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NCLM News & Political Report

The past five weeks have been jam-packed for the League's advocacy efforts. Since the last issue of EcoLINC published in mid-May, we welcomed our newest Government Affairs colleague, Scott Mooneyham. Scott, our Advocacy Communications Strategist, will manage the League's legislative and regulatory communications, including editing EcoLINC. Read details of Scott's lengthy background in political journalism. We have also benefited this summer from the participation of four interns on our team, from both law school and undergraduate programs.

League members have been a near-constant presence at the General Assembly since the legislative short session began May 14. Nearly 500 municipal officials gathered earlier this month for one of the League's largest Town Hall Day events ever. Throughout the day, they pressed legislators on priority fiscal and municipal authority issues, culminating in a meeting with Governor McCrory, NC DOT Secretary Tony Tata, and Assistant Commerce Secretary Pat Mitchell. And just prior to that big push, members of the League's legislative action committees (LACs) conducted a series of legislative visits as part of the League's LAC Lobby Day program. These efforts served to keep the perspective of cities at the front of legislators' minds.

Political Conversation in Raleigh

As expected, the coal ash controversy continued to influence most environmental policy decisions and discussions at the legislature this past month. While the Senate just yesterday released the first legislative plan to beef up coal ash regulation at the state level, both chambers made this new regulatory function a priority by giving DENR one of their few budget expansions (read more in "Budget Environment Items," below).

While they worked to prepare this major environmental initiative, legislators pushed through another one the first two weeks of session, approving a large energy package regarding oil and gas exploration. Read about its effect on local governments below in "Oil & Gas Legislation, Regulations Progress Forward." This legislation became law just as the N.C. Mining & Energy Commission (MEC) readied the state's first-ever oil and gas exploration rules for public comment, and just as more questions arose over the viability of the natural gas extraction industry in North Carolina. Those questions came this weekend with the news that a major natural gas pipeline was proposed for the state, perhaps lessening the need for an in-state source of gas (more in "New natural gas pipeline to NC could dampen interest in fracking," The News & Observer). The media also shone a light on the political make-up of the Rules Review Commission, a state board that must approve the new oil and gas rules after public comment.

Amidst these more comprehensive environmental legislative packages, the Senate passed its version of another round of  regulatory reform in what has become an annual rite that collects dozens of unrelated provisions (not all of them environmental) into one omnibus bill. The items of interest to local governments are contained in the appropriate articles below. The House will likely build upon the Senate's bill beginning this week, adding more items of interest to its members before unveiling its package sometime in the next few weeks.

Regulatory Personnel Changes

Last month, WRAL reported further on job cuts at the N.C. Department of Environment and Natural Resources (DENR) that began last year at the direction of the legislature. Losing a total of 68 positions, many of them vacant, the Department felt the losses most acutely at the regional office level, WRAL said. So far in this year's state budget negotiations, both the House and Senate agreed to cut one additional DENR position. That position is a stormwater slot in the Wilmington regional office.

DENR gained extensive environmental legal expertise last month with the addition of Craig Bromby to the agency's legal team. Bromby, formerly senior counsel at Hunton & Williams, has over three decades of environmental law experience, including time in DENR's Office of General Counsel as well as with the U.S. Environmental Protection Agency. The League congratulates Bromby on his selection.

Finally, now nearly two years old, the MEC chose new leaders at its meeting earlier this month. The League is pleased to continue working with this new board leadership, Chair Vik Rao and Vice-Chair Amy Pickle.

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Regulators Switch Gears, Propose Statewide Nutrient Standards

The N.C. Division of Water Resources (DWR) changed its approach to nutrient regulation earlier this month, proposing to develop and implement statewide numeric nutrient criteria. Previous drafts of DWR's Nutrient Criteria Development Plan (NCDP) proposed to develop these water quality criteria (or standards) on a site-specific basis. The NCDP is a roadmap for state regulators to use when developing nutrient management strategies such as the Jordan Lake Rules or Neuse Rules.

The latest NCDP draft, submitted to the U.S. Environmental Protection Agency (EPA) this month, differed significantly from earlier drafts reviewed by stakeholders over the past year. While retaining several site-specific features from previous iterations of the plan, the new plan proposed to develop statewide numeric nutrient criteria for estuaries (June 2023), reservoirs and lakes (June 2024), and rivers and streams (June 2025). The League membership made nutrient regulation a priority based on site-specific data and analysis as its top regulatory advocacy goal, and therefore opposed these additional new proposals.

Nutrient Regulation Targets Cities

Most regulatory costs of addressing nutrient impairment in the state's waters falls to municipalities because they assume a primary responsibility for implementing the requirements of the federal Clean Water Act. This federal law requires states to develop water body clean-up plans for impaired waters. In turn, with the clean-up plans, states require local governments to adhere to strict wastewater and stormwater limits to control discharges of nutrients to impaired waters. Excessive amounts of nitrogen and phosphorus can cause impairments in waters under certain circumstances.

DWR began developing the NCDP in late 2012, and since then, the Division solicited public comment four times. The NCDP is required as part of an agreement between DWR and EPA that outlines a work plan for regulators to use in addressing nutrient impairments across the state. Similar work plans, negotiated for all states receiving EPA funding, contain a description of an agency's tasks, timelines, and milestones for development of numeric nutrient criteria.

Plan Draft Adds Detail

The latest NCDP sent to EPA added more detail to prior elements of the plan already reviewed by stakeholders:

  • Site-specific plans. The new draft switched the order in which the State planned to develop site-specific nutrient criteria. While High Rock Lake (adoption of criteria July 2018) remained at the front of this work plan, DWR moved development of criteria for the Albemarle Sound (May 2019) ahead of the Middle Cape Fear River (December 2021). The updated draft also added description to these three tasks, specifically stating that the criteria would be developed in consultation with a Scientific Advisory Council (SAC) and other stakeholder input, a feature supported and encouraged by the League. Importantly, the latest draft also stated that the regulatory approaches developed for these three water bodies would be transferred to the effort to develop statewide criteria for like waters.
  • Scientific Advisory Council. The most-recent NCDP changed the make-up of the SAC to invite EPA's participation in the effort. The plan also contained other details not included in previous drafts. For example, it affirmatively stated that the SAC would assist in development of a water body management approach for each of the three water body types proposed for statewide criteria. Further, the latest plan assigned the SAC the task of reviewing proposed criteria, including a revised statewide chlorophyll-a standard, for these new nutrient management strategies. The plan also targeted November as the date by which DWR would establish the SAC. The League and other municipal stakeholders have long pressed for significant stakeholder involvement in the development of numeric nutrient criteria and the associated water body management plans to implement those criteria, thereby supporting this element of the NCDP. Finally, the plan explicitly stated that the state must seek appropriate funding--likely from the Albemarle-Pamlico National Estuary Program--for SAC activities: "The greatest challenge will be to obtain sufficient funding and personnel resources to support this endeavor."
  • DWR staffing levels. The new draft increased the number of full-time equivalent staff positions dedicated to this work plan from two to four, a point pressed by the League in its last NCDP comments, submitted in February.

The League participated in all previous NCDP efforts and reported extensively on them in previous EcoLINC articles:

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Oil & Gas Legislation, Regulations Progress Forward

In recent weeks, a flurry of activity has taken place regarding the laws and regulations for oil and gas development in North Carolina. After almost two years of work, the N.C. Mining & Energy Commission (MEC) edged closer to completing its regulatory package, while the legislature provided input and moved the regulatory process along with the passing of the Energy Modernization Act (S.L. 2014-4).

Energy Modernization Act

Of interest to cities and towns, the final version of the bill turned a harmful property tax cap proposal into two studies. The first version of the Act, recommended in early May by the Joint Legislative Commission on Energy Policy, included a provision that capped the amount by which city property tax revenues could increase from year to year at 8%. As passed, the Act instead required two studies: one to look at how other states valued energy minerals for the purpose of property taxation, and another to study ways to limit growth of property tax revenues due to the development of the oil and gas industry. As a result of these studies, the Commission will report its findings and any recommendations to the 2015 General Assembly.

In addition, the Act invalidated local ordinances that prohibited or had the effect of prohibiting hydraulic fracturing activities, mirroring current statutory provisions regarding local governments' regulation of hazardous waste facilities. However, the Act provided that a local zoning and land-use ordinance was presumed valid to the extent it was generally applicable to all development. Therefore, the law allowed cities' use of planning and zoning ordinances if those ordinances applied generally to all industries throughout a given zoning classification.

Still, the law gave industry an outlet to challenge a local ordinance, providing a process for industry to petition the validity of an ordinance to the MEC. The law justified this limitation on local government authority by stating a preference to institute a uniform system for the management of activities related to oil and gas exploration, development, and production -- providing the industry with predicable and consistent regulation.

Other items of interest included:

  • A prohibition of the disposal of waste fluids by injection into subsurface or ground waters
  • An extension of the deadline for rule development by the MEC from October 1, 2014 to January 1, 2015
  • Creation of a new Oil and Gas Commission to replace the MEC (effective August 1, 2015)
  • Additional studies of various topics, including transportation infrastructure

And finally, the bill's provisions gave the MEC the necessary authorities it needed to complete its rulemaking package.

Regulatory Package

The Commission met in early June to review its entire body of rules regarding the management and development of oil and gas exploration and voted to send the complete rule set to public hearing.

The meeting began with a discussion of the Energy Modernization Act (S.L. 2014-4), signed by Governor McCrory just prior to the Commission meeting. As a result of the legislation, the Commission had to strike the section of rules regarding impact fees. MEC Chair Jim Womack explained that the MEC had hoped to provide for local cost recovery through impact fees, but the legislature invalidated their attempt by not providing the MEC with statutory authority.

Also as a result of the recent legislation, commissioners approved the text of a new section of rules regarding hearing procedures for preempting local government ordinances. Commissioner Amy Pickle explained that the section addressed the local ordinance preemption procedure in the new legislation and matched similar procedures in the waste management rules, although she noted that the procedures regarding hazardous waste management might not be the best fit for oil and gas production.

A public comment period will open once the rule package is published in the North Carolina Register. Public hearings are scheduled for:

  • August 13 - Athens Drive High School, Raleigh, 10-2
  • August 22 - Wicker Civic Center, Sanford, 5-9
  • August 25 - Rockingham County High School, 5-9

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Water Supply Bills

This article will highlight two water supply measures of interest to cities and towns that received consideration in the past month. Clicking on any bill title will take you to the League's bill tracking service, which includes bill summaries, the League's position and tracking level for the bill, and information on bill status pulled from the N.C. General Assembly website.

  • Water supply reclassification. The Senate approved a measure that would revoke previously-granted water supply approvals for a water intake project involving Roxboro, Yanceyville, Person County, and Caswell County. The League opposed this measure, included as part of the Senate's regulatory reform package (Section 3.4). Though a floor amendment narrowed the scope of this provision to one project, in undermining the fully-approved project, the provision set a negative precedent for all future water supply intakes in the state and the economic development projects dependent on them. If allowed to become law, this measure would create permanent uncertainty that these projects would have access to a reliable, fully-approved supply of treated water. The provision would allow a local government to bring a rulemaking petition to repeal a water supply reclassification approved after January 1, 2012. In response, the provision would require the state's environmental regulatory body to downgrade necessary water body protections for those waters. In addition, the provision would require all affected local governments to repeal applicable water supply ordinances.
  • IBT study. Also in its regulatory reform bill (Section 4.3), the Senate included language recommended by the legislative Environmental Review Commission (ERC) regarding a study of the state's interbasin transfer laws. The study grew from a League suggestion made to the ERC during interim study discussions about how to incentivize local governments to consolidate water systems. (Read legislators' comments on this issue in "Water/wastewater Study Group Closes in on Recommendations," February 2014 EcoLINC.) The legislation would direct DENR to study possible areas to relax the state's restrictive interbasin transfer laws, such as for emergencies or between river sub-basins. This regulatory reform provision mirrored HB 1057/SB 757 DENR Study of IBT Laws.

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Wastewater Bills

This article will highlight three wastewater bills of interest to cities and towns that received consideration in the past month. Clicking on any bill title will take you to the League's bill tracking service, which includes bill summaries, the League's position and tracking level for the bill, and information on bill status pulled from the N.C. General Assembly website.

  • Fertilizer. A League-requested floor amendment during the Senate debate on SB 734 Regulatory Reform Act of 2014 restored local authority to enact fertilizer ordinances that were necessary to comply with state and federal water quality mandates. The amendment modified a proposal that previously would have eliminated all local authority to regulate fertilizers. Cities and towns that are subject to state and federal wastewater, stormwater, and buffer programs and permits must regulate the use and storage of fertilizer, to varying degrees. In particular, to comply with their federal wastewater permits, systems with industries that discharged substances classified as "fertilizer" into the municipal wastewater system needed to retain the ability to regulate these discharges under local wastewater pretreatment programs. Such local regulations maintain the integrity of the wastewater treatment system, and this amendment allowed that narrow scope of mandated local regulation to continue. The League thanks amendment sponsor Sen. Brent Jackson, bill sponsor and former Greensboro City Council member Sen. Trudy Wade, other Senate supporters, and agriculture stakeholders for working to address concerns cities held with the original provision.
  • Spill notification. One provision in the omnibus coal ash regulation bill considered yesterday by a Senate environment committee would reduce the time allowed for wastewater spill reporting. Though aimed at coal ash facilities in response to the February Dan River coal ash spill, this provision would apply to municipal and industrial wastewater system operators as well. Initially introduced by an interim legislative environment oversight committee in March, the provision proposed changing the window of time for a system to issue a press release from 48 hours to 24 hours. The proposal also would codify an existing state regulation that required systems to alert state regulators of a spill greater than 1,000 gallons within 24 hours of determining the untreated wastewater had reached the State's waters. This provision was identical to the language contained in HB 1137 Reporting and Notice of Wastewater Spills, filed in May.
  • Groundwater compliance boundary. A Senate environment committee added a provision yesterday to the Governor's coal ash plan that clarified state law regarding groundwater compliance boundaries, at least as it applied to coal ash facilities. Clarification of this area of state law became necessary after a March court decision upended previous interpretations of the law. While the provision included in the coal ash bill would respond to the precedent set by the March court decision as applied to coal ash facilities, the bill did not inlcude the same fix for other affected parties like municipalities. Municipalities are regulated by the same section of law at issue in the court case, particularly in the practice of land application of biosolids. If left unaddressed by the legislature, this court decision could force cities that have long operated Class B biosolids disposal programs -- those first permitted before December 30, 1983 -- to undertake expensive "immediate" actions to eliminate the sources of any discharges that contributed to a violation of the state's groundwater quality standards. Get background on how this court decision could affect municipal wastewater operations in "Judge's Decision Upends Law for Land Application Sites' Groundwater Contamination," March 2014 EcoLINC.

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Stormwater Bills

This article will highlight seven stormwater bills of interest to cities and towns that received consideration in the past month. Clicking on any bill title will take you to the League's bill tracking service, which includes bill summaries, the League's position and tracking level for the bill, and information on bill status pulled from the N.C. General Assembly website.

  • NCDOT BMP toolbox. Under the first bill signed into law by Governor McCrory this year, permitted municipal stormwater systems may use the standards in the NC Department of Transportation BMP manual to fulfill post-construction requirements for linear transportation projects. The bill came before the General Assembly at the request of the City of Winston-Salem. With this new law, all entities required to meet post-construction requirements may take advantage of the stormwater control techniques the State allows NCDOT to use. Projects that could benefit include road widening projects and greenways. The latest NCDOT toolbox is six years old and is currently being updated.
  • Use of stormwater fees. Last week, the General Assembly sent the Governor HB 573 Stormwater Management Fee Uses, which would allow counties with a population above 910,000 to use fees collected in a stormwater enterprise for specific flood control purposes. Practically, once this bill becomes law after the Governor’s consideration, it would affect only Mecklenburg and Wake counties. The bill began as a statewide bill but was narrowed after encountering resistance from House members, many of whom have publicly questioned the uses to which cities and counties may put stormwater fees. The effects of this bill on MS4s with stormwater enterprises should be minimal. Already, state law allows stormwater enterprise fees to be used for flood control purposes.
  • Tree ordinances. Following intense efforts by local officials opposing a proposal to eliminate local governments' ability to regulate trees, many legislators committed to not advancing the proposal, HB 1191 Authority to Adopt Local Ordinances, this legislative session. As written, the proposal would remove all ability of local governments to regulate trees, regardless of whether the purpose of the regulation was for public safety, stormwater control, noise reduction, aesthetic, or other reasons. Read about how this topic arose in last month's EcoLINC article "Proposal Eliminates Local Regulatory Authority over Trees, Fertilizer."
  • Fertilizer. A League-requested floor amendment during the Senate debate on SB 734 Regulatory Reform Act of 2014 restored local authority to enact fertilizer ordinances that were necessary to comply with state and federal water quality mandates. The amendment modified a proposal that previously would have eliminated all local authority to regulate fertilizers. Cities and towns that are subject to state and federal wastewater, stormwater, and buffer programs and permits must regulate the use and storage of fertilizer, to varying degrees. This amendment allowed that narrow scope of mandated local regulation to continue. The League thanks amendment sponsor Sen. Brent Jackson, bill sponsor and former Greensboro City Council member Sen. Trudy Wade, other Senate supporters, and agriculture stakeholders for working to address concerns cities held with the original provision.
  • Gravel. The House advanced HB 1166 Clarify Gravel Under Stormwater Laws, clarifying how state laws treated gravel for the purposes of stormwater regulations. The bill matched the recommendation of the interim Environmental Review Commission (ERC), and the House approved it without changes. During the interim, the ERC conducted an exhaustive study of the topic and recognized that aggregate materials colloquially called "gravel" functioned with varying degrees of perviousness that depended on the material's ability to infiltrate water. As a result of findings from that study, the bill proposed to reverse a 2013 law that declared all aggregate-covered surfaces were pervious, a conclusion not based in science. To research this distinction further, the bill directed N.C. State University to study the infiltration rates of various aggregate surfaces (read previous League coverage). Bill sponsor Rep. Ruth Samuelson stated that the proposal provided state and local regulators the tools to enforce the existing statute correctly. Read more detail about the tug-of-war between state legislators and regulators on this topic in "Legislators, Regulators Take Dueling Actions over Gravel Provision," March 2014 EcoLINC).
  • Wetlands. As part of its regulatory reform package (Section 3.1), the Senate went beyond previous recommendations to loosen State and local regulation of isolated wetlands. Under the proposal approved by the Senate, mitigation for disturbances to isolated wetlands would only be needed in the event of one acre or more of disturbance. Further, the Senate reduced the amount of mitigation currently proscribed, directing a 1:1 ratio instead. Read more background about isolated wetland regulation in North Carolina in "Lawmakers Move to Relax Wetlands Mitigation Requirements," March 2014 EcoLINC.
  • Jordan Lake Rules. The Senate also included a provision in SB 734 Regulatory Reform Act of 2014 (Section 3.16) that changed stream piping from an "allowable" use to an "exempt" use in buffer areas subject to the Jordan Lake Rules. Local governments under these Rules must enforce these state regulations on any development proposed in their jurisdictions. This change represented the only tweak to the Rules debated so far this session. Since the Rules became law in 2009, the legislature modified them in some way every subsequent legislative session. However, an interim study committee that met this spring did not recommend additional changes to the Rules.

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Utility Operations Bills

This article will highlight six utility operations bills of interest to cities and towns that received consideration in the past month. Clicking on any bill title will take you to the League's bill tracking service, which includes bill summaries, the League's position and tracking level for the bill, and information on bill status pulled from the N.C. General Assembly website.

  • Local government environment ordinances. When passing SB 734 Regulatory Reform Act of 2014, the Senate included language (Section 1.2(a)) that would end a de facto moratorium on local government environment ordinances. The language, recommended by an interim legislative environment oversight committee and also included in HB 1136 Authority to Adopt Certain Ordinances, resulted from intense outreach efforts by municipal officials over the past year. (Read about these conversations in "League Efforts to Remove Environment Ordinance Moratorium Successful at ERC," March 2014 EcoLINC.) The moratorium, as well as previous legislative efforts to remove the ability of local officials to implement required state and federal environment programs, represented the biggest threat to local government authority in the 2013 legislative session. The League supported this provision and thanks House and Senate leaders for recognizing the penalties local governments would incur if this authority was taken away from local governments.
  • Infrastructure needs study. The House advanced a proposal creating a study commission to assess and prioritize the State's infrastructure needs. Included in HB 1043 Prequalification Update, the proposal tasked a panel of legislators and public members -- including a League-recommended representative -- with examining the State's building and infrastructure needs, including new repairs, renovations, expansion, and new construction. The study group would conduct an assessment of local governments' water and sewer infrastructure needs, including prioritization of those needs across the State with an emphasis on projects that met public safety and economic development goals. Ultimately, the study would provide recommendations for funding these unmet capital needs. League members selected a statewide infrastructure capital needs program as one of their advocacy goals for this year.
  • Water/wastewater system merger study. In SB 734 Regulatory Reform Act of 2014, the Senate included a provision (Section 4.4) that directed a study of the benefits of water and wastewater system mergers. Growing out of discussions by an interim legislative study group in which the League participated, this study responded to legislators' concerns over the viability of failing water and wastewater systems. The study would specifically direct the independent, non-partisan legislative Program Evaluation Division to examine whether the benefits of successful mergers -- such as those in Charlotte-Mecklenburg, Gastonia-Cramerton, and Wilmington-New Hanover -- could apply in other areas of the state. This regulatory reform provision mirrored HB 1058/SB 756 PED Study of Water and Sewer Systems.
  • Design work/RFQs. The House approved a proposal first unveiled this spring that placed limits on what design work government units could solicit as part of a Request for Qualifications (RFQ). The contracting provisions of HB 1043 Prequalification Update passed the House nearly unchanged from the version recommended by an interim study committee in April. Though it prohibited solicitation of designs or work products in the RFQ, the bill encouraged local governments to discuss design "concepts or approaches to the project, including impact on project schedules." Such conversations with potential designers would save public dollars by ensuring that the local government knew of any innovative approaches to a project that would save on construction costs.
  • Environment program self-audits. The Senate introduced a new concept for environment program compliance in its regulatory reform bill that would allow permitted operations to self-audit and voluntarily report violations. In exchange, the provision would allow those permit-holders a level of immunity from disclosure of documents as well as fines and other enforcement actions. In order to be used by permitted local government programs for their wastewater and stormwater operations, the provision would need substantial amendments to address public records and other concerns. The language came close to a proposal put forth by the American Legislative Exchange Council and worried environmental groups, as detailed in this Washington Post article.
  • Burden of proof/contested permits. When it passed SB 734 Regulatory Reform Act of 2014, the Senate added a measure intended to clear up confusion regarding which party in contested cases -- such as actions brought by local governments to contest environment permit conditions -- bore the burden of proof. The clarification became necessary after an N.C. court decision reversed previous law regarding which party must present evidence in these cases. However, because the Senate-approved language did not adequately address this change, the League and other permitted entities worried that plaintiffs in these suits would now bear the total burden of proof in such cases. Prior to the adverse court decision, the agency issuing a permit or other decision bore responsibility for proving the facts of the case. The League has worked with legislators to further refine this language as it moves through the legislative process.

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Development Review Bills

This article will highlight three development review bills of interest to cities and towns that received consideration in the past month. Clicking on any bill title will take you to the League's bill tracking service, which includes bill summaries, the League's position and tracking level for the bill, and information on bill status pulled from the N.C. General Assembly website.

  • Sedimentation/erosion control plan review. A day before the short session began last month, in an unusual move, the Legislative Review Commission (LRC) stripped a study committee recommendation that would have transferred liability for incomplete infrastructure to local governments. Instead, the LRC replaced it with a measure that would require erosion control device designers to certify that the infrastructure was designed correctly and would be installed according to an approved sedimentation and erosion control plan. The idea for this proposal arose out of troubles with a development in Lowell. Discussions by an interim study committee focused on which entity bore responsibility for failing residential community infrastructure, such as retaining walls or other common stormwater devices; the committee's original recommendation placed that liability on local governments. In completely removing that liability provision, the new recommendation responded to concerns by committee members that local governments should not be exposed to liability that was more appropriately assigned to developers. These recommendations became HB 1106 Erosion Control Designer Certification. A related bill also recommended by the LRC, HB 1105 Local Erosion Programs/Takeover Existing Plans, would ensure that when a local government received permission to operate a delegated sedimentation/erosion control plan, responsibility to approve projects currently underway transferred from the state Sedimentation Control Commission to the local government. Each of these bills received initial approval by the House Committee on Regulatory Reform and must receive approval by the House Environment Committee before advancing further.
  • Technical review of engineering plans. The House passed HB 1081 Reform Agency Review of Engineering Work earlier this month. This bill, approved with minor changes from the version approved by an interim legislative environment study committee this spring, standardized State and local review of engineering plans such as stormwater, sedimentation/erosion control, and water and wastewater system designs. The bill contained numerous suggestions for improvement made by the League; read full details of the changes it would mandate for State and local programs in "ERC Approves Refined Proposal to Standardize Review of Engineering Plans," April 2014 EcoLINC.
  • Development review protocols. In the last ten minutes of its floor debate on SB 734 Regulatory Reform Act of 2014, the Senate introduced a new concept that would shake up current law and practices regarding the processes followed by State and local governments for a wide variety of development reviews. Specifically, the amendment would create a new statutory section that allowed an applicant to choose the set of rules under which it wanted its application to be reviewed, when the governmental entity changed the rules between the time of application and time of approval. The provision would apply to such environmental development reviews as sedimentation/erosion control, post-construction stormwater, and water/wastewater system design, as well as planning development reviews such as site plan approvals, subdivision approvals, and historic district certificates of appropriateness. The League opposed this original provision, which would eliminate local officials' ability to preserve the property rights and value of landowners next door to unforeseen proposed land uses. The League remains committed to working with legislators to ensure local officials may retain their decision-making authority, and to ensure that local governments may remain in compliance with state and federal environment mandates when those rules change. Earlier this year, this idea received a hearing during an interim committee meeting of the Committee on Property Owner Protection and Rights (for explanation, see slides 12-13 of this presentation and read a short article about the concept).

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Budget Environment Items

This article will highlight environment items contained in the state budget of interest to cities and towns. With a final vote by the House on Friday, SB 744 Appropriations Act of 2014 is poised to go to a conference committee so legislators can work out differences between the two chambers. Under rules adopted by legislators, only items considered germane to either the final  Senate or House version of the bill may be included in the conference bill. Both chambers must approve the conference-negotiated language to ratify the bill, a vote typically taken in the final days of the legislative session.

  • Enterprise fund transfers. During House budget deliberations, the League secured an amendment to a Senate provision (Section 14.17) that originally prevented the awarding of State and federal grant funding to local governments that transferred funds from an enterprise fund to the general fund to "subsidize" the general fund. This idea followed similar discussions held in meetings of the interim Committee on Public Enterprise Systems and Use of Funds. With the League-promoted amendment, the provision now would allow enterprise systems to pay for cost-allocated services provided by the general fund--such as shared personnel costs, rent, engineering and design work, and plan review--without becoming ineligible to receive grant funding. Affected grant programs included federally-funded programs such as the Drinking Water State Revolving Fund (DWSRF), the Clean Water State Revolving Fund (CWSRF), the Clean Water Management Trust Fund (CWMTF), Community Development Block Grants (CDBG), and various state-funded water and wastewater infrastructure programs.
  • Aquatic weed management. Though both the House and Senate versions of the budget addressed the state's aquatic weed program, each chamber treated the program differently. Aquatic weeds are invasive species that reproduce rapidly in lakes and other waters, contaminating water supplies. In the Senate budget (Section 14.19), legislators transferred the entire program from the N.C. Department of Environment and Natural Resources (DENR) to the N.C. Wildlife Resources Commission. Along with the program transfer, the Senate would also provide the program $500,000 annually, with $400,000 in one-time funding to address hydrilla growth in Lake Waccamaw. In contrast, the House would keep the program in DENR and provide $500,000 in annual appropriations for the program. Both chambers named the funding source of this appropriation the "Shallow Draft Navigation Channel Dredging and Lake Maintenance Fund."
  • Water/wastewater/stormwater grant programs. The House version of the budget contained more special provisions affecting infrastructure grant programs than the Senate version. First, the House set aside $1 million of the CWMTF appropriation for remediation of stormwater impacts on lakes subject to a nutrient management strategy approved by the NC Environmental Management Commission. This appropriation was likely meant to continue the funding currently supporting the Jordan Lake SolarBee project (read details about this project in last month's EcoLINC). Next, the House changed a Senate provision regarding infrastructure grants in low-income counties (Section 14.17A). The House would set aside $500,000 for projects located in Tier I and II counties, while the Senate would merely grant priority to projects located in Tier I counties. Further, the House budget contained a special $17,500 appropriation to Forest City for a water line extension (Section 14.28). Finally, both the House and Senate directed CDBG funds toward development of a new software program, directing position cuts to gain the funds for the new software.
  • DENR's federal funding. Both the House and Senate budgets directed state agencies, including DENR, to report to the legislature (1) the source and amount of federal grants received to support agency programs, (2) any required state match to receive the federal funds, and (3) conditions placed on the agency for accepting the grant (Section 14.1). For DENR, federal grants fund a significant portion of the agency's water quality programs. One example of a condition for receiving that funding is detailed in "Regulators Switch Gears, Propose Statewide Nutrient Standards," above, where the U.S. Environmental Protection Agency required DENR to write and implement a plan for nutrient regulation in order to  receive its funding.
  • DENR efficiencies report. The House added a provision to its budget (Section 14.2A) that required state agencies such as DENR to report to the legislature the rationale for recent agency reorganizations, efficiencies gained, cost savings (including eliminated positions), and improvements in the agency's administrative capabilities. Within DENR, the Division of Water Resources underwent an extensive reorganization last fall, at the direction of the legislature.
  • Coal ash positions. Both the House and Senate budgets set aside substantial sums to beef up DENR staffing and other capabilities to regulate coal ash. Each chamber allocated funds for up to 25 new positions throughout DENR in functional areas such as dam inspection, waste management, and water resources. Further, each chamber's budget directed funds for scientific equipment, vehicles, permitting, sampling, and data analysis related to coal ash regulation. In addition, the Senate coal ash plan released yesterday included language directing a $1.75 million appropriation to DENR for 25 new positions to support coal ash regulatory activities.
  • Fund interest & unspent reserves. To achieve savings elsewhere in the budget, both chambers, particularly the Senate, directed that interest and unspent reserves from various environmental program funds revert to the State's General Fund to pay agency operations costs (Section 14.21). The Senate took interest and unspent reserves from the DWSRF, CWSRF, CWMTF, commercial leaking underground storage tank program, noncommercial leaking underground storage tank program, brownfields, inactive hazardous sites clean-up, and dry-cleaning solvent funds. The House followed suit, except it did not redirect interest and unspent reserves from the CWSRF and CWMTF.
  • AgWRAP funding. The legislature created the Agricultural Water Resources Assistance Program (AgWRAP) in 2011 for several purposes, including funding projects that implement best management practices for protecting waters. Each legislative chamber differed on how to fund the program this year, with the Senate budgeting $2 million in one-time funding for the program ($3 million in total funding) and the House budgeting $1 million in one-time funding, minus a $375,000 reduction ($1.625 million in total funding).

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New Federal Law Supports Water Infrastructure Projects

Last week, President Obama signed the Water Resource Reform and Development Act (WRRDA) into law, stating that WRRDA would "put Americans to work modernizing our water infrastructure and restoring some of our most vital ecosystems." Receiving bi-partisan support in Congress, WRRDA was the first federal water resources bill approved in seven years. Specifically, the Act updated the Clean Water State Revolving Loan program; authorized thirty-four new lock, dam, levee, port, and ecosystem restoration projects; and created a Water Infrastructure Finance Innovations Authority (WIFIA).

Congress modeled WIFIA after the Transportation Infrastructure Finance and Innovations Authority (TIFIA) and included a five-year pilot program to provide low-interest loans for flood control, water supply, and wastewater infrastructure. Specifically of importance to larger municipalities, Congress supported funding for water and wastewater infrastructure projects that may have had difficulty accessing state revolving loan funds due to limitations on project size in those programs. Congress aimed WIFIA pilot funds at larger projects costing at least $20 million (or $5 million for communities of 25,000 or fewer). Under the WIFIA concept, the larger loans would leverage federal funds by attracting other investments, providing crucial support to communities with aging infrastructure.

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Join the League's Regulatory Joint Action Program, REG-TAF

Participation by League members in the Regulatory Technical Assistance Fund (REG-TAF) is growing. REG-TAF is a voluntary joint action program, created to protect N.C. municipalities’ collective interests by hiring external technical support for water quality and electric regulatory issues. The League membership asked the League to organize this annual voluntary joint action program after the success of two previous League member-supported joint action programs -- the Municipal Environmental Assessment Coalition (MEAC) and the Municipal Energy Group (NC-MEG).

REG-TAF will be a continuing program comprised of annual voluntary contributions. In some years, the funds will support both water quality and electric regulatory issues, and in other years, funds may only be spent on one issue. Funds will be expended at the direction of an oversight committee comprised of members of the League’s Board of Directors with suggestions from all REG-TAF participants.

The suggested voluntary contribution depends on the potential benefit a municipality or authority will receive from joint regulatory technical assistance, given its electric consumption, wastewater generation, and stormwater controls. The REG-TAF proposal provides more information about the program and the voluntary suggested contribution. The deadline for League members to sign up is August 1. If you have any questions, please contact League Regulatory Affairs Associate Sarah Collins (Read more).

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Regulatory Briefs

In early June, DWR announced it was accepting public comment on the North Carolina 303(d) Listing Methodology; comments are due by July 31...Yesterday, the EMC provided notice of its proposed amendments to water quality standards regulations, known as the triennial review, opening the 60-day public comment period and announcing public hearing dates of July 15 & 16...In addition, the public comment period opened for the proposed new state rules regarding stormwater management at oil and gas exploration and production sites...Also in early June, a Superior Court judge struck down as unconstitutional a 2013 law that would transfer Asheville's water system to a regional authority, a decision the State said it would appeal...DEMLR's Stormwater Unit indicated it was starting the NC Voluntary Compliance Assessment Program (VCEP), which may serve as an alternative to an MS4's state audit...DEMLR released a new procedure that allows stormwater designers to meet nutrient reduction requirements by using the state's new Storm-EZ tool, a method of calculating low-impact development designs...Changes in the NC811 law from HB 476 will go into effect on October 1, 2014, and require the following changes: increased education, creation of an enforcement web portal through which complaints can be filed and system, and changes to address the ticket size limit...Environmental groups asked to intervene in the Rose Acre Farms federal case, expressing concern that DENR would not vigorously defend its authority to require an NPDES permit for discharges of dust and feathers...EPA and Duke Energy signed a consent agreement to conduct a Superfund cleanup of coal ash deposits in the Dan River; Duke agreed to perform the assessment and removal while EPA agreed to oversee the cleanup activities...Meanwhile, environmentalists won another coal ash court victory when a judge allowed a suit to proceed brought by environmental groups to challenge DENR's oversight of Duke's Sutton plant in Wilmington...EPA granted a 91-day extension on comments to the proposed waters of the US rule, extending the comment period to October 20...To better-explain the impacts of the proposed rule on local governments, EPA is hosting a conference call on June 17 at 3:00 pm: (877) 312-7961, Conference ID  56618674...EPA will host another webinar to discuss the approach to the fourth Unregulated Contaminant Monitoring Rule (UCMR4) for public drinking water systems on Wednesday, June 25 from 9:00 am--4:30 pm...EPA submitted to OSBM a pretreatment rule for dental amalgam, which, if it advanced, would require wastewater utilities to add dental offices to effluent guidelines programs...In addition, EPA announced for public comment the draft updated ambient water quality criteria for the protection of human health for ninety-four chemical pollutants and is accepting written scientific views from the public for 60 days; the public notice also included a fish consumption report...EPA indicated that in the absence of a national post-construction stormwater rule, it would push similar stormwater retention standards as states renew MS4 stormwater permits...In addition, EPA reported it would take voluntary approaches for strengthening cyber security in wastewater and drinking water sectors, but may adopt regulatory requirements in the future...EPA also released its Groundwater Remedy Completion Strategy in May, detailing site-specific actions and decision-making processes to evaluate the performance of groundwater remedies and achieve groundwater cleanup goals.

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NCLM and State Environmental Government Meetings & Events