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NCLM News & Political Report

The dog days of summer have truly hit the state capitol. Legislative business has proceeded sporadically this past month and has sputtered toward conclusion. While the legislature passed several environment bills of significance to cities during this time -- all reported in this issue below -- many bills hang in the breeze without action, despite remaining eligible for consideration all the way until adjournment. Meanwhile, high-profile disagreements between the House and Senate over coal ash legislation, as well as when to adjourn in general, contributed to discontent amidst the lethargic pace of legislating.

Meanwhile, N.C. Department of Environment and Natural Resources agency staff continued to implement the state's environmental regulatory programs, scheduling public hearings on no less than three topics of interest to League members: buffer rules, gravel/stormwater rules, and oil and gas exploration rules (public hearing dates are in the calendar below). Also, the agency saw the promotion of two longtime staff members to positions with greater responsibility. Donald van der Vaart will now serve as the agency's deputy secretary, a position that will allow him to continue as the state's top energy advisor. Jeff Poupart will now lead the Water Quality Permitting Section, a position that oversees all wastewater permitting. The League congratulates both van der Vaart and Poupart on these well-deserved promotions.


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EPA Announces Additions to NC's Impaired Waters List

The U.S. Environmental Protection Agency (EPA) gave public notice last week of its decision to add 52 waters back to North Carolina's 303(d) impaired waters list. This notice came after EPA announced its partial approval of the state's submitted list last month.

The state's 303(d) list, named after Section 303(d) of the federal Clean Water Act, is updated every two years. For each two-year cycle, the federal law requires states to evaluate the health of their waters and list those showing signs of being impaired. Impaired waters most often become subject to water pollution restrictions for the affected watershed, typically in the form of a Total Maximum Daily Load (TMDL). Local governments, as the holders of wastewater and stormwater discharge permits, bear responsibility for reducing their discharges to waters under a TMDL--often a costly requirement.

EPA's Chosen Listing Methodology

EPA's decision to add waters to North Carolina's list comes as a result of EPA favoring a so-called “one in three” listing methodology for toxic parameters such as metals. A state's listing methodology assists in assessing whether water bodies meet water quality standards. Following EPA's preferred approach would require a state to list a water as impaired if more than one toxics sample in three years exceeded that state’s water quality standard. The EPA methodology would then mandate an impairment listing regardless of the age of the data (North Carolina's water quality sampling program has not collected metals data in waters since 2007), the extent to which the data exceeded the state's water quality standard, or the precision of the techniques used to gather the data. In contrast, for its 2014 303(d) list, North Carolina used its new “90% confidence limit” methodology, selected by the N.C. Environmental Management Commission (EMC) last year. Under this methodology, the State listed a stream when a statistical analysis of the data indicated an impairment for that particular toxin with a 90% confidence level.

Last month, EMC Commissioners expressed disappointment at the lack of support for the EMC-approved listing methodology from agency staff members who dealt with EPA. As a result of insufficient justification for the “90% confidence limit” methodology, EPA used its "one in three” listing methodology, which resulted in EPA listing the fifty-two additional waters for metal impairment.

The League has been very involved in 303(d) impaired waters list and the listing methodology, and reported on them in previous EcoLINC articles:

The League plans to submit comments regarding EPA's decision before the public comment period ends September 12. Comments can be submitted via electronic mail at hopkins.marion@epa.gov; EPA is not taking oral comments. 


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EMC Takes Action on Legislative Mandate, Buffer Rules

Despite criticizing the process that led to the rulemaking, the N.C. Environmental Management Commission (EMC) voted last week to send its proposed temporary buffer rule out for public comment. The rulemaking was mandated in SL 2014-95, a law that redirected a 15-year agency effort to update the State's buffer mitigation rules by requiring state regulators to adopt rules “substantively identical” to those contained in the April 10, 2014 Consolidated Buffer Mitigation Rule Stakeholder Report. That report was prepared earlier this year by private mitigation banking interests and state agency staff.

EMC Criticizes Process

During a special meeting to discuss the rule, the EMC expressed general support for the substance of the rule, even while criticizing the process that led to the rulemaking. Commissioners were specifically displeased with the fact that they were not informed that a stakeholder group was working on rules for which the EMC was ultimately responsible. Before the vote on the rule package, Chairman Benne Hutson condemned the stakeholder process. “That cannot happen again...We need to know what’s going on, and that didn’t happen here,” Hutson said. Commissioners also expressed concerns that the process circumvented the N.C. Administrative Procedure Act and made the opportunity for public comment a "facade." Read more about the Commission's criticism in "NC environment commission slams DENR over stream rules," News & Observer.

Also at the meeting, the N.C. Division of Water Resources (DWR) said the EMC would not be required to adopt the stakeholder report for its permanent rulemaking based on the division's interpretation of the new legislation. DWR gave a presentation listing benefits of the proposed rule, including that it was easier to understand, provided for consistency across basin/watersheds, increased flexibility for compliance, and increased the number of sites and options for buffer mitigation.

Buffer mitigation is a state program that generally requires protection of nearby waters when activities affect a stream on or adjacent to a development site. However, previous program requirements were often too strict to allow buffer mitigation in urbanized areas. For example, one former program element required a tract with a minimum of 50-foot buffers on either side of a stream. In urban areas, finding such wide swaths of uninterrupted land posed great challenges. The League and other stakeholders worked for many years with state regulators on this rule set, which was prompted by a 1999 law that directed the State to expand buffer mitigation options. That effort culminated in language approved last summer to allow more mitigation in urban areas, among other measures.

However, that rule approved by the EMC in 2013 received ten letters of objection, triggering the requirement of legislative review and putting the rulemaking on hold. These letters of objection were controversial, since some came directly from staff within the N.C. Ecosystem Enhancement Program. The issue garnered negative media attention for legislators and state regulators due to the process lawmakers followed in passing this bill:

League Supported Legislation, Rules

As it did with the previously-approved rule package, the League supported the changes in this legislative review of the rules because they would ease the ability of cities and developers to compensate for any disturbances made to buffer zones along bodies of water. In addition, the changes should result in more mitigation projects taking place, both in urban and rural areas. However, one area of concern is that the proposed rule would eliminate the ability of a locally-delegated buffer program to make intermittent and perennial stream determinations for the purposes of compliance with this portion of the rule. Currently local government staff can take the Surface Water Identification Training and Certification (SWITC) for making legal determinations of stream origins and identify surface waters subject to buffer rules. Stream determinations are made using a standardized methodology developed by DENR and certified local government officials are fully qualified to perform these determinations.

The comment deadline for the temporary rule is September 12 and a public hearing will be held on August 28 -- both cursory procedures since the EMC has been instructed to adopt a rule identical to the report. Read previous coverage of the League's involvement in these buffer rules in "EMC Approves Rules that Assist Buffer Mitigation in Urban Areas," June 2013 EcoLINC.


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Reclaimed Water Legislation Achieves League Goal

The League won a large victory for expansion of public water supplies with S.L. 2014-113 Reclaimed Water as a Source Water, signed into law by Governor McCrory earlier this month. The legislation expanded the ability of municipalities to recycle reclaimed water to supplement potable public water supplies under limited circumstances. To meet the new law's standards, water systems must treat the combined water to drinking water standards. Reclaimed water is a highly treated wastewater and is safely utilized in other U.S. states and countries to augment existing water supplies; North Carolina has now joined states such as Virginia, Colorado, Texas, Florida and California in allowing this practice.

Specifically, the legislation rewrites the water reuse statute to allow water supply systems to combine reclaimed water with other raw water sources, providing for limiting conditions - such as limiting the average daily flow of reclaimed water introduced to 20 percent of the sum of the average daily flow of source water combined with the reclaimed water. The source water then undergoes full treatment to drinking water standards before distribution to the public.

This use of reclaimed water is unprecedented in North Carolina, and marks the achievement of one of the League's advocacy goals for expansion of water supply options through use of reclaimed water.


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Law Preserves Local Authority to Regulate Fertilizer

Local authorities may enact fertilizer ordinances that are necessary to comply with state and federal water quality mandates under the NC Farm Act of 2014 (S.L. 2014-103), signed into law by Governor McCrory earlier this month. The fertilizer language had been previously negotiated by the League, and the final bill was the result of legislative conference committee negotiations. The League supported this legislation, viewing it as a win for cities because some versions of other bills would have eliminated local authority to regulate fertilizers completely. The legislation also contains a provision making clear that a local government's ability to regulate explosive, corrosive, inflammable, or radioactive substances is not affected.

It is crucial for cities and towns to retain the ability to regulate fertilizer because many are subject to state and federal wastewater, stormwater, and buffer programs and permits, and therefore must regulate the use and storage of fertilizer to varying degrees. To comply with federal wastewater permits, systems with industries that discharge substances classified as "fertilizer" into the municipal wastewater system need to retain the ability to regulate these discharges under local wastewater pretreatment programs. Such local regulations maintain the integrity of the wastewater treatment system.

The fertilizer provision included in the Farm Act was a result of the League's work with representatives of the agriculture community, including the N.C. Department of Agriculture, to produce a fertilizer provision that would satisfy all stakeholders. As a result of the stakeholder's agreement, that language also appeared in versions of SB 734 Regulatory Reform Act of 2014, and SB 38 Amend Environmental Laws, an attempt to ensure its passage in some form this session.


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Stormwater Bill Casts Wide Net While Aiming to Benefit One Company

In just one week, the legislature passed and the Governor signed into law a bill designed to relax state building code and stormwater regulations. But while the provisions applied statewide, during debate on the bill, House members spoke about the advantages the legislation would offer Ashley Furniture, a company currently redeveloping a manufacturing site in Davie County. Despite targeting this one project, the bill contained two distinct statewide stormwater provisions, including one that only applied in the Jordan and Falls watersheds. Davie County is not in either of those watersheds.

The provisions intended to help Ashley Furniture by removing stormwater control requirements typically placed on redeveloped properties, or "existing development," as those properties are called in the Jordan and Falls watersheds. On its face, the new law applied only to the State's stormwater program and not mandated local government programs. All the same, the League did not support these provisions because they indirectly affected how cities implement stormwater programs pursuant to state and federal mandates. Because the bill would result in cities placing additional requirements on developers that the State would no longer make, it increased the prospect of cities being accused of "over-regulating." Already as a result of this legislation, development groups asserted that they were watching how local governments reacted to the new law. However, under their stormwater permits, cities bear a legal responsibility to clean up bodies of water to a higher level not required of the State. In some cases, placing additional requirements on developers represents the most cost-effective means of achieving those water quality mandates, both for the public and private sectors.

Because the bill threatened to undermine the existing development portion of the Jordan and Falls Rules, the League and legal staff from the N.C. Department of Environment and Natural Resources will work together before the legislature reconvenes in January 2015 to assess the full impact of this new law on the State and local governments. Corrective legislation may be necessary as a result of this analysis.

Also, when the Senate first took up this bill last month, the bill contained another attempt to de-regulate gravel from stormwater control laws. However, before giving its final approval to this bill, the Senate removed those provisions. The League supported this move, as it threatened to trump an agreement reached on the issue during an interim legislative study.


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Legislators Send 2014 Regulatory Reforms to Governor

Legislators took a final stab at regulatory reform legislation as they met again late last week, rolling out a 47-page conference report to SB 734 Regulatory Reform Act of 2014 that avoided many of the most controversial regulatory provisions that had been in earlier versions of this session's reform bills. The bill now only needs Governor Pat McCrory's signature to become law. It followed numerous attempts by both chambers to reach agreement on regulatory reform legislation this session, efforts that spanned five other bills over eight weeks. This final bill contained mostly environment-related provisions, though legislators also placed non-environment provisions in the bill as well.

Importantly for cities and towns, the legislation passed last week would immediately repeal a de facto moratorium on local environmental ordinances (Sec. 32) that the League members had worked to have reversed. Other environment-related provisions that affected cities and towns included:

  • Review of rules (Sec. 2), which gives the Rules Review Commission explicit authority to set deadlines for when an agency must re-adopt rules, in consultation with that agency, under the "review of rules" process directed by the legislature last session. Read previous coverage here.
  • Floodplain enforcement in ETJ (Sec. 15), which gives counties the ability to enforce their floodplain ordinances on bona fide farms in municipal extraterritorial jurisdictions. Read previous coverage here.
  • Development review protocols (Sec. 16), which would restrict local review processes by allowing permit applicants to choose between a jurisdiction's old rules and new rules when that jurisdiction changed the rules during the development review process. It would not apply to zoning permits. Read previous coverage here.
  • Coastal stormwater grandfathering (Sec. 25), which directs the Coastal Resources Commission to revise its stormwater rules so that current grandfathering provisions also apply to an expansion of development activities.
  • Technical review of engineering plans (Sec. 29), which places into law a suite of development process review reforms that apply to review of technical plans, such as engineering plans. Read previous coverage here.
  • IBT laws/Kerr Lake (Sec. 37), which applies certain relaxed interbasin transfer (IBT) standards to Kerr Lake, an area that began the IBT process five years ago. Read previous coverage here.
  • Gravel (Sec. 45), which changes the stormwater rules related to gravel and built-upon area. However, it does not include a study of the infiltration rates of these non-paved surfaces, which had been recommended by a legislative study commission earlier this year. Read previous coverage here.
  • Cluster mailboxes (Sec. 46), which clarifies that for approved developments currently under development, a local government may not require a modification to any stormwater permit when the U.S. Postal Service (USPS) requires that development to install a cluster mailbox unit. The provision expires either December 30, 2015, or when USPS regulations become effective and are adopted by local governments. Read previous coverage here.
  • Minimum design criteria (Sec. 50), which extends by five months a key reporting deadline for the group writing minimum design criteria for stormwater devices. Read previous coverage here.
  • Isolated wetlands (Sec. 54), which lowers to 1:1 the mitigation ratios at which the ecological harms from isolated wetlands disturbances must be mitigated during development. In addition, it triples the minimum amount of disturbance needed to trigger mitigation requirements, to one acre for areas east of I-95 and 1/3 acre for areas west of I-95. Finally, it directs an agency study of the appropriate mitigation thresholds for mountain bogs. Read previous coverage here.
  • Groundwater standards study (Sec. 56), which directs the N.C. Department of Environment and Natural Resources to conduct a groundwater standards study, taking into consideration whether those standards may be more stringent than federal drinking water standards, a typical outcome under current N.C. regulations. Read previous coverage here.
  • Legislative review of environment rules (Sec. 57), which gives the legislature an automatic opportunity to review all environment rules that are required by state or federal law.

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Technical Correction Pulls More Systems into Source Water Plan Requirement

One provision in the 58-page technical corrections bill signed into law last week would apply a source water protection planning requirement to more water systems than the initial bill passed earlier this session. The original bill applied only to "unfiltered" surface water systems, but the change included in Section 55.5 of the latest bill struck that word from the statute. Therefore, all surface water systems will now become subject to this requirement.

However, the planning requirement will only take effect upon completion of rulemaking by the N.C. Commission for Public Health, a board that the law also tasked with developing a template for water systems to use in this new planning mandate. The League will play an active role in this rulemaking effort once it begins.

While the original bill received no substantive discussion when quickly moving through the legislative process last month, the League learned that the intent behind the requirement is to prevent contamination of public water supplies. Specifically, the requirement responded to the January contamination of the Charleston, W. Va., water supply by chemicals stored above ground near that water supply. The extent of contamination prevention activities that may be required of N.C. water systems due to this new law will depend upon the rules developed by the Commission.


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League Urges Speed in Approving Nutrient Reduction Practices

The League submitted comments last month urging the N.C. Division of Water Resources (DWR) to streamline its proposed process for approving nutrient-reducing stormwater practices. DWR released its draft "Approval Framework For Alternative Nutrient Load-Reducing Measures" in June, stating that the purpose of the document is to provide an explicit framework by which DWR would endorse nutrient-reducing measures that can be used by parties subject to existing development stormwater requirements.

As the state increases nutrient regulations on municipal stormwater and wastewater operations, cities' need for approved nutrient-reduction measures will grow. Although there are currently only two nutrient strategies that include existing development stormwater rules, the Jordan Rules and the Falls Rules, the recently approved Nutrient Criteria Development Plan not only included directives to develop nutrient criteria for High Rock Lake, Albemarle Sound, and the Central portion of the Cape Fear River, but also included a timeline for evaluating nutrient criteria for all bodies of water throughout the state. Therefore, it is only a matter of time until many more bodies of water in the state are subject to nutrient strategies that may include existing development stormwater requirements. Consequently, the availability of additional nutrient load reducing measures for local governments and developers will have broader application than just in Jordan Lake and Falls Lake basins. In addition, the draft approval framework stated that approved measures will be used to establish nutrient credit assignments applicable to both stormwater rules and nutrient strategies for new development, providing for broad application.

League Comments

The League comments stated an appreciation of DWR’s and the Nutrient Scientific Advisory Board’s effort to create an approval process to establish new nutrient measures that provides (1) expediency, consistency and predictability in the review of measures; (2) a clear and transparent pathway to support approval; and (3) an efficient expansion of cost effective tools available to regulated entities. The League also specifically expressed support of DWR's tiered approval approach since it provided a means for using relatively untested measures under existing development rules and allowed for innovative measures to partial credit.

However, the League asked for more accommodation for new measures by state regulators. The League pointed out that DWR's reliance on site-specific studies of the technologies within impacted N.C. basins that have been peer reviewed, and that have resulted in a “good body of literature" for its proposed evaluation of a measure, could mean approvals would take several years at a minimum. The League also requested assurances that the document would be used as guidance and that its implementation would not hinder or delay the approval of new, effective measures or the determination of credit values for a given practice. The League's comments mirrored its membership's prioritization of sensible nutrient regulation as its top regulatory goals. Read background on the DWR proposal in "Regulators Propose Approval Process for New Stormwater Control Designs," July 2014 EcoLINC.


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Regulatory Briefs

The controversial pilot project to use nutrient-scrubbing technology in Jordan Lake was implemented in late July, with the deployment of SolarBees in the Haw River and the Morgan Creek arms of the lake...The EMC proceeded with a permanent rulemaking to adopt a definition of the term “gravel,” holding a public hearing on August 20 in Raleigh and accepting written public comment through September 30...In addition, DWR extended the public comment period for the NC 303(d) Listing Methodology to September 30...The MEC extended the public comment deadline for the state's new oil and gas rules, which will regulate onshore natural gas extraction, to September 30 and announced the addition of a fourth public hearing to be held in Cullowhee...League members from Cary, Fayetteville PWC, Goldsboro, Raleigh, and Winston-Salem spoke at the Triennial Review public hearings, expressing support of the proposed water quality standards...Burlington, Graham, and NCDOT submitted to DWR for consideration their draft Category 4b demonstration plan to address biological Impairment in Little Alamance Creek; if the plan is approved, the water body will be re-categorized from Category 5 on the impaired waters 303(d) list to Category 4b...EEP stopped accepting any nutrient offset payments in the Jordan watershed this month due to those fees being insufficient to pay for the required amount of mitigation, a decision it will likely reverse next quarter...Nancy Stoner, EPA's acting assistant administrator for water, stepped down from her position in the agency and was replaced by Ken Kopocis, whose nomination for the slot has been stalled by the Senate...DWR recently awarded more than $2.2 million in grants as a part of its 2014 spring grant cycle for the Water Resources Development Project Grant Program. The grants went to 37 projects that will help North Carolina towns and counties restore streams, reduce erosion, study future water supplies and benefit other water resources...Wisconsin sought EPA approval of a nutrient fee variance from its numeric phosphorous limits, a move supported by EPA in other states in order to ensure the adoption by states of numeric nutrient limits...EPA could be forced to broadly apply a court decision barring "blending" of partially and full treated wastewater in wet weather events as a result of a new petition for review submitted to the U.S. Court of Appeals (D.C. Circuit)...The U.S. Court of Appeals for the 4th Circuit has denied a petition to rehear a case that narrowed the "permit shield" liability protection for holders of CWA permits, which could bolster the arguments of those who sue because a permitted entity discharged pollutants not included in its permit terms... EPA detailed new water testing methods to detect hydraulic fracturing contaminants in drinking water and released an FAQ document regarding pretreatment for shale gas wastewater...EPA assured local governments that its proposed "Waters of the US" rule would not regulate stormwater channels and green infrastructure projects -- a concern that arose as a result of the definition of "tributary" in the rule -- but cautioned that some MS4s may ultimately include jurisdictional waters under the new rule...EPA and the White House announced a new green infrastructure program to provide funds for 25 green water infrastructure projects to address expected increase in stormwater due to climate change.


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