Category Archives: Wetlands

Wetlands Protection Update

October 30, 2023. An earlier post described the interaction of new state limits on wetlands protection and a U.S. Supreme Court decision reducing federal Clean Water Act (CWA) jurisdiction over streams and wetlands. (See State Law: Removing Wetlands from “Waters of the State”.) This post provides an update on federal implementation of the Sackett decision and new information on the impact of the wetlands provision in the N.C. Farm Act (Senate Bill 582/ Session Law 2023-63).

Federal Implementation of the decision in Sackett v. EPA. In Sackett v. EPA, a plurality of four justices issued an opinion striking down rules adopted jointly by the U.S. EPA and the U.S. Army Corps of Engineers defining Clean Water Act jurisdiction over streams and wetlands. (The other five justices split between several dissenting opinions.)

In Sackett, the court held that “waters of the United States” — which defines the extent of Clean Water Act regulations — only applies to surface waters useful for interstate commerce (my shorthand description of the categories of waters listed more specifically below) and tributaries to those waters that are “relatively permanent, standing, or continuously flowing”. To be consistent with the Sackett decision, EPA has amended the CWA jurisdiction rule to limit federal jurisdiction over tributaries and wetlands. The Sackett standard appears to eliminate federal jurisdiction over ephemeral streams that flow only in response to precipitation. Jurisdiction over intermittent streams and other seasonal water bodies will likely require field interpretation of the Sackett criteria. Stay tuned for future litigation over those determinations. The restriction on CWA jurisdiction over tributaries has significant water quality implications. Nationally, an estimated 59% of streams would be classified as intermittent or ephemeral. The percentage is much higher (89%) in arid western states. Most of those streams ultimately flow into permanent water bodies.

In Sackett, the U.S. Supreme Court also interpreted the Clean Water Act to apply only to wetlands that have a continuous surface connection to water bodies otherwise in federal jurisdiction. Under the decision, wetlands must be physically “indistinguishable” from those waters to be covered by federal CWA jurisdiction. (Slip opinion, Sackett v. EPA, p. 27.) The new federal rule makes several changes in response to this restriction on federal wetlands jurisdiction:

1. The “significant nexus” standard, which had extended federal jurisdiction to wetlands with a significant water quality relationship to jurisdictional waters (such as a groundwater connection), has been removed from the rule.

2. Wetlands located near jurisdictional surface waters, but physically separated by a manmade structure (such as a berm), will no longer be considered jurisdictional based on being “adjacent” to waters of the United States.

3. The reference to ‘‘interstate wetlands’’ as a stand-alone category of jurisdictional wetlands has been removed.

Under the new federal jurisdiction rule that went into effect on September 12, 2023, the Clean Water Act will apply only to:

♦ Waters used or capable of being used in interstate or foreign commerce

♦ Tidal waters

♦ The territorial seas

♦ Interstate waters

♦ Impoundments of waters that are otherwise defined as waters of the United States (such as a reservoir created by damming a flowing river)

♦ Tributaries of the waters listed above as long as the tributaries are “relatively permanent, standing or continuously flowing”

♦ Wetlands that have a continuous surface connection to waters that fall into one of the categories above.

Filling jurisdictional waters or wetlands requires a federal permit under Section 404 of the CWA and most litigation over the definition of “waters of the United States” has been driven by property owners/developers seeking to fill wetlands for construction. But “waters of the United States” also defines the scope of Clean Water Act restrictions on water pollution. It is not entirely clear how the loss of jurisdiction over wetlands and non-permanent tributaries will affect the NPDES permitting program. There is earlier case law holding that discharge of pollutants to a non-jurisdictional stream or to groundwater with a surface water connection requires an NPDES permit if those pollutants will reach jurisdictional waters.

Scope of North Carolina Legislation Limiting Wetlands Protection.

The Sackett decision actually emphasizes language in the Clean Water Act that notes “the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution”. In limiting federal CWA jurisdiction, the court expressly deferred to broader state authority to protect waters and wetlands: “Regulation of land and water use lies at the core of traditional state authority”. (Slip opinion, Sackett v. EPA, p. 23). But just as the Sackett decision restricted federal water pollution authority in deference to the states, the N.C. General Assembly limited state water quality protections for wetlands to those falling in federal Clean Water Act jurisdiction.

Senate Bill 582 became state law on June 27, 2023 over the Governor’s veto. Confusion over the intended effect of the wetlands provision led me, as Chair of the N.C. Environmental Management Commission, to ask the Department of Environmental Quality (DEQ) to advise the EMC on implications for state water quality rules. In consultation with the Attorney General’s Office, DEQ confirmed that Session Law 2023-63 entirely eliminates state water quality protections for wetlands that fall outside federal regulatory jurisdiction, including basin wetlands and bogs that had previously been covered by a 2015 state wetlands permitting law. The DEQ memorandum also confirmed that the new law affects enforcement of state water quality standards restricting discharge of pollutants to wetlands.

Session Law 2023-63 does not affect application of state water quality standards to surface waters such as streams. Existing state laws requiring permits for discharge of pollutants and placement of fill material will continue to apply to streams and other surface waters in the state independent of CWA jurisdiction. The new federal jurisdiction rule will magnify the impact of Session Law 2023-63 on state wetlands, however. As noted above, federal jurisdiction over tributaries will shrink under the Sackett criteria. Consistent with the Sackett decision, the conforming EPA rule also removes CWA jurisdiction over wetlands adjacent to non-jurisdictional tributaries. Under Session Law 2023-63, those wetlands will also lose state water quality protections.

It is still unclear whether the General Assembly intended Senate Bill 582 to have such wide-ranging impact on state wetlands. The Sackett decision certainly expanded the impact of Senate Bill 582 beyond what would have been anticipated when the bill was filed. It is possible that Session Law 2023-63 will be modified as a result, but that seems unlikely to happen before adjournment of the 2023 legislative session. Other nearby states, including Virginia, have already take steps to ensure that state waters and wetlands that now fall outside Clean Water Act jurisdiction will be protected by state water quality laws.

Regulatory Reform 2015: A New NC Senate Proposal

July 13, 2015. Before leaving for the Fourth of July holiday, the N.C. Senate turned a minor House bill into a vehicle for major changes to environmental rules. The Senate had already proposed changes to environmental standards in a regulatory reform bill (Senate Bill 453) that has not yet passed the Senate; in individual Senate environmental bills; and in the Senate budget bill. The House has not yet voted on many of the earlier Senate proposals. The Senate version of House Bill 765 may be the most aggressive regulatory reform legislation to date — putting constraints on air quality rules; creating new immunity from environmental enforcement actions; reducing air quality monitoring; changing laws on remediation of contaminated property; and proposing outright repeal of the state’s electronics recycling law. In response to DENR concerns, the Senate delayed some proposed changes to stormwater and environmental permitting requirements to allow for study. Reportedly, the floor amendments adopted by the Senate eliminated DENR objections to the remainder of the bill which continues to have far-reaching implications for state environmental policy:

Sec. 1.4 allows a state agency to automatically recover attorneys fees from a person who unsuccessfully challenges a state action on environmental grounds. A citizen or organization challenging a state construction project or an environmental permitting decision could be at significant financial risk — a risk that would not be shared by citizens challenging state actions for other reasons.

Sec. 4.2 repeals the state law requiring computer and television manufacturers to pay fees that support local electronics recycling programs. It isn’t clear that all of the city and county electronics recycling programs could survive the loss of state recycling fee revenue. State law would continue to prohibit disposal of discarded televisions and computers in landfills; the question is whether there would continue to be electronics recycling programs in all 100 counties.

Sec. 4.7 makes changes to state laws allowing risk-based remediation of environmental contamination. A risk-based remediation allows the person responsible for the contamination (the “responsible party”) to do a partial cleanup of groundwater and soil contamination by relying on land-use controls to limit future exposure to contaminated soils or groundwater remaining on the site. The biggest changes:

1. Sites where contamination has already migrated onto adjacent properties would become eligible for a risk-based cleanup. Existing law does not allow a risk-based cleanup if contamination has migrated off the property where it originated because of the additional complication of managing exposure on property the responsible party does not control. The Senate provision allows a responsible party to do a risk-based cleanup on adjacent property with the property owner’s permission. The provision does not require land use controls on the adjacent property to prevent future exposure to remaining contamination — normally a necessary condition of a risk-based cleanup. Existing remediation standards may allow DENR to disapprove a risk-based cleanup unless the entire area has appropriate land use controls, but the new Senate provision on risk-based cleanup of adjacent property is silent on the issue.

2. The bill removes existing statute language that limits risk-based remediation to contaminated sites reported to DENR before the risk-based remediation law went into effect in 2011, allowing lower-cost, risk-based remediation as an alternative for future pollution events.

Sec. 4.9 changes a state law providing incentives for redevelopment of contaminated property (or “brownfields”). The state Brownfields Redevelopment Act uses the term “prospective developer” to describe a person eligible for liability protection and economic incentives under the law. The term excludes anyone who caused or contributed to the contamination. The Senate proposes to redefine the term to cover a “bona fide prospective purchaser”, a “contiguous landowner” and an “innocent landowner” as defined in the federal Small Business Liability Relief and Brownfields Redevelopment Act (amending the Comprehensive Environmental Response, Compensation and Liability Act or “CERCLA”). In CERCLA, the terms describe categories of landowners who have acquired property contaminated by hazardous substances, but have no legal liability for the contamination. Generally, the definitions cover landowners who acquired the property after the contamination occurred and have no relationship to a person (or company) responsible for the contamination.

All of the federal definitions referenced in the Senate provision concern liability for “hazardous substance” contamination as defined in CERCLA. CERCLA defines “hazardous substance” to include a specific list of compounds and unlisted substances with similar characteristics. The definition also excludes some substances — most notably petroleum and natural gas products — with similar health and environmental risk. (Other federal laws address contamination caused by petroleum spills and leaks.)

In redefining “prospective developer” based on CERCLA terms, the Senate provision also eliminates language in the existing definition that excludes a person who caused or contributed to contamination on the site. The question is whether those changes, in combination, could give a property owner responsible for contamination unrelated to a CERCLA “hazardous substance” liability protection and other benefits under the state Brownfields law. That result would be inconsistent with the original intent of the Brownfields Redevelopment Act and undermine the state’s ability to require cleanup of environmental contamination.

Sec. 4.14 would allow private engineers to self-permit onsite wastewater systems (such as septic systems), eliminating the need for a local health department permit. (The provision does not affect wastewater systems that discharge to the land surface or to rivers, lakes and streams; those systems require permits from DENR.) The property owner’s engineer would have to give the local health department a notice of intent to construct the wastewater system and a final post-construction report, but the engineer would be completely responsible for design and installation. The provision also allows the engineer to use wastewater system technology that has not been approved by the State “at the engineer’s discretion”.

In place of health department enforcement of on-site wastewater standards, the bill puts the burden on the property owner to sue the engineer or soil scientist if the wastewater system fails. The risk to the property owner is that problems may develop several years after installation, leading to an expensive fight over the cause of the failure — bad engineering; inappropriate siting; improper installation; or lack of maintenance. Treating a failed wastewater system as a problem strictly between the engineer or soil scientist and property owner also overlooks the possible impact on other property owners and the public. A septic system located too close to a water supply well may contaminate the well; a failing wastewater system can contribute pollutants to already stressed streams and lakes. Although the bill requires the engineer to give notice of the proposed construction to the local health department, it isn’t clear that the provision allows the health department to prevent installation of an engineer-approved system however poorly designed or improperly sited.

Sec.4.15 changes state review of applications for innovative or experimental onsite wastewater systems. For the most part, the bill seems to replace state approval of experimental waste treatment systems with reliance on national certification of the technology.

Sec. 4.18 reduces state protection of isolated wetlands by limiting the application of state water quality permitting rules to basin wetlands and bogs — excluding other isolated wetlands from environmental protection. DENR has identified seven other categories of isolated wetlands: Coastal Isolated Wetlands, Seep, Hardwood Flat, Non-Riverine Swamp Forest, Pocosin, Pine Savanna, and Pine Flats. Note: “isolated wetlands” are wetlands that do not have any connection to surface waters that fall under federal Clean Water Act jurisdiction.

Sec. 4.19 allows more development to be considered “low density” under coastal stormwater rules, raising the low density limit from 12% built-upon area to 24% built-upon area. The significance of the change is that low density projects do not require engineered stormwater controls. The bill also eliminates one trigger for compliance with coastal stormwater rules — the addition of 10,000 square feet or more of built-upon area as part of a non-residential development. The Senate provision would trigger coastal stormwater standards for both residential and non-residential projects based on the need for a sedimentation plan (required for disturbance of one acre or more) or a Coastal Area Management Act permit. Before adoption, the Senate amended the effective date for Sec. 4.19 in response to DENR concerns about the coastal stormwater changes. The provision would go into effect on July 1 2016 to allow for study in the interim.

Sec. 4.24 requires repeal of the state’s heavy duty vehicle idling rules. The rule, 15A NCAC 2D.1010, limits excessive idling of heavy duty vehicles as another way to reduce the impact of vehicle emissions on air quality.

Sec. 4.25 requires the state Division of Air Quality to remove air quality monitors that are not specifically required by the U.S. Environmental Protection Agency. The provision would significantly reduce the number of air quality monitors used to assess air quality and demonstrate compliance with federal ambient air quality standards.

Sec. 4.30 deals with mitigation of stream impacts permitted under Sec. 404 of the Clean Water Act. Under Sec. 404, many projects involving deposition of fill material in surface waters require a federal permit. In most states, the U.S. Army Corps of Engineers issues the 404 permits. The Clean Water Act requires an applicant for a 404 permit to provide the Corps with a certification (under Sec. 401 of the Act) that the project will be consistent with state water quality standards. The Senate provision affects state issuance of the 401 Certification in two ways. First, it prevents DENR from using the 401 Certification to put stream mitigation conditions on a project impacting less than 300 feet of stream without making specific findings — even if the mitigation requirement simply matches mitigation required under the federal 404 permit. The provision also limits state requirements for stream mitigation to a 1:1 ratio of stream impact to mitigation provided; in some cases, that will result in less mitigation than the Corps will require for the 404 permit. Since the permit applicant will have to meet federal mitigation conditions in any case, the reason for these new restrictions on parallel state mitigation conditions isn’t clear.

Sec. 4.31 completely eliminates state mitigation requirements for isolated streams (that is, streams that fall outside federal Clean Water Act permitting jurisdiction).

Sec. 4.37 makes changes to riparian buffer rules. The provision requires the buffer on an intermittent stream to be measured from the center of the stream rather than normal high water level. The most significant change allows unlimited development in a riparian buffer as long as the project complies with state stormwater requirements. The change appears as an amendment to a stormwater statute and does not directly refer to riparian buffer rules adopted by the Environmental Management Commission. Other bills that propose changes to riparian buffer requirements specifically list the rules affected — such as the Neuse River and Jordan Lake rules. Since this provision makes no reference to the riparian buffer rules, it may be intended to apply only to buffers required under the state’s minimum stormwater standards and local stormwater ordinances. It isn’t clear.

The bill also includes several provisions that appeared earlier in other Senate bills. Sec. 4.1 makes another run at putting environmental audit/self-disclosure immunity into state law. The Senate had included those same provisions in Senate Bill 453; see an earlier post for more detail. Sec. 4.3 and Sec. 4.4 repeat limitations on state adoption and enforcement of federal air quality standards already approved by the Senate in Senate Bill 303; see previous posts here and here.

The extensive Senate changes to House Bill 765 mean the bill now goes back to the House for a vote on concurrence. If the House refuses to accept all of the Senate changes, the bill goes to a conference committee. The General Assembly will be back in session this week, but it isn’t clear what priority the House will give H 765.

The Battle Over Riparian Buffers

June 22, 2015. An earlier post described changes to state buffer rules proposed in House Bill 760 (Regulatory Reform Act of 2015). Last week, the North Carolina Senate put its own set of buffer changes into House Bill 44 (Local Government Regulatory Reform). The buffer provisions added by the Senate look very different from those approved by the House in H 760.

First, the purpose of riparian buffer rules. In several areas of the state, water quality rules limit clearing, grading and development activity within 50 feet of rivers, lakes and streams. For the most part, the state buffer rules responded to water pollution problems caused by excess nutrients. A number of large fish kills, including a 1995 fish kill in the Neuse River estuary that lasted more than three months and killed tens of millions of fish, prompted nutrient rules for the lower Neuse River and the Tar-Pamlico River basin. The rules required stream buffers to reduce nutrient runoff and also put stricter limits on wastewater discharges of nitrogen and phosphorus. More recently, similar nutrient problems led the Environmental Management Commission (EMC) to adopt buffer rules for the Falls Lake and Jordan Lake watersheds. State buffer rules also apply to the main stem of the Catawba River and in the Randleman Reservoir watershed to prevent development of nutrient problems. The rules require a 50-foot vegetated buffer — Zone 1 (the first 30 feet back from the water) has undisturbed natural vegetation; Zone 2 can be graded and replanted.

In Section 13 of House Bill 44, the Senate proposes to shrink the riparian buffer required under the Neuse River rules from 50 feet to 30 feet and allow more disturbance within 30 feet of the water. The Senate bill then directs DENR and the Environmental Management Commission to “implement all other rules adopted by the Commission for the protection and maintenance of existing riparian buffers for nutrient sensitive waters” in the same way until the beginning of the 2016 legislative session. The implications:

♦ Stream buffers on waters already stressed by excess nutrients will be significantly narrowed; it isn’t clear whether the narrower buffer will be as effective in reducing polluted runoff.

♦ The Senate provision allows grading, clearing and revegetation of the entire 30-foot buffer.

♦ Changes to the Neuse River buffer rule would be permanent, but changes to buffer rules on other nutrient sensitive waters expire at the beginning of the next legislative session in May 2016. (Although nothing in the bill suggests the Senate actually intends to allow those buffer rules to return to their current form in 2016.)

♦ Whatever happens in 2016, temporarily reducing riparian buffer requirements on nutrient sensitive waters could set off a frenzy of buffer clearing during the one year interim.

♦ Since the provision only applies to buffer rules adopted by the EMC “for nutrient sensitive waters”, buffer rules adopted for Randleman Reservoir and the main stem of the Catawba River would be unchanged.

The Senate and House also differ on the method for measuring riparian buffers on coastal wetlands. The Senate provision (in Section 14 of House Bill 44) requires all coastal wetlands — even those regularly flooded on the tides — to be considered part of the riparian buffer. The change would potentially allow clearing, grading and development activity up to the edge of a regularly flooded coastal wetland. H 760 requires the riparian buffer on a coastal wetland to be measured from the normal water level, likely preventing use of regularly flooded wetlands as the buffer.

The House quickly voted not to accept the Senate changes to House Bill 44; the bill has been sent to a conference committee to work out the differences. The Senate has not yet taken up H 760. Legislative conferees can sometimes color outside the lines, but as things now stand the choice seems to be between: 1. Maintaining existing 50-foot riparian buffer requirements, but exempting a large number of properties from the rules entirely (the House proposal in H 760); or 2. Reducing the riparian buffer from 50 feet to 30 feet on nutrient sensitive waters and allowing grading, clearing and revegetation in the entire buffer (the Senate proposal in H 44).

Note on Goose Creek: Buffer rules for the Goose Creek watershed protect habitat for a federally listed endangered species. The rules, which were negotiated with the U.S. Fish and Wildlife Service, require broader buffers than those on nutrient sensitive waters. The Senate buffer provisions in H 44 do not affect the Goose Creek rules. The buffer exemption in H 760 could apply in the Goose Creek watershed, which may undo the negotiated agreement with U.S. Fish and Wildlife.

The NC Senate: Budget 2015

June 18, 2015. Yesterday, the N.C. Senate took a first vote to approve a Senate version of House Bill 97 ( 2015 Appropriations Act). The Senate received H 97 from the House of Representatives on May 22. The Senate released its alternative draft of the appropriations bill three days ago and quickly moved H 97 through Senate appropriations committees. The Senate takes a very different approach to funding state government than the House, but the Senate version of H 97 also contains many more “special provisions” — changes to existing law that go beyond finance and appropriations. Some of the more significant environmental provisions in the Senate budget bill (not by any means a complete list) below.

First, the Senate revisits the organization of state natural resource programs. Sec. 14.30 of the Senate bill would combine DENR’s natural resource programs (Division of Parks and Recreation, State Parks, Aquariums, the N.C. Zoo and the Museum of Natural Sciences) with cultural resource programs (such as the Museum of History and state historic sites) in a new Department of Natural and Cultural Resources. DENR would become the Department of Environmental Quality. Sec. 14.31 requires the two departments to study whether the Albemarle-Pamlico National Estuary Program, state Coastal Reserves, the Office of Land and Water Stewardship, the Office of Environmental Education and Public Affairs, the Division of Marine Fisheries and the Wildlife Resources Commission should also be moved to the new Department of Natural and Cultural Resources.

Other changes proposed in the Senate bill by subject (parenthetical descriptions are mine) :

COAL ASH

Sec. 29.18 (Beneficial use of coal ash) requires the Utilities Commission to report to several legislative committees by January 2016 on “the incremental cost incentives related to coal combustion residuals surface impoundment for investor-owned public utilities” including:

(1) Utilities Commission policy on incremental cost recovery.

(2) The impact of the current policy on incremental cost recovery on utility customers’ rates.

(3) Possible changes to the current policy on incremental cost recovery that would promote reprocessing and other technologies that allow the reuse of coal combustion residuals stored in surface impoundments for concrete and other beneficial end uses.

Although a bit opaque, the Senate seems interested in the possibility of allowing electric utilities to recover (through charges to consumers) the costs associated with making coal ash in surface impoundments available for beneficial use. Duke Energy has previously told legislators that much of the coal ash in North Carolina impoundments would require additional processing to be usable in concrete manufacturing.

COASTAL ISSUES

Sec. 14.6 (Use of sandbags for temporary erosion control) amends standards installation of sandbags for erosion control on ocean and inlet shorelines. State rules now allow installation of sandbags only in response to erosion that imminently threatens a structure. The Senate bill allows a property owner to install sandbags to align with existing sandbag structures on adjacent properties without showing an imminent erosion threat on their own property.

Sec. 14.10I (Strategies to address beach erosion) requires the Division of Coastal Management to study and develop a strategy “preventing, mitigating and remediating the effects of beach erosion”.

ENERGY

Sec 14.29 (Federal energy grants) prohibits DENR from applying for grants from two federal programs – the State Energy Program Competitive Grant Program and the Clean Energy and Manufacturing Grant Program.

FISHERIES

Sec. 14.8, Sec. 14.10A and Sec. 14.10C (measures to increase shellfish restoration and cultivation)

Sec. 14.8 directs the Division of Marine Fisheries to work with commercial fishermen, aquaculture operations, and federal agencies to open additional areas in Core Sound to shellfish cultivation leasing.

Sec. 14.10A directs DMF and the Division of Coastal Management to cooperate in development of a new, expedited CAMA permitting process for oyster restoration projects. The provision also authorizes DMF to issue scientific and educational activity permits to nonprofit conservation organizations engaged in oyster restoration.

Sec. 14.10C Amends G.S. 113-202 to allow a lease for use of the water bottom to also cover fish cultivation or harvest devices on or within 18″ of the bottom. (Devices or structures not resting on the bottom or extending more than 18″ above the bottom will continue to require a water column lease.)

Sec. 14.10F (Joint fisheries enforcement authority) repeals the Division of Marine Fisheries authority to enter into a joint enforcement agreement with the National Marine Fisheries Service. The joint agreement allows DMF to receive federal funding to enforce federal fisheries regulations in state waters.

SPECIAL FUNDS

Sec. 14.16 continues a recent trend of eliminating “special funds” that hold fees or other revenue dedicated for a specific purpose outside the state budget’s General Fund. The Senate bill eliminates special funds for mining fees, stormwater permit fees, and UST soil permitting fees and moves the fee revenue into the General Fund.

STREAM AND WETLAND MITIGATION

Sec. 14.23 (Limiting the state’s role in providing stream, wetland, riparian buffer and nutrient mitigation) requires DENR’s Division of Mitigation Services to stop accepting fees in lieu of mitigation in the Neuse, Tar-Pamlico and Cape Fear River basins within 30 months. The provision then allows DENR (with the Environmental Management Commission’s agreement) to also eliminate the state in-lieu fee programs in all other river basins after June 30, 2018.

DENR’s in-lieu fee program allows a developer to pay a fee for mitigation required as a condition of state and federal development permits. DENR then contracts with private mitigation providers for the necessary mitigation. Payment of the fee transfers responsibility for providing the mitigation from the developer to DENR. Under a Memorandum of Agreement with the U.S. Army Corps of Engineers, the state’s in-lieu fee program can be used to satisfy stream and wetland mitigation required as a condition of federal Clean Water Act permits.

Eliminating the State in-lieu fee program seems to eliminate the fee-for-mitigation approach as an option for developers. The burden would be back on the developer to find acceptable mitigation through a private mitigation bank or to plan and manage an individual mitigation project. The change may slow some development projects that can now move ahead based on the Corps of Engineers’ agreement to accept payments to the state in-lieu fee program as satisfying federal mitigation requirements.

UNDERGROUND STORAGE TANKS

Sec. 14.16A (Elimination of the Noncommercial UST Trust Fund) phases out the state’s Noncommercial UST Trust Fund which reimburses property owners for the cost of cleaning up contamination from leaking underground petroleum storage tanks. The Noncommercial UST Trust Fund has benefitted homeowners with soil and groundwater contamination caused by home heating oil tanks and property owners with contamination caused by USTs used to store fuel for personal use — as on a farm. Under the Senate provision, the Noncommercial Fund could only be used for leaks reported before August 1, 2015 and claims for reimbursement filed by July 1, 2016. The Noncommercial Fund would be eliminated for any petroleum releases reported or claims made after those dates.

WASTE MANAGEMENT

Sec. 14.20 (Life of site landfill permits) amends G.S. 130A-294 to replace the current 5 or 10 year landfill permits with a “life of site” permit to cover landfill operations from opening to final closure. The provision would require permit review every five years.

Sec. 14.21 (Study of local government authority over waste collection and disposal services) directs the legislature’s Environmental Review Commission to study local authority over solid waste management including local fees; ordinances on waste collection and processing; cost to local government to provide solid waste services; and efficiencies or cost reductions that might be realized through privatization. Solid waste collection and disposal services are entirely financed and provided by local governments; many already contract with private entities for waste collection or landfill management. It isn’t clear what the study might lead to since the legislature doesn’t have a role in providing or financing local waste management services.

Sec. 14.22 (Privatizing landfill remediation) directs DENR to privatize the assessment and remediation of at least 10 high priority pre-1983 landfill sites. For several years, DENR has received a percentage of the state’s solid waste disposal tax to fund assessment and cleanup of contamination associated with landfills and dumps that closed rather than meet environmental standards that went into effect in 1983. Some legislators have expressed concern about the slow pace of remediation (and the resulting high fund balance). Note: Most state-funded remediation programs have a slow ramp-up in spending since it takes time to set up a new program and assess the sites.

WATER QUALITY

Sec. 4.5 (Nutrient management) earmarks $4.5 million from the Clean Water Management Trust Fund for a DENR study of “in situ strategies beyond traditional watershed controls” to mitigate water quality impairment. The provision specifically mentions impairment by “aquatic flora, sediment and nutrients”, suggesting the study may be a continuation of the legislature’s effort to replace watershed-based nutrient management programs with technological solutions.

In 2013, the General Assembly suspended implementation of watershed-based nutrient management rules in the Jordan Lake watershed and funded a pilot project to test the use of aerators to reduce the impacts of excess nutrients on water quality. Sec. 14.5 allows extension of the pilot project contracts for another two years and delays implementation of the Jordan Lake watershed rules an additional two years or one year beyond completion of the pilot project, whichever is later.

Sec. 14.25 (State Assumption of permitting under Section 404 of the Clean Water Act) directs DENR to hire a consultant to plan and prepare a state application to assume the federal permitting program under Section 404 of the Clean Water Act. Sec. 404 requires a permit to fill waters or wetlands that fall under Clean Water Act jurisdiction. The U.S. Corps of Engineers issues Sec. 404 permits, but a state can assume Sec. 404 permitting authority under certain conditions. The U.S. Environmental Protection Agency oversees 404 permitting and would have to approve a state program. In a state that assumes Sec. 404 permitting, EPA retains authority to review permit applications; a permit cannot be issued over an EPA objection.

Although several states have explored the possibility of assuming Sec. 404 permitting authority, only Michigan and New Jersey have approved Sec. 404 programs. Individual states have reached different conclusions about the costs and benefits for a number of reasons. One may be cost — there are no federal grant funds to support a state 404 permitting program. The Clean Water Act also prohibits state assumption of permitting in tidal waters; water bodies used for interstate and foreign commerce; and wetlands adjacent to both categories of waters. The U.S. Army Corps of Engineers would continue to have permitting authority in those waters and wetlands.

Sec. 14.26 (Transfer Sedimentation Act implementation to the EMC) eliminates the Sedimentation Pollution Control Commission and transfers responsibility for implementation of the Sedimentation Act to the Environmental Management Commission.

Once the Senate takes a final vote on House Bill 97, the bill goes to a conference committee to resolve the (considerable) differences between Senate and House versions of the bill. Few of the environmental provisions described above appear in the House version of the bill — although that doesn’t necessarily mean all of the Senate additions will be opposed by the House in conference negotiations.

2015 Environmental Bills — Part II

April 17, 2015. A continuation of the previous post. Not a complete list, but hopefully most of the significant bills.

Amend Environmental Laws. In the category of you just can’t have too many — there are actually three “Amend Environmental Laws” bills this session (so far). As noted in the previous post, House Bill 157 (Amend Environmental Laws) has already been enacted into law and House Bill 593 (Amend Environmental Laws-2) amends laws allowing reimbursement for third-party damage claims as a result of leaking petroleum storage tanks. I missed House Bill 576 (Amend Environmental Laws-1); at the moment, the bill amends solid waste laws to allow the white goods tax (currently used by local governments to manage discarded refrigerators and other large appliances) to also be used for programs to manage discarded electronic devices. Amend Environmental Laws-1 may also pick up additional provisions as it moves through committee.

Contaminated Sites. House Bill 748 (Establish Contamination Source Removal/Disposal Bd) creates a new full-time (salaried) board to take over DENR’s responsibility for cleanup of contamination at pre-1983 landfills and other contaminated sites. The “pre-1983 landfills” are unlined waste disposal sites — in some cases, simply dumps –that stopped operating before 1983 to avoid having to comply with federal standards for waste disposal facilities. Many have groundwater contamination. A 2007 state law gave DENR responsibility for assessing and remediating the sites. Many of the landfills had been operated by local governments, so the 2007 legislation freed local governments of the potential environmental liability in return for a state solid waste disposal tax to fund cleanup. House Bill 748 expresses concern about the slow pace of remediation. It will be interesting to get more of the back story on the bill. The concern may be as much about unspent funds earmarked for the cleanup as it is about unremediated contamination; a pot of money always attracts attention. Reality is that contaminated sites require a lot of assessment work before actual cleanup can begin. Most state-funded remediation programs have had a slow start up before making significant outlays for remediation.

Also, a note that House Bill 639 (Risk-based Remediation Amends) proposes the same amendments to remediation laws that appear in the Senate regulatory reform bill. You can find a description of those provisions in an earlier post.

Fracking. House Bill 773 would strengthen requirements for public disclosure of chemicals used in hydraulic fracturing fluid.

Riparian Buffers. House Bill 760 is the House regulatory reform bill. The environmental provisions include significant changes to state laws allowing use of riparian buffers to protect water quality. It isn’t clear exactly how broad the bill’s restrictions on local government buffer ordinances are intended to be. The bill amends a law written to allow state delegation of riparian buffer programs under the nutrient sensitive waters (NSW) rules to local government, but some of the bill language could be interpreted to prohibit local adoption of riparian buffer ordinances for any other purpose:

Units of local government may impose restrictions upon the use of riparian areas as defined in 15A NCAC 02B.0202 only within river basins where riparian buffers are required by the State.

Local riparian buffer ordinances are sometimes adopted in response to other state/federal water quality mandates — such as Phase II stormwater permit conditions, water supply watershed regulations and endangered species management plans. So a local buffer ordinance may be needed to meet a water quality standard or permit condition, but not specifically required under state rules applicable to the entire river basin. Assuming the bill did not intend to prohibit use of riparian buffer ordinances to meet other state and federal water quality mandates, it would be helpful to make that clear.

In areas covered by the NSW buffer rules, the bill exempts residential lots platted before the buffer rules went into effect — even if the property could be developed for its intended purpose in compliance with the buffer requirement. (There are already exemptions and variances that cover previously platted lots that cannot be developed in full compliance with the buffer requirement.) The buffer rules are part of broader water quality strategies designed to meet federal Clean Water Act requirements. The Clean Water Act requires the state to adopt a Total Maximum Daily Load (TMDL) –in effect, a cap — for any pollutant causing impaired water quality. A number of state water bodies, including the Neuse River and Falls Lake, have impaired water quality due to excess nutrients — particularly nitrogen and phosphorus. The nutrient management rules provide the regulatory underpinning for TMDLs that set nitrogen and phosphorus reduction targets for those rivers and lakes. The rules include riparian buffer requirements as a critical tool in reducing the amount of nitrogen and phosphorus that runs off the land into surface waters. One question may be whether such a broad exemption from the buffer rules will allow the state to meet the federally-approved TMDLs.

The bill would also require that riparian buffers on shorelines bordered by coastal wetlands or marshland be measured from the waterward edge of the wetland. The term “coastal wetland” includes both wetlands that regularly flood on the tides and wetlands that flood on wind tides and seasonal high tides. Under the provision, the “buffer” would often consist of wetlands with a frequent, direct connection to coastal waters; in some cases, the buffer would effectively be in the water. The change would seem to defeat the purpose of having a buffer to allow polluted runoff to infiltrate through the soil rather than go directly into the water.

Stormwater. On the face of it, House Bill 141 (Stormwater/Flood control) authorizes cities to use existing stormwater management programs to address flood risk by purchasing properties at high risk of flooding, elevating existing structures, and retrofitting structures to reduce flood risk. The bill seems intended to allow cities in more populated counties to expand the purpose of existing stormwater programs to include flood management as well as water quality protection. (The bill would limit the new authority to cities in a county with a population of 910,000 or greater and at least one city with a population of 500,000 or greater.) One possible pitfall — the bill could be interpreted as limiting the authority of other North Carolina towns and cities to take similar actions through flood hazard mitigation projects. For example, the small coastal town of Belhaven has done a major flood hazard mitigation project to elevate structures in areas repeatedly flooded due to hurricanes. House Bill 141 may need to be clarified to avoid undermining cities and towns’ existing authority to reduce flood hazards.

Beyond Coal Ash – Other Environmental Bills

For those of you making scorecards and tracking sheets for 2014 legislation, a list of other bills on energy and the environment filed so far; some bills have already been introduced in both chambers:

Environment. The first six bills listed below were recommended by the House/Senate Environmental Review Commission (ERC). The last, House Bill 1105, came out of a House/Senate legislative study commission on land development.

House Bill 1081 (Senate Bill 765) addresses several concerns about state and local permit review of engineering plans. An engineer submitting an innovative design proposal to a state or local permitting agency will have the opportunity to elevate the permit review to a supervising engineer. The bill also allows the permitting agency to charge the applicant for a third-party engineering review if the agency does not have a staff engineer qualified to review the innovative design. The bill makes other less significant changes. The bill requires permit reviewers to clearly distinguish necessary design changes from suggested changes and cite the law or rule that makes a design change necessary for permit approval. The bill also directs permitting agencies to review working job titles for permit reviewers to insure only PEs have “engineer” job titles. For more on the history of these proposals, see an earlier post.

House Bill 1057 (Senate Bill 757) requires the Department of Environment and Natural Resources (DENR) to study several issues related to transfer of water from one river basin to another or “interbasin transfer” (IBT): 1. Whether temporary and emergency interbasin transfers, including transfers to relieve water shortages caused by drought, should be regulated differently than long-term interbasin transfers; 2. Whether interbasin transfers between river sub-basins should be regulated differently than interbasin transfers between major river basins. and 3. Whether there are types of interbasin transfers that should be exempt from state approval or other regulatory requirements.

Interbasin transfers usually involve piping water from a drinking water source in one river basin to a water system in another, although some large water systems cross river basin boundaries and need an IBT just to serve system customers. An IBT of 2 million gallons per day or more requires a certificate of approval from the Environmental Management Commission (EMC). Rather than using the boundaries of the 17 major state river basins, the IBT law requires a certificate for any transfer among 38 sub-basins. Over the last seven years, a series of legislative changes have made the IBT approval process increasingly difficult. The House and Senate IBT bills signal an interest in reexamining some of the restrictions.

House Bill 1058 (Senate Bill 756) directs the General Assembly’s Program Evaluation Division (PED) to study: 1. the benefits of combining water and sewer systems into larger, regional entities; 2. potential incentives for systems to merge; and 3. the possibility of allowing one system to apply for grants on behalf of a less efficient system based on a commitment to purchase, interconnect or enter into a joint management agreement with the less efficient system. The idea of encouraging merger of small water systems and wastewater systems into larger, more efficient utilities has popped up in just about every legislative session for a decade or more. The biggest obstacles tend to be local resistance and the financial burdens associated with the takeover of a small, inefficient system often badly in need of capital investment. The last of the three PED study issues (allowing one system to apply for grants on behalf of a system targeted for takeover) may be focused on removing the financial disincentives.

Senate Bill 737 (Amend Isolated Wetlands Regulation). “Isolated wetlands” fall outside the federal Clean Water Act permitting program for wetland impacts because the wetlands do not have a connection to navigable waters. (Congress adopted the Clean Water Act under its authority to regulate interstate commerce and limited federal regulatory jurisdiction to navigable waters used in interstate commerce.) In response to pressure from realtors and developers to eliminate state protection of isolated wetlands, S737 allows additional impacts to isolated wetlands without prior state permit review. State water quality rules now allow development impacts to isolated wetlands below specific thresholds to be “deemed permitted”. S737 raises those thresholds from 1/10th of an acre to 1/3 of an acre west of Interstate 95 and from 1/3 of an acre to 1 acre east of Interstate 95. (I-95 has long been used as the dividing line between the wetter eastern counties and drier piedmont/western counties.) DENR has expressed concern that raising the threshold to 1 acre east of I-95 will effectively eliminate review of projects impacting isolated wetlands in the eastern part of the state. S737 also reduces the amount of mitigation required for isolated wetland impacts (from a 2:1 ratio to 1:1) and eliminates the practice of giving more mitigation credit for creation or restoration of wetlands than for preservation of existing wetlands.

Senate Bill 738 (Clarify Gravel Under Stormwater Laws). In 2013, the N.C. Homebuilder’s Association successfully lobbied for legislation directing the state stormwater program to treat gravel areas as “pervious” (meaning the surface allows water to percolate through to the soil beneath) and exclude them from the calculation of built-upon area on a development site. The amount of built-upon area determines the level of stormwater control required for the project, so excluding gravel areas from the calculation potentially reduces stormwater costs. The 2013 provision (included in Session Law 2013-413) also directed the ERC to study “how partially impervious surfaces are treated in the calculation of built-upon area under [the stormwater] programs”. Ironically, the ERC study found: 1. no consensus on the definition of “gravel”; and 2. evidence that permeability is a function of several factors, including the nature of the substrate and method of installation as well as the surface material itself. Instead of further weakening stormwater control requirements, the ERC bill recommends repeal of the 2013 provision declaring gravel areas to be pervious and funds a study of the permeability of different surface materials to be done by the North Carolina State University Department of Biological and Agricultural Engineering.

Senate Bill 734 (Authority to Adopt Certain Ordinances). The Regulatory Reform Act of 2013 (Session Law 2013-413) put a one-year moratorium on local environmental ordinances and directed the ERC to study local authority to adopt environmental ordinances. The moratorium/study provision represented a compromise between the House and the Senate after the Senate passed a bill (Senate Bill 112) putting significant restrictions on local environmental ordinances.

An ERC working group looked at the issue of local authority through the lens of actual conflict between local ordinances and state or federal environmental rules. The legislators identified only one conflict — local ordinances on use of fertilizers regulated by the N.C. Department of Agriculture and Consumer Services. Based on the working group recommendation, the ERC proposed a limited bill addressing state versus local authority to regulate fertilizer use. The bill also directs DENR and the Department of Agriculture to report back in November 2014 and again one year later on any local ordinances that “impinge on or interfere with” state rules. Supporters of S112 almost certainly want something more. It seems clear the intent of S112 was to prevent local government from imposing additional environmental requirements on developers and not simply to avoid conflict with state rules.

House Bill 1105 amends the section of the state Sedimentation Pollution Control Act that allows DENR to delegate authority to a local sedimentation program. The amendment transfers responsibility for enforcement of previously approved erosion and sedimentation control plans from DENR to the local government when DENR approves a local program.

Energy

House Bill 1055 would appropriate a total of $5 million to North Carolina State University and UNC-Charlotte for research on renewable energy, energy storage, and coal ash reuse. The bill sponsor, Rep. Mike Hager, spent much of the 2013 session in an unsuccessful effort to repeal the state’s renewable energy portfolio standard (REPS). (You can find the first of several posts on the 2013 REPS repeal bill here.) Some of the 2013 combatants have already signaled an intent to continue the battle for repeal of the REPS standard. That very fresh legislative history makes Rep. Hager’s proposal to fund research on renewable energy somewhat surprising.

Senate Bill 786, (The Energy Modernization Act). The bill proposes so many changes to state law on oil and gas exploration and development that it merits a separate post. (To follow.)

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.

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.

Legislative Wrap-up I: Water Quality

July 30, 2013: A summary of legislative action on water quality-

Budget- The final budget directs the Department of Environment and Natural Resources (DENR) to combine programs in the Division of Water Quality (DWQ) and the Division of Water Resources DWR) and reduces the budget for the reorganized programs by $2 million. The $2 million cut amounts to a 12.4% reduction to the combined programs. The budget also make two specific program cuts that reduce appropriations for water resource and water quality programs by another $735,257. Total reductions may go even higher than $2.7 million if water resource/water quality programs also share in the 2% department-wide reduction required by the final budget. Although both the Division of Water Resources and the Division of Water Quality deal with water, the two have very different responsibilities and little overlap in functions; it will be difficult for the reorganized programs to absorb another 12.4 % cut without hurting program delivery.

Division of Water Quality (DWQ) has responsibility for preventing and reducing water pollution in the state’s rivers, lake, streams and groundwater supplies. By delegation of authority from the U.S. Environmental Protection Agency, DWQ issues federal Clean Water Act permits to wastewater and stormwater dischargers. DWQ also issues state water quality permits for animal waste management systems, injection wells, and for land application of waste.

Division of Water Resources monitors water supply – the amount of water in rivers, lakes, streams and aquifers rather than its quality. DWR has responsibility for state and local water supply planning; drought monitoring and drought response; and approval of water transfers from one river basin to another (for example, taking water from an intake on the Neuse River to provide drinking water to a city in the Cape Fear River basin). The Public Water Supply section in DWR enforces the federal Safe Drinking Water Act, which regulates drinking water systems to ensure that the water coming out of the tap is safe to drink.

Both divisions have river basin planning programs – DWR water supply plans use data on water use to model for future water supply and DWQ water quality plans track data on pollutant levels, identify sources of pollution and provide a foundation for addressing water quality problems. The two types of planning complement each other, but neither can take the place of the other. It will be important to continue to have strong water quality and water supply planning programs if the state is to have a scientific and technical basis for good water policy decisions.

The budget will test DENR’s ability to continue to deliver good science, timely permit reviews, compliance assistance, and enforcement with fewer resources. The department will also have to keep an eye on the effect of reduced state appropriations on federal grants supporting programs in the two divisions. The state receives a significant amount of federal grant money to support activities required under the delegated Clean Water Act and Safe Drinking Water Act programs. Those grants require a certain level of state “match” money — which is often provided in the form of state-funded positions in those programs.

Jordan Lake – Legislation delays further implementation of the Jordan Lake Nutrient Strategy for three years (Senate Bill 515). The General Assembly had already delayed the original Jordan Lake compliance dates for reducing the amount of nitrogen and phosphorus in wastewater discharges (until 2016) and for implementing new development stormwater programs (until 2014). The practical effect of the bill will be to push those dates out three more years. A number of local governments in the Jordan Lake watershed have already started implementing local stormwater ordinances and can continue with those programs. The purpose of the delay is to allow the state to “[explore] other measures and technologies to improve the water quality of the Lake”. A related budget provision earmarks $1.35 million from the 2013-2014 appropriation for the Clean Water Management Trust Fund for a pilot project to test the use of technology to improve water quality in Jordan Lake. The budget provision describes the technology to be tested very specifically in three pages of bill text and seems to direct funds to a particular product. Both in committee and on the floor of the House, legislators identified the technology as SolarBee— a technology used to aerate water tanks and raw water reservoirs. The bill exempts the pilot project from normal state contract procedures, which means DENR will not be required to advertise for bids.

Prospects for the success of the pilot project are already in doubt. A prominent North Carolina scientist, Professor Emeritus Kenneth H. Reckhow of Duke University, has said that aeration technologies are not effective in large water bodies like Jordan Lake. Even if the technology can improve in-lake conditions, the U.S. Environmental Protection Agency has put the state on notice that in-lake treatment cannot substitute for pollution reductions required under the Clean Water Act (7_10_2013 Letter to Rick Glazier re B Everett Jordan Reservoir TMDL-1). If EPA holds to that position, the technology will fail its primary purpose — which is to relieve upstream communities in the Jordan Lake watershed of the need to invest in wastewater treatment plant upgrades and stormwater controls on new development.

Groundwater (and possibly coal ash) – Section 46 of House Bill 74 (Regulatory Reform Act) seems to narrow DENR’s ability to address groundwater contamination caused by a permitted waste disposal site. When the state issues a permit for land application of waste or for waste disposal in a landfill, the permit sets a groundwater compliance boundary. Some degree of groundwater contamination will be allowed inside the compliance boundary, but the permit holder cannot cause groundwater standards to be violated outside the compliance boundary. The new language in House Bill 74 continues to allow the Environmental Management Commission (EMC) to set compliance boundaries by rule and by permit, but creates a presumption that the compliance boundary will be the property line. (By comparison, landfill permits have generally set the groundwater compliance boundary at 250 feet from the actual waste disposal area.)

The bill then goes on to limit the circumstances in which DENR can require “cleanup, recovery, containment, or other response” to groundwater contamination inside the compliance boundary. Before requiring any action inside the compliance boundary, DENR would have to show that the groundwater contamination: 1. has already caused a violation of water quality standards in nearby surface waters or can reasonably be predicted to cause a water quality standard violation; 2. presents an imminent threat to the environment or to public health and safety; or 3.causes a violation of groundwater standards in bedrock (which seems to mean contamination of deep groundwater).

The presumption that the property line will be the compliance boundary will likely create pressure on the EMC to allow much larger compliance boundaries than in the past. Expansion of the compliance boundary carries with it the possibility of larger areas of groundwater contamination. The new law also makes it more difficult for DENR to require a permit holder to take action inside the compliance boundary –even to contain or reduce the flow of contaminated groundwater off site. DENR could only require steps to contain contaminated groundwater by showing that the groundwater contamination had caused –or will cause — a specific water quality violation or an imminent threat to health, safety or the environment. The fact that the contamination has moved beyond the compliance boundary (and perhaps already migrated off the property and toward a river or lake) will not be enough. The clear risk will be that acting only after a problem already exists will create a larger and more expensive problem to remedy in the future.

The provision appears to be linked to an ongoing controversy and threatened litigation over groundwater contamination and seeps from ponds where coal-fired power plants have disposed of coal ash. The Catawba Riverkeeper has filed a notice of intent to sue under the Clean Water Act over contamination from two coal ash disposal sites — a Duke Energy coal ash pond associated with the Riverbend Steam Station and a Progress Energy coal ash pond in Asheville. The Duke Energy coal ash pond is located on the banks of Mountain Island Lake and near a water intake for the City of Charlotte. Monitoring around the coal ash pond has detected contaminants in groundwater that exceed groundwater standards, but the Division of Water Quality has not yet decided whether corrective action will be necessary. The Riverkeeper’s complaint claims that contaminants from the coal ash are reaching the lake in seepage from the impoundment and through a groundwater connection to the lake. The House Bill 74 language means that groundwater violations alone –even beyond the compliance boundary — would not necessarily require steps to contain an ongoing flow of contaminated groundwater to the lake. DENR would first have to show that the groundwater contamination is causing or will cause an actual water quality standard violation in the lake or an imminent threat to health, safety or the environment.

Regulatory Reform – More on regulatory reform in a later post, but House Bill 74 includes a requirement that agencies review and readopt existing rules of “substantive public interest” every ten years. The bill defines “substantive public interest” so broadly that it will cover every environmental rule of any real substance. The state’s Rules Review Commission will set the initial schedule for review of rules, but the bill directs the commission to schedule surface water and wetland standards for review in the first round of rule review.

Miscellaneous – This post only covers the most significant water quality legislative. House Bill 74 contains a number of other minor changes, including technical amendments to the laws on permitting animal waste management systems and an exemption from riparian buffer requirements for agricultural ponds.

Failed Water Quality Legislation – One major change did not happen. The N.C. Homebuilders Association had pushed legislation to eliminate state water quality permitting requirements for wetlands that do not fall under federal Clean Water Act permitting jurisdiction. An earlier post provides some background on the difference between federal and state wetlands jurisdiction. The language first appeared in a Senate farm bill (Senate Bill 638), but was dropped from the bill once it reached the House. The Senate agreed to the change — possibly because farmers already have broad exemptions from wetland permitting requirements. During the last few days of the legislative session, the exemption language popped up again in a Senate committee substitute for House Bill 938. The House sent the bill to committee and never took it up for a concurrence vote. The bill will still be eligible for consideration next year when the General Assembly reconvenes in May.

Removing State Protection for Isolated Wetlands

June 26, 2013: An earlier post talked briefly about a section of Senate Bill 638 (N.C. Farm Act of 2013) that would eliminate water quality protection for isolated wetlands by excluding wetlands that fall outside federal Clean Water Act jurisdiction from the definition of “waters of the state”. Although the language has changed somewhat, the bill approved by the Senate last month still has the effect of removing water quality protection from wetlands that fall outside federal permitting jurisdiction. The limit on federal jurisdiction has nothing to do with the value of the wetland — it has to do with how the U.S. Constitution divides responsibility between the federal government and the states. Congress’ authority to regulate interstate commerce has been the constitutional basis for federal environmental laws, so Clean Water Act permitting programs only apply to navigable waters (including tributaries and wetlands connected to those waters). Wetlands that have no connection to navigable waters fall entirely under state jurisdiction. Section 20 of Senate Bill 638 (as it passed the Senate) would remove state protection for those “isolated” wetlands and allow the wetlands to be filled, excavated or used for waste disposal without a water quality permit.

As noted in the earlier post, the wetlands provision appears in a farm bill but developers may get most of the benefit. Since then, I have looked back at the state’s isolated wetlands rules and found that most (and possibly all) agricultural activities are already exempt. The isolated wetlands permitting rule, 15A NCAC 2H.1301, has a list of exemptions from the permit requirement and the first is for “[a]ctivities that are described in 15A NCAC 02B .0230”. The activities described in 15A NCAC 02B.0230 include:

(1) normal, on-going silviculture, farming and ranching activities such as plowing, seeding, cultivating,minor drainage and harvesting for the production of food, fiber and forest products, or upland soil and water conservation practices…

(2) maintenance, including emergency reconstruction of recently damaged parts, of currently serviceable structures such as dikes, dams, levees, groins, riprap, breakwaters, causeways, and bridge abutments or approaches, and transportation structures, and other maintenance, repairs or modification to existing structures as required by the NC Dam Safety Program;

(3) construction and maintenance of farm or stock ponds or irrigation ditches. In addition, new pond construction in designated river basins with riparian buffer protection regulations also must comply with relevant portions of those regulations;

(4) maintenance of drainage ditches, provided that spoil is removed to high ground, placed on top of previous spoil, or placed parallel to one side or the other of the ditch within a distance of 20 feet and spoils are placed in a manner that minimizes damages to existing wetlands; and ditch maintenance is no greater than the original depth, length and width of the ditch;

(5) construction of temporary sediment control measures or best management practices as required by the NC Sediment and Erosion Control Program on a construction site…; and

(6) construction or maintenance of farm roads, forest roads, and temporary roads for moving mining equipment where such roads are constructed and maintained in accordance with best management practices…

The existing agricultural exemptions are so broad, that it is difficult to think of anything that may still be a problem for farmers — but at the very least an amendment intended to protect agricultural activity could be much narrower than the language adopted by the Senate. Having easily passed the Senate, the bill is now in the House where the path has become a little rockier. It appears that the N.C. Homebuilders Association has been lobbying hard for the provision, but a new version of the bill approved by a House Judiciary subcommittee this morning dropped the wetland language. The bill now goes to the House floor; an effort to amend the bill to restore language excluding isolated wetlands from water quality permitting requirements is likely.

SmithEnvironment Blog

Environmental Law and Policy from a North Carolina Point of View