Tag 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.

Regulatory Reform 2014

September 23, 2014. Late last week, Governor Pat McCrory signed Senate Bill 734 (the Regulatory Reform Act of 2014) on the final day to either sign or veto the bill. The bill, now Session Law 2014-120, includes both substantive changes to environmental laws and amendments to the state Administrative Procedures Act affecting environmental rule-making and administrative appeals. Below, some of the more significant environmental provisions; a future post will look at the administrative law changes.

Air Quality: Open burning and fireplaces. Section 24 of Senate Bill 734 eliminates the need for a state air quality permit for open burning of leaves, stumps, logs, tree branches, yard trimmings under certain circumstances. It also prohibits a city from banning or limiting open burning of debris in the city’s 1-mile extra-territorial jurisdiction unless the city provides yard waste pickup or access to drop off centers in the area to the same extent provided to residents in the city. These provisions are the latest in a series of legislation actions over the last three years to reduce regulation of open burning.

Section 24(h) prohibits local air pollution control programs and the state from regulating any combustion heater, fireplace, etc. in a private dwelling except as required by federal law. This appears to be a preemptive move; I am not aware of any state or local air quality initiative to regulate residential fireplaces and heaters.

Coastal Development: Coastal stormwater; inlet hazard areas; and permit appeals.

Coastal Stormwater. Section 25 of Senate Bill 734 extends a grandfathering provision in the coastal stormwater rule, 15A NCAC 02H .1005, to expansion of the grandfathered development onto adjoining property.

Inlet hazard areas. Since ocean Inlets often move in response to changing nearshore condition and cause accelerated shoreline change, state coastal development rules have long put additional density and size limitations on development in designated inlet hazard areas. In 2012, the General Assembly directed the Coastal Resources Commission (CRC) to study the Cape Fear River Inlet Hazard Area. Within the past year, the CRC expanded the review to all inlet hazard areas. Although the CRC review has not been completed, Senate Bill 734 preemptively removes some coastal shorelines from existing inlet hazard area designations:

(1) An inlet hazard area associated with an inlet that has been closed for at least 15 years. The provision applies only to Mad Inlet in Brunswick County. The inlet originally separated Sunset Beach from Bird Island to the south, but closed naturally in 1998. The CRC had already amended coastal management rules to remove the Mad Inlet hazard designation earlier this year.

(2) Inlet hazard area designations that no longer include the current inlet location due to shoreline change. This provision also applies to Mad Inlet, but it is not clear that the impact will be limited to Mad Inlet. Other inlets have moved due to natural shoreline change or engineered inlet relocation projects and a comparison of current inlet locations to the corresponding inlet hazard area will be necessary to fully understand the potential impact of the provision.

(3) The inlet hazard area surrounding an inlet providing access to a State Port via a channel maintained by the United States Army Corps of Engineers. This provision eliminates the inlet hazard area designated around the mouth of the Cape Fear River at the entrance to the Wilmington port, which now includes part of the Bald Head Island shoreline. The Village of Bald Head Island had pushed for removal of the inlet hazard area designation.

Shorelines removed from an inlet hazard area will be regulated instead under the general standards for development on ocean and estuarine shorelines.

Coastal Area Management Act (CAMA) Permit Appeals. Section 23 of the bill eliminates the automatic stay of a CAMA permit that has been appealed by a third party. Under the amended law, a petitioner appealing the issuance of a CAMA permit will have to request an administrative law judge to stay the permit pending appeal. The amendment makes the CAMA appeal statute consistent with stay provisions in the state Administrative Procedures Act, but third parties seeking to appeal a CAMA permit will continue to face a hurdle that is not imposed on other petitioners — the need for a preliminary determination by the CRC that the appeal has merit.

Environmental Permitting. Most permitting programs apply the standards in effect at the time of the permit decision. If a rule or ordinance changes during review of a permit application, the project may have to be modified to meet the new standard. In those circumstances, Section 16 of Senate Bill 734 now allows the permit applicant to choose whether to construct under the new standard or the old standard. The provision applies to development permits issued under state environmental laws or under local ordinances. The new law does not define “development permit”, but clearly excludes zoning ordinances from the “permit choice” option. The provision does not recognize any exception based on requirements of federal law.

Engineered Plans. Section 29 of Senate Bill 734 makes a number of changes in the way state and local government permit reviewers interact with professional engineers responsible for design of a proposed project. The legislature’s Environmental Review Commission recommended the provision. See the section on review of engineered plans in an earlier post for more detail and background on the conflict between PEs and state/local permit reviewers.

Onsite Wastewater Systems: Innovative systems and permitting changes.

Innovative wastewater systems. Section 28 of Senate Bill 734 changes the law on approval of innovative onsite wastewater systems using polystyrene aggregate as a substitute for the gravel traditionally used in trenches for dispersion lines. “Innovative” systems do not meet established standards for onsite wastewater systems and require approval by the Department of Health and Human Services (DHHS). The new provision prevents DHHS and the Commission for Public Health from conditioning approval of a system using polystyrene synthetic aggregate on using a certain particle or bulk density. The provision also requires DHHS and the Commission to rescind and reissue any approval that may have included those conditions. The legislative record does not reflect any discussion of the density conditions — either the reason the conditions had been imposed or the effect that removal of the density conditions may have on the performance of the wastewater systems.

Permitting. Section 40 expands the current permitting law to cover ground absorption systems and removes the 5-year limit on a permit issued for installation of an on-site wastewater system. Under the provision, the permit holder would not require a new authorization even if standards for those systems have changed.

Parks. Section 31 of the bill allows the Secretary of Environment and Natural Resources to waive the 25 mile per hour speed limit in state parks for special events and gives the Commissioner of Agriculture the same authority in state forests. Media reports during the legislative session indicated the waiver had been requested by groups interested in using a state park for private race events. See a report by the Raleigh News and Observer.

Water Quality: Isolated wetlands and stormwater.

Isolated Wetlands. Section 54 raises the permitting threshold for disturbance of isolated wetlands. (See an earlier post for an explanation of the term “isolated wetlands”.) West of Interstate 95 (the unofficial dividing line between eastern and piedmont/western N.C. ), the permitting threshold has been raised from 1/10 acre to 1/3 acre. East of I-95, the permitting threshold has been raised from 1/3 acre to 1 acre. During the legislative debate, DENR indicated that raising the permitting threshold to 1 acre east of I-95 would effectively eliminate permitting requirements for isolated wetlands in the eastern part of the state. The bill also reduces the mitigation ratio for all wetland impacts from 2:1 to 1:1 and directs DENR to study the definition of isolated wetlands and whether mountain bogs should be regulated differently than other isolated wetlands.

Stormwater. Section 45 of Senate Bill 734 reverses a 2013 regulatory reform. The Regulatory Reform Act of 2013 (Session Law 2013-413) changed stormwater standards to treat gravel areas as “pervious” and to exclude gravel from the calculation of “built-upon” area on a development site. Since the amount of built-upon area determines the level of stormwater control required, developers had pushed for exclusion of gravel areas from the calculation as a way to reduce stormwater management requirements. The 2013 provision also directed the legislature’s Environmental Review Commission (ERC) to study state stormwater programs “including how partially impervious surfaces are treated in the calculation of built-upon area under those programs”.

The ERC study group encountered an unexpected complication — the lack of consensus on the definition of “gravel” had created uncertainty about implementation of the 2013 provision. Instead of moving on to the next reform requested by developers, the ERC focused on defining gravel and found that gravel may not be pervious depending on the nature of the aggregate material and the underlying substrate. On recommendation of the ERC, Section 45 of Senate Bill 734 effectively repeals the 2013 provision and directs 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.

Water Supply: Interbasin transfer. Sec. 37 of Senate Bill 734 extends an expedited interbasin transfer approval process (originally created for certain coastal counties) to allocation of water from reservoirs managed by the U.S. Army Corps of Engineers. The intent may be to speed approval of an interbasin transfer that would allow the City of Raleigh to take drinking water from Kerr Lake.

2014 Regulatory Reform

May 21, 2014. Yesterday, the Senate Agriculture and Environment Committee approved a 62-page regulatory reform bill that many committee members did not see until it was handed out at the beginning of the committee meeting. Today, the Senate Finance Committee gave Senate Bill 734 (Regulatory Reform Act of 2014) a favorable report and the bill will go to the Senate floor tomorrow for an initial vote. Some of the most significant environmental provisions:

More legislative review of environmental rules. In 2011, the General Assembly, returning to an idea from the 1980s, put strict limits on adoption of state environmental rules that are more stringent than federal rules on the same subject. The law has exceptions only for rules needed to address a “serious and unforeseen threat to public health, safety or welfare” and rules required by state law, federal law, state budget policy or a court order. (An earlier post talks about the practical difficulties and policy implications of chaining state environment standards so tightly to federal rules.) Section 1 of Senate Bill 734 goes another step and requires legislative review of any rule adopted under one of the exceptions, possibly delaying the effective date of the rule for months. The state’s Administrative Procedures Act normally requires legislative review of a rule only if 10 or more people send letters objecting to the rule. Under Senate Bill 734, ten letters of objection would still be needed to get legislative review of a rule change that weakens environmental standards, but the legislature would automatically review any rule that goes beyond minimum federal environmental standards.

Eliminate citizen appeals of toxic air pollution permits. Sec. 2.2 limits citizen appeals of air quality permits to decisions involving a national ambient air quality standard. The problem is that “national ambient air quality standard” does not even cover the universe of federal air quality rules. National ambient air quality standards cover six pollutants (carbon monoxide, lead, nitrogen dioxide, sulfur dioxide, particulates, and ozone) that cause environmental and health problems when levels reach a certain level in outdoor air. But the Clean Air Act also regulates a much longer list of hazardous air pollutants or “air toxics” associated with cancer risk, infertility, birth defects and other acute environmental and health effects. Mercury and benzene are examples of air toxics. There are no national ambient air quality standards for air toxics; those pollutants are regulated under a different set of rules that require a high level of pollution control on every regulated air toxic source. As written, Senate Bill 734 would bar citizen appeals of air quality permits issued for facilities that emit air toxics.

Emergency Authority to Waive Coastal Development Permits. Sec. 2.5 gives the governor the authority to waive Coastal Area Management Act (CAMA) permits and environmental impact statements for emergency repairs to a highway “that provides the sole road access to an incorporated municipality or an unincorporated inhabited area bordering the Atlantic Ocean or any coastal sound, where bridge or road conditions as a result of the events leading to the declaration of the state of emergency pose a substantial risk to public health, safety, or welfare”. The description fits Highway 12 in Dare County — the perennially endangered road on Hatteras Island. (See an earlier post for the history – and cost — of maintaining Highway 12.) The idea of waiving state permits for rebuilding damaged segments of Highway 12 after a storm has some appeal — but may not have the desired effect. Aside from eliminating any state review of project impacts, waiving the CAMA permit only puts the U.S. Army Corps of Engineers entirely in control of the permitting process.

Environmental Audits/ Self-Reporting. Sec. 3.6 of the bill does two significant things: 1. Protects internal company environmental “audits” from disclosure to regulatory agencies; and 2. Provides immunity from civil penalties to a company that voluntarily self-reports a violation.

Limited immunity from penalties can make sense if limited to situations where the violator has self-reported a recent, unintended violation. The Senate Bill 734 audit/self-reporting provision has not been limited to those situations and potentially provides the benefit of confidentiality and immunity to violators who have committed longstanding, continuing violations of environmental laws. Under the bill, the violator can use a recent environmental audit to cover numerous past violations and acquire immunity by “self-reporting” those violations. Although the bill does not give immunity for willful and intentional violations or violations resulting from criminal negligence, it would deny regulators access to internal environmental audits that may document the intentional behavior. In the worst case, the provision could be a gift to violators who gambled for years on their ability to evade enforcement.

It is difficult to ignore the implications for violations at coal ash impoundments. Under the bill, a company inspection of a coal ash impoundment could be treated as a confidential “environmental audit” and withheld from state regulators. And the owner/operator of the coal ash impoundment may get immunity from civil penalties by self-reporting violations that had gone on for years.

Other sections of the bill incorporate legislation recommended by the Environmental Review Commission (described here). Senate Bill 734 actually goes beyond the ERC recommendation on isolated wetlands and proposes to eliminate permit review of isolated wetlands impacts of less than an acre in both the eastern and western parts of the state. The bill continues a recent pattern of weakening open burning rules by limiting local government authority to regulate open burning. The bill also proposes to shift rulemaking authority for the waste management and drinking water programs from the Commission for Public Health to the Environmental Management Commission.

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.)

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.

SmithEnvironment Blog

Environmental Law and Policy from a North Carolina Point of View