Regulatory Reform 2015 — The Senate Bill

March 26, 2015. The Senate has introduced the first regulatory reform bill of the 2015 session – an annual rite of spring. Senate Bill 453 includes a number of environmental provisions. The most significant:

Another attempt to  create an  environmental audit privilege and immunity for violations reported as a result of an audit.  The audit and self-reporting provisions in the bill appear to be identical to those proposed by the Senate in  2014, but not included in the final  Regulatory Reform Act of 2014. See an earlier  post  about the 2014 regulatory reform bill for a description of the environmental audit/self reporting provisions making a reappearance in 2015.

Sec. 4.3 of the bill  eliminates several environmental reporting requirements.  Most of the reports to be eliminated  have become unnecessary, but the bill  also proposes to  repeal  the requirement for DENR to report  on  environmental  permit processing times.  The report on One-Stop and Express Permitting, under G.S.  143B-279.15, has  allowed legislators to track permitting times in DENR programs that issue development permits.  Given the legislature’s strong interest in environmental permitting, the report  seems an odd candidate for repeal.

Sec. 4.4   would allow more construction of sandbag seawalls and revetments on the oceanfront.  Under coastal management rules,  sandbags can only be used if the building on the property is actually threatened by erosion and the sandbags must be installed within 20 feet of the building’s foundation. The bill removes both limitations. It would allow an oceanfront property owner to build a sandbag seawall  if there is a similar sandbag structure on the adjoining lot even if the  building  on their own lot is not threatened by erosion. The bill also  allows the  sandbags to be installed further seaward of the building foundation without putting a  limit on how far seaward the sandbags can be placed.

Sec. 4.6, 4.7 and 4.8 eliminate reports on electronics recycling;  Sec. 4.9 calls for a study of the electronics recycling program.   By eliminating the reporting requirements, the state would lose information on the volume of electronics being  recycled annually. The study language suggests some legislative concern about the current electronics recycling program without identifying any specific problem.

Sec. 4.12  expands liability protection for the owners of contaminated property in a way that may shield some polluters from cleanup responsibility. The bill amends the  state Brownfields redevelopment  law  (which provides incentives  for redevelopment of  contaminated property) to make “brown fields redeveloper” in state law mean the same thing as “bona fide prospective purchaser” under a federal law regulating hazardous substances.  The Senate bill  would also repeal existing language in state law that does not allow  a person  who caused or contributed to  the contamination to receive liability protection and other benefits under the state Brownfields Act.

The  changes  could be a problem because the definition of “bona fide prospective purchaser” in the federal  law (the Comprehensive Environmental Response, Compensation  and Liability Act  or “CERCLA”)   has been defined to mean a property owner who  innocently purchased property contaminated by a “hazardous substance”.  Under  CERCLA, “hazardous substance”  refers to a specific list of chemicals associated with  acute or chronic health effects;  simple possession of  a threshold quantity of one of the listed chemicals  may trigger a federal reporting requirement.  The CERCLA “hazardous substance” list is not intended to cover all  pollutants and contaminants that may  cause harm  if released to the environment.  For example, petroleum products are excluded from the federal definition of a “hazardous substance” although  gasoline  leaked into soil and groundwater presents both a health and environmental risk.

The Senate Bill 453 change could  allow  a property  owner  who actually caused  environmental contamination to get  liability protection and other benefits under the state Brownfields law  (such as reduced property taxes) just by showing the contamination was not caused by a  hazardous substance regulated under CERCLA. That   could seriously undermine state remediation programs and give undeserved benefits to people who actually caused environmental contamination and should have an obligation to clean it up.

Note: The change may have implications for coal ash sites, although that seems to be a more complicated question. Some of the constituents of coal ash are listed “hazardous substances” under federal law. But  the U.S. Environmental Protection Agency’s  decision to regulate coal ash as a solid waste rather than a hazardous waste may take coal ash itself out of the category of “hazardous substances”.  Although it is not entirely clear, it is possible that the Senate Bill  453 change would allow a utility to take advantage of the state Brownfields  law to get  liability protection  on a coal ash site.