Author Archives: rwsmith

The Laws in the Background of the GenX Issue

August 21, 2017. In June, residents of southeastern North Carolina learned of a previously unknown contaminant in the Cape Fear River; a study undertaken by an N.C. State University researcher documented the presence of the perflourinated compound known as “GenX” in a report published in December 2016. The river provides drinking water for Wilmington-New Hanover County and other water systems.

The U.S. Environmental Protection Agency (EPA) began studying the effects of perfluorinated compounds used in firefighting foam, water repellants, Teflon, and other products more than fifteen years ago. EPA worked with chemical companies to phase-out the two compounds most commonly used, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), because of concerns about persistence in the environment and human health risk. In 2000, 3M Corporation announced a phaseout of PFOS. Under a 2006 agreement with EPA, eight companies committed to phase out PFOA by 2015. In 2009, Dupont began manufacturing GenX, a chemically distinct perflourinated compound, at its Fayetteville plant as a replacement for PFOA. (The Chemours Company, a Dupont spin-off, now operates the Fayetteville plant.)

The discovery of an unregulated chemical with uncertain health and environmental risks in a water supply source created a high level of concern in the affected communities. It has also drawn attention to gaps in the safety net of federal environmental regulations with implications for all unregulated contaminants in water supplies. In many ways, the GenX controversy parallels the earlier controversy in North Carolina over hexavalent chromium (a contaminant associated with coal ash) in drinking water wells. In each case, the absence of a federal standard — or EPA’s failure to update a standard based on current science — left the state struggling to evaluate health risk and develop an appropriate regulatory standard.

A number of news organizations have provided detailed coverage of the GenX controversy and Cape Fear Public Utility Authority posts key documents and monitoring results online . This post will focus on the key federal laws involved and the gaps in those laws that the state may need to fill. Although I will use the GenX issue as an example, this blogpost should not be interpreted as an assessment of legal claims or liabilities associated GenX contamination in the Cape Fear River.

Toxic Substances Control Act (TSCA). EPA regulates manufacture and importation of chemicals under the Toxic Substances Control Act of 1976. Two of the key requirements of the law:

♦ Section 5 requires manufacturers to give EPA notice before manufacturing a new chemical. (EPA maintains a Toxic Substances Inventory of previously approved chemicals.) Based on review of information submitted with the notice, EPA may find the new chemical is “not likely to represent an unreasonable risk” and approve manufacture. But if EPA doesn’t have sufficient information to evaluate environmental and health effects or if the lack of information creates an unreasonable risk of harm, EPA can issue an order requiring additional testing or limiting release of the chemical to the environment. Concern that GenX may have risks similar to those already associated with PFOA and PFOS caused EPA to enter a 2009 consent order that (among other conditions) required Dupont to effectively eliminate release of GenX in wastewater and air emissions from the manufacturing operation.

♦ Section 8 of TSCA requires chemical manufacturers and distributors to inform EPA of any information the company obtains that would reasonably support a conclusion that a chemical presents a substantial risk of injury to health or the environment. In 2005, EPA used Section 8 of TSCA to assess a penalty against Dupont for withholding information the company had on the environmental and health effects of PFOA. That EPA action ultimately led to the phaseout of PFOA and development of alternatives like GenX.

Regulatory Gaps –TSCA covers chemicals manufactured or imported into the United States. It does not apply to a chemical by-product of a manufacturing or industrial process. The TSCA consent order for GenX limits release of GenX to the environment by the manufacturer, but not the discharge of GenX unintentionally created as a result of an unrelated manufacturing or industrial process. As a result, TSCA can’t address all contaminant sources. The TSCA review process also puts EPA in the position of constantly chasing the next generation of potential contaminants.

Safe Drinking Water Act. EPA has adopted national drinking water standards for 88 contaminants. Public water systems must monitor for those contaminants and insure that water delivered to its customers meets the national standard for each regulated contaminant. Given the number of compounds used in manufacturing or produced as a by-product of industrial activities, national drinking water standards clearly do not exist for many contaminants. EPA has not adopted a drinking water standard for GenX or any other perfluorinated compounds. EPA has issued a health advisory for PFOA and PFOS (combined) of 70 parts per trillion based on longterm exposure, but a health advisory is not an enforceable drinking water standard. EPA has also said that the PFOA/PFOS health advisory does not apply to other perflourinated compounds like GenX.

EPA continues to study the need for a national drinking water standard for perflourinated compounds. Under the Safe Drinking Water Act, EPA’s decision will be based on: likelihood the contaminants will be found in drinking water; the health effects; and the technical/economic feasibility of treating the water to reduce any health risk. It isn’t clear whether EPA will propose a drinking water standard for PFOA/PFOS and the decision to develop a standard for next generation alternatives like GenX would be even further in the future.

Regulatory Gaps — EPA has not adopted a national drinking water standard for every contaminant that may be detected in a water source or in a public water system; some existing drinking water standards do not reflect the most recent science. In the absence of a drinking water standard, an EPA health advisory can provide guidance to the states on safe levels but health advisories do not exist for all contaminants. Many of the environmental and human health risks associated with PFOA and PFOS have been known for 10-15 years, but EPA has not yet proposed a drinking water standard and only issued a health advisory based on long-term exposure in 2016. In the absence of a national drinking water standard or health advisory, presence of significant levels of a contaminant in water supplies may require the state to develop a benchmark for safe drinking water.

Clean Water Act. The Clean Water Act protects surface waters like lakes and rivers by requiring a permit to discharge waste to those waters. National Pollutant Discharge Elimination System (NPDES) permits allow wastewater treatment plants and industries to discharge wastewater meeting specific pollutant limits. Like other states, North Carolina has assumed responsibility for issuance of NPDES permits in the state.

EPA has set technology-based wastewater limits for individual categories of industries, including chemical plants. But those limits do not cover all pollutants or every possible waste stream. In the absence of an existing EPA limit or when faced with a new type of waste stream, the state permit writer must set a limit on a case-by-case basis based on factors set out in the Clean Water Act. That puts responsibility on the state water quality agency to determine the appropriate limits for these unregulated pollutants.

Regulatory Gaps — Existing state and federal water quality standards and guidelines for permitting wastewater discharges do not address every potential pollutant. In the absence of federal effluent guidelines for a particular pollutant, the burden will be on the state water quality permitting agency to look at any existing information on the environmental and health effects to set a permit limit.

The challenge for the state. These federal laws create frameworks for approval of the manufacture and use of chemicals; release of chemicals to the environment in wastewater; and protection of drinking water sources. But the EPA standards adopted under those laws are not comprehensive and often lag behind the emergence of new contaminants or evolving science on risk. When an unregulated contaminant affects a drinking water source, the responsibility for dealing with the immediate environmental and public health concerns falls on the state.

The NC Attorney General’s Office and Environmental Protection

August 14, 2017. The final budget adopted by the N.C. General Assembly on June 22 included a surprise reduction of just over $10 million in the budget for the state Attorney General’s Office (AGO). Legislative leaders added the cut during final budget negotiations between the two chambers. The budget bill limits the Attorney General’s ability to meet the “management flexibility reduction” in a way that will require all of the cuts to be taken from administrative and legal services. The Attorney General’s Office has only 24 administrative positions, so most of the reduction will have to be met by reducing legal services — the lawyers and paralegals who represent state agencies and handle appeals of criminal convictions on behalf of local district attorneys. Earlier this month, Attorney General Josh Stein announced that the AGO will meet $7 million of the $10 million cut by eliminating 45 positions; shifting additional legal services positions to funding provided by the state agencies the attorneys represent; and handling fewer appeals of criminal convictions. Stein has said that he cannot meet the remaining $3 million in budget reductions and asked the legislature to restore that amount to the AGO budget.

House and Senate leaders responded that the Attorney General has sufficient resources to meet his constitutional and legal responsibilities. In an August 3 Associated Press story, Emery Dalesio reported that House Speaker Tim Moore suggested the legislature may shift responsibility for civil cases out of the AG’s Office :

House Speaker Tim Moore said lawmakers are considering legislation to let agencies hire their own in-house lawyers for civil matters, shifting that work from Stein’s office. But Stein has enough money to handle criminal cases, Moore said. “He has adequate resources, very adequate resources to take care of those issues,” the Republican from Kings Mountain said.

A look at what this means for environmental protection —

Background for the new budget cuts: Under state law (G.S. 114-2), the Attorney General has a duty to represent state agencies in both civil and criminal cases. Environmental protection programs rely heavily on civil enforcement; only a very small percentage of cases can be referred for criminal prosecution because of specific aggravating factors. The 45 positions already identified for elimination by AG Stein include three positions in the Environmental Division of the AGO — two paralegals and a water quality attorney. If the legislature refuses to give any relief on the remaining $3 million in cuts, additional positions in the Environmental Division may be lost. All of these new cuts come on top of significant reductions over the previous four years. Between 2012 and the end of 2016, the Environmental Division of the AGO lost 11 lawyer positions — seven as a result of legislative action and four contract positions DEQ did not renew in 2016.

The kind of civil cases the Attorney General’s Office handles for environmental agencies:

♦ Civil penalty collections. Environmental agencies rely on civil penalty assessments as the most common enforcement response to violations ranging from illegal dumping and improper handling of hazardous waste to unpermitted air pollution sources. The AGO represents DEQ in civil actions to collect unpaid penalties. Lack of an effective collection program undermines environmental compliance, sending a signal that there may be no real penalty for violation. An example of a civil penalty case:

— In 2007, DEQ’s Division of Waste Management assessed a large penalty ($553,225) against EQ Industrial Services for violations preceding and possibly contributing to an explosion and fire at the company’s hazardous waste handling facility in Apex that forced the evacuation of 17,000 people.

♦ Civil lawsuits to stop an ongoing environmental violation; require cleanup of environmental contamination; or to seek reimbursement of state cleanup costs. Examples:

— The 2013 lawsuit against Duke Energy to require the company to take action to prevent groundwater contamination and unpermitted discharges from coal ash stored at the Riverbend Steam Station in Gaston County and several other coal-fired power plants.

— A 2016 consent agreement with Flextronics International requiring the company to fully investigate the extent of groundwater contamination affecting residential wells in a Wake Forest subdivision and do any necessary environmental remediation. The small circuit board assembly company that caused the solvent contamination had been sold and the original owners had no assets. AGO lawyers identified Flextronics International as another legally responsible party based on its acquisition of the smaller company and its environmental liabilities.

♦ Civil lawsuits challenging state environmental policies and individual permitting decisions. Examples:

— A lawsuit by the State of South Carolina asking the federal courts to allocate water in the Catawba River and Yadkin River between the two states. The lawsuit responded to N.C. decisions on water use within the state, but affecting downstream flows to S.C.

— The conflict between the State of North Carolina and Alcoa over rights to the bed of the Yadkin River. The case came out of Alcoa’s application for a state water quality approval necessary to renew the company’s hydropower license on the Yadkin.

— A lawsuit by oceanfront property owners seeking the closure of beach access walkways near their homes and claiming the right to exclude the public from the dry sand beach seaward of their property.

The bottom line. Loss of legal representation in civil cases would weaken the state’s ability to protect public health and natural resources critical to the state’s economy. Loss of the legal expertise necessary to identify and hold responsible the people who cause environmental contamination shifts the cost of contamination to taxpayers. In the absence of an alternative — and funded — plan to provide an equivalent level of legal services, the reduction in the AGO’s budget could significantly undermine environmental protection.

2017 NC Legislative Session in Review: The Budget

July 16, 2017. A few notes on the final state budget which became law following legislative override of the Governor’s veto.

Funding for Environmental Protection Programs. The final budget continues a 7-year trend of annual reductions in environmental protection programs. (See an earlier post describing the impact of those earlier reductions.) The most significant new cuts to programs in the Department of Environmental Quality (DEQ) affect:

Energy Programs. The budget takes almost $1 million from energy programs. The budget reduces pass-through funding for university-based energy centers from around $1 million to a total of $400,000 divided equally between centers at Appalachian State University and North Carolina A& T University. North Carolina State University’s Clean Energy Technology Center will receive no funding. The budget also eliminates 3 of 5 positions in DEQ’s Energy Office.

Regional Offices/Division of Environmental Assistance and Customer Service. DEQ’s seven regional offices house frontline permitting, compliance and technical assistance staff for multiple environmental programs including water quality, water resources, air quality and waste management. Since 2011, the legislature has made the regional offices a particular target for reductions in positions and funding. The 2017 budget reduces appropriations supporting DEQ’s Division of Environmental Assistance and Customer Service by $500,000 and requires DEQ to meet the cut in part by eliminating one position in each of the seven regional offices. The Division of Environmental Assistance and Customer Service is a non-regulatory program that provides technical assistance to businesses on water conservation, energy efficiency, waste reduction and other measures to improve environmental compliance.

Conservation Funding. Most funding for conservation programs, such as the Clean Water Management Trust Fund and the Parks and Recreation Trust Fund now go through the Department of Natural and Cultural Resources budget. The Department of Agriculture and Consumer Services also manages some conservation funds through the Farmland Preservation Trust, which purchases conservation easements on agricultural lands. Conservation funding in both departments generally remained stable. The legislature increased funding for the Clean Water Management Trust Fund and the Parks and Recreation Trust Fund, earmarking a combined $1 million of the increase for an acquisition project on Archer’s Creek (Bogue Banks). The budget also allocates an additional $2.6 million to the Wildlife Resources Commission for acquisition of gamelands and an additional $2 million to the Farmland Preservation Trust Fund.

Surprisingly, the budget did not include state funds to match a federal Department of Defense (DOD) challenge grant of $9.2 million to acquire conservation lands to provide buffers around military installations. DOD announced award of a Readiness and Environmental Protection Integration (“REPI”) grant to North Carolina earlier this year for acquisition of buffers around the Dare County Bombing Range and endangered species habitat near Camp Lejeune. The federal award anticipated a state contribution of an additional $10.1 to be put toward the projects. The final state budget failed to earmark any funding for the state match. The Clean Water Management Trust Fund and other state conservation agencies could provide some of the state match, but in the absence of a legislative earmark the REPI projects would be competing with other applications for those grant funds.

Special provisions. As usual, the budget bill (Senate Bill 257 ) includes a number of “special provisions” that change existing law. Those include:

Air quality. The budget allows DEQ to use fees from automobile emissions inspections to support any part of the air quality program. Previously, inspection fee revenue could only be used to implement the automobile inspection and maintenance program. In the past, the legislature has tilted toward keeping inspection and maintenance fees as low as possible while still providing adequate reimbursement to inspection stations. The 2017 provision divorces the fees from the needs of the vehicle inspection and maintenance program for the first time.

The budget also requires legislative approval of DEQ’s plan to use approximately $90 million the state will receive from the Environmental Protection Agency’s national settlement of an air quality enforcement case against Volkswagen. (The case concerned VW’s installation of software to defeat vehicle emissions control systems.) Funds from the settlement will be divided among the states and must be spent for purposes specifically allowed under the EPA settlement agreement. The agreement gives states a number of options and the legislature clearly wants to influence DEQ’s decision about use of the funds.

Solid Waste. The budget shifts $1 million from a fund for assessment/cleanup of contamination caused by old, unlined landfills to the City of Havelock to be used for “repurposing” property previously owned by a recycling company. (See Sec. 13.3) Phoenix Recycling operated on property just beyond the city limits, but closed in 2000 as a result of environmental violations. In 2012, the City of Havelock received a state grant to assess environmental contamination on the property. In 2015, Havelock’s city manager advised the town council that if the city acquired the property, it could be eligible for up to $550,000 in federal “Brownfield” grant funds under an EPA program to support cleanup and redevelopment of contaminated sites. In 2016, the city acquired the property and annexed it into the city. It isn’t clear whether the city ever applied for the federal Brownfields grant. The 2017 budget provision would instead provide state funding for redevelopment of the property. A Progressive Pulse blogpost provides a good overview of how the earmarking of these funds for the Phoenix Recycling property will reduce funds available to cleanup other, higher priority contaminated sites.

Another provision (Sec. 13.4) allows the owner of an old, unlined landfill site to exclude the property from a state program to cleanup contamination from “pre-1983” landfills. (Modern standards for solid waste landfills went into effect in 1983). Under the provision, the owner can remove property from the state cleanup program by accepting liability for any contamination and providing financial assurance to address contamination. Financial assurance would not be required if the landfill had received solid waste from a local government (which was often the case). This is a very odd provision in several ways:

♦ Under current law, DEQ has responsibility for assessment and cleanup of pre-1983 landfill sites; revenue from a statewide solid waste disposal tax pays for the remediation. Under the new provision, a property owner would waive state responsibility for cleanup and potentially accept environmental liability they might not otherwise have.

♦ The provision has not been restricted to sites that present a low environmental risk; the only limitations seem to be the property owner’s willingness to take on the liability and ability to provide financial assurance if required.

♦ The provision describes the opt-out as a “suspension” of the state cleanup program for as long as the person owns the property. That clearly means the state itself would not undertake any assessment or cleanup activity on the site, but the law does not suspend enforcement of state groundwater standards and other environmental remediation requirements. Those programs normally seek remediation by the person(s) responsible for the contamination; under the new provision, the property owner must volunteer for the liability whether they contributed to the contamination or not.

♦ The implication of a “suspension” is that the state may again have responsibility for the site if it changes ownership in the future. Suspending environmental remediation until a change of ownership could simply delay necessary cleanup activities without regard to environmental risk.

It isn’t clear why a property owner would ever choose to do this.

The budget bill also requires a study of DEQ’s use of revenue from the solid waste disposal tax. The opt-out in Section 13.4 may be a hint of additional changes to the solid waste disposal tax and the state cleanup program for pre-1983 landfills.

Water Quality: Nutrient Pollution. The (now annual) budget provision concerning nutrient management strategies directs DEQ to use $1.3 million to test use of algaecides and phosphorus-locking technologies as an alternative to state rules imposing tighter wastewater limits and stormwater controls to address excess nutrients in Falls Lake and Jordan Lake. Those rules have been temporarily suspended by the legislature. (For background on the nutrient rules, see a previous post; the proposal for an automatic sunset of the nutrient rules described in the earlier blogpost was ultimately replaced by legislation further delaying implementation of the rules and a university-based study.) Based on discussion in committee, legislators had a specific technology developed by a North Carolina-based company in mind.

Limiting Appeals of Environmental Permits

June 19, 2017. Last week, the N.C. Senate retitled House Bill 374, a labor law technical corrections bill, as the “Business Freedom Act” and (among other things) added a provision making it significantly more difficult for a citizen, community or environmental organization to challenge an environmental permit. The provisions in Section 12 of H 374 would affect appeals of any environmental permit, certification, or other approval issued by the Department of Environmental Quality or the Environmental Management Commission. Those approvals include permits for wastewater discharges, wetland/stream impacts, and new air pollution sources; inter-basin transfers; coastal development permits; and many other activities with environmental consequences.

WHAT THE PROVISION DOES

H 374 limits the ability of a person to challenge an environmental permit in three ways:

Only a person who submitted a comment before the permit was issued could appeal the permit. Even a person actually harmed by the permitted activity, making them a “person aggrieved” who would otherwise have appeal rights under the state’s Administrative Procedures Act, would be barred from appealing unless they commented during the permit review. That means individuals or organizations appealing environmental permits will face a hurdle not required for appeal of other state actions. The provision puts citizens appealing environmental permits at a significant practical disadvantage since a comment period may range from as few as 15 days to 60 days and the notice of opportunity to comment may not reach everyone directly affected by the permit decision.
An issue could not be raised in the appeal unless it had been specifically identified in a comment to the agency before issuance of the permit. Comments are submitted in response to either a permit application or a draft permit – not the final permit decision. Limiting the appeal to issues raised in a comment means there may be no opportunity to challenge permitting errors that only become clear when the final permit has been issued. The limited exception in the bill for circumstances where the person “could not have raised a particular basis prior to the decision” would simply start a new round of argument over whether an issue could or could not have been raised prior to the permit decision.
The administrative hearing would be limited to evidence in the record of the permit decision (such as the permit application, permit agency documents, and public comments). Permit appeals are heard by an administrative law judge (ALJ) who conducts a hearing and issues a decision in the case. The ALJ’s decision can then be appealed in the state courts. H 374 would not allow the ALJ to consider new evidence in an environmental permitting case; the decision could only be based on materials in the permit record. (The bill has a narrow exception for information unavailable when the permit decision was made.) The provision seems to exclude even testimony necessary to explain documents in the permit file. Most of the material in the permit record will be information provided by the applicant or generated by the permitting agency. Other parties to an appeal would rarely be able to gather all possible supporting evidence for an appeal within a 15-60 day comment period. Under current law (which would continue to apply to other types of administrative hearings) , a party can introduce any evidence relevant to the issues in the hearing.

THE PROBLEMS

Fairness. I can’t say whether these restrictions rise to the level of creating a constitutional due process or equal protection problem. But the provision clearly treats a citizen harmed by an environmental permit differently than a citizen harmed by any other kind of state action. The obstacles presented by H 374 affect every stage of the administrative appeal. A person granted an administrative appeal hearing may then find it impossible to raise issues and introduce evidence critical to the appeal. The cumulative restrictions in H 374 could greatly restrict access to the courts on environmental permitting controversies by making it more difficult to get a hearing and then limiting the evidence that could go into the hearing record for review by the courts.

Violation of federal rules for environmental permitting programs delegated to the states. The new restrictions on environmental permit appeals – particularly limits on standing to appeal — seem to violate the terms under which federal permitting programs have been delegated to the state. N.C. has delegations under all of the major federal environmental permitting laws including the Clean Water Act, Clean Air Act and Safe Drinking Water Act. Under those delegations, the Department of Environmental Quality issues federal permits that would otherwise be issued by the U.S. Environmental Protection Agency. Federal rules require states with delegated permitting programs to provide an opportunity for judicial review of the final permit decision that is comparable to review available under federal law.

For example, Clean Water Act delegation rules require the state program to provide an opportunity for judicial review that is “the same as that available to obtain judicial review in federal court of a federally-issued [wastewater discharge] permit”. The rule expressly says “[a] State will not meet this standard if it narrowly restricts the class of persons who may challenge the approval or denial of permits”. (40 CFR §123.30.) Similar provisions appear in rules for delegation of other federal environmental permitting programs. (An earlier post about a different permit appeal controversy also cites the federal rule on judicial review of Clean Air Act permits.)

Under federal law, any person “suffering legal wrong because of agency action or adversely affected or aggrieved by agency action… is entitled to judicial review” of an environmental permitting decision. 5 U.S.C. § Section 702. An administrative appeal is the first and necessary step for judicial review under state law. By imposing new conditions on a citizen’s ability to file an administrative appeal, House Bill 374 could prevent a person harmed by a permitting decision from obtaining judicial review they would be entitled to under federal law. That appears to violate federal rules for delegated environmental permitting programs.

The limits in H 374 on issues and evidence introduced at hearing also mean state judicial review will be much narrower than federal judicial review of an environmental permit. Appeal of an EPA-issued Clean Water Act permit goes through a federal administrative hearing where new evidence can be introduced. The record of the federal administrative hearing — including testimony and new evidence — can then be considered by a court. Under H 374, appeal of a state-issued Clean Water Act permit would be based solely on the original permitting materials, limiting the evidence a court could consider on judicial review. As a result, the scope of judicial review under H 374 would be narrower than review available under federal law.

The Senate changes to House Bill 374, including the environmental appeal provision, go back to the House for approval. House agreement to the Senate changes would send the revised bill to the Governor. If the House fails to agree to the Senate changes, a conference committee of Senators and House members would be appointed to work out the differences between the two.

President Trump’s Budget: State Environment Programs

June 9, 2017. Now that the Office of Management and Budget (OMB) has released detailed budget documents, the impact of President Trump’s proposed budget has become more clear. In addition to eliminating some federal grants altogether (see an earlier post), the President’s budget would significantly reduce federal funds supporting basic state environmental protection programs. The tables below have been based on the percentage reduction to each federal grant category proposed in the President’s budget as applied to the certified 2016-2017 state budget for the corresponding program. Additional detail not available in OMB documents comes from a budget analysis prepared by the Environmental Council of States (an organization of state environment officials).

The President has proposed a 30% reduction in grants to the states to carry out federal Clean Water Act, Clean Air Act and Safe Drinking Water Act permitting and enforcement programs. The proposed budget makes significant cuts in funding to support federal environmental protection programs delegated to the states, although not at the level in the “skinny budget”. OMB budget documents now show a 30% reduction in those state grants. Since federal grants provide 50% of the total funding for North Carolina’s Clean Water Act, Clean Air Act and Safe Drinking Water Act programs, a 30% cut in those federal grants would create a big hole in budgets for state permitting and enforcement. The result (by comparison to certified state budget for 2016-2017):

**N.C. Clean Air Act Implementation (Permitting and Enforcement)**
Total Need	Federal Grant	Federally Funded	President’s Budget	Program Impact
$4,854,105	$2,482,845	50%	-30%	-$744,853 (15%)

**Clean Water Act Implementation (Permitting and Enforcement)**
Total Funding	Federal Grant	Federally Funded	President’s Budget	Program Impact
$14, 160,554	$6,662,950	50%	-30%	– $1,998,885 (14%)

**Safe Drinking Water Act Implementation (Permitting and Enforcement)**
Total Funding	Federal Grant	Federally Funded	President’s Budget	Program Impact
$5,870, 612	$ 3,316,895	> 50%	-30%	– $1,459,433 (25%)

The President’s budget makes significant cuts to funding for programs addressing hazardous waste and petroleum contamination.

Superfund. The federal Superfund program addresses contaminated sites nationwide that pose the greatest risk to human health. The U.S. Environmental Protection Agency takes the lead on assessment and cleanup of those “national priority” sites. North Carolina has around 40 designated Superfund sites contaminated by pesticides, solvents and other hazardous substances. (For more information, see the EPA list of N.C. Superfund sites.) The President’s budget proposes to cut funding for Superfund cleanups by 30%.

Petroleum underground storage tanks (USTs): The budget significantly cuts federal grants to address past petroleum contamination and to regulate USTs to prevent future contamination. As a geographically large and rural state, North Carolina has nearly 20,000 properties contaminated by petroleum leaks from gas station or convenience store gas pumps. The President’s budget appears to reduce federal funds to assess and cleanup up past contamination by 30%. The budget entirely eliminates grant funds to support state regulatory programs enforcing federal standards to prevent future UST leaks.

“Brownfields” redevelopment. The federal Brownfields program supports cleanup and redevelopment of contaminated properties. EPA makes grants for individual redevelopment projects and provides grants to state programs promoting cleanup and redevelopment of contaminated properties. Brownfields grants can be particularly important to redevelopment of urban areas that might otherwise be under-utilized because of concerns about environmental contamination and liability. The President’s budget cuts direct federal Brownfields grants by 14% and reduces grants to state Brownfields programs by 30%. North Carolina’s Brownfields program — supported entirely by developer fees and federal grant funds — has leveraged over $10 billion in private development since 1997.

President Trump’s Budget: Zero-Funding Energy and Environment Programs

May 31, 2017. President Trump’s proposed budget would completely eliminate a number of environmental programs. Some of those programs fund state activities to protect against environmental harm, increase energy efficiency, build water/sewer infrastructure and respond to natural disasters. Below, some of the programs zero-funded under the President’s budget*:

EMERGENCY RESPONSE

♦ Federal Emergency Management Agency (FEMA) flood zone mapping/flood risk analysis. As part of the federal flood insurance program, FEMA maps flood zones along rivers, streams and ocean shorelines. Flood zone maps have to be updated as shorelines respond to subsidence or sea level rise and upland development increases runoff. The federal flood insurance program uses the maps to set flood insurance rates; the maps also affect state and local construction standards in flood hazard areas. The President’s budget assumes flood zone mapping should be funded by the residents of flood hazard areas and by state governments.

♦ Emergency food and housing grants. FEMA provides grants to states for emergency food and housing needs following natural disasters. The grant funds would be eliminated as duplicative of other programs; federal budget documents also indicate these needs should largely be a state responsibility.

ENERGY

♦ Energy Star Program. The Energy Star program (developed by the Department of Energy and the Environmental Protection Agency) rates household appliances for energy and water efficiency. Energy Star ratings on high efficiency washers, dryers, dishwashers, refrigerators and other appliances allow consumers to compare energy/water usage and potential cost savings over the life of the appliance. The President’s budget assumes that this kind of consumer rating program can and should be provided by the private sector.

♦ Weatherization Assistance Program. This Department of Energy program provides grants to the states to weather-proof housing for low-income residents. The weatherization program’s goals are to increase energy efficiency and reduce energy bills for low income homeowners.

♦ State Energy Program funds. These Department of Energy grants support state energy initiatives, including programs to increase the energy efficiency of state buildings and infrastructure.

COASTAL PROGRAMS

♦ Coastal Zone Management Act Grants. National Oceanic and Atmospheric Administration (NOAA) grants support state coastal management programs. A NOAA grant provides about 50% of the funding for North Carolina’s coastal program, which regulates development affecting significant coastal resources such as coastal wetlands, public trust waters, and ocean/inlet shorelines.

♦ National Estuarine Research Reserves. NOAA also provides significant funding for coastal natural areas set aside for conservation, research and education. North Carolina has four Estuarine Research Reserves: Currituck Banks, Rachel Carson, Zeke’s Island and Masonboro Island. NOAA grants provide about 75% of the funding for management of the N.C. Estuarine Research Reserve sites.

♦ Sea Grant. The federal Sea Grant program supports university-based coastal research and extension services in 33 states and territories on the coasts and Great Lakes. North Carolina’s Sea Grant program, based at North Carolina State University, provides scientific, engineering and legal expertise on coastal issues including wetlands protection, aquaculture, and shoreline stabilization. You can find a description of N.C. Sea Grant programs and activities here.

WATER/WASTEWATER INFRASTRUCTURE

♦ Rural Water/Wastewater Disposal Program. This Department of Commerce program provides water and sewer grants to rural communities. The President’s budget would eliminate the program as duplicative of infrastructure loans provided through the larger Clean Water and Drinking Water State Revolving Fund (SRF) programs. Unlike the SRF programs, however, the Rural Water and Wastewater Disposal Program provides grants that can be used to support rural economic development. SRF loans must be used to upgrade existing water and sewer systems to meet Clean Water Act and Safe Drinking Water Act standards; the loans cannot be used to extend a water or sewer system just to serve new economic development.

ENVIRONMENTAL PROTECTION AGENCY

♦ Geographic environmental restoration programs. The President’s budget eliminates funding for a number of regional water quality restoration programs. Most of the programs involve coordination among states and the federal government to solve pollution problems in multi-state water bodies like Chesapeake Bay and the Great Lakes.

♦ Chemical Safety Board. The Chemical Safety Board — made up of independent experts — investigates chemical accidents and releases. In North Carolina, the Chemical Safety Board has investigated and identified the cause of several incidents, including the 2006 explosion and fire at a hazardous waste facility in Apex that forced the evacuation of 16,000 people.

♦ BEACH program. This EPA program provides grants to support state monitoring of beach water quality during the swimming season. In North Carolina, the Division of Marine Fisheries receives BEACH funding to support the state’s Recreational Water Quality Program. The state program tests the water quality at 240 swimming areas weekly between April 1 and October 31. The water quality monitoring allows the agency to warn the public — and if necessary close a beach for swimming — if bacteria reaches unsafe levels.

* Based on budget documents released by the Office of Management and Budget and informed by additional analysis provided by the Environmental Council of States (an organization of state environmental officials.)

“Aerosolizing” Landfill Leachate

May 19, 2017. A bill under consideration by the N.C. General Assembly, House Bill 576 , requires the Department of Environmental Quality (DEQ) to allow “aerosolization of leachate and wastewater as an acceptable method of site management” at a lined municipal solid waste landfill and gives DEQ discretion to allow the practice at unlined landfills. The bill passed the N.C. House and has been sent to the Senate.

A definition of terms.

“Leachate” is the liquid produced by water (including rainfall) percolating through landfilled waste. State rules require landfills to contain leachate onsite or treat the leachate before discharging it. Treatment may occur onsite; offsite through a municipal wastewater treatment system; or by land-application of leachate to vegetation. Since leachate would be considered to be wastewater, discharge often requires a Clean Water Act permit.

“Municipal solid waste landfill” means a landfill — whether operated by a city, a county or a private waste management company — that receives household trash and other commercial and industrial waste collected for disposal. MSW landfills do not dispose of hazardous waste or medical waste generated by diagnosis, treatment and research facilities.

“Aerosolization” involves spraying untreated landfill leachate into the air, allowing solids to resettle and liquids to evaporate. Land-application systems direct leachate toward the ground for absorption by vegetation; aerosolization systems direct the leachate high into the air to facilitate evaporation. In 2016, Republic Services (a major commercial landfill operator in the state) made a presentation to the legislature’s Environmental Review Commission describing aerosolization and promoting the systems as a less expensive alternative to both conventional wastewater treatment and land application of leachate.

Scope of the bill. House Bill 576 requires DEQ to allow aerosolization of leachate at lined municipal solid waste landfills and allows DEQ to approve aerosolization of leachate at unlined landfills. The bill sets no standards for aerosolization of landfill leachate and does not expressly give either DEQ or the Environmental Management Commission authority to set standards for the practice. The bill also waives water and air quality permitting requirements for the aerosolization system if evaporation of leachate “results in a zero-liquid discharge and is not a significant air contamination source”.

Questions:

1. Does aerosolization of untreated landfill leachate from municipal solid waste landfills present a risk of exposure to viruses and bacteria? Unlike limited purpose landfills (such as those receiving only construction and demolition debris), municipal solid waste (“MSW”) landfills receive food waste, diapers, and other personal care products that may carry viruses and bacteria. There does not seem to be readily available information on the potential for increased human or wildlife exposure to viruses and bacteria as leachate becomes aerosolized and potentially wind-borne.

Without more information on the persistence of viruses and bacteria under different conditions, it is difficult to assess the risk of aerosolizing MSW leachate and develop management measures to limit the risk. An EPA study found that viruses can survive in landfill leachate for weeks or months in moderate temperatures. A Nebraska study found that avian influenza viruses may survive in landfill leachate for up to two years.

North Carolina’s Division of Waste Management has approved four demonstration projects for aerosolization of landfill leachate; one involved a small-scale project at a Republic Services landfill. The process has not been used to scale at a MSW landfill in North Carolina and I have not found an instance of any other state permitting an evaporation system at a MSW landfill. As a result, data on the potential health risk of aerosolizing MSW leachate either doesn’t exist or is not readily accessible.

2. Are existing state rules sufficient to manage risk associated with aerosolization of MSW leachate? North Carolina’s landfill rules require a 50-foot buffer between each waste disposal area and the landfill property boundary. Rules that apply to landfills permitted before 2007 require a 50-foot buffer between waste disposal areas and a river or stream. Landfills permitted since 2007 must maintain a 200-foot buffer between the waste disposal area and a perennial stream or wetland, although DEQ can approve a narrower buffer (no less than 100 feet) based on local circumstances. See Session Law 2007-550. A 500-foot buffer must be maintained between the waste disposal area and a home or water supply well.

A 2016 presentation on leachate management by SCS Engineering noted some considerations in use of evaporation systems including:

♦ Risk of overspray and wind gusts

♦ Worker exposure to aerosolized leachate

North Carolina’s waste management rules do not address these concerns and the potential risk to landfill workers or to people and wildlife beyond the landfill boundary. Existing landfill buffer requirements were developed to manage the impact of buried waste and active landfill operations on waters, wetlands and adjoining property owners — not as a safety factor for aerosolization of landfill leachate and possible drift.

State waste management rules require landfills to comply with air quality standards, but the cross-referenced standards focus on air pollutants regulated under the Clean Air Act rather than bacteria and viruses. House Bill 576 exempts aerosolization systems from air quality permitting requirements as long as the system would not be a “significant air contamination source”. The bill does not define what would constitute a “significant” air contamination source.

The knowledge gaps, lack of risk management guidance, and absence of standards for use of evaporation systems at municipal solid waste landfills suggests a need for more study.

NC Senate: Proposed 2017 Budget

May 10, 2017. Some highlights of the state budget proposed by Senate leadership as it affects environmental programs:

Money. The Senate budget continues a nearly 10-year trend of cuts in environmental programs. An earlier post described some of the impacts of previous budget cuts that began with the 2008 recession (including a 9% reversion of already-budgeted funds in 2009) and continued after the economy began to recover.

The Senate’s proposed budget for 2017 would reduce state appropriations to the Department of Environmental Quality (DEQ) by nearly $7 million. That represents a 10% reduction in state appropriations and a 3% reduction in the department’s overall budget (which also includes federal grant funds and permit fees).

The reductions include:

♦ A $3.5 million discretionary cut, which means DEQ will have to identify reductions within the department’s operating budget.

♦ A $1 million transfer of funds to the N.C. Department of Agriculture and Consumer Services (DACS) to challenge an EPA rule defining federal jurisdiction under the Clean Water Act. Under the McCrory administration, DEQ had joined a number of other states in suing over the federal rule. The Cooper administration dropped out of the litigation and the Senate provision would fund DACS to continue the state’s participation in that litigation.

♦ The budget eliminates 56.5 positions from existing DEQ programs:

32.5 positions in the Division of Environmental Assistance and Customer Service. Those cuts affect non-regulatory waste reduction, recycling, water/energy efficiency and permit assistance programs. The cuts would effectively eliminate DEQ programs that work with business/industry to voluntarily reduce waste generation which allows those businesses and industries to reduce their regulatory burden and save money.

14 regional office support positions. DEQ’s seven regional offices house frontline permitting and enforcement staff for multiple environmental programs. The legislature has targeted DEQ regional offices for staff cuts in the past. This provision requires a reduction of an additional 2 positions in each regional office. It is not clear which DEQ programs would be affected.

5 administrative positions. The Senate bill identifies specific jobs for elimination, including DEQ’s Chief Deputy Secretary, the Legislative Affairs Program Manager; a communications position; and the last two environment education positions remaining in the department.

3 positions in the N.C. Geodetic Survey

1 position in the Land Quality Section of the Division of Energy, Mineral and Land Resources

1 position in the Division of Marine Fisheries

Policy provisions in the budget bill. The budget bill includes a number of changes in state law or policy related to environmental programs:

♦ Conditions on use of funds the state may receive as a result of the U.S. Environmental Protection Agency’s settlement with Volkswagen for violations of the Clean Air Act (Sec. 13.2 ) The Senate provision sets criteria for use of the funds and requires legislative approval of a DEQ plan for the funds.

♦ A provision that allows the owners of old landfill sites to avoid environmental cleanup requirements by: 1. Accepting liability for onsite and offsite contamination; and 2. Providing financial assurance for any environmental harm. There is an exception for property owners who did not receive compensation to accept local government waste for disposal. The provision affects a state program to assess and cleanup contamination associated with landfills and trash dumps that never met standards for solid waste landfills adopted in 1983. (iSec. 13.4).

♦ Changes to laws governing the Marine Fisheries Commission (Sec. 13.17) . The provision reduces the MFC from nine members to seven members and requires a super-majority of five members to take any action — including adoption of rules. As with most state commissions, current law only requires a simple majority of the MFC to take most actions although a super-majority is required for adoption of fisheries management plans.

♦ A moratorium on wind energy projects (Sec. 24.2). The bill would prevent DEQ from issuing permits for new wind energy projects until December 31. 2020. During the moratorium, the bill would require a study of the impact of wind energy facilities on military operations in the state. Note; the process for approval of wind energy facilities already requires Federal Aviation Administration review and input from military installations.

Pigs (Again) Update

April 26, 2017. Yesterday, the Senate Agriculture, Environment and Natural Resources Committee approved a revised version of House Bill 467. The Senate changes resolve some of the questions noted in the earlier post about the bill’s impact on availability of punitive damages and compensation for injury other than lost property value.

The version approved by the Senate committee has a new subsection that reads:

(d) This Article does not apply to any cause of action brought against an agricultural or forestry operation for negligence, trespass, personal injury, strict liability, or other cause of action for tort liability other than nuisance, nor does this Article prohibit or limit any request for injunctive relief or punitive damages that are otherwise available.

The Senate language:

♦ Expressly allows an award of punitive damages against an agricultural or forestry operation based on existing standards in North Carolina law.

♦ Makes it clear that the bill does not limit compensation a plaintiff can receive under legal theories other than nuisance — including negligence, trespass, strict liability “or other cause of action for tort liability other than nuisance”. In legal-speak, a “tort” means a wrongful act injuring another person and recognized by law as the basis for a civil lawsuit. The injury may be damage to reputation or property as well as physical injury.

Under “strict liability”, a person can be held legally responsible for harm even if there is no evidence of negligence. Historically, strict liability has applied only to a very narrow set of activities considered to be ultrahazardous — the classic example has been use of explosives. Few (if any) activities associated with an agricultural or forestry operation would fall under strict liability standards.

As applied to agricultural and forestry operations, the most significant implications of the Senate language are: 1. recognition of a plaintiff’s ability to receive compensation (beyond fair market value of the property) for harm caused by negligence or trespass; and 2. preservation of the potential for punitive damages in a particularly egregious nuisance case.

One reference in the new Senate language is not like the others — unlike nuisance, negligence, or trespass, “personal injury” in itself is not a cause of action. Instead, “personal injury” describes a type of harm the plaintiff may have suffered as a result of negligence, nuisance, trespass or some other tort.

The House version of H 467 limited damages for nuisance to fair market value or fair rental value of the property affected — apparently excluding compensation for health effects caused by the nuisance condition. Given the context, It isn’t clear whether the Senate language intends to allow compensation for health effects in a nuisance action against an agricultural/forestry operation — or simply acknowledges the possibility of compensation for personal injury under another legal theory such as negligence.

The bill has now been referred to a Senate Judiciary Committee for review before going to the Senate floor.

Pigs (Again)

April 25, 2017. Two weeks ago, the N.C. House quickly approved a bill limiting the money damages available to a plaintiff who wins a nuisance lawsuit against an agricultural or forestry operation. According to the bill title, House Bill 467 “clarifies” the compensation available to a person whose property use has been negatively affected by agricultural or forestry activities.

The backstory. In 2014, multiple nuisance lawsuits representing hundreds of North Carolina plaintiffs were filed against Murphy Brown LLC (the grower subsidiary of Smithfield Foods) in federal court. The plaintiffs allege that odors, ammonia emissions, pests and other conditions associated with nearby swine farms negatively affect the use of their property. A 2015 Charlotte Observer story provides a good overview of the claims. The nuisance cases allege many of the same problems described in a separate civil rights complaint concerning N.C. swine farms filed in 2014. (That complaint remains under investigation by the U.S. Environmental Protection Agency; see a previous post for more on the environmental justice complaint and EPA’s preliminary response.)

H 467 limits compensation available to a person who successfully proves an agricultural or forestry operation has created noxious conditions that interfere with use of their property. As originally introduced, the bill limited compensation available in both pending and future lawsuits. In a letter to the News and Observer, Rep. Jimmy Dixon described the bill as a necessary response to greedy lawyers who “want to sue farmers for outrageous sums without having to prove real damages”. Although more broadly worded, H 467 clearly responded to the pending nuisance lawsuits against swine operations.

The General Assembly has acted to protect agricultural operations from nuisance lawsuits before. North Carolina has had a “right to farm” law since 1979. Under G.S. 106-701, an agricultural operation that has been in existence for a year cannot be considered a nuisance based on changing conditions around it. “Right to farm” laws (adopted in nearly every state) attempt to protect farms from nuisance claims by people who later buy property near the farm — presumably with knowledge of the existing agricultural activity. In 1991, the N.C. legislature amended G.S. 106-701 to extend the same protection against nuisance lawsuits to forestry operations.

How H 467 Would Affect Compensation for Nuisance. “Nuisance” means interference with the use and enjoyment of another person’s property. For example, plaintiffs in the pending swine farm nuisance cases allege conditions created by farm operations (including odor, pests, and exposure to ammonia emissions) have caused health problems and restrict outdoor activities. H 467 limits the money damages that a plaintiff who successfully proves a case of nuisance can recover as compensation. Under the bill, compensation for a nuisance condition caused by an agricultural/forestry operation would be limited to either the fair market value of the property affected (for a permanent nuisance) or the fair rental value (for a temporary nuisance).

Historically, North Carolina case law has recognized other types of nuisance damages such as injury to a business. One case allowed compensation for water pollution that damaged a downstream fishing/ fish processing operation. Nuisance cases have also sometimes alleged health problems caused by the nuisance condition. H 467 does not allow a plaintiff to recover damages for a business loss or compensation for negative health effects. The only compensation for an agricultural/forestry nuisance allowed under the bill would be the fair market value or fair rental value of the plaintiff’s property. (I do not know whether compensation for health effects could be available under a legal theory other than nuisance.)

The bill may also bar award of punitive damages, which a court can award to punish and deter bad actors. In North Carolina, G.S. 1D-15 allows the court to award punitive damages if the defendant has been found liable for compensatory damages (such as lost property value due to nuisance conditions) and the plaintiff proves one of three aggravating factors: 1. fraud 2. malice or 3. willful or wanton conduct. Willful or wanton conduct means “the conscious and intentional disregard of and indifference to the rights and safety or others, which the defendant knows or should know is reasonably likely to result in injury, damage, or other harm.” See G.S. 1D-5 (7). Without further clarification, H 467 may be interpreted to prevent an award of punitive damages even if the defendant willfully ignored the likelihood of harm to nearby property or acted in violation of state law.

The Scope of H 467. The bill, as first introduced, would have applied to both pending nuisance lawsuits and future lawsuits. Two prominent Republican lawyers, former N.C. Supreme Court Justice Robert Orr and former Representative Paul Stam, raised questions about the constitutionality of limiting compensation available under pending lawsuits. In response to those concerns, the bill was amended to apply only to future nuisance lawsuits; the House then adopted the bill as amended.

H 467 also contains a provision that extends the limitation on nuisance damages to “any private nuisance claim brought against any party based on that party’s contractual or business relationship with an agricultural or forestry operation”. The language most likely intends to protect parent corporations sued as a result of nuisance conditions created by a subsidiary or contractual supplier. For example, the limit on damages would apply to Smithfield Foods as the parent company of Murphy Brown LLC even though Smithfield Foods itself would not be considered an “agricultural operation”.

Status of the bill. Having passed the House, H 467 still needs Senate approval. The bill has been scheduled for discussion in the Senate Agriculture, Environment and Natural Resources Committee today. If the bill receives the committee’s endorsement, it would go back through the Senate Rules Committee before reaching the Senate floor. (Note: Bills often pop out of the Rules Committee without warning.)

Bonus literary tip — A favorite children’s picture book by David McPhail describes a different kind of piggy nuisance.

SmithEnvironment Blog

Environmental Law and Policy from a North Carolina Point of View