Category Archives: Waste

To Drink or Not to Drink: A Change in Advice for Well Owners


March 17, 2016. In 2015,  the N.C. Division of Public Health (Department of Health and Human Services) sent letters advising the owners of  369  wells located near coal ash ponds not to drink their well water because of elevated levels of vanadium and chromium-6.  Last week, the Division of Public Health sent letters to those same well owners to withdraw the “do not drink” advisory.  Some questions and answers on the conflicting advice below.

What are vanadium and chromium-6 (Cr-6)? Both elements occur naturally in the environment and can be found in coal ash. Both may  be concentrated in the air or in groundwater as a result of industrial activities.  Inhalation of Cr-6 (or hexavalent chromium) has been associated with increased risk of lung cancer. In 2010,  the U.S. Environmental Protection Agency  began a new health study to determine whether ingestion of  Cr-6  in drinking water increases other types of cancer risk. The Erin Brokovitch story of hexavalent chromium contamination in the town of Hinkley, California raised public awareness of Cr-6 as a public health issue. In Hinkley, Pacific Gas & Electric  had used Cr-6 as an additive in cooling water for a natural gas compression station. The  Cr-6 percolated into groundwater from unlined ponds used to store the cooling water, contaminating the town’s drinking water supply. (Levels of Cr-6 in  Hinkley’s groundwater were exponentially higher than concentrations found  in North Carolina  wells.)

Are there drinking water standards for vanadium and  Cr-6? There is no federal drinking water standard for vanadium.   The U.S. Environmental Protection Agency has adopted a drinking water standard for total chromium of 100 parts per billion (ppb);  the standard covers combined concentrations of chromium-3 (a nutritional element found in plant material) and chromium-6.  Water systems required to meet federal Safe Drinking Water Act standards monitor  total chromium levels, but not necessarily  Cr-6. Nationally, only the State of California  has adopted a specific drinking water standard for Cr-6. In 2014, after  years of  study prompted by the Hinkley contamination,  California adopted a standard of 10 parts per billion for Cr-6 in drinking water — 1/10th the concentration allowed under the federal drinking water standard for total chromium.

How are  N.C. groundwater standards different from  federal drinking water standards?  In part,  the two sets of standards serve different purposes. Drinking water standards adopted by U.S. EPA under the Safe Drinking Water Act only apply to the treated water that public water systems  provide to their customers.  Under the law, “public water system” means any system providing water to 15 or  more connections or to 25 or more people whether the system is  operated by a local government or a for-profit water utility.  Federal drinking water standards do not apply to privately owned water supply wells serving individual homes or businesses.

N.C.’s  groundwater standards are used to identify unsafe levels of groundwater contamination;  set goals for groundwater remediation; and advise well owners on use of water from affected wells.  Most N.C. groundwater standards track the federal drinking water standard for the same contaminant, but in a few cases the state has adopted a more stringent groundwater standard or has adopted a groundwater standard for a contaminant that has no corresponding drinking water standard.  Leading up to the well testing around coal ash ponds, N.C. had no groundwater standard for vanadium and no specific standard for Cr-6. although the state had a groundwater standard of 10 ppb for total chromium (more stringent that the 100 ppb drinking water standard for total chromium.)

How does N.C. set groundwater standards?  The N.C. Environmental Management Commission has adopted state groundwater standards as rules. Since existing groundwater standards may not address every potential contaminant,  the rules also create a process for developing  a temporary  standard  — an Interim Maximum Allowable Concentration or “IMAC” —  to address an unregulated contaminant.  Epidemiologists in the N.C. Division of Public Health generally develop a recommended IMAC based on review of human health effects such as toxicity and increased cancer risk.

Why did the  Division of Public Health send “do not drink” letters in 2015 based on  vanadium and chromium-6?   Since no state groundwater standard or federal drinking water standards existed for vanadium and  Cr-6, DEQ  asked the Division of Public Health to develop interim groundwater standards (the IMACs described above)  to be used in assessing wells around the coal ash ponds. Division of Public Health calculated a standard of 0.07 ppb for Cr-6 and 0.3 ppb for vanadium.  In each case, the deciding factor was the concentration associated with an  incremental increase in cancer risk. The table below shows the IMAC standard compared to the federal Safe Drinking Water Act standard and the N.C. groundwater standard.

Contaminant Fed. Drinking Water Standard N.C. Groundwater Standard IMAC
Vandadium No standard No standard 0.3 ppb
C.hromium-6 None –Total Cr 100 ppb None – Total Cr 10 ppb 0.07 ppb

Why did Division of Public Health withdraw the “do not drink” letters?  None of the  well owners who received “do not drink” letters  based solely on the vanadium and Cr-6 IMAC standards have well water that would violate Safe Drinking Water Act standards for a public water system.  DEQ has reported that 70% of public water systems in the U.S. exceed the IMAC standards set by Division of Public Health, including several large public water systems in North Carolina. (The information, provided in a report to the legislature’s Environmental Review Commission,  did not indicate how many of those systems exceeded the IMAC standard for vanadium versus Cr-6. You can find the entire DEQ presentation to the Commission  here.)

The gap between the IMAC standards and Safe Drinking Water Act standards meant that well  owners were being advised not to drink water that meets current drinking water standards and could lawfully be provided to customers of a  public water system.   As a practical matter, that also  means the well owners may not have access to an alternative water supply of any better quality  since  the nearest public water system also may not meet the IMAC standards.

None of this  means the analysis done by the Division of Public Health in developing the IMACs was wrong. Environmental and public health standards change with additional knowledge; the fact that the U.S. Environmental Protection has undertaken a new health study of Cr-6 in particular suggests some question about the adequacy of the  federal drinking water standard based solely on total chromium.  The standards adopted by EPA and the states also sometimes involve compromise between the most protective health-based standard and the practicalities (and cost) of meeting that standard.

Making Sense of a Coal Ash Penalty

March 8, 2016.   The  civil penalty for  groundwater violations around Duke Energy’s Sutton Plant in New Hanover County has taken several unprecedented  twists and turns.  This post looks at the  $25 million civil penalty for groundwater contamination at the Sutton Plant that became a $7 million civil penalty for groundwater violations at all 14 coal ash sites in the state and then a $7 million civil penalty just for the Sutton violations.

Groundwater Enforcement 101.   The Department of Environmental Quality (DEQ) can order remediation of groundwater contamination and assess civil penalties for violation of the state’s  health-based groundwater standards.  Some contaminants (like arsenic) occur naturally; if natural  “background” levels of the contaminant exceed the state standard, the background level becomes the standard. State rules allow for some exceedence of  groundwater standards within the footprint of a waste disposal facility, but set a “compliance boundary” around the facility where the  standards must be met.  Coal ash ponds permitted before 1983 must meet groundwater standards within 500 feet of the ash pond; those  permitted later have a  250-foot compliance boundary.

To assess a civil penalty for coal ash contamination,  DEQ  must show: 1. Contaminants in the groundwater exceed the state standard (which may require determining background levels if the contaminant occurs naturally); 2. Exceedences occur at or beyond the compliance boundary; and 3. Coal ash  caused or contributed to the contamination. State law caps the maximum penalty for a single groundwater violation  at  $25,000.  In setting the specific penalty amount within the cap, DEQ considers a number of penalty factors including the extent of environmental harm;  whether the violation was intentional; and any compliance costs the violator may have avoided.  Since  DEQ can assess daily penalties for continuing violations, the total civil penalty may exceed $25,000  if a violation continues over a period of time.

Now a Little Coal Ash History. The state originally permitted  coal ash ponds as wastewater treatment systems. The ponds receive, treat and discharge  process wastewater and sometimes stormwater.  A coal ash pond functions like  the  settling basins used  in other wastewater treatment systems; the coal ash settles out of the  wastewater slurry,  reducing pollutants in the top layer of pond water.  The utility then discharges wastewater  from the top of the pond to a river, stream or lake under a  Clean Water Act Permit —  the  National Pollutant Discharge Elimination System (or “NPDES”)  permit.  NPDES permits  protect surface water from pollution; since groundwater was never the focus, the  permits  historically required very limited groundwater monitoring around coal ash ponds.

In response to pressure for national coal ash disposal standards,  companies operating coal-fired power plants began a program of voluntary groundwater monitoring in 2006 and provided results to the state.   (As a voluntary program, the power companies alone decided what contaminants to monitor for and where to put monitoring wells.) By  2009,  state water quality officials had become so concerned about the utilities’ groundwater data  that the Division of Water Quality  (DWQ) moved  to put stronger  groundwater monitoring conditions on NPDES permits for coal ash ponds as the permits came up for renewal.  The new permit conditions made monitoring for specific contaminants mandatory and required  DWQ approval of the monitoring plan so monitoring wells would be appropriately placed to identify violations at the compliance boundary.

As DWQ began adding monitoring conditions to permits,  the senior manager in DWQ’s groundwater protection program issued a  memo  explaining how the program would take enforcement actions based on the new groundwater monitoring data. The memo applied to any facility that had operated for a long period of time before being required to do groundwater monitoring.  It  implicitly recognizes that imposing groundwater monitoring conditions  after many years of facility operation may result in immediate detection of groundwater exceedences — giving the operator little opportunity to prevent  a violation. The memo did not completely foreclose  the possibility of a civil penalty for groundwater violations at these facilities, but indicated that  DWQ  may not issue a Notice of Violation (the first step to a penalty) as long as the operator responded to state requests for assessment and clean up of any contamination.

The Sutton Plant Civil Penalty. The Sutton Plant’s wastewater system, consisting of two coal ash ponds built in 1971 and 1984, has had an NPDES  permit since 1977.    For most  of the system’s history,  the  permit only required monitoring for a  limited number of  groundwater quality parameters —  groundwater level, pH, Arsenic, Iron, Total Dissolved Solids, Chlorides and Selenium.   When DWQ renewed the Sutton Plant’s NPDES permit in 2011,  the new permit required monitoring of  additional contaminants (including boron, thallium, and manganese) under a state-approved monitoring plan designed to detect exceedences at the compliance boundary.  In March 2015,  DEQ assessed a record $25 million civil penalty for groundwater violations around the Sutton Plant. The civil penalty  covered a number of different groundwater standard violations over varying periods of time. The earliest violations identified in the assessment  document  dated back to 2009 (for boron) and 2010 (for thallium).    Most of the violations  (for iron, arsenic, selenium, manganese and total dissolved solids)  dated from 2012 or 2013. To reach the  $25 million assessment, DEQ  assessed either $1,000 or $5,000  per day (from initial detection to the assessment date) for each contaminant that exceeded state groundwater standards.

A Big — and Short-Lived — Settlement. Duke Energy  appealed the penalty and several months later  DEQ agreed to a settlement reducing the civil penalty to $7 million.  The most notable thing about the September 2015 settlement agreement was not the penalty reduction, but the fact that the settlement would have resolved all groundwater violations (known or discovered in the future) around all 14 Duke Energy coal ash impoundment sites in the state.  Southern Environmental Law Center (SELC),  on behalf of several environmental organizations, challenged the settlement agreement in court. SELC’s appeal did not contest  the penalty reduction for the Sutton violations, but argued  Administrative Law Judge Phil Berger, Jr. had no authority to approve a settlement agreement affecting issues beyond the Sutton civil penalty.  SELC particularly complained that the settlement agreement affected other coal ash enforcement cases without notice to the parties in those cases — including organizations represented by SELC.  Those enforcement cases dealt with specific actions required of Duke Energy to  address groundwater contamination around coal ash ponds at multiple sites.

Key provisions in the September 2015  DEQ-Duke Energy   settlement agreement

♦ Duke Energy agreed to pay a civil penalty  of $7 million and accelerate groundwater remediation at the Sutton, Asheville, Belews Creek and H.F. Lee plants. The settlement agreement did not set a timeline for the accelerated remediation.

♦ DEQ agreed to dismiss groundwater enforcement cases already pending in superior court related to the Sutton Plant and the Asheville Steam Station. See the SELC appeal of the settlement agreement for more on the relationship between the settlement agreement and pending enforcement cases.

♦ DEQ agreed not to issue Notices of Violation,  notices requiring assessment or remediation, civil penalty assessments or to  take any other enforcement actions against Duke Energy based on groundwater conditions “at any of the Duke Energy Sites” as long as Duke Energy complied  with requirements of the Coal Ash Management Act related to groundwater assessment, remediation and closure of the coal ash basins. Under the agreement, the “Duke Energy Sites” included all 14 coal ash sites across the state.

♦ DEQ agreed not to change groundwater monitoring conditions in existing or future NPDES permits for the coal ash ponds unless required by  court order;  a federal or state law; a rule; or in response to an immediate threat to public health.  Under the agreement, an “immediate threat to public health” had to involve something more than violation of a  health-based groundwater standard.  In effect, the settlement prevented DEQ from using its permitting authority to requiring monitoring for additional contaminants.

♦ DEQ agreed not to use groundwater monitoring data collected under either the NPDES permit conditions or under provisions in the Coal Ash Management Act for any purpose other than classification and closure of the coal ash ponds. In other words, DEQ agreed not to use groundwater monitoring data for enforcement purposes.

Reversing Direction.  In February, Superior Court Judge Paul Ridgeway held a hearing  on SELC’s objections to the Sutton settlement agreement.  Persuaded that the settlement agreement  affected the other enforcement  cases already before him,  Judge Ridgeway indicated an intent to take jurisdiction over the settlement agreement unless Judge Berger  narrowed the scope of his order in the Sutton civil penalty case.   Charlotte Business Journal has  reported  that Judge Berger later issued a revised order at the request of DEQ and Duke Energy.   According to the article, the settlement agreement between Duke Energy and DEQ did not change, but the  order  approving the settlement has been expressly limited to the Sutton civil penalty case.  (I have not been able to find the  revised order  on either the Office of Administrative Hearings  or DEQ website.)  As a result, the $7 million civil penalty now covers only  groundwater violations at the Sutton Plant.

Signs and Portents? DEQ made several unusual decisions in assessing and then settling the Sutton civil penalty case:

The  original $25 million civil penalty for the Sutton groundwater violations broke from past enforcement practices.  State programs  rarely impose daily penalties for newly discovered groundwater violations. Daily penalties are usually reserved for willful, intentional violations and for violators who  fail to quickly address contamination once it has been detected.  DEQ didn’t cite either of those aggravating factors in assessing the original $25 million Sutton penalty.  To reach the $25 million total, DEQ assessed a penalty of either $1,000 or $5,000 a day (depending on the contaminant) from the date of detection to the date of assessment.  (The contamination persists today and will until coal ash on the site has been removed, which everyone understands will require more time.)  The question is whether DEQ’s very aggressive penalty for the Sutton violations indicates a change in enforcement policy that may affect  other groundwater cases.

There doesn’t seem to be any precedent for DEQ agreeing –as it did in the original Sutton settlement — to limit its own permitting and enforcement authority to settle a civil penalty case.  State agencies often settle  civil penalty cases for a lower penalty amount. In the Sutton settlement, DEQ  also agreed not to change groundwater monitoring conditions on Duke Energy’s NPDES permits except in very narrow circumstances. Most of those circumstances required  some outside force  — federal law, a court order — to compel the change. In effect, DEQ  gave up the ability to use its permitting authority to  require monitoring for additional contaminants. The department also agreed not to issue Notices of Regulatory Requirements (orders for assessment and remediation of contamination)  or take  new enforcement actions against Duke Energy based on coal ash contamination at the 14 sites in N.C. The settlement agreement was conditioned on Duke Energy complying with provisions in the Coal Ash Management Act on  groundwater assessment and corrective action, but those requirements assume application of state groundwater regulations. It isn’t clear why DEQ would agree to give up use of normal groundwater enforcement tools like the Notice of Regulatory Requirements. Limits on DEQ use of groundwater data for enforcement purposes could have affected the state’s ability to address  groundwater problems discovered later.

What Does it Mean?  Assuming Judge Berger’s revised order has set much of the Sutton settlement agreement aside, the Sutton case is mostly  interesting as an insight into DEQ’s enforcement decision-making. It is hard to identify a consistent principle that would explain both  DEQ’s very aggressive use of civil penalty power in the first instance and DEQ’s willingness to  give up significant permitting and enforcement authority  to settle the  case. The question is whether the Sutton decisions  were peculiar to it or have broader implications.

Risk-Ranking Coal Ash Impoundments

February 12, 2016.  The 2014 Coal Ash Management Act, Session Law 2014-122 , required the Department of Environmental Quality (then the Department of Environment and Natural Resources) to propose classifications for  coal ash impoundments in the state as High, Intermediate or Low Risk. The risk classification determines both how quickly the impoundment must be closed and whether closure requires removal of the coal ash for beneficial reuse or disposal in a lined landfill. Only Low Risk impoundments can be closed by de-watering and capping the coal ash in place.  The General Assembly designated Dan River Steam Station, Riverbend, Asheville and the Sutton Plant as high risk by law;  DEQ and the Coal Ash Management Commission have responsibility for classifying the remaining 10 coal ash sites.

Statutory Criteria for Risk Classification. The law, in G.S. 130A-309.211,  listed factors to be considered in classifying the impoundments:

(1)        Any hazards to public health, safety, or welfare resulting from the impoundment.
(2)        The structural condition and hazard potential of the impoundment.
(3)        The proximity of surface waters to the impoundment and whether any surface waters are contaminated or threatened by contamination as a result of the impoundment.
(4)        Information concerning the horizontal and vertical extent of soil and groundwater contamination for all contaminants confirmed to be present in groundwater in exceedance of groundwater quality standards and all significant factors affecting contaminant transport.
(5)        The location and nature of all receptors and significant exposure pathways.
(6)        The geological and hydrogeological features influencing the movement and chemical and physical character of the contaminants.
(7)        The amount and characteristics of coal combustion residuals in the impoundment.
(8)        Whether the impoundment is located within an area subject to a 100‑year flood.
(9)        Any other factor the Department deems relevant to establishment of risk.

DEQ’s Proposed Risk Classifications. On January 29, 2016,  DEQ  released a report providing information to support proposed classifications for most coal ash impoundments.  (Several impoundments have temporary classifications pending complete information on impacts to water supply wells.)  DEQ has based its risk classifications on three “key factors” — one each for groundwater, surface water and dam safety risks:

♦ Groundwater Risk Factor: The number of people served by water supply wells within 1500 feet and down-gradient of the impoundment’s compliance boundary that are potentially or known to be exposed to groundwater contamination related to the impoundment. DEQ used a scale based on the number of people affected by well contamination:  0 people = Low Risk; 11-20 people = Intermediate Risk and  >  30 people = High Risk.  Transitional  classifications of Low/Intermediate Risk and Intermediate/High Risk cover the gaps between the three basic categories.

♦ Surface Water Risk Factor:   The impoundment’s location relative to the 100-year floodplain.   Impoundments located outside of the 100-year floodplain or contained by a stream valley embankment with an engineered discharge (such as a spillway) have been classified as Low Risk. Impoundments sited along the run of a river, in the floodplain, and within the 100-year flood level are classified as  High Risk.

♦ Dam Safety:  Structural integrity and maintenance as reflected in dam safety inspections.    Impoundments that received a Notice of Deficiency  identifying non-structural deficiencies at the last dam safety inspection have been classified as Intermediate Risk.  Impoundments that received a Notice of Deficiency identifying structural deficiencies  at the last inspection have been classified as High Risk. One important note —  a number of impoundments have a High Risk dam safety rating because of structural deficiencies identified in the last inspection, but DEQ has discounted that factor in the overall facility risk rating by assuming  the impoundments will be Low Risk once the structural deficiencies has been corrected.

Other Risk Factors.  The DEQ  report describes a number of  “other considerations”  that were not given the same weight in risk classification as the key factors. “Other considerations”  for groundwater and surface water risk include significant site conditions such as:  toxicity of contaminants exceeding groundwater standards; the extent of groundwater contamination; proximity of coal ash to the water table; potential impact of groundwater contamination on surface waters; location of the impoundment in a stream or drainage way; the water quality classification and use of  nearby surface waters; and proximity to a drinking water intake.

How DEQ Arrived at Each Proposed Classification.  The exact method DEQ used to arrived at the overall classification for each site is something of a mystery.   We know the three “key factors” largely drove the classification because the report tells us that. But there is no explanation of how (or whether) DEQ also used the information on “other considerations”  or even how the three key factors were weighted.

Example: Buck Steam Station.  Looking in greater depth at the classification of  one coal ash facility  provides a little more insight into DEQ’s classification decisions. DEQ has  temporarily  given Buck Steam Station a Low-Intermediate classification until the department receives additional information on impacts to water supply wells. If no well users near Buck Steam Station are  affected  by contamination associated with the impoundments (or well users have an alternate water source),  DEQ intends to classify the Buck  impoundments as Low Risk. Well impacts will be the deciding factor in the proposed classification. Buck rated as Low Risk under the key factor for surface water impacts because the impoundments are outside the 100-year flood plain. The three impoundments at Buck rated as  High Risk for dam safety, but DEQ assumed the  impoundments would  be Low Risk once the deficiencies have been corrected.

Looking  beyond the three key factors,  however, Buck rated as  high risk on a number of other groundwater and surface water parameters including:   contaminants exceeding state groundwater standards at or beyond the compliance boundary;  proximity of coal ash to the water table;  and discharge of contaminated groundwater to surface waters. It rated Intermediate risk based on the use of adjacent surface waters (the Yadkin River has been classified for water supply) and proximity to a drinking water intake. On some other parameters related to surface water, Buck Steam Station rated as low or intermediate risk.  See pages 92-99  for the entire list of risk ratings for the Buck impoundments.

The Buck classification seems to be fairly representative. Overall,  the  “other considerations”  discussed at great length in the report are  irrelevant to DEQ’s proposed classifications.  The one exception has to do with groundwater; after focusing the “key factor” for groundwater on impacts to down-gradient water supply wells, DEQ has deferred classification of several sites to get additional information on up-gradient and side-gradient wells.   It is also unclear how DEQ weighted different risk levels for the three key factors to arrive at an overall classification.   The Cape Fear Steam Station  was ranked Low Risk for groundwater (no impacted wells); High Risk for surface water (all of the impoundments are in the 100-year floodplain); and High Risk for  half of those impoundments because of dam safety deficiencies. But the facility as a whole received a classification of Intermediate Risk.

There may be more method to the  proposed classifications than it appears. It is possible that DEQ weighted the key factors and “other considerations”  or viewed some conditions as mitigating others.  Since the report does not provide any explanation, it is difficult to know.  The Coal Ash Management Act itself did not provide any guidance on how to translate nine statutory criteria into three risk classifications. Normally, that gap would be filled through rulemaking.   In the absence of  rules (or even a clear explanation in the DEQ report), it is hard to identify  the principles underlying the classification decisions.  The approach to groundwater risk classification may be particularly controversial since an impoundment that contains a very large volume of coal ash; extends below the water table; has documented groundwater standard violations at or beyond the compliance boundary; and discharges contaminated groundwater to surface water could be classified as Low Risk as long as no existing water supply wells users are affected.

Next Steps.  DEQ has scheduled public meetings on the proposed classifications as required under the law.  Those meetings will take place in March.  The final decisions on classification will be made by the Coal Ash Management Commission.  (Assuming the Commission can be reconstituted in time; see an earlier post on the Commission’s inability to act because  appointments to the Commission violated the N.C. Constitution.)

Appointments to Environment/Energy Commissions Violated N.C. Constitution

February 1, 2016. On January 29, 2016, the N.C. Supreme Court issued a decision in McCrory v. Berger — a lawsuit filed  by Governor Pat McCrory  to challenge the constitutionality of two recent state laws that created new executive branch commissions dominated by legislative appointees. The ruling in the Governor’s favor means the three commissions cannot act until the General Assembly changes the statutes governing commission appointments.

Background. The lawsuit concerned appointments to the Coal Ash Management Commission,  the Oil and Gas Commission,  and the Mining Commission. The Coal Ash Management Act of 2014  gave the Coal Ash Management Commission authority to (among other things) make final decisions on closure of coal ash impoundments.  The 2014 Energy Modernization Act eliminated the  Mining and Energy Commission (created in 2012) and divided its regulatory responsibilities  between a new Oil and Gas Commission and a reconstituted Mining Commission. In each case, the legislature gave itself the power to appoint a majority of the commission members.

The lawsuit filed by Gov. McCrory argued the legislative appointments violated the N.C. Constitution. In March of 2015, a special panel of three superior court judges ruled in the Governor’s favor, concluding that the N.C. Constitution bars legislative appointments to commissions that have executive authority. “Executive authority” generally means authority to implement existing laws as distinct from legislative authority to adopt new laws.   See an earlier post  on the superior court decision.

N.C. Supreme Court opinion. The N.C. Supreme Court opinion disagrees with the superior court decision on one key point — the Supreme Court ruled that the N.C. Constitution does not entirely bar the legislature from making appointments to executive branch commissions.  The court interpreted the Constitution’s “appointments clause” to allow the legislature to make appointments to statutorily-created offices including commission seats. The court ruled, however, that  legislative appointments to the Coal Ash Management Commission,  Oil and Gas Commission  and Mining Commission violated the separation of powers clause in Art. I, § 6 of the N.C. Constitution,  which requires that  “[t]he legislative, executive, and supreme judicial powers of the State government shall be forever separate and distinct from each other.”

The court concluded that the appointments scheme for the three executive branch  commissions interfered with the Governor’s constitutional duty to insure that state laws are faithfully executed:

In light of the final executive authority that these three commissions possess, the Governor must have enough control over them to perform his constitutional duty. The degree of control that the Governor has over the three commissions depends on his ability to appoint the commissioners, to supervise their day-to-day activities, and to remove them from office.

The court pointed to three factors that combined to create an unconstitutional legislative  interference with the Governor’s executive powers and responsibilities:

1. Each commission has authority to take final executive action  (i.e., the Coal Ash Management Commission has the final authority to prioritize coal ash ponds for closure and approve final closure plans);

2. The legislature appointed a majority of the members to each commission; and

3. The legislature limited the Governor’s ability to remove commission members by allowing removal only for cause (such as misconduct).

The implication of the decision is that a separation of powers violation has occurred when all three conditions exist.  The court included a footnote specifically suggesting that the outcome may be different with respect to a body like the Rules Review Commission that exercises a different kind of authority.

The court refused to address another separation of powers issue raised in the case. The Governor  argued that the legislature also violated separation of powers  by statutorily directing the Coal Ash Management Commission (CAMC)  to operate “independently” of the executive department where it is housed.  (Legislation creating the CAMC placed the commission under the Department of Public Safety.) The Supreme Court held the issue had been mooted by the portion of its decision ruling appointments to the CAMC unconstitutional.  The issue could come up again if the  legislature changes the appointments statute in response to the court’s decision,  but leaves the “independence” provision  in place.

Implications.  The three commissions directly named in the case cannot act until the legislature changes the unconstitutional appointment provisions and new appointments are made.  The Coal Ash Management Commission (CAMC) began meeting in 2014, but has not met since the March 2015 superior court decision that first ruled appointments to the CAMC unconstitutional. In the meantime, other pieces of the Coal Ash Management Act have moved  forward; a newly appointed CAMC will need to catch up.  The Oil and Gas Commission took over implementation of state laws on oil and gas development from the Mining and Energy Commission, so the court’s ruling could delay decisions related to hydraulic fracturing.

Two other pending lawsuits  raising similar separation of powers issues may be affected by the McCrory v. Berger decision. The N.C. State Board of Education sued to challenge Rules Review Commission authority over rules adopted by the Board.  The Board of Education raises several constitutional issues, including a separation of powers violation based on the fact that all Rules Review Commission members are legislative appointees.   The McCrory v. Berger footnote about the Rules Review Commission seems to caution against assuming the court would also find  RRC  appointments to violate separation of powers.   The footnote suggests that the Rules Review Commission’s specific function — to review and object to rules adopted by executive branch agencies — may put it in a different category than the commissions addressed in McCrory v. Berger.

Another pending separation of powers case  in Wake County Superior Court challenges the constitutionality of appointments to the Mining and Energy Commission (MEC). The MEC  seems to fit the McCrory v. Berger template: the commission had authority to take executive actions; the legislature made a majority of commission appointments; and the Governor only had the power to remove a commission member for cause. But the case also presents an additional question: Are actions taken by an unconstitutionally appointed commission void? Over a two-year period, the MEC developed and adopted state rules for hydraulic fracturing.  Plaintiffs in the MEC case (Haw River Assembly and a Lee County property owner) have asked the Wake County judge to rule appointments to the MEC unconstitutional and  void the rulemaking actions already taken by the commission.  The superior court judge had delayed hearing the MEC case until the N.C. Supreme Court issued a decision in McCrory v. Berger. While the Supreme Court decision now provides a roadmap for addressing the separation of powers issue, it doesn’t provide any guidance on how a separation of powers violation affects past commission actions.

N.C. Environmental Legislation 2015: The Budget

October 9, 2015. Now that the General Assembly has adjourned, a look at legislative actions affecting the environment. First, the state budget for 2015-2017.

Among the most significant impacts:

♦  REORGANIZATION.   The Clean Water Management Trust Fund and the Natural Heritage Program — originally intended to protect and restore water quality and identify important natural areas — have been separated from the environmental protection programs in the Department of Environment and Natural Resources (DENR). The budget transfers the CWMTF, Natural Heritage Program, Museum of Natural Sciences, state park system, N.C. Aquariums and N.C. Zoo from DENR to a newly organized Department of Natural and Cultural Resources. The move combines conservation  and ecological education programs with state historic sites and cultural resources. The new department appears to be organized around management of the programs as public attractions rather than as research and education partners to state environmental protection programs.  As a result of the reorganization, DENR becomes the Department of Environmental Quality (DEQ).

Whatever the merits of the move for facilities like the Museum of Natural Science and N.C. Zoo,  the Clean Water Management Trust Fund and Natural Heritage Program do not  fit the new department’s basic organizing principle. Unlike the “attractions”,  the  CWMTF and Natural Heritage Program provide no public facilities and exist primarily to protect  water quality and identify important natural resources.

The General Assembly created the Clean Water Management Trust Fund (CWMTF) in 1996 to fund projects to prevent water pollution and to restore water bodies already impaired  by pollution.   CWMTF’s  non-regulatory approach complemented water quality rules  protecting state waters.  Originally,   CWMTF grants funded acquisition of riparian buffers to reduce polluted runoff into streams and rivers and  extension of sewer lines where failing  septic  systems threatened surface water quality.  In moving CWMTF, the 2015 budget severs its connection with other state efforts to restore and protect water quality.  The move follows 2014  legislation diluting the original CWMTF  focus on  water quality protection by authorizing use of the Trust Fund for acquisition of historic sites and buffers around military bases.

The  Natural Heritage Program researches, classifies and inventories the state’s natural resources, including endangered and rare plant and animal species. Information collected by the program can be used to document the conservation value of property and to assess the environmental impacts of projects requiring state and federal environmental permits.  The program has a much closer working relationship to the environmental  protection programs that remain in DENR than to public attractions like the N.C.  Zoo and Aquariums. (Note: The 2013 state budget eliminated the Natural Heritage Trust Fund which had been a source of funding for conservation of important natural areas;   the CWMTF  has become the funding source for those projects as well.)

♦  LANDFILL PERMITTING. The budget changes landfill permitting, allowing issuance of a single “life of site” permit to cover construction and operation of a landfill that may have a 30-year lifespan.  State rules had previously  required review and approval of the entire landfill site before construction, but also required each 5 or 10-year phase of the landfill to have a construction and operation permit.  Moving to a “life of site” permit  reduces the number of permit reviews for each landfill operation, changing the permit fee schedule and cutting funding for the state’s solid waste management program by 20%.  The change also reduces state oversight of landfill operations.  Landfill construction will continue to be done in phases for economic and practical reasons,  but the “life of site permit” eliminates state compliance review for each new  phase of the landfill.   The change also seems to eliminate the possibility of imposing additional permit conditions for construction or operation of later landfill phases in response to  technological developments  or new knowledge  of  risks to groundwater and other natural resources. The  budget provision does not set minimum inspection requirements in place of the 5 and 10-year phased permit reviews.

The bill also creates a legislative study of local government authority over solid waste collection and disposal, including ordinances on solid waste collection;  fees for waste management services; and potential for privatization.  The study suggests the General Assembly may focus next on reducing local solid waste regulation.  That will be a somewhat different discussion, since solid waste disposal has long been a local government responsibility so  local fees and ordinances have a direct connection to city/county collection and disposal services.

♦  LEAKING PETROLEUM UNDERGROUND STORAGE TANKS. The budget eliminates a state fund for cleanup of petroleum contamination from small  petroleum underground storage tanks (USTs) such as home heating oil tanks.   The Noncommercial UST Trust Fund has assisted property owners with the cost of soil and groundwater remediation caused by leaks from farm, home and small commercial USTs.  The budget allocates additional money to the Noncommercial UST Trust Fund to cover pending claims, but  limits use of the Fund to  cleanup costs associated with leaks reported to DENR by October 1, 2015.  All claims for reimbursement of those costs must be filed by July 1, 2016.

The budget provision also prohibits DENR from requiring removal of petroleum-contaminated soils at noncommercial UST sites that have been classified as low risk.  The  problem —  risk classifications  have been based on groundwater impacts;  a low-risk classification does not mean that contaminated soils on the property pose no health hazard. Current UST  rules require remediation of contaminated soils to levels safe for the intended land use (residential versus nonresidential) without regard to the overall risk classification of the site.  Soil remediation standards have been based on the potential health risks associated with exposure to petroleum-contaminated soil. Adverse health effects may include increased cancer risk since petroleum products contain a number of carcinogens. The budget provision may allow petroleum-contaminated soils to remain on residential properties at levels putting children at particular risk of adverse health effects.

♦ JORDAN LAKE WATER QUALITY RULES. The budget allocates another $1.5 million (from the Clean Water Management Trust Fund) to continue the 2013 pilot project to test use of aerators to improve water quality in the Jordan Lake system. The budget also has a special provision further delaying implementation of the Jordan Lake water quality rules for  another 3 years or one year beyond completion of the pilot project (whichever is later). The rules had been developed by the state’s Environmental Management Commission to address poor water quality  caused by  excess nutrients reaching the lake in wastewater discharges or in  runoff from agricultural lands and developed areas. See an earlier post  here on the  2013 legislation creating the pilot project.

♦ COASTAL EROSION CONTROL.   A special provision in the budget also changes state rules on use of sandbag seawalls and terminal groins in response to coastal erosion.  State coastal management rules have only allowed use of  temporary sandbag seawalls to protect a building facing an imminent threat from erosion. The same rules prohibit construction of the seawall more than 20 feet seaward of the threatened building. (These sandbag seawalls are substantial structures built on the beach in response to oceanfront erosion; the rules do not apply to sandbags used to prevent water from entering a building during a flood event.) The budget bill allows an oceanfront property owner to install a sandbag seawall to align with an existing sandbag structure on adjacent property without showing an imminent erosion threat to any building on their own property.  Since the bill allows construction to align with the adjacent sandbag seawall, the new seawall  may  also be more than 20 feet seaward of any  building. The irony here — a property owner may want to install a sandbag seawall in these circumstances  out of concern that the adjacent sandbag seawall may itself cause increased shoreline erosion.

The budget bill also increases the number of terminal groin structures that can be permitted at the state’s ocean inlets from four to six and identifies New River Inlet for location of two of the additional structures. See an earlier post  for more on earlier legislation allowing construction of terminal groins as a pilot project. Note: No terminal groins have been completed under the original pilot program, so the state does not yet have any data on the actual impacts of these structures.

♦ RENEWABLE ENERGY TAX CREDIT.  The budget bill allows the state’s 35% tax credit for renewable energy projects to sunset on December 31, 2015. A separate bill provides a “safe harbor” for renewable energy projects already substantially underway by that date. Those projects may qualify for a one-year extension of the tax credit. See Senate Bill 372 for more on conditions that apply to the safe harbor extension.

Regulatory Reform 2015: A New NC Senate Proposal

July 13, 2015. Before leaving for the Fourth of July holiday, the N.C. Senate turned a minor House bill into a vehicle for major changes to environmental rules.  The Senate had already proposed changes to environmental standards in a regulatory reform bill (Senate Bill 453) that has not yet passed the Senate; in individual Senate environmental bills; and in the Senate budget bill.  The House has not yet voted on many of the earlier Senate proposals. The Senate version of House Bill 765  may be the most aggressive regulatory reform legislation to date —  putting constraints on air quality rules; creating new immunity from environmental enforcement actions; reducing air quality monitoring; changing laws on remediation of contaminated property; and  proposing outright repeal of the state’s electronics recycling law. In response to DENR concerns, the Senate delayed some proposed changes to stormwater and environmental permitting requirements to allow for study.  Reportedly, the floor amendments adopted by the Senate eliminated DENR objections to the remainder of the bill which continues to have far-reaching implications for state environmental policy:

Sec. 1.4 allows a state agency to automatically recover attorneys fees from a person who unsuccessfully challenges a state action on environmental grounds. A citizen or organization challenging a state construction project or an environmental permitting decision could be at significant financial risk —  a risk that would not be shared by citizens challenging state actions for other reasons.

Sec. 4.2 repeals the state law requiring computer and television manufacturers  to pay fees that support local electronics recycling programs. It isn’t clear that all of the city and county electronics recycling programs could survive the loss of state recycling fee revenue. State law would continue to prohibit disposal of discarded televisions and computers in landfills; the question is whether there would continue to be electronics recycling programs in all 100 counties.

Sec. 4.7 makes changes to state laws allowing risk-based remediation of environmental contamination. A risk-based remediation allows the person responsible for the contamination (the “responsible party”) to do a partial cleanup of  groundwater and soil contamination by relying on land-use controls to limit future exposure to contaminated soils or groundwater remaining on the site.  The biggest changes:

1. Sites where contamination has already migrated onto adjacent properties would become eligible for a risk-based cleanup.  Existing law  does not allow a risk-based cleanup if contamination has migrated off the property where it originated  because of the additional complication of managing exposure on property the responsible party does not control. The Senate provision allows a  responsible party  to do a risk-based cleanup on adjacent property with the property owner’s permission. The provision does not require land use controls on the adjacent property to prevent future exposure to remaining contamination — normally a necessary condition of a risk-based cleanup. Existing remediation standards may allow DENR to disapprove a risk-based cleanup unless the entire area has appropriate land use controls, but the new Senate provision on risk-based cleanup of adjacent property is silent on the issue.

2. The bill removes existing statute language that limits risk-based remediation to contaminated sites reported to DENR  before the risk-based remediation law went into effect in 2011, allowing   lower-cost, risk-based remediation as an alternative for future pollution events.

Sec. 4.9 changes a state law providing incentives for redevelopment of contaminated property (or “brownfields”).  The state Brownfields Redevelopment Act uses the term “prospective developer” to describe a person eligible for liability protection and economic incentives under the law.  The term excludes anyone who caused or contributed to the contamination. The Senate proposes to redefine the term to cover a  “bona fide prospective purchaser”, a “contiguous landowner” and an “innocent landowner” as defined in the federal Small Business Liability Relief and Brownfields Redevelopment Act (amending the Comprehensive Environmental Response, Compensation and Liability Act or “CERCLA”). In CERCLA, the terms describe categories of landowners who have acquired  property contaminated by hazardous substances, but have no legal liability for the contamination. Generally, the definitions cover landowners who acquired the property after the contamination occurred and have no relationship to a person (or company) responsible for the contamination.

All of the federal definitions referenced in the Senate provision concern liability for “hazardous substance” contamination as defined in CERCLA. CERCLA defines “hazardous substance” to include a specific list of compounds and unlisted substances with similar characteristics.  The definition also excludes some substances  — most notably petroleum and natural gas products — with similar health and environmental risk. (Other federal laws address contamination caused by petroleum spills and leaks.)

In  redefining  “prospective developer” based on CERCLA terms, the Senate provision also eliminates language in the existing definition that excludes a person who caused or contributed to contamination on the site. The question is whether those changes, in combination,  could give a property owner responsible for contamination unrelated to a CERCLA  “hazardous substance”   liability protection and other benefits under the state Brownfields law. That result would be inconsistent with the original intent of the Brownfields Redevelopment Act and undermine the state’s ability to require cleanup of environmental contamination.

Sec. 4.14  would allow private engineers to self-permit onsite wastewater systems (such as septic systems), eliminating the need for a local health department permit.  (The provision does not affect wastewater systems that discharge to the land surface or to rivers, lakes and streams; those systems require permits from DENR.)  The property owner’s engineer would have to give the local health department a notice of intent to construct the wastewater system and a final post-construction report, but the engineer would be completely responsible for design and installation.  The provision also allows the engineer to use wastewater system technology that has not been approved by the State “at the engineer’s discretion”.

In place of health department enforcement of on-site wastewater standards, the bill puts the burden on the property owner to sue the engineer or soil scientist if the wastewater system fails.  The risk to the property owner is that problems may develop several years after installation, leading to an expensive fight over the  cause of the failure  — bad engineering; inappropriate siting; improper installation; or lack of maintenance. Treating a failed wastewater system as a problem strictly between the engineer or soil scientist and property owner also overlooks the possible impact on other property owners and the public.  A septic system located too close to a water supply well may contaminate the well; a failing wastewater system can contribute pollutants to already stressed streams and lakes. Although the bill requires the engineer to give notice of the proposed construction to the local health department,  it isn’t clear that the provision allows the health department to prevent installation of an engineer-approved system however poorly designed or improperly sited.

Sec.4.15 changes state review of applications for innovative or experimental onsite wastewater systems. For the most part,  the bill  seems to replace state approval of experimental waste treatment systems with reliance on national certification of the technology.

Sec. 4.18 reduces  state protection of isolated wetlands by limiting the application of state water quality permitting rules  to basin wetlands and bogs — excluding other isolated wetlands from environmental protection. DENR has identified seven other categories of isolated wetlands: Coastal Isolated Wetlands, Seep, Hardwood Flat, Non-Riverine Swamp Forest, Pocosin, Pine Savanna, and Pine Flats.  Note: “isolated wetlands” are wetlands that do not have any connection to surface waters that fall under federal Clean Water Act jurisdiction.

Sec. 4.19 allows more development to be considered “low density” under coastal stormwater rules, raising the low density limit from 12% built-upon area to 24% built-upon area. The significance of the change is that low density projects do not require engineered stormwater controls. The bill also eliminates one trigger for compliance with coastal stormwater rules — the addition of 10,000 square feet or more of built-upon area as part of a non-residential development.  The Senate provision would trigger coastal stormwater standards for both residential and non-residential projects based on the need for a sedimentation plan (required for disturbance of one acre or more) or a Coastal Area Management Act permit. Before adoption, the Senate amended the effective date for Sec. 4.19 in response to DENR concerns about the coastal stormwater changes. The provision would go into effect on July 1 2016 to allow for study in the interim.

Sec. 4.24 requires repeal of the state’s heavy duty vehicle idling rules. The rule, 15A NCAC 2D.1010, limits excessive idling of heavy duty vehicles as another way to reduce the impact of vehicle emissions on air quality.

Sec. 4.25 requires the state Division of Air Quality to remove air quality monitors that are not specifically required by the U.S. Environmental Protection Agency. The provision would significantly reduce the number of air quality monitors used to assess air quality and demonstrate compliance with federal ambient air quality standards.

Sec. 4.30 deals with mitigation of stream impacts  permitted under Sec. 404 of the Clean Water Act. Under Sec. 404,  many projects involving deposition of fill material in surface waters  require a federal permit. In most states,  the U.S. Army Corps of Engineers issues the 404 permits. The Clean Water Act requires an applicant for a  404 permit to provide the Corps with a certification (under Sec. 401 of the Act) that the project will be consistent with state water quality standards.  The Senate provision affects state issuance of the 401 Certification in two ways. First, it prevents DENR from using the 401 Certification to put stream mitigation conditions on a project impacting less than 300 feet of stream without making specific findings — even if the mitigation requirement simply matches mitigation required under the federal 404 permit. The provision also limits state requirements for stream mitigation to a 1:1 ratio of stream impact to mitigation provided; in some cases, that will result in less mitigation than the Corps will require for the 404 permit. Since the permit applicant will have to meet federal mitigation conditions in any case, the reason for these new restrictions on parallel state mitigation conditions isn’t clear.

Sec. 4.31 completely eliminates state mitigation requirements for isolated streams (that is, streams that fall outside federal Clean Water Act permitting jurisdiction).

Sec. 4.37 makes changes to riparian buffer rules. The provision requires the buffer on an intermittent stream to be measured from the center of the stream rather than normal high water level. The most significant change allows unlimited development in a riparian buffer as long as the project complies with state stormwater requirements. The change appears as an amendment to a stormwater statute and does not directly refer to riparian buffer rules adopted by the Environmental Management Commission. Other bills that propose changes to riparian buffer requirements specifically list the rules affected — such as the Neuse River and Jordan Lake rules.  Since this provision makes no reference to the riparian buffer rules, it may be intended to apply only to buffers required under the state’s minimum stormwater standards and local stormwater ordinances. It isn’t clear.

The bill also includes several provisions that appeared earlier in other Senate bills. Sec. 4.1 makes another run at putting environmental audit/self-disclosure immunity into state law. The Senate had included those same provisions in Senate Bill 453; see an earlier  post for more detail. Sec. 4.3 and Sec. 4.4 repeat limitations on state adoption and enforcement of federal air quality standards already approved by the Senate in Senate Bill 303; see previous posts  here and here.

The extensive Senate changes to House Bill 765 mean the bill now goes back to the House for a vote on concurrence. If the House refuses to accept all of the Senate changes, the bill goes to a conference committee. The General Assembly will be back in session this week, but it isn’t clear what priority the House will give H 765.

The NC Senate: Budget 2015

June 18, 2015.  Yesterday, the  N.C. Senate  took a first vote to approve a Senate version of House Bill 97  ( 2015 Appropriations Act).   The Senate received H 97 from the House of Representatives on May 22. The Senate  released its  alternative draft of the appropriations bill three days ago and quickly moved H 97  through Senate appropriations committees.  The Senate takes  a very different approach to funding state government than the House, but the Senate version of H 97 also contains many more “special provisions” — changes to existing law that go beyond finance and appropriations.  Some of the more significant environmental provisions in the Senate budget bill  (not by any means a complete list) below.

First, the Senate revisits the organization of state natural resource programs.  Sec. 14.30 of the Senate bill would combine  DENR’s natural resource programs (Division of Parks and Recreation, State Parks, Aquariums, the N.C. Zoo and the Museum of Natural Sciences) with cultural resource programs (such as the Museum of History and state historic sites)  in a new Department of Natural and Cultural Resources.  DENR would become the Department of Environmental Quality. Sec. 14.31  requires the two departments to study  whether  the Albemarle-Pamlico National Estuary Program,  state Coastal Reserves, the Office of Land and Water Stewardship,  the Office of Environmental Education and Public Affairs, the Division of Marine Fisheries and the Wildlife Resources Commission should also be moved to the new Department of Natural and Cultural Resources.

Other changes proposed in the Senate bill by subject (parenthetical descriptions are mine) :

COAL ASH

Sec. 29.18 (Beneficial use of coal ash) requires the Utilities Commission to report to several legislative committees by January 2016 on “the incremental cost incentives related to coal combustion residuals surface impoundment for investor-owned public utilities” including:

(1) Utilities Commission policy on  incremental cost recovery.

(2) The impact of the current policy on incremental cost recovery on utility customers’ rates.

(3) Possible changes to the current policy on incremental cost  recovery  that would promote reprocessing and other technologies that allow the reuse of coal combustion residuals stored in surface impoundments for concrete and other beneficial end uses.

Although a bit opaque, the Senate seems interested in the possibility of allowing electric utilities  to recover (through charges to consumers) the costs associated with making coal ash in surface impoundments available  for beneficial use.  Duke Energy has previously told legislators  that much of the coal ash in North Carolina impoundments  would require additional processing to be usable in concrete manufacturing.

COASTAL ISSUES

Sec. 14.6 (Use of sandbags for temporary erosion control) amends standards installation of sandbags for  erosion control on ocean and inlet shorelines. State rules now allow installation of sandbags only in response to erosion that imminently threatens a structure. The Senate bill allows a property owner to install sandbags to align with existing sandbag structures  on adjacent properties without showing an imminent erosion threat on their own property.

Sec. 14.10I (Strategies to address beach erosion) requires the Division of Coastal Management to study and develop a strategy “preventing, mitigating and remediating the effects of beach erosion”.

ENERGY 

Sec 14.29  (Federal energy grants) prohibits DENR from applying for grants from two federal programs – the State Energy Program Competitive Grant Program and the Clean Energy and Manufacturing Grant Program.

FISHERIES

Sec. 14.8, Sec. 14.10A and Sec. 14.10C  (measures to increase shellfish restoration and cultivation)

Sec. 14.8  directs the Division of Marine Fisheries to work with commercial fishermen,  aquaculture operations, and federal agencies to open additional areas in Core Sound to shellfish cultivation leasing.

Sec. 14.10A  directs DMF and the Division of Coastal Management to cooperate in  development of a new, expedited  CAMA permitting process for oyster restoration projects. The provision  also  authorizes DMF to  issue scientific and educational activity permits to nonprofit conservation organizations engaged in oyster restoration.

Sec. 14.10C Amends G.S. 113-202 to allow a lease for use of the water bottom to also cover fish cultivation or harvest devices on or within 18″ of the bottom. (Devices or structures not resting on the bottom or extending more than 18″ above the bottom will continue to require a water column lease.)

Sec. 14.10F (Joint fisheries enforcement authority) repeals the Division of Marine Fisheries authority to enter into a joint enforcement agreement with the National Marine Fisheries Service. The joint agreement allows DMF  to receive federal funding to enforce federal fisheries regulations in state waters.

SPECIAL FUNDS

Sec. 14.16  continues a recent trend of eliminating “special funds” that hold fees or other revenue dedicated for a specific purpose outside the state budget’s General Fund. The Senate bill eliminates special funds for mining fees,  stormwater permit fees, and UST soil permitting fees and moves the fee revenue into the General Fund.

STREAM AND WETLAND MITIGATION

Sec. 14.23 (Limiting the state’s role in providing stream, wetland, riparian buffer and nutrient mitigation)  requires DENR’s Division of Mitigation Services to stop accepting fees in lieu of mitigation in the Neuse, Tar-Pamlico and Cape Fear River basins within 30 months.  The provision then allows DENR (with the Environmental Management Commission’s agreement) to also eliminate the state in-lieu fee programs in all other river basins after June 30, 2018.

DENR’s  in-lieu fee program allows a developer to pay  a fee for mitigation  required as a condition of state and federal development permits. DENR  then contracts with private mitigation providers for the necessary mitigation. Payment of the fee transfers responsibility for providing the mitigation from the developer to DENR. Under a Memorandum of Agreement with the U.S. Army Corps of Engineers, the state’s in-lieu fee program can be used to satisfy stream and wetland mitigation required as a condition of federal Clean Water Act permits.

Eliminating  the State in-lieu fee program seems to eliminate the fee-for-mitigation approach as an option for developers. The burden would be back on the developer to find acceptable mitigation through a private mitigation bank or to plan and manage an individual mitigation project.  The change may slow some development projects that can now move  ahead based on the Corps of Engineers’ agreement to accept payments to the state in-lieu fee program as satisfying  federal mitigation requirements.

UNDERGROUND STORAGE TANKS

Sec. 14.16A (Elimination of the Noncommercial UST Trust Fund) phases out the state’s Noncommercial UST Trust Fund which reimburses property owners for the cost of cleaning up contamination from leaking underground petroleum storage tanks. The Noncommercial UST Trust Fund has  benefitted homeowners with soil and groundwater  contamination caused by home heating oil tanks and property owners  with contamination caused by USTs  used to store fuel for personal use — as on a farm. Under the Senate provision, the Noncommercial Fund could only be used for leaks reported before August 1, 2015 and claims for reimbursement filed by July 1, 2016. The Noncommercial Fund  would be eliminated for any petroleum releases  reported or claims made after those dates.

WASTE MANAGEMENT

Sec. 14.20 (Life of site landfill permits) amends G.S. 130A-294 to replace the current  5 or 10 year landfill permits with a “life of site” permit to cover landfill operations from opening to final closure. The provision would require permit review every five years.

Sec. 14.21 (Study of local government authority over waste collection and disposal services) directs the legislature’s Environmental Review Commission to study local authority over solid waste management including local fees; ordinances on waste collection and processing; cost to local government to provide solid waste services; and efficiencies or cost reductions that might be realized through privatization.   Solid waste collection and disposal services are entirely financed and provided by local governments;  many already contract with private entities for waste collection or landfill management.  It isn’t clear what the study might lead to since the legislature doesn’t have a role in  providing or financing local waste management services.

Sec. 14.22  (Privatizing landfill remediation) directs DENR to privatize the assessment and remediation of at least 10 high priority pre-1983 landfill sites. For several years, DENR has received a percentage of the state’s solid waste disposal tax  to fund assessment and cleanup of  contamination associated with landfills and dumps that closed rather than meet environmental standards that went into effect in 1983. Some legislators have expressed concern about the slow pace of remediation (and the resulting high fund balance). Note: Most state-funded remediation programs have a slow ramp-up in spending since it takes time to set up a new program and assess the sites.

WATER QUALITY

Sec. 4.5  (Nutrient management) earmarks $4.5 million from the Clean Water Management Trust Fund for a  DENR study of “in situ strategies beyond traditional watershed controls” to mitigate water quality impairment. The provision specifically mentions impairment by “aquatic flora, sediment and nutrients”, suggesting the study may be a continuation of the legislature’s effort to replace watershed-based nutrient management programs with technological solutions.

In 2013, the General Assembly suspended implementation of watershed-based nutrient management rules in the Jordan Lake watershed and funded a pilot project to test the use of aerators to reduce the impacts of excess nutrients on water quality. Sec. 14.5 allows extension of  the  pilot project contracts for another two years and delays implementation of the Jordan Lake watershed rules an additional two years or one year beyond completion of the pilot project, whichever is later.

Sec. 14.25 (State Assumption of permitting under Section 404 of the Clean Water Act) directs DENR to  hire a consultant to plan and prepare a state application  to assume the  federal permitting program under Section 404 of the Clean Water Act.   Sec. 404 requires a permit to fill waters or wetlands that fall under Clean Water Act jurisdiction. The U.S. Corps of Engineers issues Sec. 404 permits,  but a state can assume Sec. 404  permitting authority under certain conditions.  The U.S. Environmental Protection Agency oversees  404 permitting and would have to approve a state program. In a state that assumes Sec. 404 permitting, EPA retains authority to review  permit applications; a permit cannot be issued over an EPA objection.

Although several states have explored the possibility of assuming Sec. 404 permitting authority, only Michigan and  New Jersey have approved Sec. 404 programs. Individual states have reached different conclusions about the costs and benefits for a number of reasons. One may be cost — there are no federal grant funds to support a state 404 permitting program.   The Clean Water Act also prohibits state assumption of permitting in  tidal waters; water bodies used for interstate and foreign commerce;  and wetlands adjacent to both categories of waters. The U.S. Army Corps of Engineers would continue to have permitting authority in those waters and wetlands.

Sec. 14.26 (Transfer Sedimentation Act implementation to the EMC) eliminates the Sedimentation Pollution Control Commission and transfers responsibility for implementation of the Sedimentation Act to the Environmental Management Commission.

Once the Senate takes a final vote on House Bill 97, the bill goes to a conference committee to resolve the (considerable) differences between Senate and  House versions of the bill.  Few of the environmental provisions described above appear in the House version of the bill — although that doesn’t necessarily mean all of the Senate additions will be opposed by the House in conference negotiations.

N.C. General Assembly: 2015 Environmental Bills

April 15, 2015.   The final bill introduction deadline  fell  yesterday for bills that don’t affect finance or appropriations,  so it is a good time  to look at the environmental bills  introduced and awaiting action. The General Assembly can also amend environmental laws  in the budget bill or by completely rewriting a bill on an entirely different subject, but with that warning in mind:

House Bill 795 SEPA Reform  would  greatly  limit the number of  projects requiring an  environmental impact statement (EIS) under the state’s Environmental Policy Act (SEPA).   Adopted in 1971, SEPA requires an  EIS  for projects that potentially have a significant environmental impact, need a state approval (such as a permit), and involve either the use of public funds or use of public lands.  Unlike its federal counterpart (the National Environmental Policy Act  or “NEPA”), the state law  has never applied to  privately funded development projects no matter how significant the environmental impact. To require an EIS under the state law, there must be public investment ( which could mean either state or local government funding) or use of public land.  Typical projects requiring an EIS in the past would be  a new wastewater treatment plant; a county landfill; a major development project on state-owned submerged lands; or activities on state parkland.

House Bill 795 proposes to  limit SEPA review  to projects involving $20 million or more in public funding or land-disturbing activity affecting 20 acres or more of public land.   It is difficult to know what percentage of projects required to do an EIS in the past would avoid  SEPA review under the amended law, but it is reasonable to assume that many public  projects fall below the $20 million threshold. Controversial proposals for use of state parks and tidelands could also avoid SEPA review because — whatever the other impacts of the project —  an EIS would only be required for land-disturbing activity that permanently alters the landscape and affects 20 acres or more. For projects that exceed the new size and funding thresholds, House Bill 795 provides additional  SEPA exemptions  for projects receiving  certain types of state approvals. Some of the approvals listed in the bill, such as a certificate of convenience and necessity for a  public utility infrastructure project,  do not  involve  any environmental review.  (That particular exemption also doesn’t seem to serve a purpose;   the “public utilities” that need a certificate of convenience and necessity are by definition not owned or operated by a governmental  entity and  don’t involve public funds.)

For projects that would still require an EIS under the amended law, the bill also limits the scope of the EIS.  Under the bill,  the EIS would only describe direct project impacts — eliminating consideration of indirect and cumulative impacts.

Projects  exempted from the EIS requirement would still need  any necessary environmental permits, but permit reviews tend to be more narrow than an EIS. The EIS looks beyond one set of permitting standards to evaluate the environmental impacts of the project as a whole — which can include consideration of noise, traffic, endangered species, historic sites, and effects on minority and low income communities as well as natural resource impacts. Projects that require a federal permit could still trigger NEPA review; what the state may lose is an opportunity for the same comprehensive review and public input on projects that do not require a federal permit —  which may include some landfill projects and inter-basin transfers.

THE OMNIBUS BILLS (AMEND ENVIRONMENTAL LAWS AND REGULATORY REFORM)

In every recent legislative session, the General Assembly has enacted an Amend Environmental Laws bill  and a Regulatory Reform bill. Both bills become vehicles  for multiple changes to environmental laws. See an earlier post for a description of Senate Bill 453, the Regulatory Reform Act of 2015.

At the moment, House Bill 593 (Amend Environmental Laws-2) only  contains provisions amending  state law on reimbursement of third-party damage claims by the state’s petroleum underground storage tank (UST)  trust funds.  (The UST trust funds can reimburse UST owners for up to $1,000,000 in third-party claims for property damage or personal injury resulting from a petroleum release.)  The amendments require the UST owner to provide specific documentation of the third party damage claim; add definitions of “third party”, “bodily injury” and “property damage”;  and provide more  direction on how to calculate  compensation for  property damage.

It is the  nature of  both the Regulatory Reform and Amend Environmental Laws bill to pick up baggage as the session goes along.  Expect new versions of each bill  as the bills move through committee.

Note: This bill is Amend Environmental Laws-2 because  House Bill 157 (Amend Environmental Laws) has already been enacted into law as Session Law 2015-1. H 157 generally made uncontroversial and technical changes to solid waste laws, the Coal Ash Management Act and other environmental laws. The one provision in H 157 that  created some controversy amended a state law requiring the Environmental Management Commission to adopt air toxics rules for hydraulic fracturing sites.The bill replaced the requirement with language authorizing the EMC to adopt  air toxics  standards for fracking sites  if necessary to protect public health, safety, welfare and the environment.

AIR QUALITY

Senate Bill 303  Protect Safety/Wellbeing of N.C. Citizens  prohibits state enforcement of any federal standards for wood heaters used for home heating.  The bill  is interesting as an example of  state legislation intended to nullify  a federal standard.  In February, EPA adopted updated performance standards for wood heaters. Federal air quality rules have included standards for wood heaters since 1988; the new rule updates the standards to reflect changes in technology and to  regulate  wood-burning boilers and wood-burning furnaces as well as wood stoves.   The  revised  standards only apply to newly manufactured wood heaters, phase in over several years and do not affect fireplaces (at all) or wood heaters already in use.  An EPA fact sheet provides an overview of the rule.  Generally, N.C.’s delegated authority to implement Clean Air Act programs  requires the state  to adopt and enforce federal new source performance standards, but EPA has not delegated enforcement of the wood heater rule to the states.

House Bill 169  Limit Motor Vehicle Inspections  eliminates motor vehicle emissions inspections in six counties  (Burke, Granville, Haywood, Rutherford, Surry and Wilkes). Forty-eight of N.C.’s 100 counties require annual emissions inspections as part of the state’s plan to meet the  federal ozone standard under the Clean Air Act. Recently, the Department of Environment and Natural Resources (DENR) issued a  report concluding that emissions inspections could be eliminated in as many as 28-31 counties without  violating either the current ozone standard or the stricter ozone standard EPA  will  finalize by the end of the year. Given the DENR report, expect the number of counties  the bill removes from the emission inspection program to increase.  Since the emissions inspection program has been used to meet a federal air quality standard, any change by the General Assembly must have EPA approval.

House Bill 172 Fracking – Protecting the Public requires the Environmental Management Commission to adopt rules establishing best management practices and  leak detection and repair standards to  minimize air emissions from natural gas operations. The bill approaches the related problems of wasted natural gas and  air pollution by focusing on  ways  to minimize unintended releases resulting from leaky equipment or inefficient practices during exploration, development, production, processing and compression of the natural gas.

House Bill 571 Implementation of Carbon Dioxide Regulations requires DENR  to begin work on a plan to comply with new federal regulations reducing carbon dioxide (CO2) emissions from power plants. EPA’s Clean Power Plan rule sets a CO2 reduction goal for each state, but states have flexibility in the mix of power plant emission reductions, renewable energy generation, and energy efficiency measures used to meet the goal.  Find  more background on the federal rule here. Each state  must  submit a plan for meeting its   CO2 reduction goal by June 2016, although EPA can extend the deadline if the plan needs legislative approval or relies on a multi-state strategy.  DENR does not appear to have any effort underway to develop a plan. Instead, DENR has both  questioned the legal basis for the federal rule and urged EPA to delay implementation until lawsuits  challenging the rule  have been resolved. House Bill 571 appears to be intended to push DENR to begin  work  on a CO2 reduction plan and do it in a way that provides for  input from both stakeholders and the public.

COAL ASH

House Bill 448 Extend Coal Ash Structural Fill Moratorium  The Coal Ash Management Act of 2014 put new, stricter standards in place for large projects using coal ash as structural fill .  ( “Large” means > 8,000 tons per acre or > 80,000 tons total).   But the law made few change to existing standards for smaller structural fill projects. Instead, the 2014 bill put a moratorium on permitting smaller structural fill projects  until August 1, 2015 to allow time for DENR and the Environmental Management Commission to study the standards for those projects.  The law required a report back  to the General Assembly by January 15, 2015.  The EMC discussed an interim report in  January,  but the interim  report didn’t address the adequacy of existing structural fill standards for small projects. The interim report indicated that a final report would be released in April; it doesn’t appear that a final report has been issued yet.  In the absence of a report on the adequacy of the existing structural fill standards and recommendations, House Bill 448 would extend the moratorium on permitting smaller projects until August 1, 2016.

COASTAL ISSUES

House Bill 151 Property Insurance Ratemaking Reform is not strictly speaking an environmental bill, but deals with use of models projecting catastrophic losses as a result of a hurricane or other natural disaster in setting property insurance rates. The bill would continue to allow use of models, but would require the results of more than one model to support a property insurance rate change.  The bill is interesting given the longstanding tension between the economic benefits of coastal development and the externalized costs of building in natural hazard areas.

House Bill 302 Strengthen Oyster Industry  requires the Division of Marine Fisheries to study the state’s shellfish lease and franchise programs and make recommendations for changes necessary to increase shellfish  aquaculture on the North Carolina coast. The bill also expands on existing law requiring DMF to plan and construct  oyster sanctuaries in the  Albemarle and Pamlico Sounds; sets new civil penalties for interference with oyster cultivation; and makes other changes designed to increase oyster production. State funding for creation of oyster habitat has seen a steep decline in recent years; some additional resources will likely be needed to make the oyster sanctuary program a reality.

House Bill 346 Counties/Public Trust Areas extends to counties the  authority to enforce local ordinances in public trust areas and particularly on the state’s ocean beaches.  Municipalities already have this authority.

CONTAMINATED SITES

Senate Bill 301 DOT/Purchase of Contaminated Land would exempt the N.C. Department of Transportation from a law enacted in 2013 that  effectively prohibited state agencies from purchasing property with environmental contamination.  As noted in a earlier post about the 2013 law,  the General Assembly may not have realized the far-reaching effects.   Environmental contamination is widespread and state policies allowing polluters to do limited, “risk-based” remediation of groundwater contamination mean the contamination will persist well into the future. The 2013 law exempted the UNC system campuses from the restriction; NCDOT has asked for the same exemption — presumably because the law makes acquisition of property for highway construction more difficult.

INFRASTRUCTURE

Senate Bill 397 Open and Fair Competition Water and Wastewater would prevent a state or local government from “preferring” one type of piping material  for use in a  water, sewer or stormwater infrastructure project receiving state funds.  I don’t know the story behind the bill,  but usually legislation attempting to  change a state agency’s policy about  use of a particular product or system has been introduced in response to complaints by  a  vendor.

RENEWABLE ENERGY

The General Assembly’s internal debate over renewable energy development continues. In 2013,  the Republican majority in the General Assembly split over attempts to repeal both the Renewable Energy Portfolio Standard (REPS) and the state’s tax credit for investment in renewable energy projects. In the end, a bipartisan majority declined to repeal the incentives for renewable energy development — in large part, because renewable energy had become one of the bright spots in the state’s economic recovery. See an earlier post on the end of the 2013 fight over the REPS.

This session, one focus is on the scheduled sunset of the renewable energy tax credit on January 1, 2016. There are bills in both the House and the Senate to extend the tax credit;  House Bill 454  extends the tax credit until January 1, 2021 and Senate Bill 329 extends the tax credit to January 1, 2020.  Opponents of the tax credit have introduced a bill, Senate Bill 372, that essentially retains the existing January 1, 2016 sunset,  but provides a “safe harbor” for investors who have made substantial outlays on projects not  in service  by the sunset date. Those taxpayers would have an additional year  (until January 1, 2017) to claim the tax credit.

UPDATE:  House Bill 681 would sunset the REPS requirement early, ending in 2018  with a  standard requiring  6% of retail sales of electricity to be generated from renewable sources. The current law requires that  electric public utilities generate 12.5% of retail sales from renewable energy source by 2021 and thereafter.

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.

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.