Category Archives: General Observations

General comment on environmental issues

House Bill 74: Limiting Local Options

July 24, 2013: The House and Senate members negotiating to resolve differences over the 2013 regulatory reform bill, House Bill 74, released a conference report  this afternoon.

The twists and turns of regulatory reform over the last few years deserve a much longer discussion. For now,  it is enough to say that many members of the General Assembly hate rules (or believe it politic to sound like they do),  but the General Assembly has not  figured out how to stop state agencies and local governments from adopting rules without also preventing them from doing things that need to be done to comply with federal law or to  protect public health and safety.

That unresolved conflict surfaces  again in the conference report on  House Bill 74. The bill adds a section that 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.  No limit on local government  ordinances appeared in  the  versions of House Bill 74  that passed the House and the Senate, so its appearance in the conference report is something of a surprise. Language preempting local environmental standards did appear in a different Senate regulatory reform bill (Senate Bill 112); that  bill proposed to  permanently  restrict  local  adoption of ordinances exceeding state and federal environmental standards with only limited exceptions.  Although the conference report provision in House Bill 74  has a temporary effect, it  would prevent adoption of any local ordinance dealing with an issue regulated under state or federal rules.

I am sure that the one-year  moratorium to allow more legislative study of  local  preemption was intended to be a compromise of an issue the two chambers disagree on, but it  creates  two immediate problems for local government:

1. Many local ordinances deal with issues also regulated by state environmental  agencies  because state rules  and environmental permits issued  by the state for local government activities sometimes  require adoption of a local ordinance.

2. Some of the most fundamental responsibilities of local government — such as addressing nuisance conditions, regulating development and  maintaining public infrastructure — involve activities also  regulated to some degree by state environmental agencies. In many cases, state rules and  local ordinances use similar tools to solve entirely different problems. State stormwater rules have been adopted to protect water quality, but a local government may  find it necessary to adopt stormwater standards to manage a local flooding problem. Under the  House Bill 74 conference report, the existence of state stormwater rules  would prevent a local government  from adopting a local stormwater ordinance  unless there was unanimous agreement on the content of the ordinance.

It is difficult to predict how big a problem  the moratorium  would be given the very different circumstances in cities and counties across the state, but it seems an unnecessary gamble. The legislature needs to  take more time to understand how state environmental rules and local government ordinances relate to each other; a  legislative study makes a lot of sense. But a study  can be done without putting  permits at risk and preventing local governments from addressing local problems.

Compromise Budget: Effect on Environmental Programs

July 24, 2013: Today, both the Senate and the House will take final votes on the compromise state budget.

Money (Summary)

Although  the  total budget for the Department of Environment and Natural Resources (DENR) appears to  grow, the final budget bill actually cuts the DENR budget for existing programs by  5% over the two-year budget period.  The reductions are not evenly distributed; water quality and water resource programs will take the largest cuts — at least 12.4 % compared to the 2012 budget for those programs.

The apparent increase in the DENR budget  mostly  comes from  moving money for programs being transferred into DENR from other departments (such as the State Energy Office); creation of  a new grant program for water and wastewater infrastructure; and replacement of dedicated funding sources with year to year appropriations.

The overall 5% reduction does not  include the reduction in funds  available to  the Parks and Recreation Trust Fund by shifting deed stamp tax revenue to the General Fund and replacing the dedicated funding with an  appropriation. See an earlier post  for more detail on the amount of revenue that the deed stamp tax had generated for the Parks and Recreation Trust Fund and Natural Heritage Trust Fund.

More detail below.

Department-wide spending reductions: The budget bill requires the Department of Environment and Natural Resources to reduce department spending by 2% from 2012 spending levels ( just over  $2.227 million department-wide).  DENR  can decide where to reduce spending to meet the 2% target. DENR’s 2012  budget already represented a nearly  40%  reduction from 2008 spending levels as a result of budget cuts in earlier years.

Other Reductions: In addition to the department-wide reduction of 2%, the budget makes additional cuts to specific programs. The largest of the targeted reductions requires  DENR to cut an additional $2 million out of the budget for water resources and water quality programs in the second  year of the  two-year budget  (2014-2015). That represents a 12.4% reduction from 2012  funding for water quality and water resource programs. The budget assumes the additional savings can be found by combining water resource and water quality programs into a single division. See an earlier post for more on the water quality/water resource budget cut.

Elimination of dedicated funding sources: The budget eliminates a number of dedicated funding sources for environmental protection and conservation programs, including the earmark of revenue from the state’s deed stamp tax for parks and recreation. All revenue from the deed stamp tax will go to the General Fund and the legislature will appropriate money for parks and recreation on a year to year basis. The budget also eliminates dedicated funding sources for the Bernard Allen Emergency Drinking Water Fund, the Solid Waste Management Trust Fund and the Inactive Hazardous Sites Fund.   Replacing dedicated  revenue from the deed stamp tax with an appropriation significantly reduces funds available for parks and conservation programs.

Clean Water Management Trust Fund: $10.4 million is appropriated for the Clean Water Management Trust Fund in 2013-2014 and $13.6 million in 2014-2015.

At-Sea Observer Program (Division of Marine Fisheries): The budget provides a one-time appropriation of $1.1 million to monitor the number of endangered sea turtles caught  in commercial fishing nets. The sea turtles, which  are protected under the federal  Endangered Species Act, sometimes get caught in gill nets  used by commercial flounder fishermen. The  monitoring program  is required as a part of an agreement between the state Division of Marine Fisheries and the  National Marine Fisheries Service that allows North Carolina commercial fishermen to continue to use gill nets.

Program increases: The  budget increases funding for shale gas and offshore energy staff (+$400,000) and  for  investigation of hazardous waste contamination (+ $250,000).

Grant Funds for Water/Wastewater Infrastructure: The General Assembly appropriates $3.5 million in 2013-2014 and $5 million in 2014-2015 for water and wastewater infrastructure grants. The new grant program partially offsets the fact that the budget provides zero funding for  infrastructure grants  through the N.C. Rural Economic Development Center.

Programs Eliminated: The budget eliminates the  Fisheries Resource Grant Program,  Sustainable Communities Task Force, Uwharrie Regional Resource Commission,   Adopt a Trail program, and the Division of Water Quality’s Groundwater Investigation Unit well drilling services.

Jordan Lake Cleanup

$1.35 million from the 2013-2014 appropriation for the Clean Water Management Trust Fund is earmarked for a pilot project to test the use of technology to improve water conditions in Jordan Lake. The appropriation appears to be partner to Senate Bill 515 which (as amended in the House) delays further implementation of the Jordan Lake rules for three years to test technology  to  reduce the water quality impacts of nutrient pollution. The budget bill describes the technology to be tested very specifically and appears intended to  direct the funds to a particular product.  The bill exempts the pilot project from normal state contract procedures, which means DENR will not be required to advertise for bids.

Environment Commissions

The budget bill includes changes in appointments to the state’s major environmental regulatory commissions — the  Environmental Management Commission (water quality, air quality and water resource rules) and the Coastal Resources Commission (coastal development rules).  The bill reduces the  number of members on each commission, but the most significant change gives Governor McCrory and current legislative leadership an opportunity to replace nearly all of the members immediately. Terms for  all  Environmental Management Commission (EMC)  members will end July 31, 2013.    Four Coastal Resources Commission (CRC)  members will continue to serve until June 30, 2014 (the specific seats on the commission  are identified in the bill); the terms of  all other CRC members will end July 31, 2013. Until now, members of both commissions served staggered terms of four or six years. Each new governor and legislature had an opportunity to appoint new members as their terms ended. The changes will recreate the staggered appointments, but only after giving the current governor and legislature  unprecedented power to replace all  of the members of each commission.

The final language on EMC appointment includes conflict of interest language intended to address conflict of interest requirements in federal law.

Noncommercial Underground Storage Tanks

The bill changes state law to require owners of  noncommercial underground petroleum storage tanks to pay a deductible of $1,000 and a 10% co-payment for environmental cleanup  if the tank leaks. The bill caps the total contribution required from the tank owner at $2,000 for the combined deductible and co-payment.  Until now, the state’s Noncommercial Underground Storage Tank Trust Fund paid the full amount of cleaning up soil and groundwater contamination from a noncommercial tank and the tank owner only paid for removal of the leaking tank. (“Noncommercial” tanks include home heating oil tanks and farm or residential motor fuel storage tanks that hold less than 1,100  gallons.)

Reorganization

Conservation Programs:  Clean Water Management Trust Fund staff will be transferred to DENR. The bill eliminates the Natural Heritage Trust Fund (NHTF) and amends the CWMTF statute to allow that fund to be used for conservation projects previously funded by the Natural Heritage Trust Fund.  Existing NHTF obligations  will be honored and any remaining funds will be transferred to the  Clean Water Management Trust Fund.

Water/Wastewater Infrastructure Programs: The budget creates a new Division of Water Infrastructure in DENR by combining existing staff for the Drinking Water State Revolving Fund and   Clean Water State Revolving Fund and  transferring some number of infrastructure staff from the Community Development Block Grant program in Department of Commerce. (The actual number to be negotiated between the two departments.)  Infrastructure grant and loan decisions will be made by a new Water Infrastructure Authority.

State Energy Office: The State Energy Office moves from the Department of Commerce to DENR.

Compromise Budget Significantly Cuts Water Quality/ Water Resource Programs

July 22, 2013:  The House and Senate have released a compromise budget proposal to be voted on by both chambers this week. The budget comes in two pieces: 1. The report on continuation, expansion and capital budget (the “money report”) shows the proposed changes up or down in appropriations for state agencies. The money report also shows funds set aside for state capital improvement projects. You can find a copy of the money report here; 2. The conference committee report on the budget bill (Senate Bill 402) has the text of statute changes being adopted as part of the budget. Some of the statute changes are needed because of appropriations decisions; others pop up in the budget bill  for more strategic reasons and have very little relationship to budgeting. Another post will provide an overview of budget decisions affecting environmental programs. This post focuses on one of the most significant — the reorganization of water quality and water resources programs and a large budget cut associated with the reorganization.

The money report shows a $2 million cut to water quality and water resource programs beginning the second year of the biennium (2014-2015)  from  savings to be realized by combining the Division of Water Quality (DWQ) and the Division of Water Resources (DWR). The $2 million dollar reduction represents 12.4% of state appropriations to programs in the two divisions in 2012 and comes on top of a department-wide budget reduction of 2% also required in the compromise budget. An earlier post talked about DENR’s plans to reorganize the state’s water quality programs and anticipated some reduction in positions as part of the reorganization. The questions raised in the earlier post become more important given the magnitude of the cut proposed in the budget bill.

The challenge comes from the fact that the two divisions do very different things.  The Division of Water Quality  has responsibility for  the quality of water in rivers, lakes, streams and aquifers. DWQ develops and enforces state  water quality standards. DWQ also carries out federal Clean Water Act  programs, including permitting programs for wastewater discharges, stormwater discharges and development activities affecting streams and wetlands.  The Division of Water Resources deals with water quantity — the amount of water available in rivers, lakes, streams and underground aquifers;  water supply planning;   drought response;  and regulation of  public water systems. Functions of the two divisions  intersect at points (and there may well be some efficiencies there), but do not overlap. The kind of data needed to monitor water quality in a river is different from the data needed to  understand the volume of water in the same river. Water supply planning and water quality planning are not exactly the same thing – it may well make sense to marry the two, but the marriage will only work  if there are still  sufficient resources to look at both water quality and quantity. After four years of budget cuts, it will be difficult to achieve the  12.4% reduction required in the budget without compromising either the level of service provided to permit applicants or water quality/water supply monitoring and planning activities.

When the earlier post was written in June, the word on the street had been that DENR planned to transfer all of the state’s stormwater programs to the Division of Energy, Mineral and Land Resources (DEMLR) effective August 1 and move remaining Division of Water Quality programs into the Division of Water Resources. About the time word began to get out about the department’s reorganization plans, the Senate put language in House Bill 94  (and later in House Bill 74)  directing DENR to combine the Division of Water Quality and Division of Water Resources. The Senate language seemed to anticipate that stormwater programs would  go to the Division of Water Resources with other DWQ programs. (Both bills made changes to a number of state stormwater statutes to substitute “Division of Water Resources” for “Division of Water Quality”.)  Those bills are still waiting for final action and until that happens, there may be lingering questions about exactly what form the reorganization will take.

See the earlier post  for  more about the implications of moving stormwater programs to the Division of Energy, Mineral and Land Resources. Whatever the final configuration of the state’s water quality programs, the budget cut will be a challenge. The  sedimentation pollution control program  in  DEMLR  (the only water quality -related program in that division)  has already been decimated by budget cuts  that  reduced sedimentation program staff by 35% over  the last four years. As the  number of sedimentation program staff declined, the number of  open construction sites  to be monitored for sedimentation and erosion control did not.  (“Open” construction sites includes sites actively under construction  and sites where construction stopped before completion of the project.) There are now 40 state sedimentation staff to manage an inventory of 8,000 open construction sites across the state. The gap between open  construction sites and state staff to enforce the Sedimentation Pollution Control Act will only become larger as new development activity picks up.  There are no efficiencies left to wring out of  the sedimentation program and it isn’t clear that DWQ  stormwater programs  could help given other state and federal stormwater responsibilities.

The question for DENR is whether any combination of programs can absorb the additional reduction without damaging essential water quality programs. After the budget reductions of the last four years, can the department continue to do all of the things required for delegated Clean Water Act and Safe Drinking Water Act programs, maintain water quality and water supply planning functions, enforce the state Sedimentation Pollution Control Act, and provide good customer service with  another  12.4% budget cut targeting water quality and water resources programs?

NOTE: The original post was modified to make it clear that the $2 million cut begins in the second year of the biennium (2014-2015).

Jordan Lake and EPA Action to Reduce Nutrient Pollution

July 18, 2013:  As things now stand, Senate Bill 515 (Jordan Lake Water Quality Act)  will either repeal the state’s water quality rules  for Jordan Lake (Senate version) or delay implementation of the rules for another three years to investigate technologies that may reduce water quality  problems  caused by nutrient pollution (House version). With the bill still under consideration, some background on how issues of nutrient pollution are playing out nationally and where N.C. stands.

The Clean Water Act requires the state to  reduce  pollutants that cause water quality violations in a lake or stream by adopting a Total Maximum Daily Load (TMDL) for the pollutants causing the problem. In September of 2007, EPA approved the state’s Jordan Lake nutrient strategy as the TMDL for the lake. The nutrient strategy identifies the  amount  of  nitrogen and phosphorus  that  can be absorbed by the lake  without violating water quality standards and then allocates  nitrogen and phosphorus  reductions among all of the major  sources contributing nutrients to the lake to reach the target level. Sources include wastewater treatment plants, large industrial facilities that discharge wastewater, stormwater from developed areas, and agricultural activities. The part of the Jordan Lake strategy setting the maximum  level of nitrogen and phosphorus consistent with meeting water quality standards  represents the heart of the TMDL required under the federal Clean Water Act.   An earlier post  links to  a July 10, 2013 letter from EPA’s Acting Administrator for Region 4, Stan Meiburg,  saying  that EPA does not believe that  either delay or repeal of the Jordan Lake rules relieves the state of the obligation to achieve the pollution reductions called for in the  approved TMDL.

If a state fails to act on a TMDL, EPA has the ability to impose a federal TMDL.  The Jordan Lake rules share the burden of reducing nutrient  loading to the lake more broadly than EPA  could do under a federal TMDL, which would have to be focused on  federally permitted wastewater discharges.  The result would be an  increased burden on local governments and industries that discharge wastewater because the pollution reductions would no longer be shared by stormwater and agricultural sources that do not require federal permits. EPA also  accepted the  state’s timeline  for  implementing  pollution reduction measures for Jordan Lake. The original Jordan Lake rules allowed between four  years and nearly ten years  for implementation of different parts of the nutrient reduction strategy;  those timelines have already been  extended several  years by earlier legislation. A federal TMDL would likely have a shorter implementation time.

Apart from the Jordan Lake TMDL, North Carolina finds itself on the wrong side of EPA’s national policy on  permitting  nutrient discharges to all lakes and streams. EPA’s longstanding position has been that states need numerical in-stream or in-lake standards for nutrients. That would involve setting a nitrogen and phosphorus standard for each water body in the state and using those  standards to  set  permit  limits  for wastewater discharges.  The N.C.  Division of Water Quality (DWQ)  has resisted the push for numerical nitrogen and phosphorus standards. N.C.’s water quality program has supported use of  the existing  chlorophyll-a standard as a better indicator of  nutrient impairment and one less likely to  put an unnecessary burden on wastewater treatment plants and industrial dischargers.

So while  a number of states have adopted numerical nutrient standards, North Carolina has not.  (Note: DWQ and the Environmental Management Commission are due to report to EPA soon on the state’s progress on  nutrient standards.) EPA has not yet forced the issue here, but EPA has directly intervened in several other states to either press for state adoption of nutrient standards or to actually impose federal nutrient standards. In Florida, EPA  adopted federal nutrient rules for some Florida waters in 2010 and proposed additional rules in 2012.  A November 2012 EPA  document provides a history of EPA actions on nutrient standards in Florida. (Florida has since adopted state nutrient standards that EPA has approved.) EPA has also pushed several midwestern states to adopt numerical nutrient standards. Just last month, EPA ordered the state of Minnesota to  tighten nutrient limits on wastewater discharge permits  or risk having EPA take over the water quality permitting program.  See an article in Governing magazine  for an overview of the EPA action in Minnesota.

In deciding how to ease the financial and regulatory burden of  the  Jordan Lake rules, the state needs to be  mindful of  Clean Water Act requirements and  EPA’s possible response. So far, EPA has  allowed North Carolina  a great deal of flexibility  to address  nutrient pollution and has not pressed the issue of numerical nutrient standards.  It is likely that EPA  has  given some deference to the state’s good faith efforts to  develop  solutions  – like the Jordan Lake nutrient strategy — tailored to the state’s  needs. But nationally, EPA has also shown a willingness to intervene directly to enforce the Clean Water Act in the face of state inaction on nutrient problems.

There  are ways  to ease the burden of nutrient reduction on upstream communities without completely walking away from the need to reduce  nutrient pollution. One  idea (which actually came up in  development of the Falls Lake and Jordan Lake rules)  is creation of  a  cost-sharing plan so downstream communities that benefit from upstream pollution controls would  help offset the cost. There may also be modifications to the Jordan Lake rules that could ease the burden on upstream local governments without abandoning the goal of reducing nutrient pollution.  Putting state energy into improving the Jordan Lake rules and exploring innovative financing of pollution controls  would be consistent with the Clean Water Act and less likely to provoke direct EPA action. If  N.C. completely steps back from the commitment to reduce nutrient loading to Jordan Lake,  the state may lose  the ability to create a solution that  meets the state’s interests.

Environmental Legislation: Where Things Stand

July 8, 2013: Just coming off the Fourth of July holiday and an odd legislative week  may be a good time to check the status of some of the more important environmental bills.

Environmental legislation that — one way or the other — is done:

House Bill 488 (Regionalization of Public Utilities) transfers ownership of the Asheville water system to the Metropolitan Sewage District of Buncombe County. The City of Asheville strongly opposed the legislation, which provides no compensation to the city for transfer of assets associated with the water system. The city immediately sued to challenge the law and a superior court judge has issued an order  stopping  the transfer while the fight moves through the courts. There are lots of issues in play — including the constitutionality of the law and allegations that one of the bill sponsors has threatened Asheville with more retaliatory legislation if the lawsuit isn’t dropped.

House Bill 628 (Protect/Promote Locally Sourced Building Materials) was signed into law after a major rewrite in the Senate.  The  original House bill would have prohibited state building projects from seeking Leadership in Energy and Environmental Design (LEED) certification under Green Building Council standards.  The Senate rewrote the bill to allow construction of state projects under “green” building standards that  give credit for use of local building materials — which LEED standards do.  (Background on the LEED controversy and the Senate compromise language can be found here.) The Senate also added a new provision  calling  for study of the energy efficiency standards for state buildings that were adopted in 2007. The House agreed to the changes and the bill has become law.

House Bill 706 (Preserve Landfill Space) allows for on-site disposal of demolition debris from manufacturing facilities and decommissioned electric generating stations. The bill exempts disposal of these materials from landfill standards and allows the debris to be buried on site under environmental standards set in the bill. (Any hazardous waste in the debris must still be disposed of under standards set in state and federal hazardous waste rules.)

Senate Bill 638 (N.C. Farm Act of 2013) is significant for what it doesn’t do; the bill was signed into law without the controversial wetlands provision discussed in an earlier post.  The House removed a section of the Senate bill that eliminated state water quality permitting requirements for wetlands that do not fall under federal Clean Water Act permitting jurisdiction. The Senate accepted the change.

House Bill 298/Senate Bill 365  (Affordable and Reliable Energy Act) died for this session.  Both bills proposed to repeal the state law requiring major electric utilities to generate an increasing percentage of power from renewable energy sources (such as wind turbines and waste-to-energy facilities). Neither bill made it to a floor vote by the May 15 deadline for bills to pass at least one house of the General Assembly to stay alive for the session. Background on the renewable energy portfolio standard controversy can be found in an earlier post.

House Bill 983 (Fisheries Economic Development Act) died in the House without ever coming to a vote.  Commercial fishermen opposed the bill designating red drum, spotted sea trout and striped bass as coastal game fish because it  would have put the fish off-limits for fishermen using large nets and trawls.

Bills in conference to resolve differences between the House and the Senate:

House Bill 94 (Amend Environmental Laws): The Senate took a final vote last Wednesday on the Senate version of House Bill 94 (Amend Environmental Laws). The Senate added a number of entirely new sections to the bill that came over from the House. One of the most controversial new sections would allow oil and gas operations to withhold information on “trade secret” chemicals used in hydraulic fracturing  from the Department of Environment and Natural Resources unless the department needed the information to respond to an environmental or health emergency. See earlier discussion of the Senate’s intervention on behalf of the oil and gas industry  here.  The Senate also added a section limiting groundwater cleanup requirements at permitted waste disposal sites.  The groundwater cleanup language appears to respond to legal action by N.C. Sierra Club and the Waterkeepers Alliance over groundwater contamination at sites where Duke Energy and Progress Energy  disposed of coal ash. With only a few exceptions, the Senate language would make groundwater cleanup unnecessary as long as the contamination is confined to the property where the waste disposal site is located.

Senate Bill 76 (Domestic Energy Jobs Act):  The Senate bill made a number of changes to the 2012 law that set the stage for adoption of rules on hydraulic fracturing. One of the most controversial sections of the bill would repeal a longstanding state law that prohibits underground injection of waste. The Senate bill also repeals a  requirement that agents engaged in the acquisition or leasing of land for energy development must register with the Department of Environment and Natural Resources. The House made significant changes to the Senate bill; an earlier post talks about the differences between the House and the Senate. The bill has been in conference  since June 19.

Bills approved by one chamber of the legislature and waiting for action in the other:

House Bill 74 (Periodic Review and Expiration of Rules) passed the House and is sitting in the Senate Rules Committee. As described here, the bill requires state agencies to review and readopt existing regulations or  the rules automatically expire.

House Bill 300 (Cities/Public Trust Rights) passed the House and has been sent to the Senate State and Local Government Committee. The bill would allow coastal cities to take action  to address nuisance conditions on the public trust beach. For background on the lawsuit that led to the legislation, see this post.

House Bill 938 (Improve Wetlands Mitigation Programs) legislatively sets mitigation requirements for impacts to isolated wetlands and intermittent streams, overriding mitigation rules adopted by the state’s Environmental Management Commission. The bill passed the House and is waiting for a hearing in the Senate’s Agriculture and Environment Committee.

House Bill 1011 (Government Reorganization and Efficiency Act)  has  the House proposals for reorganization of boards and commissions, including changes in appointments to the Environmental Management Commission, Coastal Resources Commission and Wildlife Resources Commission. The House  passed this bill after the original board and commission reorganization bill (Senate Bill 10) died when the House refused to accept the compromise bill negotiated by House and Senate conferees.  House Bill 1011 is being held in the Senate Rules Committee; in the meantime, the Senate put its changes to Environmental Management Commission and Coastal Resources Commission appointments in the Senate budget bill. The House and Senate are also in conference over different budget bills.

Senate Bill 151 (Coastal Policy Reform Act) makes a number of changes to fisheries laws; includes a section (similar to House Bill 300) that allows coastal cities to address nuisance conditions on the public trust beach; and amends a 2011  law allowing limited use of terminal groin structures for erosion control on inlet shorelines. The Senate  bill eliminates the existing cap on the number of terminal groin structures that  can  be permitted and weakens some of the permitting requirements. This is another issue with a long history.  For about  forty years, state environmental rules completely prohibited use of hard erosion control structures like groins, jetties and seawalls on the state’s ocean and inlet shorelines. The General Assembly opened the door to construction of terminal groins on inlet shorelines in 2011 legislation after a  contentious legislative battle. The 2011 legislation allowed DENR to issue permits for no more than four terminal groins as part of a pilot project and put strict conditions on groin construction. The Senate would remove any restriction on the number of terminal groins and also repeal some of the permitting standards enacted just two years ago. The House received the Senate bill on May 16 and referred it to the House Environment Committee, which has not yet brought the bill up for discussion.

Senate Bill 328 (Solid Waste Reform Act of 2013) passed the Senate and has gone over to the House. The bill  repeals  a number of  landfill siting and construction standards adopted by the General Assembly  in 2007 following a study of landfill permitting. An earlier post described the Senate’s proposed changes. The bill  has been referred to the House Environment Committee and then to the House Finance Committee.

Senate Bill 341 (Amend Interbasin Transfer Law) simplifies approval of some new interbasin transfers (generally in the coastal area) and modifications to  existing interbasin transfers. The House received the bill from the Senate on May 2; the House Environment Committee has not yet brought the bill up for discussion.

Senate Bill 515 (Jordan Lake Water Quality Act) repeals water quality rules designed to reduce nutrient pollution in the Jordan Lake reservoir and calls for a legislative study. A short version of the long history of the Jordan Lake rules can be found here.  The House received the bill on May 16 and referred the bill to the House Environment Committee; the committee has not yet scheduled the bill for discussion.

Senate Bill 612 (Regulatory Reform Act of 2013) follows up on 2012 legislation designed to make rulemaking (and particularly environmental rulemaking) more difficult. The bill requires state environmental agencies to rewrite state rules that  are  more strict than corresponding federal rules. An earlier post talks about the possible result. Senate Bill 612 would also prevent local governments from adopting ordinances that are more strict than state environmental rules — with some of the same unintended consequences.   Section 3 of Senate Bill 612  limits requirements for groundwater cleanup at permitted waste disposal sites. The House received the bill from the Senate on May 6, but has not yet  brought the bill up in the House Environment Committee. In the meantime,  the Senate  added the groundwater cleanup  language to House Bill 94,  which is now in conference to resolve  differences between the House and Senate versions.

Cautionary Note: To quote Yogi Berra,  “It ain’t over ’till it’s over”. So the fact that a controversial   proposal appears to have died with a bill that didn’t make cross-over or has been removed from a bill that went on to be adopted does not mean that it  won’t appear again. Sometimes it will appear more than once — in the budget, in another bill, or possibly in both — and  “it’s deja vu all over again”. (Yogi one more time.)

Another Solid Waste Issue

July 2, 2013: The Senate Agriculture and Environment Committee took up a noncontroversial House bill concerning local solid waste planning (House Bill 321).  Before approving the bill, senators amended it by adding a section that chooses sides in a specific legal dispute between a landfill operator and a local government. Sen. Fletcher Hartsell described the amendment as “grandfathering” a construction and demolition debris landfill in Union County that lost its local franchise agreement.  There appears to be a bit more to the situation, including several years of litigation between the  landfill operator and the local government where the landfill is located.

First, a little background on the landfill franchise requirement. Since 1994, N.C. law has required the operator of a solid waste landfill that receives household waste or construction/demolition waste to have a franchise from the local government. The franchise approach assumes that a privately-run landfill still exists largely  to provide waste disposal services for  a city or county. The franchise also allows the local government hosting a privately-run  landfill greater influence on its operation and management.

Based on  the brief description in committee (and a quick Google search), the amendment to House Bill 321 seems to involve a dispute between the Town of Unionville and Griffin Farm & Landfill, Inc. that has been going on since 2009.  In 2004, Griffin Farm & Landfill, Inc. received a franchise from the Town of Unionville for a construction and demolition debris (C&D) landfill. On June 30, 2008, Griffin Farm stopped accepting waste at the C&D landfill rather than meet new state landfill standards. Both the franchise and the 5-year state permit for the C&D landfill were set to expire on February 9, 2009 and in December 2008 Griffin Farm applied to the Town of Unionville for a new franchise. The Town of Unionville denied the franchise application in April of 2009, citing Griffin Farm’s neglect of the landfill, refusal to comply with new landfill standards, and past history of state violations. Several years of litigation between Unionville and Griffin Farm followed. Griffin Farm filed suit in federal court, claiming a constitutional right to continue operating the C&D landfill. The U.S District Court for the Western District of N.C. issued a decision in August of 2012 in favor of the Town of Unionville. [Note: The background facts largely come from the August 8, 2012  federal district court  decision in Griffin Farm & Landfill, Inc. & Richard S. Griffin v. Town of Unionville.]

If the General Assembly approves House Bill 321 as amended, Griffin Farm & Landfill, Inc. will be allowed to apply for a new state permit for the C&D landfill without a local government franchise. Since state law otherwise requires a franchise for operation of a C&D landfill, Griffin Farm & Landfill, Inc.  would presumably  become the only solid waste landfill in the state without a local government franchise.  Disconnecting the solid waste landfill permit from a local franchise should not be done without considering the implications for other landfill operators, local governments and state waste management policy.  At the very least, the General Assembly needs to be aware that it is both setting a precedent and intervening in a longstanding legal dispute.

Note: Like much of the state’s solid waste law, the franchise statute treats waste disposal primarily as a service to citizens rather than a commercial activity in its own right. State solid waste laws also  set goals for waste reduction and increased recycling.  The tension between treating landfills as a necessary service versus a moneymaking commercial activity also  provides much of the back story behind Senate Bill 328 (Solid Waste Management Reform Act of 2013).  In that case, the push to change the 2007 landfill standards largely comes from private waste management companies interested in a business opportunity beyond simply serving N.C. waste disposal needs. That business case is supported by a U.S. Supreme Court decision holding that movement of trash from one state to another for disposal is interstate commerce, so no state can just prohibit shipment of  waste either into or out of the state. (The U.S. Supreme Court has upheld state and local regulations  that  support legitimate  public purposes — such as environmental protection or recycling — even if the regulations affect  movement of trash across state lines.)

N.C. Senate Tries to Quiet Controversy over Disclosure of Fracking Chemicals

July 2, 2013: Earlier today, the Senate  took a first vote on  the Senate version of House Bill 94 (Amend Environmental Laws).  The Senate version already looked significantly different from the bill that came over from the House, but senators approved several more floor amendments before voting on the bill. One amendment attempts to calm a controversy over new language  on disclosure of fracking chemicals that senators added to House Bill 94 in committee.  The new language allowed drilling companies to withhold information on “trade secret” chemicals from state regulators; those chemicals would only be identified if  needed  to address an environmental emergency or health hazard. An earlier post talked about the disclosure language and some of the problems with after-the-fact disclosure of fracking chemicals.

The proposed limits on chemical disclosure were not well-received.  Members of the state’s  Mining and Energy Commission —  many appointed by legislative leaders — objected strenuously to the bill language. The commission had already drafted a disclosure rule that required drilling companies to fully disclose the chemicals used in hydraulic fracturing to staff in the Department of Environment and Natural Resources (DENR), but protected trade secret information from disclosure to the public. Because of objections from Halliburton lawyers, the Commission had delayed action on the draft rule to allow more time for DENR to  address concerns about trade secret protection.

The Senate bill language clearly caught members of the Mining and Energy Commission by surprise. Although DENR had signed off on the new legislative language, no one had consulted the MEC.  On behalf of the Mining and Energy Commission, Chair James Womack delivered a letter to legislators  expressing concern  about allowing an energy company to  unilaterally decide to withhold information from the state by labeling it a trade secret. The letter also noted that the bill would be inconsistent with the way trade secret information is normally handled under the state’s  Public Records Act.  Full text of the MEC letter here:  H94 Concerns_MEC Memo_30Jun2013 (1).

In an effort to quiet the controversy, the Senate amended the bill on the floor to revise the disclosure language again.  The amended language requires the Mining and Energy Commission to adopt a chemical disclosure rule that will do two things:

1.  The rule would allow  DENR and the MEC  to  “review” information on chemicals used in fracking fluid, but not  actually “take possession or ownership” of trade secret information. The amended language seems  intended to prevent creation of a public record that might become the focus of a lawsuit over disclosure. State regulators could see information on fracking chemicals,  but could not receive the information in writing and keep it on file with other information on the fracking operation. While that approach may make the industry more comfortable, it will make it very difficult for  DENR staff to have the information needed  to provide adequate oversight for drilling operations– a problem that would be compounded over time by staff turnover.  Allowing a DENR staff person to see the  list of  fracking chemicals  when fracking begins does not ensure the availability of that information to staff five years later.

It also isn’t clear whether the state would have any recourse if the information provided for review turned out to be inaccurate or misleading. Generally, state agencies can take enforcement action if a permit applicant submits inaccurate or misleading information; under the new Senate language, the information would be made available for review but never actually submitted to the agency.

2. The disclosure rule would also require public disclosure of the chemical family for each fracking chemical through an online chemical registry such as FracFOCUS. The draft MEC rule had similar language, except that the draft rule required disclosure of each specific fracking chemical unless the chemical constituted a trade secret.  Under the rule, disclosure of the chemical family in place of the specific chemical would only be allowed for chemicals designated as trade secrets.

The Senate has to take one more vote on the new version of House Bill 94. Once approved by the Senate, the bill goes back to the House for concurrence in the Senate’s changes.

The McCrory Administration Remakes the N.C. Water Quality Program

June 25, 2013:   The N.C. water quality program has been innovative, award-winning and a frequent target of complaints — complaints about  excessive regulation and complaints about poor customer service. The complaints probably result in part from the reach of water quality rules. Over the last 15-20 years,  water quality programs have expanded to address pollution that gets to rivers and streams indirectly —  in runoff from parking lots, roads, lawns and agricultural activities, for example. The expanded scope of the water quality program responded to specific state water quality problems and a new (beginning in the 1990s)  federal focus on “nonpoint sources”.  (The term “nonpoint source” distinguishes these indirect sources of water pollution  from “point sources”, such as pipes and ditches,  that directly discharge waste to rivers, lakes and streams.) In the 1970s and 1980s, the Division of Water Quality  mostly regulated municipal wastewater systems and industrial discharges to rivers and streams.  A simple subdivision development only needed a water quality permit if the  construction involved filling a wetland or stream.  Since the 1990s,  water quality rules have had a much greater effect on real estate development, agriculture, and even the activities of individual property owners.  Any regulatory program that touches so many citizens and activities will generate controversy and complaints — some legitimate and  others not.

The McCrory administration has begun moving toward a major reorganization of the  water quality programs in DENR’s Division of Water Quality (DWQ). It is not yet clear what the state’s water quality program will look like in the end or even what the McCrory administration wants to achieve,  but Secretary John Skvarla has been publicly and harshly critical of the Division of Water Quality’s customer service. Word has  started to get out about  first  steps in reorganization of the division.  Both the division director and deputy director  have recently  taken new assignments;  former director Chuck Wakild  will retire in August.  Reports are that the first reorganization move will be to transfer all  stormwater programs from the Division of Water Quality  to the Division of Energy, Mineral and Land Resources effective  August 1 2013.  The transfer will have a big impact — the Division of Water Quality now manages a number of different state and federal stormwater programs.  State stormwater programs include coastal stormwater  rules designed to protect the quality of shellfish waters and stormwater requirements associated with the Neuse River, Tar-Pamlico River, Falls Lake and Jordan Lake nutrient rules. Federal  stormwater programs  (Clean Water Act programs delegated to the state by EPA)  issue permits for municipal and industrial stormwater discharges and construction stormwater permits for active construction sites.

The Division of Energy, Mineral and Land Resources (DEMLR)  has no stormwater experience  (other than a supporting role in  DWQ’s issuance of construction stormwater permits)  and no experience managing  federal  Clean Water Act programs. Taking on the stormwater programs will greatly increase the portfolio of a division already struggling to meet the enormous workload associated with shale gas rule making.  The move will also separate  federal  stormwater programs from other federal Clean Water Act permitting programs delegated to DWQ, requiring a bit more effort to coordinate water quality strategies that require control of both point and nonpoint pollution sources. It appears that the remaining DWQ  programs will become part of an expanded Division of Water Resources.

As the McCrory administration  moves forward with reorganization plans, a few things to watch for and think about:

— Will the reorganized programs have enough  staff to  review permits, inspect  projects,  enforce  environmental  laws and meet federal grant requirements? Even in the construction stormwater program where there has long been a cooperative agreement between DWQ and DEMLR’s sediment program,  merging staff from the two divisions does not yield a single program with enough staff to meet its responsibilities under state and federal law.  Budget cuts in the sedimentation program over the last five years have take too great a toll.  The temptation to use reorganization as a way to cut positions will be great; it should only be done if the new organization can continue to meet all of its state and federal responsibilities. The same holds true for transfer of DWQ programs to the Division of Water Resources; some programs in the two divisions  appear to do similar things, but in reality have very different purposes.  Reorganization decisions will need to keep those different  program functions in mind.  Staffing levels also affect the federal grants that support much of the water quality program;  state-funded staff positions provide much of the required state match for federal grant dollars and at a certain point eliminating state-funded positions jeopardizes the federal funding.

— Will reorganization decisions maintain all of the functions needed to meet Clean Water Act requirements?  Permits are only a small part of the state’s federal Clean Water Act responsibilities. The state must also have an ongoing water quality planning program  that regularly reviews water quality standards; identifies rivers, lakes and streams that are not meeting water quality standards;   develops  plans to improve water quality; and develops best management practices to reduce nonpoint source pollution.

The Division of Water Quality’s water quality planning program provides much of the information and analysis needed to meet the planning requirements of the Clean Water Act.  Planning programs may appear less critical than permitting, but the planning program provides the monitoring data needed to evaluate the effectiveness of water quality rules, pinpoint pollution problems,  and develop the right solution. A planning program that meets federal requirements is also necessary for the state to  have a delegated Clean Water Act permitting program.

— Will the reorganization maintain the expertise needed to evaluate water quality trends, find solutions to impaired water quality, provide good advice to permit applicants, and advocate the state’s position on water quality policy to EPA? Many water quality programs (especially the delegated federal programs) are very complex. Water quality staff need to understand both the science and the law to help permit applicants through the process. There are also times that EPA and the state will disagree on an issue that affects a Clean Water Act permitting program;  DENR will need the knowledge and experience to make a case for the state’s position.

— Will changes that affect federal Clean Water Act programs require EPA approval? The answer  will depend on what kind of changes are made (to organization structure, staffing and program functions)  and how the existing program description approved by EPA was written. Generally, program changes have to be submitted to EPA for approval along with a certification by the Attorney General that the water quality program continues to meet requirements of the Clean Water Act.

N.C. has made tremendous gains in water quality over the last 20 years. Some of the more visible signs of progress have been better management of swine waste, innovative approaches to stormwater control, creation of GIS tools to better predict stream and wetland impacts, and development of river-basin water quality plans that provide a big picture of water quality conditions, threats and trends. One of the real challenges of environmental protection programs is that success often means avoiding a problem — success is the swine waste lagoon that doesn’t fail, the fish kill that doesn’t happen, drinking water supplies unaffected by algae. The challenge for the McCrory administration will be to improve what needs to be improved in the state’s water quality programs without undermining their effectiveness. Water supply will be key to the state’s economic future — and the quality of the water is as important as the quantity.

Note: A new version of House Bill 94 (Amend Environmental Laws) came up in the Senate Agriculture and Environment Committee this  morning. The bill included a new section that directs DENR to combine the Division of Water Quality with the Division of Water Resources.  The senator presenting the bill indicated that DENR had asked for the reorganization authority, but the details of the bill language do not match up with reported plans for moving the stormwater programs to the Division of Energy, Mineral and Land Resources.  The version of House Bill 94 approved by the committee shifts the stormwater programs to the Division of Water Resources with other water quality programs. Either the DENR plan has changed or the bill needs a little more work.

Landfill Update

June 20, 2013:  Yesterday, the Senate Finance Committee approved a revised version of Senate Bill 328 (the Solid Waste Management Reform Act of 2013). The new bill draft undoes some of the changes to existing solid waste laws proposed in earlier versions of the bill. The bill:

— Reinstates the requirement for an Environmental Impact Statement (EIS) for landfills.

— Adds a modified requirement for inspection and cleaning  of leachate lines  (requiring inspection every five-years and cleaning as needed in place of the current requirement for annual cleaning).

— Removes earlier bill language that would have allowed waste disposal in wetlands that are not  protected under federal law; the bill still eliminates the current  200 foot buffer between waste disposal areas and wetlands.

— Returns to existing limits on landfill size, removing language that would have increased the maximum landfill height from 250 to 300 feet.

Unfortunately, the new version of Senate Bill 328 provides even less protection for endangered species habitat and other sensitive areas than the previous bill draft.  The new version still repeals language in the solid waste laws that allows DENR to deny a landfill permit based on significant damage to:

“ecological systems, natural resources, cultural sites, recreation areas, or historic sites of more than local significance…[including] national or State parks or forests; wilderness areas; historic sites; recreation areas; segments of the natural and scenic rivers system; wildlife refuges, preserves, and management areas; areas that provide habitat for threatened or endangered species; primary nursery areas and critical fisheries habitat designated by the Marine Fisheries Commission; and Outstanding Resource Waters designated by the Environmental Management Commission.”

But the  bill also drops earlier Senate Bill 328 language that would have prevented landfills from being located in critical habitat for a threatened or endangered species or in a historically or archaeologically sensitive site.  The only protection for important natural resources appears in one provision that requires a 1500 foot setback between a landfill and  a national or State park, a designated Natural and Scenic River, a  National Wildlife Refuge, critical fisheries habitat or Outstanding Resource Waters.

Without any permitting standard that protects sensitive areas,  information from an  EIS that shows construction or operation of the landfill will significantly damage a  park, wildlife refuge, endangered species habitat, historic or archaeological site will just be interesting reading. The bill will leave DENR with little or no ability to actually use that information to deny a permit or to put conditions on the permit to protect conservation areas, public recreation areas, endangered species habitat and other sensitive resources.

House v. Senate Budget on Environmental Policy

June 15, 2013: A comparison of the House and Senate budget bills continued (again, not a comprehensive list).

Policy and organization changes the House and Senate agree on; these also have related   money provisions:

●  Transfer the State Energy Office from the Department of Commerce to the Department of Environment and Natural Resources.

●  Move Clean Water Management Trust Fund staff into the Department of Environment and Natural Resources. (There are  differences in the way the House and the Senate would organize the conservation trust funds after the transfer.)

●    Allow the state Division of Marine Fisheries to enter into a  joint  enforcement agreement with the National Marine Fisheries Service.  Under the agreement,  the  state marine patrol would receive federal  funds  to enforce  federal  fisheries regulations in federal waters.

●  Require owners of small, noncommercial underground petroleum storage tanks (such as home heating oil tanks and on-farm gasoline storage tanks) to pay a $1,000 deductible and a 10% copay for assessment and cleanup of a spill or leak. Currently, the state’s Noncommercial UST Trust Fund pays the full cost of assessment and cleanup; the tank owner only pays for removal of the leaking tank.

Things to be resolved in conference:

●  How to  fund conservation and parks. The Senate budget transfers all revenue from the deed stamp tax (which has been dedicated to the Parks and Recreation Trust Fund and the Natural Heritage Trust Fund) to the state’s General Fund and then appropriates a smaller amount for parks and conservation programs  supported by the trust funds. The House budget continues to dedicate revenue from the deed stamp tax  to trust funds for parks and conservation — 75%  to the Parks and Recreation Trust Funds (no change) and 25% to the Clean Water Management Trust Fund (eliminating the Natural Heritage Trust Fund).

●   Elimination of the Uwharrie Regional Resources Commission. The House budget bill proposes to repeal the Uwharrie Regional Resources Act, which would have the effect of eliminating the Uwharrie Regional Resources Commission.  The Commission was created largely to advocate for and support a state  takeover of the Alcoa hydropower plants on the Yadkin River.

●  Creation of a new Oregon Inlet Land Acquisition Task Force to study the possibility of acquiring federal lands on either side of Oregon Inlet for purposes of building jetties to stabilize Oregon Inlet.  See an earlier post on the Senate  proposal here.

●   Changes to board and commission appointments. The Senate put changes to the Environmental Management Commission and Coastal Resources Commission appointment statutes into  the budget bill. The House budget bill does not include anything on board and commission appointments, but  a separate House  bill (House Bill 1011) has very similar language.

●  Whether to continue to dedicate some tax revenues to specific programs or bring all revenue into the General Fund to be allocated by the legislature on a year to year basis. The Senate budget  reclaims revenue from a number of  special taxes for the state’s General Fund and replaces the dedicated funding from those taxes with year to year appropriations  — generally at lower funding levels.   I have already talked about the Senate proposal to transfer deed stamp tax revenue to the  General Fund. The Senate budget does the same thing with  the scrap tire disposal tax, the white goods disposal tax and a portion of the solid waste disposal tax. Those taxes now directly support  recycling, waste reduction,  and solid waste management programs.  The Senate budget  transfers the  revenue from those waste disposal taxes to the  General Fund to be allocated by the legislature.  That diversion of tax revenue raises a bit of a bait and switch issue. The taxes were originally justified as necessary to pay for appropriate waste disposal and recycling;  transferring revenue from the disposal taxes to the General Fund weakens that link.