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.

StormwaterSection 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.