Confession is Good for the Soul

August 6, 2015.  Back to an issue mentioned briefly in earlier posts on regulatory reform legislation — efforts to  make environmental audits confidential and to extend immunity from penalties to environmental violators who self-report violations. In an environmental audit, a business or industry reviews its own operations for compliance with environmental standards.  The N.C. Senate has made several attempts to enact legislation  protecting the confidentiality of  audit reports  and provide immunity for violations identified in an audit and voluntarily reported to state regulators.

The most recent version of an  environmental audit privilege/immunity  provision appears in the Senate version of House Bill 765.  That bill is now in a conference committee to work out differences between the House and the Senate.  The Senate provision has two parts:

1. The bill  creates an audit “privilege”  to prevent  state regulators from obtaining  or using an audit report in  environmental enforcement. The privilege does not apply in a criminal investigation, but In practice only  the most egregious, intentional violations would be referred for criminal prosecution. Agencies rely almost entirely  on civil penalty assessments to enforce environmental standards and the bill would prevent use of a company’s environmental audit report in a penalty  case. The  audit privilege does not cover Information the company has a legal obligation to report to the state or  information independently discovered by state regulators. The bill also excludes other kinds of information  from the privilege (such as records gathered  before or after the certified dates of the audit and information deliberately withheld from an audit report.)

2.  The bill offers immunity from civil penalties to a violator who voluntarily discloses an environmental violation to state regulators. (The bill does limit how often a company can claim immunity based on a self-reported violation.) Immunity would not extend to a criminal prosecution.  To be considered  “voluntary”, the  disclosure must meet specific criteria.  If there is a legal obligation to report the violation, disclosure would not be considered voluntary and the violator could not receive immunity.  Other criteria in the bill condition immunity on  prompt disclosure of the violation and timely action to correct the violation. See the text of the bill for a complete list of the  factors  used to distinguish voluntary disclosures from disclosures that would not qualify for immunity.

One way to understand  the scope of the Senate proposal may be to compare it  to an existing Department of Environment and Natural Resources (DENR) self-disclosure policy that has been in place since 2000 and to the  U.S. Environmental Protection Agency’s enforcement policy on self-disclosed violations.

For DENR’s  existing policy on enforcement discretion for self-reported environmental violations,  see the DENR environmental self-audit policy (1995, updated in 2000).  The longstanding DENR policy differs from the Senate proposal in several ways:

♦ The DENR policy provides guidance to DENR staff on the exercise of enforcement discretion for self-reported violations, but does not  grant  new legal rights to environmental violators. The Senate provision creates a both a new legal privilege (limiting the use of audit information in state enforcement cases) and  statutory  immunity from civil penalties.

♦  In allowing reduction or waiver of  penalties for a self-disclosed violation, the DENR policy assumes full disclosure. Although the policy indicates DENR will not necessarily request the  audit report, the policy  encourages complete disclosure  — including providing the audit report to document  the existence of an internal management system to identify and correct violations. The Senate proposal tilts toward limiting both agency and public access to audit reports rather than encouraging full disclosure.  Nothing in the bill assures DENR access to a full audit report, so  a company could self-report a violation and provide DENR only as much information about the violation as it chooses.  The  one reference in the bill to the public’s right to information concerns information the company voluntarily provides DENR in self-reporting a violation.

♦ Unlike H 765, the DENR policy does not prevent the department from obtaining and  using information in an environmental audit to enforce environmental standards.

♦  The DENR policy does not apply to  investigative costs,   natural resource damages, or to recovery (through penalties) of any economic benefit the company may have realized as a result of the violation.  The Senate provision does not  distinguish between different types of civil penalties and fines, so it isn’t clear whether the immunity provided under  H 765 could also apply to investigative costs and natural resource damage assessments.  Instead of clearly excluding recovery of economic benefit from the grant of immunity, the Senate provision makes “substantial economic benefit” a reason to consider the self-report of a violation involuntary — but puts the burden on the agency to show the company had a substantial economic benefit.

The U.S. Environmental Protection Agency also has a self disclosure policy.  If a violator meets all nine conditions in the policy (including documenting use of an environmental audit or other internal environmental management system to improve compliance), EPA can completely waive penalties above recovery of any economic benefit realized as a result of the violation. If a violator  meets all of the conditions in the policy other than documenting use of  an environmental audit or environmental management system,  EPA can reduce the part of the penalty that exceeds economic benefit recovery by 75%. EPA will not generally  make a  criminal referral of a violation meeting the conditions of the self-disclosure policy;  the conditions  tend to exclude violations likely to result in a criminal referral in any case. The federal policy does not provide legal immunity from penalties;    does not apply to  recovery of any economic benefit realized by the violator; and does not limit EPA’s ability to obtain and  use environmental audit information in either a civil or criminal enforcement action. In fact, EPA’s self-disclosure policy makes a strong statement opposing both legal privilege for environmental audit materials and statutory immunity from penalties as inconsistent with effective enforcement of environmental standards.

So the  H 765 provisions would  go significantly beyond  existing DENR and EPA  self-disclosure policies in  both creating a legal privilege shielding environmental audit reports from use in enforcement cases and  in granting statutory immunity from civil penalties for many self-reported violations. The  immunity provided under  H 765  may also extend to investigative costs; natural resource damages; and  recovery of some economic benefit realized by the violator as a result of the violation.

The Senate proposal recognizes the need for EPA approval of the privilege/immunity provisions as they apply to enforcement of federally delegated environmental programs. As a result, the provision would only go into effect following EPA review.

The North Carolina Response to EPA’s Clean Power Plan Rule

July 26, 2015.  In one way, the proposed  U.S. Environmental Protection Agency (EPA) rule to limit carbon dioxide (CO2) emissions from power plants  — expected to be final in August — looks like a typical air quality rule. The Clean Power Plan rule sets state by state reduction goals for a pollutant (CO2) from a particular set of of sources (electric generating facilities).  But the rule takes an unusual and  innovative approach to meeting those goals. The rule identifies  four components  (or “building blocks” in EPA rule-speak ) of a plan to reduce CO2 emissions associated with power generation : 1. reducing power plant CO2 emissions (the traditional Clean Air Act approach); 2. energy efficiency measures; 3. increased  electric generation from renewable energy sources;  and 4. transition of electric generation facilities from coal to natural gas.   In effect, the rule aims to lower CO2 emissions per kilowatt hour used and allows the  states to take credit for CO2 emissions avoided through increased energy efficiency and by shifting electric generation to energy sources with low or no CO2 emissions.

The proposed EPA rule requires each state to submit a plan for meeting its CO2 reduction target by June 30, 2016. The state plan can rely on any or all of the four “building blocks” in the EPA rule; it can also include measures that fall outside those categories as long as the plan achieves the CO2 reduction target for regulated electric generation facilities. If a state fails to develop a plan, EPA can create a federal plan for the state.  An earlier post  provides more detail on the  proposed federal rule.

The McCrory administration has opposed the Clean Power Plan rule in  written comments and in testimony before Congressional committees. In part,  the administration has argued that the Clean Air Act does not authorize EPA to issue  a rule that relies on measures — such as energy efficiency and increased reliance on renewable energy — that go beyond limiting  pollutant emissions from regulated power plants.  Last week,  the practical implications of  that   position became more clear when DENR  Secretary Donald van der Vaart  told a Senate committee that  the McCrory administration intends to resist the flexibility offered under the federal rule and submit a CO2 reduction plan  based entirely on requiring additional CO2 emission reductions at  power plants.

The Secretary’s comments came  as a state Senate committee debated House Bill 571, which requires DENR to develop  a state CO2 reduction plan with the participation of the public and the electric utilities. DENR did not support House Bill 571, but the bill passed the House with a bipartisan majority and the support of  the state’s major electric utilities and environmental organizations. Last Wednesday, the  Senate Agriculture and Environment Committee took up a substitute draft of  H 571 that would prohibit DENR from taking any action or expending any state resources on development of a CO2 reduction plan until all legal challenges to the federal rule had been resolved or until July 1, 2016 (whichever came later).  Asked to comment on the proposed substitute bill,   Secretary van der Vaart  indicated that DENR  would prefer to submit a CO2 reduction plan by June 30, 2016 as required under the federal rule — but a plan based entirely on reducing  power plant emissions.

Based on the Secretary’s statement, the McCrory administration response to the Clean Power Plan rule puts the state in a strange place:

♦  DENR has argued for an interpretation of  the Clean Air Act that would force the federal rule to be more rigid and offer the state less flexibility to meet CO2 reduction targets.   (A number of environmental law experts disagree with this narrow interpretation of EPA authority; the issue will likely have to be settled in court.)

♦  Based on this narrow interpretation of EPA authority, DENR intends to develop a state CO2 reduction plan that relies entirely on further reducing  CO2 emissions from power plants even though existing  state policies have North Carolina on a path to achieve much (if not all)  of the necessary reductions through increased renewable energy generation, greater energy efficiency, and  transition of power plants from coal to natural gas.  Although DENR has not provided an analysis of the state’s ability to meet the state’s CO2 reduction target based on those existing policies, others have. You can find one (an analysis by the Natural Resources Defense Council)  here.

♦  Relying  entirely on lowering power plant emissions could  make meeting the CO2 reduction target more difficult and more costly for electric utilities and consumers. Again, DENR has not provided a comparative analysis of the cost of relying entirely on power plant pollution controls versus  a comprehensive CO2 plan that takes credit for energy efficiency measures, renewable energy generation and transitioning power plants from coal to natural gas.

Most states have started planning to meet the  CO2 reduction targets. Even in coal-producing states where political opposition to the EPA rule tends to be highest,  state air quality agencies have begun sketching out CO2 reduction scenarios in case the rule survives the expected legal challenges. Only one state — Oklahoma — has prohibited its environmental agency from developing a plan. A recent Washington Post story  reported that even coal-dominated states like Kentucky seem confident of meeting the  CO2 reduction target thanks in part to recent investments in renewable energy generation. It isn’t clear that any state other than North Carolina has decided to develop a plan based solely on CO2 reductions at coal-fired power plants.

Which leaves something of a public policy mystery. A state with significant advantages in renewable energy, energy efficiency and already on the road to transitioning power plants from coal to natural gas seems to have settled on a policy that throws those advantages away. Instead of working with electric utilities, consumers and environmental organizations to develop the most cost-effective  CO2 reduction plan for the state, DENR intends  to unilaterally develop a plan based entirely on reducing power plant emissions.  It isn’t clear why or what that policy choice could cost the state.

Note: The Senate committee approved the substitute draft of House Bill 571 on Wednesday, but offered to continue talking to DENR about the content of the bill. The bill was pulled off the Senate calendar last Thursday; when the bill  reappears on the Senate calendar, there may be amendments as a result of the ongoing discussions.

Update: The original post has been revised to make it clear that state CO2 reduction plans can also rely on measures other than those covered by the  four “building blocks” identified in the EPA rule.

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.

The “Ag-Gag” Bill

June 3, 2015.  Today, both the House and the Senate overrode Governor Pat McCrory’s veto of House Bill 405 (the Private Property Protection Act). From the beginning,   animal welfare activists opposed H 405 as another attempt to enact  “ag-gag” legislation in North Carolina.  (The term “ag-gag” has been used by opponents of  laws intended to deter activists  from taking jobs with agricultural operations  to  document animal cruelty.)  But House Bill 405  affects all employees – not just agricultural workers — and opposition to the bill broadened out of concern that the bill will discourage employees from documenting and reporting all sorts of unlawful activities.

Bill supporters, including the N.C. Chamber of Commerce,  describe H 405  as necessary to protect businesses from activists, undercover reporters,  and industrial spies. At its heart, the bill aims to discourage employees from making photographs, videos, and recordings in the workplace and using the documentation to the disadvantage of their employer.    Supporters point to “whistle blower” protections in the bill to answer concerns that the bill  will  discourage  employees from documenting and reporting dangerous, cruel and even criminal behavior.

Opponents fear the  bill will become a shield for unlawful activity. The American Association of Retired Persons  (AARP)  lobbied against the bill because of the potential impact on documentation of  abuse in nursing homes and other care facilities.   Although not mentioned in the legislative debate, the bill could also deter employees from providing evidence of  environmental and public health violations.

What the bill does. House Bill 405 allows an employer to take legal action against an employee who enters a “nonpublic” area of the workplace;   takes photographs, makes recordings, or copies records without permission; and uses those documents against the interest of the employer.   The employer can already fire the employee; H 405 allows  the employer to also sue the employee  for  monetary damages,  including legal fees and a $5,000 per day penalty.

Employees affected by the bill.   Supporters describe H 405 as a  defense against infiltrators and  industrial spies, but the legal actions authorized by the bill are not limited to those circumstances.  Some bill language  seems to focus on employees who are not  legitimately in the workplace to  “do business with” the employer.   But the bill can be interpreted to authorize  legal action against any  employee  who  makes  photos, recordings or copies of records without permission and uses those documents against the employer’s interest.  (The employer would certainly argue that the  employee  was not — at least in the moment — there  “to do business with” the employer.)   If the General Assembly intended H 405  to authorize legal action only against an employee who purposefully took the  job to sabotage, collect damaging information or steal trade secrets, the law  needs to be more clear.

Protection for “whistle blowers”.  H 405 provides only limited “whistle blower” protection for private sector employees.   The bill  incorporates a number of anti-retaliation laws  that shield employees who file claims under worker health and safety standards.  So H 405 would not allow an employer to take legal action against an employee who documented  violations of Occupational Safety and Health (OSHA) rules, mine safety regulations, or laws that protect agricultural workers from exposure to pesticides.

But none of the “whistle-blower”  provisions in H 405  protect  a private-sector  employee  who documents  a violation of environmental standards, public health regulations, or other laws protecting the general public.  Under H 405, an employee who (without the employer’s permission) photographs illegal dumping of hazardous waste and provides the photo to DENR could  be required to pay damages to the company that caused the violation.

A model for whistle-blower protection. In debate on the veto override, legislators  seemed to agree on  both the need to protect businesses from unethical activities and the importance of  shielding  whistle blowers who uncover violations of the law. Legislators disagreed on how effectively House Bill 405 shields whistle-blowers.   On this, bill opponents appear to have the stronger argument; H 405 does not protect private sector employees who document and report violations other than those directly related to worker health and safety laws.

But H 405 includes a reference to a state law that could be a model for providing more effective  “whistle-blower” protection.  In addition to protecting employees documenting violations of  worker health and safety standards, H 405 bars legal action against state employees covered by  G.S. 126-85.  That law protects state employees  who report unlawful, fraudulent or unsafe actions by a state agency as long as the employee did not know or have reason to know that the information reported was inaccurate.

The problem is that G.S. 126-85 only protects state employees  who report violations caused by a state agency or a state employee.  At the moment,  nothing in H 405 provides an equivalent level of protection for private sector employees who document unlawful, fraudulent or unsafe activities.

In pushing for an override of the governor’s veto,  bill supporters  expressed a willingness to continuing working on the law and to make changes if necessary. ( With the veto now overridden, H 405 becomes law so any changes would  have to be  made in separate legislation.)  G.S. 126-85 could be a good starting point if legislators are serious about protecting the ability of private sector employees to report unlawful and dangerous activities without fearing a lawsuit by their employer.

Reforming Riparian Buffers Out of Existence

May 7, 2015.  Yesterday, the N.C. House approved House Bill 760 (Regulatory Reform Act of 2015) after adopting several amendments. House Bill 760 has  attracted a lot of media attention because of  the renewable energy provisions.  Less attention has been paid to part of the bill that will significantly weaken use of riparian buffers to reduce water pollution.

An earlier post  described the original riparian buffer provisions in House Bill 760. By amendment,  the House changed the provision on measurement of riparian buffers adjacent to coastal wetlands.  The new language requires the buffer to be measured from the normal water level, recognizing that some coastal wetlands regularly flood on the tides. The bill continues to have confusing language on  local government authority  to adopt riparian buffer ordinances outside of the river basins and watersheds covered by state buffer rules. Amendments  improved those provisions a bit,  but I am not sure even the amended bill  allows for all of the circumstances in which a local government may need to adopt a buffer ordinance to meet state and federal environmental standards.

But in what may be the most under-discussed section  of House Bill 760, the bill  still creates an exceptionally broad exemption from riparian buffer rules that apply in the state’s nutrient impaired river basins and watersheds. None of the amendments  to House Bill 760 narrowed the scope of the  buffer exemption.  In  areas covered by state nutrient sensitive waters (NSW)  buffer rules, the bill exempts all tracts of land 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 only condition on the exemption:

Other than the applicable buffer rule, the use of the tract complies with either of the following:

a. The rules and other laws regulating and applicable to that tract on the effective date for the applicable buffer rule set out in subsection (a) of this section.

b.The current rules, if the application of those rules to the tract was initiated after the effective date for the applicable buffer rule by the unit of local government with jurisdiction over the tract and not at the request of the property owner.

The conditions  don’t narrow the exemption  much — if at all.  Enforcing (a)  requires someone in the present to  determine whether use of the property complies with laws and rules in effect as much as 15 years ago.  And (b) appears to be the “Get Out of Jail Free” card that allows a property owner to claim the exemption based on meeting all current local ordinances other than the buffer rule. Unless  I am missing something, the property owner can just opt out of the riparian buffer requirement as long as a development project meets other current standards.

The exemption applies whether the riparian buffer rules are enforced by the state or by a local government with  delegated authority to enforce the  buffer requirements.  The exemption also seems to apply to both undeveloped properties and to properties already developed and currently in compliance with the buffer requirements.  If so, owners of developed properties would be free to clear vegetation and create new encroachments in the buffer. (Failure of the bill to distinguish between developed and undeveloped properties in applying the exemption criteria may have led to some unintended consequences —  although the exemption language is so aggressively broad,  I am not sure that is the case.)

The buffer  rules are  part of  broader  water quality restoration plans designed to meet  federal Clean Water Act requirements. The Clean Water Act requires the state  to adopt a Total Maximum Daily Load (TMDL) —  a cap —  for any pollutant causing impaired water quality. A number of state  water bodies, including the Neuse River estuary, Falls Lake and Jordan Reservoir,   have had impaired water quality due to excess nitrogen and phosphorus.   For those river basins and watersheds, the nutrient management rules provide the underpinning  for  TMDLs that set nitrogen and phosphorus reduction targets.

North Carolina ‘s longstanding  policy has been to share the burden of pollution reduction among all of the major nutrient sources so the rules include tighter controls on wastewater dischargers; measures to reduce the amount of nitrogen and phosphorus leaving agricultural lands; and stormwater controls and riparian buffer requirements to reduce nutrient runoff from developed areas.  Each set of nutrient management rules reflects a long negotiation  involving  all of the  interests  affected — local governments, agriculture, landowners, real estate developers, environmental organizations — to balance the pollution reduction burden.

The House Bill 760 buffer exemption has the potential to upset the balance of the nutrient management plans and jeopardize the state’s ability to meet nutrient reduction targets in the TMDLs.  Understanding the impact of the exemption will require the answers to a number of questions yet to be asked or answered in the legislative debate:

1.  How many properties in each nutrient sensitive  river basin or watershed potentially qualify for the exemption and what percentage of riparian area  could be affected?

2.  How much nutrient reduction has the Division of Water Resources credited to protection of the riparian buffers in the approved TMDLs?

3.   Would the exemption affect the state’s ability to meet nutrient reduction goals for these impaired water bodies?

4.  Would the state have to ask for more nutrient reductions from other sources (such as wastewater treatment plants and agricultural operations) to make up the difference?

The bill now goes to the Senate, which has more often been the starting point for legislation to  limit use of stormwater controls and riparian buffers to restore water quality in impaired waters.

What is the SEPA Problem?

April 30, 2015. In a late evening vote, the N.C. House voted yesterday to put significant limits on a 1971 state law requiring an environmental impact statement (EIS)  for projects that  involve expenditure of public funds or use of public lands. An earlier post on House Bill 795 provides some background on the State Environmental Policy Act (SEPA) and the first version of the bill.  The version approved by the House last night had been amended to lower the thresholds for requiring an EIS from those in the original  bill;  now, expenditures of $10 million in public funds or activities affecting 5 acres or more of public lands will require environmental review.  Another amendment to House Bill 795 excludes interbasin transfers (the movement of water from one river basin to another for water supply) from the new  SEPA thresholds. All IBT proposals will continue to require SEPA review, although other provisions in House Bill 795 mean the scope of review will be narrowed to just direct project impacts — excluding indirect impacts  and the combined effects of similar water withdrawals.

House Bill 795 has also been amended to require the Department of Environment and Natural Resources (DENR) to create a new environmental review process for water/wastewater infrastructure projects that fall below the new public expenditure threshold, but receive loans from the Drinking Water Revolving Loan Fund or the Clean Water Revolving Loan Fund.  In committee last week, House members heard from DENR  (apparently for the first time) that eliminating SEPA review could have the seriously unintended consequence of shifting those projects into a federal environmental review process. Federal monies provide much of the capital for the revolving loan funds and federal rules require funded projects to go through an environmental review equivalent to review under the National Environmental Policy Act (NEPA).  SEPA had provided N.C. projects with a streamlined alternative to NEPA review; now, DENR will  have to reinvent an environmental review process for projects that fall below the new SEPA thresholds.

The circle legislators traveled  to liberate revolving loan projects from SEPA  only to create a similar environmental review process to avoid the even worse fate of federal review reflects the amount of confusion surrounding House Bill 795.  Debate on the bill has  revealed so many misconceptions about SEPA and so little information about the effect of the law  that it isn’t clear what problem legislators are  trying to solve.

First, some misconceptions about the State Environmental Policy Act that seem to be affecting legislative debate:

SEPA requires environmental review every time someone turns a shovel on a state project (as one of the bill sponsors suggested.)  In reality, the law has  a number of exemptions and state agencies  can adopt rules exempting additional categories of projects that have minimal impacts.  DENR has an entire set of SEPA “minimum criteria” rules that  allow  many state and local projects with  minor impacts  to go ahead without SEPA review.  Projects that don’t qualify for an exemption can often do a brief  Environmental Assessment to show the project  has no significant environmental impacts, avoiding the time and cost of a full Environmental Impact Statement.

SEPA  review delays major highway projects.   Legislators debating  House Bill 795 often mentioned road projects.   The executive director of the N.C. Chamber of Commerce (which made SEPA reform its top legislative priority this session) wrote an op-ed using the long, tangled path to final approval of plans to replace the Bonner Bridge over Oregon Inlet as an example of a SEPA horror story.  The problem with that example — SEPA had nothing to do with environmental review of the Bonner Bridge replacement project. Like every major road project in the state  that needs federal permits or receives federal highway funds, the Bonner Bridge project required review under the National Environmental Policy Act. Severely limiting environmental review under SEPA may mean less review of small road projects funded entirely by state and local government; it will not change environmental review of major highway projects in the state.

Environmental permitting makes SEPA review unnecessary.   House Bill 795 supporters suggest the increase in environmental permitting programs  since adoption of SEPA makes the law less necessary.  Some permit reviews can take a broad look at environmental impacts,  making  a SEPA review unnecessary; that has been the basis for some exemptions already in the law. (Projects permitted under the state’s  Coastal Area Management Act do not require SEPA review.)  But many environmental  permits only  look at one kind of environmental impact and do not provide a comprehensive environmental review.

An air toxics permit review  leads to limits on emission of toxic air pollutants, but does not  evaluate  the facility’s broader environmental impacts — or even answer the basic question of whether it makes sense to put a facility emitting toxic air pollutants in a particular place. In debating House Bill 795, several legislators mentioned controversy over the proposed Titan Cement plant near Wilmington which raised exactly this issue. Citizens wanted the state to delay issuance of air quality permits for the Titan project  until an EIS had been completed. One concern was that even  highly controlled mercury emissions from the plant could be too much given the plant site’s close proximity to the Cape Fear River (which already has elevated mercury levels).

SEPA also requires review of environmental impacts earlier in project planning — before the state or local government agency has entirely committed to a single site or project design.  That allows the possibility of changing direction based on information from the environmental review. By the time a permit application is submitted,  decisions about location and project design have already been made.

SEPA review slows economic development and job creationThe N.C. Chamber of Commerce made this argument in support of the bill, but never gave a real example.  First, it is important to remember that SEPA  does not apply to purely private development projects no matter how great the environmental impact. (You can take that as either a fine quality in the law or a serious flaw depending on your point of view.)  No manufacturing plant, shopping center, residential subdivision, or commercial development will — by itself — require review under SEPA.  Sometimes, state or local government economic  incentives for a project trigger SEPA review.  Most financial incentives (like  tax credits) don’t have that effect because the incentives don’t involve an actual public expenditure on the development project. The Titan Cement project involved a question about whether a particular type of state incentive package  triggered SEPA review. The kind of economic incentive that may lead to SEPA review more often involves  a local government agreement to provide dedicated infrastructure for the development project — such a sewer line or access road.

Given the brief consideration given the bill,  the number of misconceptions surrounding the existing law, and the failure to identify a specific problem to be solved,   the SEPA reforms in House Bill 795  seem  haphazard and unfocused. The bill isn’t likely to solve a problem if the problem  hasn’t  been identified. Legislators who assume House Bill 795 will speed highway and reservoir projects will be disappointed; those projects will still require federal NEPA review.  Arbitrarily drawing a new line  for SEPA review based on project cost will exempt some projects that have significant environmental impacts since cost and environmental impact are not the same thing.  At the moment,  there is a significant risk that House Bill 795 will make  SEPA  less useful in circumstances where  it is most needed without solving any particular problem for the bill supporters.

The bill now goes to the Senate.

Should N.C. Stop Enforcing Federal Air Quality Standards?

April 25, 2015. Since an earlier post briefly described Senate Bill 303 (Protect Safety/Wellbeing of N.C. Citizens), the bill has passéd the Senate in a form that could  put the state’s delegated Clean Air Act permitting and enforcement programs at risk. The bill  passed by the Senate:

♦  Requires a 3/5 vote to of the Environmental Management Commission (EMC) to adopt state rules consistent with federal New Source Performance Standards (NSPS); these  Clean Air Act standards apply to large, stationary sources of air pollutants such as power plants.

♦ Requires a 3/5 vote of the EMC  to adopt new federal hazardous air pollutant (HAP) standards as state rules. The hazardous air pollutant standards regulate emissions of  toxic air pollutants such as mercury and arsenic.

♦ Requires legislative review and approval of all state rules adopting federal air pollution standards.

♦ Prevents the state Division of Air Quality from enforcing existing NSPS and hazardous air pollutant standards after January 1, 2016 unless the EMC has readopted all of those standards under the new requirements for a 3/5 vote of approval and legislative review.

A story  by Gabe Rivin  in N.C. Health News reports that the Department of Environment and Natural Resources  (DENR) supports the bill and  quotes DENR Assistant Secretary Tom Reeder describing the bill as benign. According to the story,  a DENR spokesperson did express concern about the provision that could end state enforcement of existing federal air quality standards on January 1, 2016. (That provision was added to the bill in a floor amendment.)

Failure to adopt and enforce federal Clean Air Act standards could have  serious implications for the state’s delegated Clean Air Act permitting and enforcement authority.   North Carolina  currently has full delegation of authority from the U.S. Environmental Protection Agency (EPA) for Clean Air Act programs.  (All 50 states have taken on full or partial delegation under the Clean Air Act.)  Failure  to adopt a new federal standard may have a greater or lesser impact on the state’s delegated authority depending on the type of rule.  An end to all state enforcement of federal NSPS and hazardous air pollutant standards would presumably require EPA to withdraw the state’s delegated authority entirely.

Whatever the impact of Senate Bill 303 on state rulemaking, federal air quality standards will continue to apply to sources in North Carolina.   If the state refuses to enforce a federal standard, EPA will step in and do it.  Senate Bill 303 cannot free N.C. industries and utilities from compliance with federal air quality standards. On the other hand,  loss of state delegation under the Clean Air Act may disadvantage those industries and utilities in two ways: 1. permitting and enforcement matters would have to be resolved with EPA rather than a state agency;  and 2.  regulated sources may lose the benefit of  flexibility in permitting and enforcement allowed to states implementing federal requirements through a delegated program.

It isn’t clear who  Senate Bill 303 would  benefit. Assistant Secretary Reeder’s comments suggest the bill could help the department avoid new, burdensome Clean Air Act responsibilities. But the one example offered  —  a new NSPS standard for wood heaters — is entirely enforced by EPA through third-party certification of  manufacturers.  (Find EPA information on enforcement of the wood heater standard here.) Since EPA does not delegate enforcement of the wood heater rule to the states, there is no real danger the state would  be required to visit homes to inspect wood heaters.

The state already has the ability to decline new federal rule delegations and to give up existing delegations under the Clean Air Act.  It seems the kind of decision best made deliberately and after a clear-eyed assessment of the  consequences  — not as a side-effect of failure to adopt a rule by a supermajority.

Update: The original post has been updated to add a link to the EPA webpage on enforcement of the wood heater standard.

Correction: The post has been updated to correctly identify the publication in which Gabe Rivin’s story appeared — N.C. Health News.

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.