Category Archives: General Observations

General comment on environmental issues

Of Leaking Garbage Trucks and the N.C. Constitution

April 11, 2014. One of the draft bills the legislature’s Environmental Review Commission approved for introduction in the 2014 session would “terminate” Governor McCrory’s Executive Order 22. ERC co-chair Ruth Samuelson indicated the bill could also become a vehicle for terminating outdated or unnecessary executive orders issued by previous governors. So the ERC bill raises two interesting questions:

1. What is the controversy behind Executive Order 22?

2. Does the General Assembly have the authority to “terminate” an executive order?

The Controversy. Governor McCrory issued Executive Order 22 in response to one section of the Regulatory Reform Act of 2013 (S.L. 2013-413). Section 59.2 changed a longstanding state rule that vehicles hauling solid waste must be leak proof and substituted a standard that the vehicles must be “designed and maintained to be leak resistant”. The legislation also amended a law enforced by the state Highway Patrol. As amended in 2013, G.S. 20-116(g)(1) now reads:

“No vehicle shall be driven or moved on any highway unless the vehicle is constructed and loaded to prevent any of its load from falling, blowing, dropping, sifting, leaking, or otherwise escaping therefrom, and the vehicle shall not contain any holes, cracks, or openings through which any of its load may escape…. For purposes of this subsection, the terms “load” and “leaking” do not include water accumulated from precipitation.”

Executive Order 22 directs the State Highway Patrol to continue to enforce the law against leakage from vehicles hauling solid waste, but also directs officers to take weather conditions into consideration. The controversy likely stems from a sentence in the executive order that directs Highway Patrol officers to issue a citation to the driver if rainfall, snowmelt or other precipitation leaking from the vehicle passed through the solid waste. In solid waste terms, liquid — including precipitation — that has percolated through solid waste becomes leachate that must be managed because of contaminants picked up from the waste material.

Executive Order 22 prompted a backlash from waste management companies that supported the 2013 legislation. In the ERC meeting, the executive order termination bill was presented as a necessary correction to an unlawful executive action. Critics of the executive order clearly believe the 2013 law prevents enforcement of G.S. 20-116(g)(1) if the leaking liquid began life as precipitation. Executive Order 22 seems to start from a different assumption — that the 2013 amendment should not be interpreted to make G.S. 20-116(g)(1) unenforceable against leaking garbage trucks. (Requiring a Highway Patrol officer to determine the original source of liquid that has percolated through the waste load and leaked onto the highway would almost certainly have that result.)

Discussion in the ERC meeting suggested that legislators continue to be interested in resolving the conflict through discussions with the Governor’s Office, but prepared the bill as a backstop.

Legislative Authority to “Terminate” an Executive Order. There was no discussion in the ERC meeting of the underlying assumption that the General Assembly has the authority to “terminate” an executive order. Article II of the N.C. Constitution vests legislative power in the N.C. General Assembly. Article III gives the Governor executive power, including the duty to “take care that the laws be faithfully executed”. The N.C. Constitution, in section 6 of Article I, also requires the legislative, executive and judicial powers to be “forever separate and distinct from each other”. So the question is whether the General Assembly’s legislative power extends to the “termination” of an executive order.

Governors use executive orders to guide the activities of executive branch agencies. An executive order cannot replace or directly conflict with laws enacted by the General Assembly. To the extent that an executive order “legislates”, it violates the N.C. Constitution. The most recent separation of powers decision by a state appellate court concerned a 2002 executive order issued by Governor Michael Easley authorizing the state budget director to transfer money from the Highway Trust Fund to cover General Fund obligations and avoid a projected budget shortfall. Two citizens, filing suit as taxpayers and bondholders, asked the court to issue a declaratory judgment finding the executive order unconstitutional. The plaintiffs in the case successfully argued that the Governor exceeded his executive budget authority and acted in conflict with statutes governing use of the Highway Trust Fund. See, Goldston v. State of North Carolina and Michael F. Easley, Governor, 683 S.E. 2d 237 (2009). So, it is clearly possible for an executive order to go too far and violate the constitutional mandate that legislative and executive powers “shall be separate and distinct”.

On the other hand, legislative actions sometimes stray into the powers of the executive. A 1982 N.C. Supreme Court decision struck down a law allocating a certain number of seats on the state’s Environmental Management Commission (EMC) to legislators. (The EMC is the executive branch commission, organized under the Department of Environment and Natural Resources, given authority to implement the state’s air and water quality laws.) The court found that legislators could not serve on a commission exercising administrative and executive authority without violating the N.C. Constitution’s mandate for separation of powers. See, Wallace v. Bone, 286 S.E.2d 79 (1982).

There don’t seem to be any court decisions in North Carolina dealing with legislative authority to terminate an executive order. In fact, there seems to be little law on executive orders at all — in North Carolina or in other states. A legislature can effectively “repeal” an executive order by adopting a contrary statute on the same subject or by withholding funding for an activity required by executive order. A Congressional Research Service guidance document on federal executive orders reports that Congress has responded to some Presidential executive orders by passing legislation simply stating that the order does not have the force of law.

To sum up the settled law: Governor McCrory can rescind or replace any executive order — including those issued by previous governors. The General Assembly can effectively nullify an executive order by adopting a contradictory law on the same subject or by exercising control over state appropriations. The idea of legislatively “terminating” an executive order based on a perceived conflict between the executive order and a statute enters new territory. In the past, those conflicts have been resolved by the courts as a matter of state constitutional law. In any case, a more direct way to legislatively resolve a perceived conflict between Executive Order 22 and the 2013 legislation would be to clarify G.S. 20-116(g)(1) to remove all doubt about the interpretation.

Unless the conflict over leaking garbage trucks can be resolved otherwise, the bill to “terminate” Executive Order 22 may create some new law on the relationship between the N.C. General Assembly and the Governor.

ERC Recommends Environmental Legislation for 2014

April 10, 2014. In March, the N.C. General Assembly’s Environmental Review Commission (ERC) provided a first look at legislative proposals for the 2014 session. See an earlier post for more detail on the draft bills presented to the ERC on March 12, 2014. Yesterday, the ERC voted to approve a legislative package that included all of the proposals first presented in March. There had been few changes since then; the bill on state review of engineering plans was the only environmental bill that had revisions. The ERC also approved one additional bill to remove small areas currently included in several state parks and natural areas.

A few notes from yesterday’s discussion of the draft bills.

Stormwater: The ERC endorsed a bill to repeal a 2013 legislative provision that required the state’s water quality program to exclude gravel areas from the calculation of impervious surfaces on a development site. (See the March 19 post for more on impervious surfaces and stormwater requirements.) Repealing the 2013 provision will again allow water quality staff to make individual judgments about the permeability of different combinations of aggregate material, substrate and installation method. ERC co-chair Ruth Samuelson noted a DENR concern about lack of funding for a study required by the bill and suggested funding could be addressed during the legislative session.

Isolated wetlands: The ERC also approved a bill to allow somewhat greater development impacts to “isolated” wetlands without a state water quality permit. (Isolated wetlands fall outside federal Clean Water Act permitting jurisdiction.) The ERC bill would raise the thresholds for triggering prior state review of isolated wetland impacts and reduce mitigation requirements for larger projects that require an individual state permit. The March 19 post provides more detail on the isolated wetlands bill draft; the bill has not changed since then.

Rep. Samuelson mentioned a DENR concern about raising the permitting threshold for wetlands in the eastern part of the state to one acre, but there was no further explanation or discussion of the department’s concern. (No one from DENR spoke during the meeting.) Rep. Samuelson also noted a question from the N.C. Homebuilder’s Association about the relationship between the ERC bill and review of surface water and wetland rules under the Regulatory Reform Act of 2013. Samuelson suggested the ERC may need to think more about how the two fit together. (More on the rule review and re-adoption requirements here.) The N.C. Homebuilder’s Association has pushed unsuccessfully for legislative repeal of the state’s isolated wetlands rules in the past and sees the rule review process as another way to remove the rules. The real question being asked by the Homebuilder’s Association is whether the ERC bill (a compromise that reduces isolated wetland permitting requirements without eliminating protection completely) may stand in the way of complete repeal of the rules.

Review of engineering work: Since March, legislators made some technical and clarifying changes to the proposed bill on state and local permit review of engineering plans. Those changes largely involve definition or clarification of terms used in the bill.

Local environmental ordinances: The bill draft approved by the ERC remained unchanged since March. The bill immediately repeals a 2013 moratorium on local environmental ordinances that impose stricter standards than federal or state environmental rules. (The 2013 provision sunsets on October 1 2014 in any case.) The bill approved by the ERC continues to focus on a narrow set of circumstances where a local ordinance actually conflicts with state or federal standards and identifies one specific conflict between local fertilizer ordinances and rules adopted by the Department of Agriculture and Consumer Services. Otherwise, the bill directs state environmental agencies to continue to review new local ordinances for actual conflict with state rules and report back to the General Assembly in the fall of 2014 and again in 2015.

See an earlier post for more on the controversy over local environmental ordinances; the relationship between federal, state and local standards; and a 2013 Senate bill supported by the N.C. Homebuilders Association that proposed much tighter limits on local authority. Discussion in the ERC meeting suggests members may be making different assumptions about the scope of the proposed ERC bill. Legislators who had worked on the bill draft consistently talked about identifying local ordinances that “infringe” on state authority; questions from other ERC members sometimes talked in terms of local ordinances that “overlap” state rules.

Reporting wastewater spills: This bill draft also remained unchanged since the March meeting. The bill requires reporting of a wastewater spill to DENR and to the public within 24 hours after the spill reaches surface waters — clarifying the duty to report to DENR and reducing the time for public notice from 48 hours to 24 hours. At the March ERC meeting, Rep. Pricey Harrison suggested requiring immediate reporting to DENR; that change was not made.

“Terminating” executive orders. The ERC also approved a bill to “terminate” an executive order issued by Governor McCrory concerning enforcement of standards for vehicles transporting solid waste. Co-chair Samuelson indicated the bill may also become a vehicle for legislative action on executive orders issued by previous governors. A future post will go into greater detail on the controversy surrounding the McCrory executive order and constitutional issues raised by a legislative attempt to “terminate” executive orders.

Removal of land from state nature and historic preserves: The one new bill considered by the ERC yesterday makes adjustments to lands included in several state parks and natural areas. The General Assembly sometimes removes areas from state parks, natural areas and historic sites to reflect boundary adjustments or to accommodate road rights of way. The ERC bill would delete a total of just under 1 acre from Crowder’s Mountain State Park; the deletions appear to be boundary adjustments. The bill removes approximately 1/4 acre from Jockey’s Ridge State Park, referencing a surveyed easement for the Town of Nags Head. The bill also deletes 7.26 acres from Gorges State Park for a state highway project and 3.39 acres from Lumber River State Park for a secondary road project. The final deletion would remove an unspecified acreage in the Lower Haw State Natural Area in Chatham County. (The bill references the tract by deed book and page number, but has placeholders for both the acreage and specific property description.) For the Lower Haw State Natural Area deletion, the bill simply refers to removal under G.S. 113-44.14. The statute allows DENR to recommend removal of a state park if “the major purposes of a park are not consistent with the purposes of [the State Parks Act]”.

Note: All of the the bill drafts recommended by the ERC can be found in the ERC handouts for April 9.

To be continued: The ERC did not take up any legislation related to coal ash. A special ERC meeting has been schedule for 1:30 p.m. on April 22 to receive an update on coal ash, but ERC co-chair Ruth Samuelson could not say whether legislation would be considered at that meeting.

Landslide

April 7, 2014. The recent mudslide in Oregon that killed at least 30 people occurred in an area with a history of slides extending back to the 1940’s. A series of studies, including a 1999 U.S. Army Corps of Engineers report, warned of the potential for catastrophic failure of the slope. After receiving another report on the landslide risk from private consultants in 2004, Snohomish County considered creating a program to buyout homes in the area at greatest risk. In the end, the county chose to do a slope stabilization project instead. (See this Seattle Times article for a history of the Oregon slide area.)

The Oregon disaster has raised (again) questions about landslide risk and the role of state and local government in responding to those risks. The questions about availability of landslide hazard information; communication of risk to property owners and homebuyers; and the need for regulation of development on steep slopes have very recent echoes in North Carolina policy debates.

North Carolina can have hundreds of landslides a year — most in the mountainous western part of the state. According to this report by WSPA news, the N.C. Geological Survey estimated 300 landslides, rock slides and slope failures in 2013. Slides in uninhabited areas may do little damage, but the state also has a history of large, dangerous landslides causing millions of dollars in property damage and a number of deaths. Rock slides periodically close interstate highways and sections of the Blue Ridge Parkway, impeding transportation in western counties for months and requiring costly repairs.

Panoramic photo of 2004 Peeks Creek landslide, Macon County, N.C. (noaa.gov)

In 2004, the state experienced over 100 landslides triggered by just two heavy rainfall events associated with back-to-back hurricanes (Frances and Ivan). In September 2004, a slope failure following Hurricane Frances destroyed one home in a subdivision near Boone and caused eight others to be condemned for occupancy. The same storm caused a slope failure and debris flow that destroyed a home in Burke County and left a home in McDowell County on the edge of an eroded slope. A week after Frances, Hurricane Ivan rainfall caused slope failures and debris flows that destroyed homes in Buncombe and Macon counties. The Macon County event (known as the Peeks Creek landslide) began near the top of Fishhawk Mountain and barreled 2.25 miles down the mountain at an estimated 30 miles an hour. The Peeks Creek disaster destroyed fifteen homes, killed five people and injured two others. The event also caused state and local officials to take steps toward identifying landslide risk for the first time.

Photo of Peeks Creek slide damage (N.C. Dept. of Public Safety)

For more information on the Peeks Creek disaster, see the N.C. Geological Survey report and an analysis by the National Oceanic and Atmospheric Administration.

After the Peeks Creek slide, the N.C. General Assembly earmarked funds from the 2005 Hurricane Recovery Act to start a state landslide hazard mapping program focused on 19 western counties. Five N.C. Geological Survey employees began mapping landslide hazard areas in the counties considered to have the greatest landslide risk. By 2010, state geologists had completed landslide hazard maps for four counties (Macon, Henderson, Watauga and Buncombe), using information on historic landslide locations, soil types and slope data. The maps can be accessed through links on the N.C. Geological Survey homepage.

As state geologists worked on the first landslide hazard maps, the N.C. General Assembly considered several bills to address development on steep slopes. The 2007 Safe Artificial Slope Construction Act (House Bill 1756) would have required local governments to set standards for development on artificially-created steep slopes. The bill also proposed to amend real estate disclosure laws to require notice to a prospective purchaser of location in a landslide hazard area identified on N.C. Geological Survey maps. The bill encountered resistance from some mountain-area local governments as well as realtors and developers and never got out of committee. A 2009 bill (also titled the Safe Artificial Slope Construction Act) took a step back and simply proposed a legislative study committee to look at the need for statewide artificial slope construction standards and disclosure of natural landslide hazards to prospective purchasers. The 2009 bill also failed to get out of committee.

Against this background of resistance to state action on steep slope construction standards and disclosure of natural landslide hazards, the 2011 General Assembly defunded the landslide hazard mapping program. The budget cut eliminated four of the five landslide hazard mapping positions and brought state mapping efforts to an end.

As the state backed away from any role on landslide hazard mitigation, some local governments in the western part of the state (including Macon County) moved ahead with ordinances on steep slope development. A few of the 15 counties the N.C. Geological Survey mapping program did not reach have attempted to map landslide hazard areas using other funding sources.

The state has returned to the more limited role of emergency response and disaster relief. Basic property insurance does not cover landslide damage. In the 2005 Hurricane Relief Act, the N.C. General Assembly allocated over $200 million in state funds for disaster relief largely focused on western counties that experienced flooding and landslide damage from Frances and Ivan. Uses of the disaster relief funds included “housing buyout and relocation assistance for those persons whose homes were destroyed or severely damaged by debris flows or whose homes are located in a landslide zone”.

A Preview of 2014 Environmental Legislation

March 19, 2014. On March 12, the N.C. General Assembly’s Environmental Review Commission (ERC) met to hear reports from several working groups created to follow up on 2013 legislative issues. [The ERC is a joint House/Senate committee that meets between legislative sessions to study and develop legislation on environmental issues.] The reports included recommended legislation, but the ERC did not really discuss the bill drafts. The ERC will vote on legislative proposals for the 2014 session in April. The working group bill drafts represent a starting point for development of 2014 legislation; the ERC co-chairs indicated a willingness to consider changes to the proposals before voting on April 3 to approve a package of 2014 ERC bills. With the understanding bill drafts may change between now and April 3, legislative proposals presented last week included:

Stormwater. The Regulatory Reform Act of 2013 (Session Law 2013-413) changed state stormwater standards to treat gravel areas as “pervious” and exclude those areas from the calculation of built-upon area on a development site. (A pervious surface allows water to percolate through to the soil beneath; an impervious surface –such as a concrete driveway — does not.) Since the amount of built-upon area determines the level of stormwater control required, developers had asked for exclusion of gravel from the calculation of built-upon area as a way to reduce stormwater requirements. The 2013 regulatory reform provision also directed the ERC to study state stormwater programs “including how partially impervious surfaces are treated in the calculation of built-upon area under those programs”.

Having successfully lobbied for legislation treating “gravel” as a pervious surface and intending to push for changes in the way partially impervious surfaces are counted toward built-upon area, supporters of the 2013 legislation encountered a complication — there was no consensus on the definition of “gravel”. As a result, the ERC stormwater working group focused on the gravel controversy instead of moving on to the issue of partially impervious surfaces.

The working group found that gravel areas may or may not be pervious depending on the size and type of the aggregate material used and the underlying substrate. The draft bill presented to the ERC would actually undo the 2013 legislative decision to exclude all gravel surfaces from the calculation of built-upon area and direct the Department of Environment and Natural Resources (DENR) to contract with N.C. State University for a study of the pervious/impervious qualities of different types of aggregate materials.

Isolated Wetlands. After several bills proposing to repeal state rules protecting isolated wetlands failed to win passage, the General Assembly asked the ERC to study isolated wetlands regulation. (See an earlier post for more background on the isolated wetlands issue.) Senator Brent Jackson presented a recommendation for modification, but not repeal, of state standards for development in isolated wetlands. You can find a copy of the draft legislation here.

The bill would allow developers to disturb a somewhat larger area of isolated wetlands without a water quality permit review. Current state rules allow isolated wetland impacts below specific thresholds to be “deemed permitted” under certain conditions. The proposed legislation would raise those thresholds. West of Interstate 95, the “deemed permitted” threshold would be increased from 1/10th of an acre to 1/3 of an acre; east of Interstate 95, the “deemed permitted” threshold would increase from 1/3 of an acre to 1 acre. (Interstate 95 has long been used as the dividing line between wetlands-rich eastern counties and piedmont/western counties that have fewer wetlands.)

The bill also proposes to reduce the mitigation required for isolated wetland impacts. Wetland rules only require mitigation (in the form of wetland creation, wetland restoration or preservation) for impacts to one acre or more of wetlands; for projects requiring mitigation, the rules set a 2:1 ratio of acres of wetlands mitigation to acres of wetlands impacted by development. The 2:1 mitigation ratio allows for loss of wetland function and potential for mitigation failure. Current rules also use a sliding scale of mitigation credits — giving less credit toward meeting the mitigation requirement for preservation of existing wetlands and more credit for creation or restoration of wetlands. The ERC working group recommendation appears to propose a flat 1:1 mitigation ratio and makes no distinction based on the type of mitigation used.

Local Environmental Ordinances. An earlier post described legislative efforts to restrain local government adoption of environmental ordinances, resulting in a one-year moratorium on adoption of new city and county environmental ordinances and an ERC study. The ERC working group on local ordinances, led by Rep. Chuck McGrady and Sen. Andrew Brock, found little actual conflict between state environmental regulations and local ordinances. The existence of a specific state/local conflict apparently became the practical guideline for the working group’s proposed legislation. The draft bill addresses the one area of conflict the members found — local ordinances on use and application of fertilizer already regulated by the N.C. Department of Agriculture and Consumer Services.

The recommended legislation follows the General Assembly’s past practice of preempting local regulation only when necessary to meet some overriding state interest. It is not clear how the narrowly drafted bill recommended by the working group will be received by those pushing for stricter limits on local environmental ordinances. In 2013, the N.C. Homebuilders Association lobbied for the much broader restrictions on local authority in Senate Bill 112 (discussed in the earlier post). Under the approach proposed in SB 112, it would be very difficult for a local government to adopt a more stringent ordinance on a subject already addressed (however narrowly) by state or federal environmental rules. For Senate Bill 112 supporters, the issue may be more about the benefits of a single, statewide set of minimum development standards than concern about conflict between state and local regulation.

Reporting wastewater spills. In response to concerns about delayed public notice of the recent Haw River wastewater spill, an ERC working group proposed to amend the existing notice law. You can find a copy of the draft legislation here. The amendments would do two things —

1. Clearly require notice to DENR of any spill of more than 1,000 gallons of untreated wastewater. (Although notice to DENR can be implied from the existing law, the statute only talks about published notice.)

2. Reduce the time allowed to provide notice (both to DENR and to the public) from 48 hours to 24 hours after untreated wastewater reaches surface waters. Based on discussion at the March meeting, the ERC may consider requiring more immediate notice to DENR.

Review of Engineering Work. North Carolina’s professional engineers (PEs) have lobbied for several years to limit state review of plans prepared by PEs and to limit the ability of regulators to require changes to engineering plans. The most recent effort led to language in the Regulatory Reform Act of 2013 (Session Law 2013-413) requiring a study of state and local review of engineering plans. Section 58 of S.L. 2013-413 directed DENR, the Department of Transportation, the Department of Health and Human Services and local governments to study:

“(iii) the standard scope of review within each permit program, including whether… staff are requiring revisions that exceed statutory or rulemaking requirements when evaluating such permits or plans; [and]

(iv) opportunities to eliminate unnecessary or superfluous revisions that may have resulted in the past from review processes that exceeded requirements under law, and opportunities to otherwise streamline and improve the review process for applications and plans submitted for approval.”

These issues have come up a number of times in recent years and seem to represent several different concerns on the part of private sector engineers: questions about the engineering credentials of state and local permit reviewers; concern about professional liability for changes in engineering design required by state/local permitting staff; time added to the permitting process; and chaffing at second-guessing of a PE’s judgment by regulatory staff.

The working group’s legislative proposal, can be found here. It appears to take a moderate path toward managing the tension between private sector engineers and state/local permitting staff. (A sometimes necessary tension given their different responsibilities.) One interesting part of the proposal has to do with review of innovative systems and designs. The bill would allow a permitting agency to charge the applicant for a third-party engineering review of an innovative system if the agency does not have a staff engineer qualified to do the review. That seems to be a wise approach given past controversies (and litigation) over approval of innovative systems.

Historical note: There have been a number of lawsuits against state and local permitting agencies based on approval of engineered innovative systems that later failed. One of the largest lawsuits resulted from the failure of a wastewater system serving dozens of homes in an Orange County subdivision in the 1990s. The homeowners sued the developer, the engineering firm that designed the system and the private utility managing the system — but also sued the state based on claims of negligent permitting. The state ultimately settled the lawsuit, paying thousands of dollars in damages to the homeowners.

Coal Ash. ERC co-chair Rep. Ruth Samuelson noted the high level of public interest in coal ash, but indicated the ERC would not discuss coal ash at the March meeting. Samuelson stressed the need for deliberation and informed decision-making. The ERC has only one more scheduled meeting before the General Assembly convenes in May. At the April 3 meeting, the ERC will vote on recommended legislation for the legislation session and there has been no discussion of potential coal ash legislation.

Understanding the Court’s Coal Ash Order

Note: This post was updated to link to a different site for a copy of the judge’s order after the original source site became unavailable.

On March 6, 2014, a Superior Court judge issued an order reversing part of a 2012 declaratory ruling by the N.C. Environmental Management Commission (EMC) concerning regulation of coal ash ponds under state groundwater rules. The declaratory ruling case began in October of 2012 — before the Clean Water Act citizen suits of 2013 and the recent Dan River spill — as a request for an interpretation of state groundwater rules as applied to the coal ash ponds. The declaratory ruling request (filed on behalf of Cape Fear River Watch, Sierra Club, and Western N.C. Alliance) asked the EMC to rule on three issues:

1. Operators of coal ash ponds with Clean Water Act discharge permits first issued on or before December 30, 1983 must take corrective action (such as assessment and remediation) when their activity causes a groundwater standard violation — even if the violation occurs inside the compliance boundary around the ash pond;

2. Operators of coal ash ponds with Clean Water Act discharge permits first issued on or before December 30, 1983 must take immediate action to remove sources of contamination causing a groundwater standard violation; and

3. These same requirements apply to owners of coal ash ponds that are closed and inactive.

Two background notes. State rules recognize the possibility that waste disposal may cause groundwater contamination. The rules generally only require corrective action at a permitted waste disposal site if the waste disposal activity has caused a groundwater standard violation beyond a defined compliance boundary. Corrective action can include assessment of the extent of contamination, steps to contain or reduce ongoing contamination and groundwater remediation. Landfills built to modern (post-1983) solid waste management standards have a groundwater compliance boundary of 250 feet around the perimeter of the waste disposal area or the property line, whichever is closer. Older facilities (like the coal ash ponds) generally have a 500-foot groundwater compliance boundary. See a previous post for more on groundwater compliance boundaries.

December 30, 1983 becomes significant because state rules treat waste disposal sites that first received Clean Water Act permits on or before that date as unpermitted facilities. (More about the logic of that assumption as applied to ash ponds later.) The rules require a different response to groundwater contamination found at an unpermitted waste disposal site as opposed to a permitted facility — presumably because newer facilities have been built to more environmentally protective standards.

Judge Ridgeway’s Decision. On the first issue, Judge Ridgeway agreed with the EMC, concluding that state rules only require corrective action if the waste disposal activity causes a violation of groundwater standards beyond the compliance boundary around the disposal site. Exceedence of a groundwater standard within the compliance boundary does not require corrective action except in extraordinary circumstances. Although consistent with past EMC and DENR interpretations, Judge Ridgeway’s decision leans heavily on new groundwater legislation adopted as part of the Regulatory Reform Act of 2013. (See the earlier post for more on the 2013 legislation.) According to the judge’s order, all of the parties to the declaratory ruling case agreed that the 2013 legislation mooted the compliance boundary issue.

On the other hand, Judge Ridgeway decided the second issue (concerning immediate removal of the source of groundwater contamination) in favor of the petitioners. The judge relied on state rules treating waste disposal facilities first permitted under the Clean Water Act on or before December 30, 1983 differently from those permitted later. The rules classify older facilities as unpermitted and a groundwater standard violation at an unpermitted waste disposal site triggers a requirement to immediately remove the source(s) of contamination. All of the coal ash ponds in the state first received a Clean Water Act discharge permit before December 30, 1983.

Treating the ash ponds as unpermitted waste disposal facilities is key to the judge’s ruling that the utility companies must immediately remove the contamination source at any ash pond that has caused a groundwater standard violation beyond the compliance boundary. Removal of the source of groundwater contamination associated with a coal ash pond clearly has huge implications, since the primary source of contamination is the coal ash itself. Under the rules, a groundwater standard violation at a permitted waste disposal facility may require corrective action, but not necessarily removal of waste causing the contamination.

Judge Ridgeway disposed of the third issue by briefly noting that the laws and rules don’t distinguish between active and inactive waste disposal facilities.

Potential confusion. Judge Ridgeway’s order seems to treat coal ash ponds as permitted waste disposal sites in deciding the first issue and as unpermitted waste disposal sites in deciding the second. The 2013 legislation the judge relies on to decide the first issue clearly applies to waste disposal systems that require an individual permit under either water quality or waste management laws. The new statute language limiting the EMC’s power to require corrective action inside the compliance boundary begins with these words: “When operation of a disposal system permitted under this section results in an exceedance of the groundwater quality standards…”

It seems clear that the 2013 legislation can only benefit operators of waste disposal facilities holding individual water quality or waste management permits. Having given coal ash ponds the benefit of the new law on the first issue, the judge does not explain why the coal ash ponds are treated as unpermitted waste disposal facilities in deciding the second. The judge relies on state rules that predate the 2013 legislation to identify the kind of corrective required at the ash ponds even though the new law also addresses corrective action — without making any distinction based on the permitting history of the facility:

“(k) Where operation of a disposal system permitted under this section results in exceedances of the groundwater quality standards at or beyond the compliance boundary established under subsection (i) of this section, exceedances shall be remedied through cleanup, recovery, containment, or other response as directed by the Commission.”

It is possible that Judge Ridgeway saw no conflict between the new law on corrective action and existing groundwater rules on corrective action at older facilities, but the decision does not explain how he reconciled the two.

Permitted or unpermitted and does it matter? There may well be an appeal of Judge Ridgeway’s decision. By assuming the coal ash ponds have a different permitting status for purposes of the two major issues in the case, the decision awards each side a win and a loss. It is conceivable that at least one party to the case would prefer two wins.

The permitted/unpermitted conflict just emphasizes again the peculiar regulatory status of coal ash ponds. EMC rules treating pre-December 30, 1983 waste disposal sites as “unpermitted” makes perfect sense in the context of truly unauthorized waste disposal sites or older landfills that closed rather than meet new standards for solid and hazardous waste disposal that went into effect in 1983. It makes less sense as applied to coal ash ponds that largely fell under the jurisdiction of the Utilities Commission until 2009 and never had an obligation to comply with solid and hazardous waste regulations. In fact, the coal ash ponds continued to operate for decades after 1983 — subject only to Clean Water Act permits for discharges from the ponds — with the acquiescence of both state and federal policy makers. That only began to change in 2009 after the TVA ash spill drew more attention to the risks. Then, the state somewhat increased environmental oversight for the ponds — but failed to enact comprehensive coal ash disposal legislation much less demand immediate closure of the ash ponds.

Since coal ash ponds operated outside of most environmental regulatory programs for years, existing laws and rules don’t fit either operation or closure of the ash ponds very well. As badly as the state needs a solution to the problems surrounding coal ash ponds, Judge Ridgeway’s order in itself is not likely to be the answer. A solution will require standards for coal ash disposal; a process for safe closure of coal ash ponds; priorities for closure; and assessment of environmental damage and ongoing risk at existing facilities. It’s going to require legislation.

The Dan River Coal Ash Spill and Environmental Policy

March 3, 2014. The February 2 coal ash spill at Duke Energy’s Dan River steam station (see an earlier post for more on the spill) puts some recent and still pending environmental policy decisions in a new light.

Preventing state environmental programs from adopting standards “more stringent than” federal standards. In 2011, the General Assembly prohibited environmental agencies from adopting a rule “that imposes a more restrictive standard, limitation, or requirement than those imposed by federal law or rule, if a federal law or rule pertaining to the same subject matter has been adopted”. You can find the statute (G.S. 150B-19.3) here. The increasing evidence of water quality problems associated with coal ash ponds may test those limits on state regulation —

♦ The question is whether new state rules on coal ash disposal or closure of existing coal ash ponds would be considered “more stringent” than existing federal rules. Federal rules exempt coal ash from regulation as a hazardous waste, but include ash as a “solid waste” and set minimum standards for solid waste landfills. On the other hand, coal ash ponds aren’t considered solid waste landfills so the solid waste rules don’t apply. Federal Clean Water Act rules regulating stormwater and wastewater discharges apply to the ponds, but nothing in the existing federal rules requires a coal ash pond to meet construction standards to minimize groundwater impacts or obligates the utility company to move coal ash from a pond to a disposal facility with less environmental risk. Given that landscape — federal rules address some, but not all, concerns about coal ash disposal — can state environmental programs fill the gaps by imposing additional requirements without specific statutory authority?

♦ The exceptions in G.S. 150B-19.3 are inadequate to get ahead of an environmental problem that poses a long-term risk, but not a “sudden, unforeseen” threat. Few of the problems associated with coal ash ponds would be considered sudden or unforeseen. Both federal and state regulators have long known that unlined ash ponds pose some risk of groundwater contamination. The massive spill at TVA’s Kingston plant in 2008 focused attention on the possibility of structural failure of a coal ash impoundment. The U.S. Environmental Protection Agency has been working on federal coal ash disposal regulations off and on for over ten years because of these and other concerns. As obvious as the problems surrounding coal ash disposal have now become, the exceptions in G.S. 150B-19.3 don’t seem to give environmental agencies a way to address those problems through rulemaking.

♦ If state agencies need additional statutory authority to adopt state rules that go beyond current federal regulation of coal ash disposal, rulemaking could not begin until after the 2014 legislative session that begins in mid-May. Rule adoption often takes two years. The other alternative would be for the General Assembly itself to set standards for coal ash disposal through legislation. Legislation can move much more quickly than rulemaking, but the last effort to enact state legislation on coal ash failed due to opposition from the utility companies. See this post for more information on earlier state legislation and a link to the 2009 coal ash disposal bill.

Efforts to limit state review of engineered plans and drawings. North Carolina’s professional engineers (PEs) have lobbied for several years to limit state review of plans prepared by PEs and to constrain the ability of regulatory staff to require changes to engineering plans. The most recent effort led to language in the Regulatory Reform Act of 2013 (Session Law 2013-413) requiring a study of state and local review of engineering plans. Section 58 of S.L. 2013-413 requires DENR, the Department of Transportation, the Department of Health and Human Services and local governments to study:

The history and recent failure of the Dan River stormwater pipe reinforces the value of having a second, objective review of engineering plans and decisions. The early decision by utility company engineers (before state regulation) to expand the ash pond over a metal stormwater pipe and the apparent failure to plan for maintenance of the pipe likely contributed to the spill. In the aftermath of the February spill, it became clear that current Duke Energy staff did not know how the stormwater pipe had been constructed — incorrectly assuming that the entire stormwater pipe was concrete. Even in real time response to the Dan River spill, Duke Energy and DENR engineering staff sometimes reacted very differently to the same information. Duke Energy did a camera inspection of a second, smaller stormwater pipe at the Dan River site to check its condition. According to news reports, Duke Energy staff planned no immediate action based on the results of the camera inspection other than continued monitoring. A state dam safety engineer who looked at the same video showing leaks and pooling of water in the pipe concluded that the second pipe could also be discharging coal ash to the Dan River. Water quality testing confirmed high levels of arsenic in discharges from the pipe and the dam safety program ordered Duke to close the second pipe within 10 days. When an error carries potentially high risks or costs, review of engineering plans and decisions can be critical — simply because state and local environmental staff will look at the same situation through different eyes.

Note: The Study of Review of Engineering Work has been submitted to the legislature’s Environmental Review Commission and the General Assembly could consider legislation on state/local review of engineering plans in the upcoming legislative session.

Limiting DENR’s ability to order steps to contain groundwater contamination. The Regulatory Reform Act of 2013 also does two significant things to limit (or defer) steps to contain or cleanup groundwater contamination:

♦ The law makes the property line the presumed “compliance boundary” for groundwater contamination caused by a permitted waste disposal facility (including a coal ash pond). State rules allowed for some exceedence of groundwater standards near a waste disposal area, but generally put the compliance boundary at 250 feet around the footprint of the facility or at the property line whichever is closer. Causing an exceedence of groundwater standards beyond the compliance boundary violates the permit. The new law presumes groundwater contamination associated with a waste disposal facility can be allowed to migrate to the property boundary — including any adjoining property in the same ownership. The law does not change existing compliance boundaries set by permit, but sends a strong message about future permit terms and regulatory requirements. The change would potentially allow the owner of a waste disposal facility to contaminate a much greater area of groundwater without any obligation to remediate. Using the property line as the compliance boundary also leaves little safety margin to protect the groundwater rights of nearby property owners.

♦ The law limits DENR’s ability to require the operator of a permitted waste disposal facility to take steps to remediate or contain groundwater contamination within the compliance boundary. The law ties DENR’s hands until the contamination has migrated beyond the compliance boundary unless DENR can show that:

(1) The contamination has already caused a water quality violation in adjoining classified waters or a violation “can be reasonably predicted to occur”;

(2) The contamination poses an imminent threat to the environment, public health, or safety;

(3) The contamination will cause a violation of any standard in groundwater occurring in the bedrock, including limestone aquifers, unless the violation has no potential to adversely affect a water supply well.

At the very least, DENR will have to meet a significant new burden before directing the owner of a waste disposal facility to take steps to prevent further migration of groundwater contamination. It appears that clear evidence of groundwater contamination moving offsite — affecting another property owner’s groundwater — will not be enough by itself to allow DENR to require steps to contain the contamination. DENR will have to demonstrate that groundwater standards will be violated. In the worst case, the horse will be well out of the barn before the state can act.

Limiting Local Environmental Ordinances

Earlier posts here, here, and here talked about regulatory reform in North Carolina and the impact on state environmental standards. In 2013, a Senate regulatory reform bill (Senate Bill 112) also proposed to significantly limit local government authority to adopt environmental ordinances. Although Senate Bill 112 did not pass the House, the Regulatory Reform Act of 2013 (Session Law 2013-413) effectively put a one-year moratorium on adoption of local environmental ordinances to allow time for a legislative study. The bill directed the General Assembly’s Environmental Review Commission (ERC) to study:

“the circumstances under which cities and counties should be authorized to enact ordinances (i) that regulate a field that is also regulated by a State or federal statute enforced by an environmental agency or that regulate a field that is also regulated by a rule adopted by an environmental agency and (ii) that are more stringent than the State or federal statute or State rule.”

Existing State Limits on Local Authority. In North Carolina, cities and counties only have the authority granted to them by state law. But even where the General Assembly has clearly given local governments authority to act, there are existing limits on exercise of local regulatory authority. For example, local ordinances must be consistent with state law. Cities and counties have no authority to enforce an ordinance that requires an action that would be illegal under state law or make compliance with state law difficult. The reverse is also true — a local ordinance cannot make an act unlawful if state law clearly makes it lawful. But “consistent” does not mean identical and many state laws allow local governments to adopt ordinances that go beyond minimum state standards.

The General Assembly can also claim the exclusive authority to regulate a particular subject at the state level. The state expressly preempts local regulation by adopting legislation that clearly prohibits or limits adoption of local ordinances on the same subject. For example, N.C. General Statute 130A-293 prohibits cities and counties from adopting ordinances regulating transportation, storage and disposal of hazardous waste or prohibiting construction of hazardous waste facilities. The same statute, however, allows local governments to apply zoning and land use ordinances to hazardous waste facilities to the same extent those ordinances apply to other land uses. A general zoning or land use ordinance will not be preempted under the law unless DENR finds that the ordinance would prohibit construction of a hazardous waste facility needed to “serve the interests of the citizens of the State as a whole”. The law preempts some local authority, but attempts to strike a balance between the state’s need for hazardous waste facilities and local land use decisions.

Courts most often find that the state has implicitly preempted local government authority on a particular subject when a comprehensive state regulatory scheme forecloses the possibility of local standards. In 2001, the N.C. Court of Appeals ruled that Chatham County could not set standards for siting swine farms because detailed state standards for siting large animal operations (including swine farms) indicated an intent to have a single, consistent set of state standards. See Craig v. County of Chatham, 143 N.C. App. 30, 545 S.E.2d 455 (N.C. App., 2001).

In short, the General Assembly can preempt local regulation of a particular subject by saying so outright or by adopting a comprehensive state regulatory program that crowds out local regulation. Whether express or implied, preemption has been directed to individual regulatory issues and only when necessary because of some overriding state interest. That may be the need for uniform regulation or to prevent local governments from excluding unpopular land uses that serve a necessary purpose.

Changing the balance between state and local authority. The approach proposed in Senate Bill 112 would completely change the balance between state and local decision-making. Instead of assuming local ordinances can reflect local conditions and values, Senate Bill 112 would only allow a local government to go beyond minimum federal and state environmental standards in extraordinary circumstances. The circumstances listed in the bill included unique local conditions; a serious threat to health, safety and welfare; a requirement of federal or state law; and ordinances needed to qualify for discounted federal flood insurance rates. But even those exceptions would require approval by a super-majority of the local governing board (3/4 members) and by the Department of Environment and Natural Resources.

The risk of gaps in nuisance, environmental and health standards. Since federal, state and local programs don’t have the same scope, an overly broad preemption of local environmental ordinances would leave significant gaps:

Some of the most fundamental responsibilities of local government predate state and federal environmental laws. Those laws have been built on the foundation of local nuisance, public health and land use ordinances — not to replace them. Local governments have long had the responsibility to address nuisance conditions and regulate land use. State and federal environmental standards came later and while those standards sometimes touch on the same subjects, they do not substitute for local zoning, subdivision, nuisance, and health ordinances. To use one example cited in legislative discussions last session — a city stormwater ordinance to control nuisance flooding doesn’t become unnecessary because the state has adopted stormwater rules to protect water quality. Preempting local ordinances without having a comprehensive set of state standards to put in their place could leave significant holes in protection of public health, safety and the environment.

Local governments need ordinances to manage local water, sewer, stormwater and waste disposal infrastructure. To give one example, state and federal environmental rules regulate sewer systems and wastewater treatment plants to prevent water pollution, but don’t address grease disposal that may cause a sewer line to become blocked. A local ordinance regulating grease disposal could easily be considered “more stringent” than federal and state standards. The General Assembly will also find that many local governments have ordinances on waste collection, waste disposal and connection to local water and sewer systems. Although federal and state rules touch on some aspects of those infrastructure systems, many local ordinances have no parallel in federal or state rules — because federal and state agencies have no direct responsibility for providing those services and managing the infrastructure. Under the approach proposed in Senate Bill 112, local ordinances needed for operation and maintenance of environmental infrastructure could be prohibited unless justified under one of the exceptions in the bill and approved by the state.

Different communities have different values in terms of land use and development activity. Many local development ordinances could be considered to overlap federal and state “environmental” standards. Overly broad preemption of local standards for land use and development activity would eliminate the ability of citizens to shape their own community. If local officials act contrary to the wishes of their constituents, they can be voted out of office. It will be much more difficult for the residents of Wilmington, Cary, Charlotte and Siler City to have a say in how their communities develop if much of that power shifts to officials in Raleigh and Washington D.C.

What will be the guiding principle for further limiting local authority? Given the different roles of local, state and federal regulations, very broad preemption of more stringent local environmental ordinances will create significant controversy — controversy about what it means for a local ordinance to be “more stringent”; controversy about what should be considered an “environmental” ordinance; and controversy about justification of more stringent local standards. What seems to be missing from the debate so far is some new guiding principle for limiting local authority that could be used to answer those questions. Until now, the General Assembly has shaped local authority through laws granting specific powers to cities and counties and by preempting local authority when necessary to promote some broader state interest. If that set of operating principles changes, some new principle will need to be stated.

Note: In January, the full Environmental Review Commission heard a brief discussion of the issue. On February 17, 2014, the ERC’s City and County Ordinance Working Group will hear public comment in a meeting at 3:30 in Room 414 of the Legislative Office Building.

Coal Ash Problems Continued

February 9, 2014. An earlier post described groundwater contamination and potential surface water pollution associated with coal ash impoundments in North Carolina. Last week, a Duke Energy ash impoundment in Rockingham County released an estimated 82,000 tons of coal ash into the Dan River. The ash, in a slurry of as much as 27 million gallons of water, leaked from a ruptured stormwater pipe running under an ash impoundment at Duke’s now-closed Dan River Steam Station. The spill continued off and on for five days as Duke Energy worked to temporarily contain the spill and then permanently cap the stormwater pipe. Duke Energy workers finished installing and testing the permanent cap yesterday. Early reporting on the spill can be found in stories by Charlotte Observer reporter Bruce Henderson here and here and by AP reporter Michael Biesecker here.

EPA staff have been on site since early last week. Although coal ash has not been classified as a hazardous waste, coal ash can contain a number of metals identified as hazardous substances in rules adopted by EPA under the Clean Water Act. Under federal law, a hazardous substance spill that exceeds thresholds set in federal rules must be reported immediately to EPA and to emergency response agencies. (You can find the rule listing hazardous substances regulated under the Clean Water Act and the reporting threshold for each substance here.) Although EPA must be notified immediately of a reportable spill, the person (or company) responsible can take up to 24 hours to determine whether the spill meets the reporting threshold.

Under state law (G.S. 143-215.85), anyone responsible for a hazardous substance spill must “immediately notify the Department, or any of its agents or employees, of the nature, location and time of the discharge and of the measures which are being taken or are proposed to be taken to contain and remove the discharge.” Both state and federal law also require immediate action to contain the spill, remove the hazardous substance and restore damage caused by the spill.

It is not yet clear how the spill will affect water quality and life in the Dan River. The nonprofit Waterkeeper Alliance reported that water samples taken by that organization close to the spill site showed high levels of arsenic and other metals. The Waterkeeper Alliance reported arsenic at levels capable of causing acute injury to fish and wildlife. You can find the Waterkeeper Alliance test results here. (Click on an individual sampling location in the box on the left-hand side of the page to pull up the test results for that sample.) Note that results have been reported as milligrams/liter (mg/L) and have to be converted to micrograms/liter (ug/L) for direct comparison to DENR sampling results.

DENR posted its complete water quality test results late Friday; you can find the DENR lab report here. Allowing for different sampling locations and units of measure, DENR’s results are generally consistent with test results reported by the Waterkeeper Alliance. A DENR water quality sample taken on February 3, 2014 at Draper Landing (about 2 miles downstream of the spill site) showed arsenic levels of 40 micrograms per liter — four times the water quality standard of 10 micrograms/liter. A sample taken on the same day further downstream (at the Virginia border) showed arsenic levels of 13 micrograms/liter. DENR’s results also show water quality standard violations in the Dan River for copper, aluminum and iron. By February 4, arsenic levels at Draper Landing had dropped back below the water quality standard and levels at the Virginia border were at the water quality limit of 10 micrograms/liter. Results for copper, aluminum and iron remained high.

Sampling immediately after a spill only provides a snapshot of water quality conditions and may not reflect long-term impacts to the river as metals leach out of coal ash settled on the river bottom. A year after the TVA coal ash spill, Duke University scientists found extremely high levels of arsenic in pore water (the water in river-bottom sediment) in Tennessee’s Emory River. Although surface water testing showed arsenic levels in the Emory River dropped just after the TVA spill, the contaminated sediment became a source of ongoing arsenic loading to the river in low oxygen conditions. (Source: Bruce Henderson’s report for the Charlotte Observer.) It will also take more time to get an assessment of the damage caused to vegetation, fish and wildlife as a result of the physical presence of ash in the water and on the river bottom.

There have been no reported impacts to drinking water. The Danville, Virginia water system has an intake in the river downstream of the spill site, but the water treatment plant had been able to filter out the ash and treated water continued to meet drinking water standards.

Some questions and concerns raised by the spill:

Public notice of hazardous substance spills. It doesn’t appear that either federal or state law requires the person (or company) responsible for a hazardous substance spill to notify the general public and that may be a gap for the N.C. General Assembly to fill. After notifying state and federal officials, Duke Energy put out a press release about the Dan River spill just over 24 hours after detecting the release. In the case of an immediate health and safety hazard, early notice would be better — although there may be a trade-off between early notice and the completeness and accuracy of information about the spill.

Conflicting water quality test results. Conflicting water quality test results created a significant amount of confusion about the Dan River spill — and some degree of suspicion. Mid-week, Duke Energy reported that river water samples taken downstream of the release showed only trace amounts of arsenic and other metals. You can find the Duke Energy water quality testing plan and results here. Note that Duke Energy reported water quality test results as parts per billion (ppb) — a unit that is essentially equivalent to the micrograms/liter (ug/L) used by DENR. (For purposes of comparing results, assume 1 ppb =1 ug/L.) Duke Energy also provides results for both unfiltered samples and filtered samples used to monitor treated drinking water quality.

Duke Energy’s instream results differ significantly from results reported by the Waterkeeper Alliance and by DENR. In the end, the Waterkeeper Alliance results and the DENR results seem to be generally consistent with each other; differences can most likely be attributed to selection of sampling locations. The extreme divergence of Duke Energy’s water quality test results calls for some explanation. Since state water quality test results lagged behind by several days, the Duke Energy results became the basis for early public statements about water quality impacts and that information proved to be unreliable. The inconsistent test results also suggest the public would be better served if the person responsible for a hazardous substance spill provided water quality test results to the state’s water quality agency for confirmation before releasing the information to the public.

Much of the water quality concern over the last week focused on arsenic levels in the Dan River. Another metal found in coal ash, selenium, can damage fish populations and present a health risk to people who eat the fish. DENR’s February 7, 2014 lab results for the Dan River did not find excessive levels of selenium, reporting selenium at the lowest quantifiable level. Preliminary lab results released by DENR on February 6, 2014 omitted the initial selenium results, indicating those samples would be given additional analysis because of suspected “interference”. The preliminary lab report did not explain the nature of the interference — which could mean another potential source of selenium in the Dan River or something related to the analytical process. Given conflicting data and general confusion over water quality test results from the Dan River spill, it would be helpful to have more explanation of the preliminary and final selenium results.

Delays in providing state water quality sampling results. DENR tested for more potential contaminants than either Duke Energy or the Waterkeeper Alliance, but that does not completely explain why results only became available five full days following the spill. Some analytical methods take longer than others, but it is important to know if inadequacies in the state water quality laboratory or other factors contributed to the delay. In this case, waiting five full business days for complete water quality test results probably didn’t cause additional harm, but the next hazardous substance spill may be different. The delay clearly did have one immediate result — it left an information gap that was filled by what turned out to be inaccurate water quality information.

Lack of information about conditions in old coal ash impoundments. Since older coal ash ponds have been largely unregulated, state and federal environmental agencies have very limited information about the impoundments. The Dan River spill suggests that utility company managers don’t have all of the information needed to manage environmental risk at these facilities either. Duke Energy struggled to find and fix the cause of the spill in part because the company believed the leaking stormwater pipe had been constructed entirely of concrete. Duke Energy employees could not find any damage to the end of the pipe and there was no obvious reason that a buried section of concrete pipe would have broken. It turned out that much of the buried pipe was actually constructed of metal rather than concrete, suggesting that corrosion caused the break.

The lack of accurate information on conditions at the Dan River Steam Station impoundment suggests the need for a joint Duke Energy/ DENR engineering review of existing ash ponds –including documentation of past construction, maintenance and expansion activities –to identify potentially high risk conditions.

Environmental Policy in N.C.: Looking back at 2013 and forward to 2014

Some of the most significant environmental policy developments of 2013:

Elimination of the dedicated funding source for parks/conservation programs and repeal of the conservation tax credit. The budget adopted by the General Assembly for the 2013-2015 biennium changed the structure of conservation funding by repealing a law that dedicated revenue from the state’s real estate transfer tax (popularly known as the deed stamp tax) to the Parks and Recreation Trust Fund (75%) and the Natural Heritage Trust Fund (25%). The change was part of a larger legislative trend toward recapturing earmarked revenues for the state’s general fund, replacing dedicated funding sources with year to year appropriations. The 2013 tax reform legislation eliminated the state tax credit for donation of conservation lands.

“Regulatory reform” legislation focused on state and local environmental standards. The Regulatory Reform Act of 2013 (Session Law 2013-413 ) created a new requirement for review and re-adoption of existing state rules every ten years. Although the legislation applies to all state programs, the General Assembly singled out water quality standards and wetland rules for the first round of review in 2014. You can find more on the Regulatory Reform Act of 2013 in an earlier post. The Regulatory Reform Act also puts a one-year moratorium on adoption of new local government ordinances that regulate something already addressed by state or federal environmental rules. The only exception would be for ordinances unanimously adopted by the local governing body — a phenomenon only slightly more common than unicorn sightings. A more detailed discussion of the limit on local environmental ordinances can be found here.

Reorganization and down-sizing of the state’s water quality and water resource programs. The 2013-15 budget directed the Department of Environment and Natural Resources to combine the Division of Water Quality and Division of Water Resources and reduces the budget for the reorganized programs by $2 million (12.4%) in the second year of the biennium. The budget also makes an additional cut of over $700,000 to water resource programs. By August 1, 2013, DENR had moved all stormwater programs to the Division of Energy, Mineral and Land Resources (separating those programs from other water quality programs) and reorganized the remaining water quality/water resource programs into a larger Division of Water Resources. More on the reorganization here.

How the reorganization and position cuts will affect DENR’s ability to deliver effective water quality and water supply programs remains a question. Early on, Division of Water Resources director Tom Reeder signaled an intent to make cuts significantly beyond those required by the General Assembly — as much as $4 million versus the $2.7 million in reductions included in the 2013-2015 state budget — and to move quickly to eliminate “unnecessary” staff positions. Actual implementation of the cuts seems to have slowed, however, and DENR has not provided an overview of planned reductions in water programs and staff.

Reduced state funding for water and sewer infrastructure. Funding for water and sewer systems isn’t often thought of as environmental protection, but compliance with federal environmental laws requires adequate wastewater and drinking water infrastructure. Congress created two state revolving loan programs to help finance infrastructure needed to comply with Clean Water Act and Safe Drinking Water Act requirements. DENR manages North Carolina’s revolving loan funds. Before July 1, 2013, local governments could also apply for water and wastewater infrastructure grants from the federally funded Community Development Block Grant Program in the N.C. Department of Commerce; the Clean Water Management Trust Fund (for wastewater projects only); and the N.C. Rural Economic Development Center.

The 2013-2015 state budget reorganized infrastructure funding programs, moving the Commerce CDBG program and the drinking water and wastewater revolving loan funds into a new DENR Division of Water Infrastructure. The General Assembly also added a small infrastructure grant program to be managed by the new DENR division. The budget eliminated state funding for the N.C. Rural Economic Development Center (which operates as an independent nonprofit agency) and created a Division of Rural Economic Development in the N.C. Department of Commerce. The N.C. Rural Economic Development Center had previously been the largest source of state grant funds for water and sewer projects.

The changes could have a significant impact on rural areas and small towns that have limited ability to take on new debt and need infrastructure grants. The General Assembly appropriated $10.8 million to the new Dept. of Commerce program for rural economic development loans and grants, but water and sewer projects will have to compete with other economic development projects for those funds. Wastewater projects eligible for funding by the Clean Water Management Trust Fund will have to compete with conservation projects for the $9.2 million appropriated to CWMTF. Only the $3.5 million appropriated for the new DENR infrastructure grant program has been specifically earmarked for water and wastewater grants. By comparison, in 2008 the N.C. Rural Center and Clean Water Management Trust Fund combined to award $160 million in water and sewer grants to local governments. You can find more detail and a chart showing 2013-14 and 2014-15 appropriations for state infrastructure programs here.

Limits on DENR authority to prevent migration of groundwater contamination. The Regulatory Reform Act of 2013 (Session Law 2013-413) limits DENR’s authority to require “cleanup, recovery, containment, or other response” to groundwater contamination inside the compliance boundary at a permitted waste disposal site. (When the state issues a permit for a waste disposal site, the permit sets a groundwater compliance boundary around the facility. Inside the compliance boundary, the permit allows some groundwater contamination associated with the waste disposal; beyond the compliance boundary, state groundwater standards must be met.) The new law will only allow DENR to require the permit holder to take action inside the compliance boundary by showing that the groundwater contamination has already caused –- or will cause — a specific water quality violation or an imminent threat to health, safety or the environment. The new law does not appear to allow DENR to require the permit holder to take steps to contain groundwater contamination based solely on movement of contaminated groundwater beyond the compliance boundary.

Legislative intervention in plans to restore Jordan Lake water quality. The federal Clean Water Act requires the state to develop a Total Maximum Daily Load (TMDL) for any water body with impaired water quality; the TMDL puts a cap on the pollutant causing the problem. About five years ago, the state’s Environmental Management Commission adopted rules designed to meet a nutrient TMDL for Jordan Lake. The rules allocate nitrogen and phosphorus reductions among the major sources of nutrient loading to the lake — wastewater dischargers, agricultural operations, and stormwater runoff from new and existing development. In earlier General Assembly sessions, legislation modified some requirements of the rules and extended the compliance deadlines. In 2013, legislation delayed further implementation of the rules for three years to test a technology using aeration to reduce algal growth caused by excess nutrients. The budget provision funding the technology pilot project became controversial for several reasons: 1. the provision includes technology specifications that effectively require DENR to use the product of a particular company; 2. some scientists familiar with the technology questioned whether it could be effective in a water body as large as Jordan Lake; and 3. EPA does not believe the Clean Water Act allows use of in-lake treatment as a substitute for reducing the amount of pollution reaching the lake. See an earlier post for more on the Jordan Lake controversy and EPA’s response to the legislation.

What to look for in 2014:

Proposed changes to water quality standards. The review and re-adoption of water quality standards and wetland rules required under Session Law 2013-413 has overtaken DENR’s planned internal review of water programs. As the state’s Rules Review Commission (RRC) began laying out the process for review and re-adoption of rules under S.L. 2013-413, DENR put the internal review on hold. Now, the S.L. 2013-413 review of water quality standards and wetland rules will be the vehicle for identifying water quality rules for change or repeal.

Because of the interrelationship of many water quality rules, the review of water quality standards and wetland rules required under S.L. 2013-413 will actually pull in nearly 400 water quality rules covering everything from groundwater remediation to operation of animal waste management systems. It seems clear, however, that both DENR and the General Assembly have already set some priorities for review. Reeder had earlier identified stream buffer requirements, water quality standards for isolated wetlands and water quality classifications for shellfish waters as high priorities for DENR’s internal review of water quality rules. Two legislative study committees and a working group of the joint House-Senate Environmental Review Commission have also been authorized to look at issues related to stream and wetland rules in the interim before the next legislative session. Stream buffers, shellfish water classifications and wetland rules have one thing in common — all put design and construction constraints on development projects.

Elimination of additional water quality and water resource staff. Of the cuts to water programs included in the state budget, $2 million in reductions must be achieved in the second year of the biennium (2014-15) as a result of the water resource and water quality program reorganization. As noted above, DENR has not yet provided any blueprint for reaching the targeted reductions. Presumably, the cuts will need to be identified by the start of the 2014-2015 fiscal year on July 1, 2014.

Completion of hydraulic fracturing rules ? The Mining and Energy Commission (MEC) faces an October 1, 2014 deadline to adopt rules for hydraulic fracturing. You can find the status of the rules under development here. The MEC plans to send all of the rules out to public notice as a package. Final adoption can only take place after consideration of public comments. The timing may be tight –it will certainly be a busy nine months.

Legislative study of local government authority to adopt environmental ordinances. The Regulatory Reform Act provision that put a one-year moratorium on new local government environmental ordinances also directed the Environmental Review Commission to study and make recommendations to the 2014 session of the General Assembly on the appropriate scope of local government authority to adopt environmental ordinances. The ERC will have an initial public discussion of the issue on January 15.

Regulatory Reform and the Environment III: The Future

December 4, 2013. Two earlier posts looked at the history of regulatory reform in North Carolina and regulatory reform’s focus on environmental rules. The current General Assembly has continued to work on regulatory reform in general and limiting environmental rules in particular. Regulatory reform legislation adopted by the N.C. General Assembly since 2011 reflects two basic ideas: 1. Some number of agency rules are simply unnecessary and should be repealed; and 2. If a federal environmental standard exists, state and local environmental rules should not go beyond the federal requirement except in extraordinary circumstances. More about the assumptions behind recent regulatory reform efforts below.

Assumption: State agencies have unnecessary and overly burdensome rules that should be repealed. There will always be a need to review, update and in some cases repeal outdated rules, but it is not clear that rooting out “unnecessary” rules can do much to turn down the political heat over regulations. It isn’t for lack of trying. In October 2010, Governor Beverly Perdue issued an executive order on regulatory reform. Executive Order 70 invited citizens to identify overly burdensome and unnecessary rules and directed state agencies to do an internal review to identify unnecessary and outdated rules. In 2011, the General Assembly’s Regulatory Reform Committee invited the public to identify “outdated, unnecessary, unduly burdensome, or vague rules…that are an impediment to private sector job creation” in a series of public meetings. The legislature also amended the state’s Administrative Procedures Act in 2011 to put the rules review process created under Executive Order 70 into law. G.S. 150B-19.2

The earlier post on the history of regulatory reform describes the somewhat underwhelming results of both efforts to root out unnecessary and overly burdensome rules. Although state agencies identified several hundred unnecessary rules through the internal review required under Executive Order 70 , most of those rules related to programs that no longer existed or had been superceded by new standards. Since the rules were no longer being enforced, repeal did nothing to ease complaints about regulatory burden. On the other hand, rules identified by citizens as unnecessary or unduly burdensome often turned out to be required by state or federal law or the result of a significant policy debate and unlikely candidates for a politically painless repeal.

The Regulatory Reform Act of 2013 (Session Law 2013-413 ) takes a new approach, requiring state agencies to review and readopt all existing rules every ten years. If a rule is not reviewed on the schedule set by the state’s Rules Review Commission, the rule automatically expires. (Rules needed to carry out a delegated federal program will not automatically expire, but still have to be reviewed and readopted.) Continuing its preoccupation with environmental rules, the General Assembly directed the Rules Review Commission to schedule state water quality standards and wetland rules for the first round of review in 2014. Ten-year review and readoption may one day settle into a manageable routine, but several potential pitfalls lie ahead:

— Given N.C.’s lengthy rulemaking process, a 10-year readoption schedule could lead to constant churning and little certainty for either regulators or the public. Nothing in Session Law 2013-413 shortens the process for readoption of an existing rule, so the agency would need to go through all of the usual rule adoption steps: public notice, fiscal analysis, review by the Rules Review Commission, and possible legislative disapproval. The Falls Lake nutrient rules took about five years from beginning to effective date and the rules include some requirements that phase-in even later. Streamlining the process for readoption and starting the ten-year review period at full implementation of a rule (rather than adoption) could reduce the churning.

— Review and readoption of rules will be even more disruptive if it is used to constantly revisit policy decisions rather than simply identify outdated, unnecessary rules. The fact that the General Assembly targeted water quality and wetland rules for the first round of review and readoption suggests a policy agenda. Public statements by the director of the state’s water quality programs, Tom Reeder, indicate that the Department of Environment and Natural Resources has already put stream buffer and wetland rules — repeatedly targeted by development interests — in the spotlight for the first round of water quality rule review.

— Complex sets of rules have to be reviewed together. Stream buffer rules, for example, have generally been adopted as part of a larger plan to solve a specific water quality problem. Federal law requires the state to reduce pollution causing impaired water quality (like the nutrient problems in Falls Lake and Jordan Lake), but federal rules do not dictate the solution. North Carolina ‘s longstanding policy has been to create a solution that shares the burden of pollution reduction among all of the major pollution sources (wastewater treatment plants, industrial dischargers, agricultural runoff and development activity). In most cases, the final rules also represent a long negotiation process. Using rule review to respond to one interest group could shift more of the regulatory burden and cost of pollution reduction to others. A piecemeal approach to regulatory reform carries the risk of making complex environmental protection programs less effective and less equitable, but no less politically charged.

— The interrelationship of rules has practical implications. According to Tom Reeder, the legislative mandate to review surface water standards and wetland rules in 2013 also draws in two additional sets of rules. Mr. Reeder expects the 2014 water quality rule review to involve 395 rules.

— Rule review comes without any additional staff resources. The massive water quality rule review will create a new workload for a water quality staff still shrinking under budget cuts and reorganization decisions. Mr. Reeder has already suggested that rule review may further delay revisions to state water quality standards needed to comply with federal Clean Water Act requirements.

Assumption: State and local environmental standards should not go beyond federal standards except in extraordinary circumstances.

The Regulatory Reform Act of 2011 ( Session Law 2011-398 ) prohibited state environmental agencies — and only environmental agencies — from adopting a more restrictive standard than a corresponding federal rule. The law has exceptions for rules to address a “serious and unforeseen threat to public health, safety or welfare” and rules required by state law, federal law, state budget policy or a court order. The same legislation directed all state agencies to provide the General Assembly’s Joint Select Regulatory Reform Committee with a list of existing rules and indicate for each rule whether the rule was mandated by federal law and whether the rule was more stringent than an analogous federal regulation. (The session law defined analogous to mean that a federal rule regulated the same conduct or activity.)

An earlier post (originally written about a 2013 Senate bill) provides examples of state environmental rules that go beyond the corresponding federal rule. (The examples come from the 2011 DENR report to the Select Regulatory Reform Committee.) The post also notes some of the difficulties in limiting state environmental rules to federal standards. At the most basic level, it turns out to be harder than legislators may think to even figure out whether a state rule is “more stringent” than a corresponding federal rule. It is rarely as easy as comparing two numerical standards; in many cases, federal rules set a framework and goals in the expectation that the state will fill in the detail. Another problem is that federal environmental statutes and rules set a floor rather than a ceiling on environmental protection — a floor based on national priorities rather than state needs. Finally, federal rules rarely include all of the administrative pieces needed for a complete environmental protection program. Since the states actually carry out most of these programs, Congress and EPA left the states a good bit of flexibility in setting up permitting and enforcement programs.

Having put limits on new state environmental rules in 2011, the 2013 General Assembly took on local environmental ordinances. Session Law 2013-413 puts a one year moratorium on adoption of new local environmental ordinances regulating issues addressed by state or federal environmental rules. An earlier post goes into more detail about the temporary limit on local environmental ordinances. The one-year moratorium actually represents a compromise to allow time for the legislature’s Environmental Review Commission to look at the appropriate scope of local government authority to adopt environmental standards. The N.C. Senate had proposed to permanently restrict adoption of local environmental ordinances.

Even the one-year moratorium may be a problem for local government. A number of cities and counties operate environmental infrastructure (like water and wastewater treatment systems) under state-issued permits that require the local government to put environmental protection measures in place by ordinance.

Behind all of this lies a genuine concern about the layering of federal, state and local requirements. Citizen comments clearly indicate confusion about where environmental standards come from and how different requirements fit together. In spite of everyone’s best efforts, the overlay of federal rules, state rules and local ordinances don’t always fit together perfectly. Conflicts get resolved, but the property owner caught up in an unintended consequence of overlapping standards will be understandably frustrated in the meantime.

Which is all to say that there are good reasons to look at the intersection of federal, state and local environmental standards. It is just not as easy as waiving away everything other than the standard adopted by the highest level of government.

SmithEnvironment Blog

Environmental Law and Policy from a North Carolina Point of View