A Preview of 2014 Environmental Legislation

March 19, 2014.  On March 12, the N.C. General Assembly’s Environmental Review Commission (ERC) met to hear reports from several  working groups created to follow up on 2013 legislative issues. [The ERC is a joint House/Senate committee that meets between legislative sessions to study and develop  legislation on environmental issues.]  The reports included recommended legislation, but the ERC did not really discuss  the  bill drafts. The ERC will vote on legislative proposals for the  2014 session  in April.  The working group bill drafts   represent a starting point for development of 2014 legislation; the ERC co-chairs indicated a willingness to consider changes to  the  proposals  before voting  on April 3 to approve  a package of  2014  ERC  bills.  With the understanding  bill drafts may change between now and April 3,  legislative proposals presented last week included:

Stormwater.  The Regulatory Reform Act of 2013 (Session Law 2013-413) changed state  stormwater  standards to  treat gravel areas as “pervious” and exclude those areas from the calculation of built-upon area on a development site.  (A pervious surface allows  water to  percolate through  to the soil beneath; an impervious surface –such as a concrete driveway —  does not.) Since the amount of built-upon area determines the level of stormwater control required, developers had asked for exclusion of gravel from the calculation of built-upon area as a way to reduce stormwater requirements. The 2013 regulatory reform provision  also directed the ERC to study state stormwater programs “including how partially impervious surfaces are treated in the calculation of built-upon area under those programs”.

Having successfully lobbied for legislation treating “gravel” as a pervious surface and intending to  push for changes  in the way partially impervious surfaces are counted toward built-upon area, supporters of the 2013 legislation encountered a complication — there was no consensus on  the definition of  “gravel”.  As a result, the ERC stormwater working group  focused  on the  gravel  controversy instead of moving  on to the  issue of partially impervious surfaces.

The working group found that gravel areas may or may not be pervious depending on the size and type of the aggregate material used and the underlying substrate. The draft  bill presented to the ERC would actually undo the 2013 legislative decision to exclude all gravel surfaces from the calculation of built-upon area and  direct 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.

Isolated Wetlands. After several bills proposing to repeal  state rules protecting isolated wetlands failed to win passage,  the  General Assembly asked the ERC to study isolated wetlands regulation.  (See an earlier post for more background on the isolated wetlands issue.) Senator Brent Jackson  presented a recommendation for  modification, but not repeal, of state standards for development in isolated wetlands. You can find a copy of the draft legislation here.

The bill would allow developers to disturb a somewhat larger area of isolated wetlands without a water quality permit review.   Current state rules  allow  isolated wetland impacts below specific thresholds to be “deemed permitted” under certain conditions. The proposed legislation would raise those thresholds. West of Interstate 95, the “deemed permitted” threshold would be increased  from 1/10th of an acre to 1/3 of an acre; east of Interstate 95,   the “deemed permitted” threshold would increase from 1/3 of an acre to 1 acre.  (Interstate 95 has long been used as the  dividing line between wetlands-rich eastern counties and piedmont/western counties that have fewer wetlands.)

The bill also proposes to reduce the mitigation required for isolated wetland impacts.  Wetland rules only require mitigation (in the form of wetland creation, wetland restoration or preservation) for impacts to one acre or more of wetlands; for projects requiring mitigation, the rules set  a  2:1 ratio of acres of wetlands mitigation to acres of wetlands impacted by  development.  The 2:1 mitigation ratio  allows for  loss of wetland function and  potential for mitigation failure.  Current  rules also use  a sliding scale of mitigation credits — giving less credit toward meeting the mitigation requirement for preservation of existing wetlands and more credit for creation or restoration of wetlands.  The ERC working group recommendation appears to propose a flat 1:1 mitigation ratio and makes no distinction based on the type of mitigation used.

Local Environmental Ordinances.  An earlier post described legislative efforts to restrain local government adoption of environmental ordinances,  resulting in a one-year moratorium on adoption of  new city and county  environmental ordinances and an ERC study. The ERC working group on local ordinances, led by Rep. Chuck McGrady and Sen. Andrew Brock, found little  actual conflict between state environmental regulations and local ordinances.  The existence of a specific state/local conflict  apparently became the practical guideline for the working group’s proposed  legislation.  The draft bill addresses the one area of conflict the members found — local ordinances on use and application of fertilizer already regulated by the N.C. Department of Agriculture and Consumer Services.

The recommended legislation follows  the General Assembly’s  past practice  of preempting  local regulation only when necessary to meet  some overriding state interest. It is not clear how the narrowly drafted bill recommended by the  working group will be received by those pushing for stricter limits on local environmental ordinances.   In 2013, the N.C. Homebuilders Association  lobbied for the much broader restrictions on local authority in Senate Bill 112 (discussed in the earlier post).  Under the approach  proposed  in SB 112,   it would be very difficult for a local government  to adopt a  more stringent  ordinance on a subject already addressed (however narrowly) by state or federal environmental rules. For Senate Bill 112 supporters, the issue may be more about the benefits of  a single, statewide set of minimum development standards  than concern about conflict between state and local  regulation.

Reporting wastewater spills. In response to concerns about delayed public notice of the recent Haw River wastewater spill,  an  ERC working group   proposed to amend the existing notice law. You can find a copy of the draft legislation here.  The amendments would do two things —

1. Clearly require notice to DENR  of any spill of more than 1,000 gallons of untreated wastewater.   (Although notice to DENR can be implied from the existing law,  the statute only talks about published notice.)

2. Reduce the time allowed to provide notice (both to DENR and to the public) from 48 hours to 24 hours after untreated wastewater reaches surface waters.  Based on discussion at the March meeting, the ERC  may consider requiring more immediate notice to DENR.

Review of Engineering Work. North Carolina’s professional engineers (PEs)  have lobbied for several years to limit state review of plans prepared  by  PEs and  to limit the ability of regulators to require  changes to  engineering  plans. The most recent effort  led to language in the Regulatory Reform Act of 2013 (Session Law 2013-413)  requiring a study of state and local review of engineering plans. Section 58 of S.L. 2013-413   directed DENR, the Department of Transportation, the Department of Health and Human Services and local governments to study:

“(iii) the standard scope of review within each permit program, including whether… staff are requiring revisions that exceed statutory or rulemaking requirements when evaluating such permits or plans; [and]

(iv) opportunities to eliminate unnecessary or superfluous revisions that may have resulted in the past from review processes that exceeded requirements under law, and opportunities to otherwise streamline and improve the review process for applications and plans submitted for approval.”

These issues have come up a number of times in recent years and seem to represent several different concerns on the part of private sector engineers: questions about the engineering credentials of state and local permit reviewers; concern about professional liability for changes in engineering design required by  state/local permitting staff; time added to the permitting process; and chaffing at second-guessing of  a PE’s judgment by regulatory staff.

The working group’s legislative proposal,  can be found here. It appears to take a moderate path toward managing the tension between private sector engineers and state/local permitting staff. (A sometimes necessary tension given their different responsibilities.) One interesting part of the proposal has to do with review of innovative systems and designs. The bill  would allow a permitting agency to charge the  applicant for a third-party engineering review of an innovative system if the agency does not have a staff engineer qualified to do the review.  That seems to be a wise approach given past controversies (and litigation) over approval of innovative systems.

Historical note: There have been a number of lawsuits against state and local  permitting agencies based on  approval of  engineered innovative systems that later failed.  One of the largest lawsuits resulted from the failure of a wastewater system serving  dozens of homes in an Orange County subdivision in the 1990s.   The homeowners sued the developer, the engineering firm that designed the system and the private utility managing the system — but also sued the state  based on claims of negligent permitting. The state ultimately settled the lawsuit, paying thousands of dollars in damages to the homeowners.

Coal Ash.  ERC co-chair Rep. Ruth Samuelson  noted the high level of  public interest in coal ash,  but  indicated the ERC would not discuss coal ash  at the March meeting.  Samuelson stressed the need  for deliberation and informed decision-making. The  ERC has only one more scheduled meeting before the General Assembly convenes in May.  At the  April 3 meeting, the ERC will  vote on recommended legislation for the legislation session and there has been no discussion of potential  coal ash legislation.