to bring suit to recover the cost of removal and cleanup of abandoned markers and gear, including legal fees. Previously, did not include requirement to remove gear, or provision granting legal fees. Allows the Secretary to establish Shellfish Aquaculture Enterprise Areas and allows the Secretary to only issue nontransferable leases to residents of the state within these designated areas. Leased parcels in these areas revert to the State when they are relinquished or terminated and are then made available to other applicants.

Defines resident for purposes of the statute as the following. (1) An individual who at the time in question has resided in the state for the preceding six months or has been domiciled in the state for the preceding 60 days. Provides that when domicile in the State for a period of 60 days up to six months is the basis for establishing residence, the individual is required to sign a certificate stating the necessary facts and the intent to establish domicile here. (2) A corporation chartered under the laws of the state. (3) A partnership in which all partners are residents of the state. (4) An association or group principally composed of individual residents of the state and organized for a purpose that contemplates more involvement or contact with this state than any other state. (5) A member of the US Armed Forces stationed at a military facility in the state, the member's spouse, and any dependent under 18 years of age residing with member are deemed residents of the state, of the county in which they live, and also, if different, of any county in which the military facility is located. (6) Nonresident students attending a university, college, or community college in the state.

Requires the North Carolina Policy Collaboratory and the Division of Marine Fisheries to study and recommend whether establishing a Shellfish Mariculture Commission to oversee shellfish bottom leasing and other aspects of shellfish aquaculture would advance and promote the industry.

Requires the North Carolina Policy Collaboratory to establish a stakeholder process to study and recommend whether the shellfish leasing moratoria should apply to the Shellfish Aquaculture Enterprise Areas.

Amends GS 143B-289.57, adding new subsection (f), requiring the Chair of the Marine Fisheries Commission to appoint a three-member Shellfish Cultivation Lease Review Committee (the committee) to hear appeals of decisions of the Secretary regarding shellfish cultivation leases issued under GS 113-202. The committee consists of one Commission member who will serve as hearing officer, and two public members, one with experience in shellfish aquaculture, and the other with experience in coastal property or property assessment. The Commission is to adopt procedures for the appeals. 

Amends GS 113-203, subdivision (a2)(3), prohibiting transplant of oysters or clams from public grounds or permitted aquaculture operations utilizing waters in the prohibited classification to private beds except when transplanting is done in accordance with the provisions of this section. Modifies subsection (a3) to allow the transplant of seed oysters or seed clams taken from permitted aquaculture operations that use waters in the prohibited classification to private beds pursuant to an Aquaculture Seed Transplant Permit. Forbids the transplant of seed oysters or seed clams from permitted aquaculture operations that use waters in the prohibited, restricted, or conditionally approved classification to private beds if the Secretary determines that the nursery of shellfish in an area will present a risk to public health. Amends GS 113-210(c) to allow the Director of the Division of Marine Fisheries to issue an Under Dock Oyster Culture Permit for an area that the State Health Director has recommended be closed to shellfish harvest due to pollution or that has been closed to harvest by statute, rule, or proclamation due to suspected pollution only if the owner of the dock has signed a written acknowledgment that said oysters are intended for restoration purposes and not for consumption.  

Amends GS 113-201.1, adding new subdivision (3a), defining Shellfish Aquaculture Enterprise Area as an area designated and permitted by the Department, subdivided into parcels, and made available for shellfish aquaculture leasing.

Sets a moratorium on new shellfish cultivation leases and new water column leases for aquaculture in a specified area near Wrightsville Beach and Wilmington, including the waters of Masonboro Sound and Greenville Sound, until July 1, 2020.

Sets a moratorium on new shellfish cultivation leases and new water column leases for aquaculture in a specified area in Bogue Sound until July 1, 2020. Requires the Division of Marine Fisheries, during the process for establishing Shellfish Aquaculture Enterprise Areas, to identify areas in Bogue Sound where there are fewer anticipated user conflicts with shellfish leases and report its findings to the General Assembly by July 1, 2019.

Part II.

Amends SL 2016-94, Section 14.11(f), to allow the University of North Carolina at Chapel Hill to extend the deadline to report the result of its oyster studies from December 31, 2018, to June 30, 2019, on written notice to the Fiscal Research Division, if the University determines that additional time is needed to complete the study. 

Amends SL 2017-57, Section 13.13(b), to allow the North Carolina Policy Collaboratory to extend the delivery date of the Shellfish Mariculture Plan from December 31, 2018, to June 30, 2019, on written notice to the Fiscal Research Division, if the Collaboratory determines that additional time is needed to complete the study. 

Amends SL 2017-57, Section 13.13(d), as amended by SL 2017-97 Section 4.1, to include the North Carolina Sea Grant in the list of stakeholders to be included in the planning of economic development related to promotion of the State's shellfish harvesting heritage. Removes the requirement to create a North Carolina Oyster Festival, and adds an allowance to create other public engagement events. Allows the Collaboratory to extend the due date for the recommendations to June 30, 2019, on written notice to the Fiscal Research Division if the Collaboratory and stakeholders determine that additional time is needed to complete the study. 

Part III.

Includes a severability clause.

Effective July 1, 2018.

Makes conforming changes to the act's titles.