Tag Archives: N.C. Constitution

Separation of Powers Battle, Part II

May 25, 2016.  In response  to the N.C. Supreme Court decision in McCrory v. Berger,  the House of Representatives has approved a bill to reconstitute the Coal Ash Management Commission, the Mining Commission and the Oil and Gas Commission.   The lawsuit largely concerned the constitutionality of  legislative appointments to the commissions, but also challenged  a provision in the Coal Ash Management Act  that made the Coal Ash Management Commission independent  of oversight by any executive branch department.   See an earlier post on the court decision here.

The McCrory v. Berger decision does not state any clear, generally applicable separation of powers rule with respect to organization and appointment of state boards and commissions. (The court so stoutly resists providing any general rule, that the decision may raise more questions than it answers.) But the court clearly held that the General Assembly violated the separation of powers doctrine in the N.C. Constitution by giving the legislature power to appoint a majority of each commission’s members. Senate Bill 71 attempts to cure that separation of powers violation.

The Governor’s Office does not believe the bill resolves the separation of powers issues and has put the legislature on notice that the Governor will file suit again if the new bill becomes law.  In fact, the Governor’s objections have broadened and appear to attack the entire concept of giving executive authority to citizen commissions. The expansive interpretation of McCrory v. Berger adopted by the Governor’s Office would potentially affect many other longstanding commissions, including the Environmental Management Commission.

The Senate Bill 71 response to McCrory v. Berger. The bill  amends laws creating the three commissions at issue in McCrory v. Berger to give the Governor a majority of appointments subject to confirmation by the General Assembly. The bill also  insures that the governor’s appointees  represent a majority of the quorum required for commission action. Senate Bill 71 removes language in the Coal Ash Management Act that made the Coal Ash Management Commission “independent” of  supervision by the Department of Public Safety (where the Commission has been administratively housed) and adds a clause noting the powers and duties of the Secretary of Public Safety — appointed by the Governor — with respect to programs in  the department.

As a backstop, the bill has a provision that transfers the responsibilities of the Coal Ash Management Commission to the existing Environmental Management Commission if Governor McCrory fails to make timely appointments or the reconstituted CAMC becomes the focus of new litigation.

The Governor’s opposition.  The Governor’s Office does not believe the bill resolves the separation of powers issues surrounding appointment and supervision of the three commissions. The Governor’s legal counsel, Bob Stephens,  appeared in a House Committee  to oppose the bill and listed several objections:

  1. The Governor opposes  legislative confirmation of  commission appointees as a new violation of separation of powers.  Legislative confirmation has been the exception rather than the rule in North Carolina, but is required for a few boards and commissions.  State law has long required legislative confirmation of the Governor’s appointees to the N.C. Utilities Commission.  The McCrory v. Berger  decision does not discuss legislative confirmation one way or the other since it was not an issue in the case.  Mr. Stephens did not explain the legal basis for the Governor’s position in committee, but a letter from Mr. Stephens to legislative leaders contends that legislative confirmation inappropriately interferes with the Governor’s appointment power.
  2.  Governor McCrory  objects to provisions giving the Governor authority to remove a commission member only for  misconduct or failure to perform their duties. Stephens argued that the decision in McCrory v. Berger means the governor must have the power to remove governor’s appointees at will.  On this point, the McCrory v. Berger decision itself is unclear.  The court talks about power to remove commission members as necessary for the Governor to effectively supervise commissions with executive powers.  Although the decision can be read to imply that removal for cause may not be sufficient,  the court never  expressly holds the Governor must have power to remove commissioners at will.  Instead, the court treats power to remove as one of several factors  to be considered in determining whether the legislature has inappropriately limited the Governor’s executive authority. The actual holding in the case turns on the number of legislative appointments to each commission.
  3. Governor McCrory does not believe Senate Bill 71  sufficiently  recognizes the Governor’s authority to supervise the Coal Ash Management Commission. The CAMC  has  been administratively housed in the Division of Emergency Management of the  Department of Public Safety, but the 2014 Coal Ash Management Act  included language that put the CAMC outside the supervision and direction of either the Division or the Department. Senate Bill 71 removes the “independence” language and adds a clause noting the statutory authority of the Secretary of Public Safety (which includes supervisory responsibility for programs in the department).  Stephens rejected the changes as insufficient to  give the Governor supervisory control over the CAMC consistent with  McCrory v. Berger, but did not suggest alternative language to the committee.

 Questioning the entire concept of citizen commissions. Yesterday, Mr. Stephens sent a  letter  to House and Senate leaders to express the Governor’s concerns in writing. The letter goes beyond the comments offered in committee and opposes the exercise of executive authority by any citizen commission not entirely within the governor’s  supervision and control.  The Governor interprets McCrory v. Berger to mean the  Governor must have the ability to appoint members without legislative confirmation; remove members at will; and direct commission actions  in much the way the Governor, through cabinet secretaries, directs state agency employees. The letter to Senate President pro tempore Phil Berger and House Speaker Tim Moore rejects the idea of using the existing Environmental Management Commission as a backup for the Coal Ash Management Commission because:

The Environmental Management Commission suffers from the same constitutional defects as the proposed Coal Ash Management Commission. Again, the Governor must have a majority of appointments, the ability to remove his appointees at will and the ability to supervise the day to day activities of the commission.

The letter goes on to argue that commissions with ability to “review and approve” executive agency decisions:

pose an exceptional threat to the Governor’s duty to execute the laws…Some in the General Assembly believe that independent commissions superior to our agencies are a good idea — they serve as a check on the executive branch. But McCrory v. Berger rejects this argument.

That conclusion cannot be found in the McCrory v. Berger decision.  The court  went out of its way to avoid  grand declarations — to the point of leaving a lot of confusion about how to apply the decision beyond the three commissions directly involved in the case. The statement reflects the Governor’s expansive interpretation of McCrory v. Berger and signals an intent to use that interpretation to either eliminate semi-independent citizen commissions or to force a significant change in the role of commissions.

The practice of giving citizen commissions authority  to develop and implement state policy has a long history in North Carolina.  Commissions — rather than the Department of Environmental Quality– adopt most state environmental rules. While checking the executive branch may have been one purpose, commissions also bring a broad range of expertise and practical experience to policy development and implementation. Laws creating the commissions require  members to have backgrounds more diverse than those typically found among the technical staff of a state agency. By law, the Environmental Management Commission  must have members with  backgrounds in business, agriculture, public health, local government, conservation, etc. Members  bring that expertise and experience to bear on environmental policy decisions.  EMC members, like most state commission members, have other full-time jobs;  volunteer their time to the state; and in return receive only reimbursement of travel costs and a very small per diem for meeting days.

Given the different perspectives among commission members and a perch outside state government bureaucracy, commissions will not always see an issue in quite the way a Governor’s political appointees do. Recent friction between the Environmental Management Commission and the Department of Environmental Quality attests to that. On balance, the benefits of bringing citizen commissions into state policy development have outweighed the messiness and occasional friction. The Governor seems to prefer something more like the federal model — where policy development and policy implementation are both firmly under the control of a government agency. The question is whether a separation of powers argument can take him there.

Next steps for Senate Bill 71.  The bill passed the Senate last year as a bill to adjust the terms of Rules Review Commission members. Since the House has stripped out the original Senate bill text and replaced it with something entirely different, the bill now goes back to the Senate for concurrence in the changes.  The bill also makes other substantive changes to the Coal Ash Management Act to be discussed in another blogpost.

The Fate of the Coal Ash Management Commission

March 19, 2016. An earlier post discussed the N.C. Supreme Court decision in McCrory v. Berger. In brief, the court ruled that laws giving the General Assembly  power to appoint a majority of the members of the Coal Ash Management Commission (CAMC) and two other state commissions violated the N.C. Constitution’s provisions on separation of powers.  (See the earlier post for more detail and a link to the court’s opinion.)   The decision means the Coal Ash Management Commission cannot take any further action until the General Assembly amends the CAMC’s  appointment statute  to be consistent with the court’s decision and new appointments are made.  The most likely solution would be to give the Governor power to appoint a majority of the members;  the law could be amended as early as April of this year when the legislature convenes again.

Multiple news outlets have now reported that the McCrory administration has taken steps to effectively disband the Coal Ash Management Commission in advance of the April legislative session.  The Charlotte Observer’s Bruce Henderson reported that the Governor’s Office informed CAMC executive director  Natalie Birdwell  that the commission is “no longer a legal entity”.  The same Charlotte Observer article reports that the move by the Governor’s Office to shut down the commission’s work will dissolve contracts with independent experts retained by the commission to provide an outside review of  the Department of Environmental Quality’s (DEQ) proposed risk classification of coal ash ponds.

A few observations about the Governor’s decision to shut down the Coal Ash Management Commission:

The Governor’s action  wasn’t required by the decision in McCrory v. Berger.  The court did not find anything unconstitutional in the creation of a Coal Ash Management Commission to oversee decisions on closure of coal ash ponds and coal ash disposal.  The court  only held the method of appointing CAMC members  to be  unconstitutional.  The N.C. Supreme Court has found commission appointments statutes unconstitutional in the past and the solution has been to amend the statute to change the appointment scheme.  In 1982, the N.C. Supreme Court  ruled in Wallace v. Bone  that the General Assembly violated the N.C. Constitution’s separation of powers provisions by designating four seats on the N.C. Environmental Management Commission (EMC) for active members of the legislature.  In response, the General Assembly amended the EMC appointments statute to replace the legislators serving on the commission with citizens appointed by the General Assembly.  Nothing in the court’s decision suggested the EMC must be dissolved and that did not happen; nothing in the decision questioned the validity of past EMC actions.  The decision in McCrory v. Berger likewise  does not hold that actions already taken by the Coal Ash Management Commission — such as hiring staff and entering into contracts  for services —  are void or voidable.

Another separation of powers case still pending in  Wake County Superior Court challenges appointments to the Mining and Energy Commission  (MEC) and specifically asks the court to void the MEC’s past rulemaking actions.   But to date, no  court has ruled that the presence of unconstitutionally appointed members invalidates a commission’s  past acts. The MEC case directly  raises the issue for the first time and could lead to a decision affecting future separation of powers cases. In the meantime, the McCrory administration has chosen to go further than the decision in McCrory v. Berger  requires to  undo the existing organizational, staff and contractual arrangements supporting the Coal Ash Management Commission.  (It isn’t clear whether the McCrory administration’s position on the CAMC  would carry over to support for the plaintiffs seeking to invalidate the Mining and Energy Commission’s past rulemaking actions on similar grounds.)

The General Assembly’s next move may depend on continued legislative interest in providing oversight for DEQ’s coal ash decision making.  In 2014, the General Assembly created the Coal Ash Management Commission to provide independent oversight for DEQ decisions related to coal ash disposal and closure of existing coal ash ponds. At the time, legislators expressed concern about relying entirely on DEQ’s judgment because of controversy surrounding early McCrory administration decisions on coal ash enforcement and a pending federal investigation of relationships between state regulators and Duke Energy. The question is whether those concerns still exist and,  if so,  how the legislature will react to the Governor’s unilateral move to disable the commission. The General Assembly can resolve the separation of powers issue and revive the CAMC by simply changing the CAMC appointment provision to  allow the Governor to make a majority of the appointments.

By forcing the Coal Ash Management Commission to start over, the Governor’s action may make it impossible for the commission to meet its first critical deadline –risk classification of coal ash ponds. The Coal Ash Management Act gave the CAMC final authority to determine the appropriate risk classification of each coal ash pond; the risk classification will determine how quickly the ash pond must be closed and whether the coal ash must be excavated and disposed of in a lined landfill. Only coal ash ponds classified as Low Risk can be closed out by dewatering and capping the ash in place.  Under the law, the CAMC must make a final decision on risk classification of a coal ash pond within 60 days after DEQ sends the commission a proposed risk classification. If the commission does not act within 60 days, DEQ’s proposed risk classification becomes the final classification by default.

Timelines in the law will  require DEQ to submit proposed classifications for all of the coal ash ponds to the  Coal Ash Management Commission by mid-May.  Some proposed classifications may be ready sooner. Even if  new appointments to the CAMC can be made under an amended appointments statute by that time, the Governor’s action means the newly appointed commission will have to reassemble a staff, re-engage consultants and revive basic  operating systems to function.  Unless the General Assembly extends the time for the CAMC to review and act on proposed risk classifications,  the DEQ proposed classifications may become final by default before the commission can act.

After the ash ponds have been classified, the next major set of CAMC decisions under the Coal Ash Management Act  involve approval of final closure plans for each coal ash pond.  The closure plans determine whether coal ash will be excavated and removed from the site or capped in place and  includes approval of technical specifications for final disposal of coal ash. The closure plan may also involve approval of a beneficial reuse project as an alternative to landfill disposal. The law directs the CAMC to make the final decision on  approving a final closure plan based on a recommendation from DEQ.  The law again gives the CAMC a limited time to act on each recommended closure plan; if the commission does not act within the time allowed, DEQ’s recommended closure plan becomes final by default.

If the General Assembly does not intervene to protect the Coal Ash Management Commission’s ability to carry out its responsibilities, the practical result could be a significant change in the way the Coal Ash Management Act works. Delaying the commission’s ability to act in time to affect DEQ’s decisions on closure of coal ash ponds will have the practical effect of ceding all  decision-making back to DEQ.  The original concept of providing  independent oversight of those decisions through the Coal Ash Management Commission will be lost.

Fighting for Control of Environmental Policy

April 8, 2015.   In  North Carolina, most  environmental regulations  are adopted by commissions; the  members serve on a voluntary basis and receive only travel expenses and a minimal  per diem. Serving on a commission is like jury duty — for four years and with homework.   Of the major environmental commissions, the  Environmental Management Commission (EMC) adopts air quality, water quality, solid waste and hazardous waste regulations;  the  Coastal Resources Commission regulates coastal development;  and the Mining and Energy Commission regulates mining and onshore energy exploration and development.  The Department of Environment and Natural Resources (DENR)  provides staff support to the commissions,  but the commissions act independently  in adopting environmental rules.  DENR itself has very limited rulemaking authority.

The Governor and  legislative leaders  are currently battling for control of the commissions.  For  decades,  laws creating boards and commissions either gave the Governor exclusive  power to appoint the members  or gave  the Governor a majority of appointments and divided remaining appointments between the state House and Senate.  Since  2010,  the General Assembly has moved to increase legislative influence over the  commissions.  In the last three years, several laws creating new commissions have given the legislature a majority of the appointments.    Reflecting both legislative interest and emerging issues,  the new environment commissions have responsibilities at the crossroads of environmental regulation and energy development.

In 2012, the General Assembly created the Mining and Energy Commission to develop hydraulic fracturing rules. The commission  has eight legislative appointees, three ex officio members (who serve by virtue of holding a specific position — such as the chair of  N.C. State University’s Minerals Research Laboratory Advisory Committee) and only four  Governor’s appointees.  In 2014, the General Assembly continued the practice in creating  the Coal Ash Management Commission to address coal ash contamination;  an Oil and Gas Commission to regulate onshore and offshore energy production;  and a newly constituted Mining Commission.    All three of the new commissions are dominated by legislative appointees.

Late last year, Republican Governor Pat McCrory  filed suit to challenge the constitutionality of provisions in the Coal Ash Management Act of 2014  (creating the Coal Ash Management Commission) and the Energy Modernization Act of 2014  (creating  the  Oil and Gas Commission and Mining Commission). Two former governors, Republican Jim Martin and Democrat Jim Hunt, joined as plaintiffs. In part, the case challenged the  legislature’s authority to appoint a majority of the members serving on executive branch commissions as an unconstitutional  violation of separation of powers. The  lawsuit also raised some lesser separation of powers issues that I won’t go into here.

On March 16, 2015,  a special three-judge panel of Superior Court judges ruled in the governors’ favor in a far-reaching decision that has implications for all of the  commissions involved in environmental policy.   A copy of the court’s order in McCrory v. Berger can be found  here.  Several things to note about the decision:

1. Although the  lawsuit challenged the constitutionality of legislators appointing a majority of the members of a commission with administrative responsibilities, the decision goes further and concludes that it is unconstitutional for the General Assembly to appoint any members of a  commission that exercises “executive” authority.

2. The decision has broader implications than even the judges recognized.   First,  the judges assumed that the Governor appointed all  EMC  members until 2013;  in reality,   the legislature had  appointed at least one-third of the EMC members for decades.  The judges also mistakenly concluded that authority to regulate energy development and mining had rested entirely in the Governor’s appointees to the old Mining Commission and DENR officials  until 2014.   In fact, a 2012 law gave most regulatory authority over onshore energy development and mining to a Mining and Energy Commission also composed largely of legislative appointees.  Those errors caused the judges to mistakenly conclude  that appointees of the Governor  controlled implementation of laws  governing coal ash disposal, energy exploration and development,  and mining until very recently.

The judges’ misunderstanding of the  reality  before  2013-2014 suggests  they may not have fully appreciated the impact of their decision. The practice of making legislative  appointments to the environment commissions has been  longstanding and well-entrenched. Calling into question the constitutionality of commissions with legislative appointees has implications far beyond three commissions too recently created to have taken any significant action.  Which leads to the next problem–

3. The judges did not discuss how the ruling might affect the validity of actions taken by an unconstitutionally appointed commission.  Of the three commissions directly at issue in  the case, two (the Oil and Gas Commission and the new Mining Commission)  do not officially come into being until July 1 2015.  The Coal Ash Management Commission began meeting in  2014, but has not taken any action beyond submitting preliminary reports to the General Assembly.  But a number of other commissions with legislative appointees have made significant regulatory decisions for years.

In January,  Southern Environmental Law Center filed a  lawsuit on behalf of the Haw River Assembly and an individual Lee County property owner separately  challenging  the constitutionality of the Mining and Energy Commission on separation of powers grounds. The lawsuit  explicitly asked  the court to void hydraulic fracturing rules adopted by the MEC based on the constitutional violation. That case is still pending. The EMC, which has had legislatively appointed members for decades,  has been responsible for the entire body of state air quality and water quality rules.

One note– When the N.C. Supreme Court decided in Wallace v. Bone (1982) that the N.C. Constitution did not allow sitting legislators to also  serve  on the Environmental Management Commission, the court did not void EMC actions in which legislative members had participated.  There is probably an inverse relationship between the number of past actions potentially affected and the likelihood that a court will void past actions based on a separation of powers violation.

4. The most immediate impact of the ruling may be on implementation of the Coal Ash Management Act. The General Assembly gave the Coal Ash Management Commission the power to make critical decisions about closure of coal ash impoundments. Under the law, the commission –rather than DENR — will make final decisions prioritizing  coal ash impoundments for closure and approving closure plans. Those decisions will affect both the pace of closure and the environmental impacts. Because of the  ruling in McCrory v. Berger, the Coal Ash Management Commission canceled a planned meeting for March and finds itself in  limbo.

The next critical point in implementation of the Coal Ash Management Act  will come in early 2016 when the Coal Ash Management Commission should  receive DENR’s recommendations on prioritizing coal ash impoundments for closure.   Timelines in the law anticipate a final decision by the commission within 60 days after receiving the DENR recommendations. It isn’t clear that the legal issues  surrounding the commission will be resolved by then. One immediate question  will be  how to keep moving forward on implementation of the Coal Ash Management Act  until those issues have been settled.

Next steps — Legislative leaders have appealed the decision in McCrory v. Berger to  the N.C. Court of Appeals.

The Disappearance of the Coastal Resources Commission

September 25, 2013.   Under the state’s Coastal Area Management Act (CAMA), the Coastal Resources Commission (CRC) has responsibility for developing standards needed to balance protection of highly productive  coastal resources, public trust rights, and  economic development.  But  the N.C. Coastal Federation’s Coastal Review Online  reports that  the CRC  has been effectively out of commission since the beginning of August. The question is why.

This year,  the General Assembly  changed the makeup of the  Coastal Resources Commission by  reducing the number of commissioners from 15 to 13;  revising  the categories for appointment; and  giving  legislative leadership the  power  to appoint 4 of the 13 members. (See Sec. 14.24  of Senate Bill 402.) To  make the changes  effective more quickly, the  bill  caused the terms of  all  Coastal Resources Commission members serving on January 1, 2013 to  expire on  July 31, 2013 with four exceptions. Those four seats, specifically identified in the bill, have terms expiring on June 30, 2014. The bill required  the Governor to appoint nine new CRC members by August 1, 2013 to replace the nine whose  terms would end on July 31, 2013.

The problem is that  new appointments have not been made and the CRC webpage now lists only four members  — the four whose terms extend until June 30, 2014.  Those four members alone  participated in a special called meeting of the commission  in August to make a decision  related to litigation over an earlier CRC  variance decision. The regular September  meeting of the CRC scheduled for this week has been canceled.

The reason for the sudden loss of two-thirds of the commissioners  is unclear.  Both the N.C. Constitution and state law  expressly say that state officials can and should serve  until their successor has been appointed or elected.

N.C. Constitution, Article VI, Sec. 10: “In the absence of any contrary provision, all officers in this State, whether appointed or elected, shall hold their positions until other appointments are made or, if the offices are elective, until their successors are chosen and qualified.”

N.C.G.S. § 128-7: “All officers shall continue in their respective offices until their successors are elected or appointed, and duly qualified.”

The term “officers” covers all elected and appointed state officials, including members of boards and commissions. The provisions exist to guarantee that essential government functions continue even as terms of office end.   N.C. judges  have applied  the provisions to find that decisions made by state officials  beyond the end of their appointed term are valid  and enforceable since  those officials legitimately continue in  office until a  successor takes over.

The CRC’s responsibilities go beyond  rule adoption. CAMA also gives the CRC power to grant variances from  coastal development  standards,  issue declaratory rulings (interpreting how  coastal development rules  apply to a particular project), and approve local land use plans in the coastal counties. Those decisions are often time sensitive and important to developers as well as local governments,  community groups and environmental organizations. Right now, the CRC cannot meet those obligations with a membership of four.   Four commissioners may not even  meet CRC quorum requirements unless the remaining nine members resigned or have been individually removed from office. (Neither seems to be the case.)  The remaining four commissioners also cannot represent the broad range of interests and expertise needed to make balanced decisions about protection of the state’s coastal resources.

The N.C. General Assembly, Water System Operator

The N.C. General Assembly seems to be increasingly tempted to intervene in the operation of local — and particularly municipal — water and sewer systems. Is  this a good idea?

Last year,   Senate Bill 382  tried to  require the City of Durham to extend water service to a  development project outside the city limits.    Senate Bill 382  started  legislative life as  a tax bill, but in  the last few days of the 2012  legislative session  it became the  vehicle for  a House proposal to  legislatively approve a water line extension for a specific development project. (Durham had  refused the developer’s  request for water service in part because of   the high cost of extending a water line to the project.) Senate Bill 382 ultimately failed, but local conflicts over water service  continue to tempt legislators to intervene.

This year, three western legislators have introduced  a bill that would force the City of Asheville to turn its  water system over to the Metropolitan Sewerage District of Buncombe County (MSD).  You will not find any mention of the City of Asheville or the  Metropolitan Sewerage District  by name –the bill avoids naming the parties by using a generic description that happens to only apply to them — but  House Bill 488 is the latest in a series of skirmishes over control of  the Asheville water system.  The history behind the Asheville water system conflict is  long and complicated, but — as in Durham — some amount of the friction has to do with the relationship between water service and development.

One long-standing issue  has to do with  water rates  for Asheville water system customers who live outside the city limits.  Asheville is the only city in the state prohibited by law from charging water customers outside the city a higher rate — a common practice of other municipalities.  (Higher rates may be used to recover higher costs of providing the service or to offset some of the additional taxes paid  by in-town customers.) Just as friction over a development decision  led to the Durham controversy, the history of the Asheville water system  includes a  thread of  concern about the city’s  ability to use water system decisions to influence  development outside the city. Until last year, extension of water and sewer service gave cities a strong basis for forced  annexation and fear of annexation seems to have created some of the tension  between Asheville and surrounding areas.  Although the annexation process has changed,  cities like Durham and Asheville can still find themselves in conflict with developers and county officials over  development conditions tied to extension of city services or (as in the Durham case)  denial of  service  to a new development outside the city limits.  In short, decisions about extension of water and sewer service  touch two hot buttons —   money  and regulation of new development.

These conflicts have a  very direct connection to environmental protection. Water and sewer  systems are creatures of environmental and public health regulation;  environmental protection programs fund water and sewer infrastructure in many North Carolina communities.   Like many other cities,  Asheville and Durham have the challenge of  expanding water service to accommodate new development  while also maintaining or replacing the aging  infrastructure  that serves existing residents.   The land use regulations sometimes attached to extension of water and sewer service can  provide a number of environmental protection benefits, but maintaining the  fiscal health of a water system has its own environmental  value. Decisions about when and how to extend water or sewer service can have significant  financial  implications; a financially strained system will have much more difficulty providing the maintenance needed to meet public health standards and avoid environmental damage.

To run  a water or sewer system responsibly, local officials   sometimes  have to make controversial decisions about service, rates and financing.  It becomes even harder to make  a tough decision knowing the General Assembly may step in and reverse it.    Forcing the transfer of infrastructure from a city without providing for compensation — as in the case of Asheville — particularly sends the wrong message to cities  that need to invest in water or wastewater infrastructure.  Legislation affecting the  capital assets of a water or sewer system also carries the additional risk of  undermining planning and financing for system improvements.

These bills  raise another question — is it in the General Assembly’s power to force an extension of water and sewer service or to divest a city of its water system.? The answer isn’t clear to me. Local governments are  subdivisions of the state — the General Assembly can change municipal boundaries and expand or contract the authority of cities. It is less clear that the General Assembly can directly intervene in decision-making about a water and sewer system without circumscribing local government authority. In 2012, Senate Bill 382 attempted to compel an expansion of the Durham water system without actually changing the law governing the City of Durham’s authority to operate a water system. House Bill 488 directs the City of Asheville  to transfer ownership of its  water infrastructure also without  changing state laws  authorizing cities to own and operate water and sewer utilities. (The sections of House Bill 488 that require the transfer of property from Asheville to the MSD  do not amend existing statutes governing local government water and sewer systems.   The sections of the bill that enact new  statutes to cover the operation of metropolitan water and sewer districts allow, but do not require,  transfers of property between cities or counties and a district.)

Article II, Section 24 of the  N.C. Constitution prohibits the General Assembly from adopting a piece of legislation relating to “health, sanitation or the abatement of nuisances”  that applies  to  only one local jurisdiction. Since water systems fall into  all three categories, the Constitution seems on its face  to prohibit  the  General Assembly from reaching down to make decisions related to an individual water system. Legislators frequently try to draft around the Constitutional restrictions on local acts by using language that appears to be generic, but in fact only describes a single city or county. At some point, the fiction simply becomes too strained.

For  constitutional law junkies: Since state law treats cities as “persons” for many purposes, can city property be taken (even by the State) without compensation? Would the U.S. Supreme Court consider a city to be a “person” under the Fifth Amendment’s just compensation clause? A research project for another day.