July 26, 2014. House Bill 201 (Building Reutilization for Economic Development Act) left the House as a bill exempting restored buildings from the most recent state energy efficiency standards. The bill returned from the Senate with the addition of significant changes to state stormwater standards and a new exemption from environmental review under the state Environmental Policy Act (SEPA). The bill received final House approval on July 24 without review by an environment committee in either chamber. The House approved the new measure on a vote of 66-42 and the bill will go to the Governor for signature.
The stormwater amendments affect a number of existing state water quality programs, including rules for development in water supply watersheds; coastal stormwater rules to protect the quality of shellfish waters; and nutrient management strategies adopted to restore water quality in rivers and reservoirs already degraded by excess nutrients. In the last 20 years, stormwater controls have become increasingly important in reducing the amount of pollution running off developed areas into rivers, lakes and streams The bill raises two questions — 1. Will higher intensity development with significantly reduced stormwater controls be consistent with maintaining water quality (particularly in sensitive areas near shellfish waters and drinking water supplies)? and 2. Are the changes consistent with federal Clean Water Act requirements?
What the stormwater provisions do:
♦ A new definition of “development” excludes existing built-on area from the calculation of stormwater requirements.
♦ The bill prohibits the Environmental Management Commission (EMC) from requiring private property owners to install new or increased stormwater controls on existing development “except as required by federal law” — a savings clause that will raise more questions than it answers.
Excluding existing development from the built-on area calculation for a site could allow redevelopment with seriously under-designed stormwater controls. Under existing rules for water supply watersheds, low density development (defined as no more than 12% built-on area) does not require engineered stormwater controls; projects exceeding 12% built-on area do. H 201 would allow a developer in a water supply watershed to increase existing built-on area by another 12% before being required to install any engineered stormwater controls. If the added built-on area exceeds 12%, the developer will only have to provide stormwater controls for the added built-on area.
Using redevelopment of a property in a water supply watershed (but outside the water supply critical area) as example: If the property already has 50% built-on area, H 201 allows the developer to expand the built-on area by another 12% with no engineered stormwater controls. The developer could add up to 30% additional built-on area (the maximum allowed under the rules) — for a total of 80% built-on area — and only provide stormwater control for 30%. The end result could be a property in a water supply watershed that is largely impervious, but has either no stormwater controls or stormwater controls designed for only a fraction of the stormwater generated by the development. The EMC’s coastal stormwater rules and rules for municipal storm sewer systems also use the low density/high density approach (with different high-density thresholds), so the bill will have similar results in those programs.
It is less clear how the bill will affect stormwater requirements under nutrient management strategies for impaired waters (including the Neuse River, Tar-Pamlico River, Falls Lake and Jordan Lake). The nutrient management strategies address the stormwater impacts of new development ( including redevelopment that adds built-on area) by limiting nitrogen and/or phosphorus loading associated with the development activity. Developers usually meet those load limits by either limiting built on area or installing stormwater controls, but the nutrient management rules do not directly link stormwater requirements to percentage of built-on area. The question is whether the provision in H 201 prohibiting the EMC from requiring a private property owner to provide stormwater controls for existing development would also affect the calculation of nutrient loading on a redevelopment site where some part of the loading comes from existing built-on area. Nutrient management strategies will also be affected to the extent those rules loop in other stormwater standards (like those for water supply watersheds) in areas with specific water quality classifications.
H 201 may not have a significant effect on the existing development rules included in the Falls Lake and Jordan Lake nutrient strategies. Depending on the success of other parts of those nutrient management strategies, local governments in the two watersheds could be required to achieve additional reductions in nutrient loading from existing developed areas. Although stormwater retrofits will be one way to meet the reduction targets, the rules give local governments flexibility to use a number of strategies to achieve the load reductions and those may or may not include requirements on private property owners.
The savings clause in H 201 allowing the EMC to require stormwater controls on preexisting development to the extent required by federal law raises the question of what it means to be “required by federal law”. The federal Clean Water Act creates a framework, but allows the state to develop water quality standards appropriate for state waters. The U.S. Environmental Protection Agency (EPA) has delegated implementation of most federal Clean Water Act programs to North Carolina’s Department of Environment and Natural Resources (DENR), but subject to EPA approval and continuing oversight. Federal law does not dictate the content of state water quality rules, but does require the state to have standards adequate to protect water quality. In the programs described above, stormwater controls have played an important role in those standards. The question is whether state water quality standards will still be adequate to meet the goals of the Clean Water Act given the restrictions imposed by H 201.
The federal Clean Water Act also requires the state to establish a Total Maximum Daily Load (TMDL) for any pollutant contributing to impaired water quality. The TMDL caps pollutant discharges to an impaired water body at a level that will allow the waters to meet water quality standards. TMDLs must be approved by EPA . State nutrient management strategies for the Tar-Pamlico River, Neuse River, Falls Lake and Jordan Lake have been designed (and approved by EPA) to meet the TMDL requirement for those nutrient-impaired water bodies. Each of those nutrient strategies relies in part on stormwater controls to reduce nutrient loading from new development. By significantly changing stormwater requirements as applied to existing development, H 201 has also changed the TMDLs previously approved by EPA.
Amendments to the Clean Water Act in the 1990s extended wastewater permitting requirements to municipal stormwater discharges, requiring municipalities to get National Pollutant Discharge Elimination System (NPDES) permits for storm sewer systems. To have permit coverage, federal rules require municipalities to put stormwater controls on new development. The EMC’s urban area stormwater rules, which set the minimum requirements for coverage under a federal NPDES stormwater permit, will also be affected by H 201. It isn’t immediately clear whether the changes required by H 201 will be consistent with federal NPDES stormwater rules.
The EIS exemption in H 201 will likely have limited impact (positive or negative). Under the exemption, a state Environmental Impact Statement (EIS) would not be required for expansion or new construction that does not increase the footprint of a building or facility to more than 150% of the previous footprint. (In other words, the total footprint of the expanded facility could be 50% larger than the existing facility without triggering an environment document.) The State Environmental Policy Act, N.C.G.S. 113A-1, et seq., only requires an EIS for a project that requires a state approval and involves expenditure of public funds or use of public lands. As a result, SEPA has a limited impact on private development projects.
For projects meeting the SEPA triggers, DENR rules already exempt many construction projects. The difference is that H 201 grants an EIS exemption based on the size of the expansion project alone and without regard to natural resource impacts. To the extent H 201 has an effect on SEPA reviews, it may be to exclude from review some construction projects that would otherwise require an environmental document because of the sensitive location or amount of stream and wetland disturbance. Note: some projects will still trigger an EIS under federal law; the National Environmental Policy Act (NEPA) applies to both public and private projects and the H 201 exemption would have no impact on federal environmental review requirements.