Regulatory Reform 3.0

April 29, 2013:  Last Thursday, the N.C. Senate’s Committee on Commerce approved a new version of Senate Bill 612 (Regulatory Reform Act of 2013) — the third in a series of “regulatory reform” bills developed since Republicans gained control of both houses of the General Assembly in the 2011. The bill may be on the Senate calendar tonight.

The bill attempts too  much  to describe in one post, but  the  most significant provisions would  repeal stream buffer requirements in the Neuse River and Tar-Pamlico River basins  and  require  repeal or modification of any state rule  that “imposes a more restrictive standard, limitation, or requirement” than a federal law or rule on the same subject. ( See an earlier post  for more detail on the  Senate Bill 612 stream buffer language.) The idea of prohibiting  state agencies from adopting rules (particularly environmental rules) that  go beyond minimum  federal requirements has been around for awhile. The Regulatory Reform Act of 2011     ( Session Law 2011-398 )  prohibited  state environmental  agencies — and only environmental agencies — from adopting  more restrictive standards or requirements  than federal rules on the same subject.   The  law had exceptions  for  rules 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.  Even then, the General Assembly had an eye on existing rules as well. The same legislation directed all state agencies to provide the Joint Select Regulatory Reform Committee with a list of existing rules and indicate for each rule whether the rule was mandated by federal law and whether the  rule was more stringent than an analogous federal regulation. (The session law defined analogous to mean that a federal rule regulated the same conduct or activity.)

The Regulatory Reform Act of 2012 (Session Law 2012-187)    did  not follow up on the reports  submitted in the fall of 2011.  Senate Bill 612 also ignores the information submitted by state agencies in 2011. Instead of using the 2011 reports to focus regulatory reform efforts, Senate Bill 612 directs state environmental agencies — and only environmental agencies —  to  repeal or modify any rule that exceeds minimum federal requirements unless the rule fits under one of  the exceptions set out in the 2011 legislation for new rules.  The bill  also takes away the authority of  city and county governments to adopt local ordinances that go beyond state and federal environmental standards.

It isn’t clear how   legislators  mean to interpret the Senate Bill 612 provisions. Even the most detailed federal environmental regulations (like those adopted by EPA under the Clean Air Act and Safe Drinking Water Act) have gaps that need to be filled by state rules.  Federal regulations often lack  detail on program implementation, such as record-keeping and monitoring  requirements. Sometimes the gaps are more substantive; environmental and public health issues of great concern  in North Carolina have not always been national priorities.  Most  federally delegated or authorized  environmental programs  operate under federal regulations  that are much  less detailed than  the Clean Air Act and Safe Drinking Water Act standards. The  state’s  water quality,  solid waste and coastal management programs  all operate under federal  laws  that  create  a framework for state regulatory programs, but  for the most part leave development of specific environmental standards to the state.  For those programs, it will be  difficult to directly compare state rules to federal regulations and determine what is more or less stringent.

So,  the Senate Bill 612 language  raises a number of questions:

— Where fairly detailed federal  standards  exist, would the bill require repeal of state rules that address gaps in the federal regulations?   Or can state rules go beyond  federal regulations to  describe the content of a complete permit application or establish specific  monitoring  and record-keeping requirements?

— In programs that operate under a federal framework for regulation that  leaves  specific standard-setting largely to the state agency (with federal oversight),  will Senate Bill 612 require repeal of  types of standards and requirements not specifically  identified  in the   federal regulations?   Will  the state’s water quality program, for example,  be limited to using regulatory  tools provided under the Clean Water Act (such as wastewater discharge permits) to solve  a water pollution problem? Or can the program continue to address all major water pollution sources and use innovative approaches not contemplated in the federal rules?

— Does the exception for rules addressing a  “serious and unforeseen threat to public health, safety and welfare”    allow state rules to go beyond minimum federal requirements because of particular conditions  in the state or in response to concerns that may not have come up in development of the federal regulation? Or will the General Assembly take the position that if EPA doesn’t think putting a petroleum underground storage tank (UST)  near a drinking water well is a problem, then it must not be a problem?

The  2011 DENR report  to the Joint Legislative Committee on Regulatory Reform identified a number of state environmental rules that go beyond the requirements of  federal rules on the same subject. From a quick review, I found some examples of state rules that may have to be repealed under Senate Bill 612 :

● State waste management rules  requiring minimum separation from groundwater for land application of septage (to prevent groundwater contamination) and maximum slopes for land application sites (to prevent runoff to surface waters).

● State rules requiring water systems to  treat drinking water with excessive levels  of iron and manganese; both can cause discoloration of skin and teeth, as well as odor and taste problems.  Federal rules have only “advisory” standards for manganese and iron and do not require water systems to provide treatment to improve the water quality.

● State rules requiring a public water system to notify  the  owner  if routine water system monitoring  finds  a drinking water standard violation or high levels of fecal coliform bacteria in a water sample from a building. Federal rules only require water systems to provide notice to customers  if the water system overall violates Safe Drinking Water Act standards. Since  a water system can  exceed drinking water  standards at some number of  individual monitoring locations without  being in violation as a system (the exact number varies depending on the size of the water system and number of monitoring sites), the federal rules do not require the water system to notify  individual  property owners of  a problem  confined to a particular site. The state notice rule was adopted in 2006 after complaints that local water systems did not notify  citizens of high lead  levels in their drinking water after it was detected in routine water systems monitoring.

● Rules  prohibiting  location of a petroleum  underground storage tank (UST) within  100 feet from a  well serving the public or within 50 feet of any other well used for human consumption.

● Rules requiring setbacks for land application of all wastewater residuals (both sewage sludge and other solids  from wastewater treatment) and setbacks for disposal of coal combustion byproducts. The  rules include setbacks from property lines, public and private drinking water supplies, other water supply wells, and surface waters.

● Limits on emissions of  three toxic air pollutants (arsenic, beryllium and chromium)  by   industrial, medical, hazardous waste and sewage sludge incinerators.

It isn’t clear that these are the kind of “regulatory reforms”  that the General Assembly actually wants to see.

You can find the full report at:

Note: Why the General Assembly believes  environmental rules  to be a greater burden on North Carolina citizens than other types of regulation will be  a subject for another day.