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League Bulletin

May 19, 2015

As the legislative session continues along, the last few weeks have seen a flurry of activity. April 30 marked "crossover," the date by which all non-finance/appropriations bills must advance through their originating chamber (and "cross over" to the other chamber) in order to remain eligible to become law during the biennium. On the crossover date, the House took up roughly 70 bills over a 10-hour period that ended with a 2:30 a.m. adjournment. The Senate took a more leisurely approach, but still approved about 50 bills during the two days leading up to the deadline.

After crossover week, House members' focus shifted to finalizing their budget proposal, much of which was rolled out during subcommittee meetings on Thursday. All of the provisions are subject to being amended as House leaders moved the combined bill through the House Finance Committee on Monday, the House Appropriations Committee on Tuesday, and finally onto the House later this week. The proposal covers both years of the two-year legislative biennium.

The state's strong revenue picture allowed House budget writers to increase funding in a number of key areas. Some key environmental-related provisions of importance to municipalities include:

  • $500,000 in additional recurring dollars and $11.5 million in a one-time appropriation to the Clean Water Management Trust Fund (CWMTF). The additional appropriation would bring total program funding for the biennium to $52 million and would achieve a League priority advocacy goal of increased appropriations to this fund. The separation of the National Heritage Trust Fund from the CWMTF would pull $750,000 from it.
  • $5 million for Water Resource Development projects, dollars that would be used around the state to match federal grants, many for dredging projects.
  • $478,825 cut from the Drinking Water State Revolving Fund, leaving $4.5 million for the program.
  • $5.1 million for the Clean Water State Revolving Fund, enabling federal funds to be drawn down.
  • $3.27 million in additional recurring dollars and $10 million in non-recurring funds for state water and wastewater infrastructure grants. The money is part of $38.2 million in total funding for the purpose over the biennium.
  • $900,000 in additional non-recurring money for aquatic weed control.

In a key vote on Thursday, the N.C. Environmental Management Commission (EMC) decided that the "listing methodology" used in deciding NC's 2016 impaired waters list -- known as the 303(d) list -- should stay significantly similar to what was used in 2014, with some slight modifications to reflect the recently approved water quality standards. The significance of the approval of the 2016 303(d) Listing Methodology was that the EMC did not let the U.S. Environmental Protection Agency's (EPA) addition of waters to North Carolina's 2014 list, caused by a disagreement between the State and federal regulators over the way to determine certain waters did not meet water quality standards, affect its decision regarding what listing methodology was appropriate.

The League argued strongly in favor of the EMC's methodology two years ago and opposed EPA's action, which led to fifty-one additional N.C. water bodies being declared impaired. For the 2016 list, the League supports the EMC decision to retain its listing methodology. The procedures used by the agency to make impaired waters determinations directly influence a regulatory decision that often has expensive outcomes for municipalities. 

The state's 303(d) list, named after Section 303(d) of the federal Clean Water Act (CWA), 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 decision to add waters to North Carolina's 2014 list was based on differences in opinion that the federal agency had with the EMC regarding how the State should list waters based on toxic parameters, such as copper. In choosing the state's 2016 methodology, the EMC continued to support its decision to use a 90% confidence limit listing methodology, which utilizes a numeric water quality criteria evaluation for toxic parameters to list waters when data showed that greater than 10% of the available results exceeded the standard with a 90% statistical confidence. EPA favored a so-called “one in three” listing methodology for toxic parameters such as metals which 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 League submitted comments in September regarding the 2016 listing methodology, requesting that the state retain its 2014 approach and stating that it reflected solid science, statistical validity and thoughtful water quality management public policy.

The League has been very involved in efforts around the 303(d) impaired waters list and the listing methodology. These efforts were reported on in these previous EcoLINC articles:

This article will highlight stormwater bills of interest to cities and towns that have received consideration during this legislative session. Clicking on any bill title will take you to the League's bill tracking service, which includes the tracking level for the bill and information on bill status pulled from the N.C. General Assembly website.

  • Regulatory Reform Act of 2015--House. The House's omnibus regulatory reform bill, HB 760 Regulatory Reform Act of 2015, passed the House in early May and moved to the Senate. Changes to riparian buffer rules and limitations to stormwater programs contained in this bill are of major concern to cities and towns. The bill sponsor, Rep. Chris Millis, offered an amendment to clarify that the riparian buffer provision (Section 3.3) did not affect a local government's ability to use buffers to comply with total maximum daily loads (TMDL) or permits issued by the state, including National Pollutant Discharge Elimination System (NPDES) permits. While this amendment language was an improvement to the original proposal, it did not address all municipal concerns. Specifically, the bill would still limit local governments' use of buffers for compliance with water supply watershed and many other requirements. Other municipal concerns with the buffer provisions include broad exemptions from the complex riparian buffer rules, including exemptions to tracts of land that were platted before the buffer rules went into effect. These exemptions would apply to riparian buffer rules enforced by either the state or a local government. The bill would also eliminate local governments' ability to implement stormwater programs that exceeded the state's model stormwater ordinance (Section 3.2). The League proposed alternate language to address outstanding concerns and continues to work with the bill's proponents as the Senate now considers the bill.
  • Regulatory Reform Act of 2015--Senate. Among other provisions, the Senate's omnibus regulatory reform bill, SB 453 Regulatory Reform Act of 2015, includes a measure (Section 4.5) to abolish the Sedimentation Control Commission and turn that state board's responsibility over to the N.C. Environmental Management Commission. The Senate has yet to take action on this bill.
  • Stormwater/Built-Upon Area Clarification. HB 634 Stormwater/Built-Upon Area Clarification passed the House at the end of April, resurrecting a debate from last session over whether the state and local governments should treat gravel-covered surfaces, such as parking lots, as impervious under stormwater laws. The bill would specifically exempt a surface of certain-sized stones laid at least 4" thick over a geotextile fabric from built upon area calculations, treating the material as if water would run though to the ground below. The League opposed the provisions and supported instead retaining the current definition of built-upon area codified in S.L. 2014-210, which resulted from extensive study by the Environmental Review Commission. The bill has not yet been heard by the Senate.
  • Stormwater/Flood Control Activities. Filed as a statewide bill with limited applicability to Mecklenburg County, HB 141 Stormwater/Flood Control Activities would allow a city, as part of its stormwater management program and for the purposes of operating a public enterprise, to purchase property for the purpose of demolishing flood‑prone buildings and implement certain flood damage reduction techniques that result in improvements to private property. An amendment in a House committee discussion widened applicability beyond Mecklenburg County to include municipalities in counties with a population of 275,000 or greater that had at least one city with a population of 225,000 or greater -- which added cities in the counties of Durham, Forsyth, Guilford, and Wake. While the bill cleared the House, it has not yet been heard by the Senate.
  • Sedimentation Control on Trails Projects. SB 486 NC Trail Expansion/Economic Corridors contains a provision that prohibits local government regulation of activities related to construction, maintenance, or removal of trails unless required by federal law. The League is working to ensure that this limitation does not disallow some non-federally-permitted municipalities from applying stormwater controls to these activities. The Senate Committee on Agriculture, Environment, and Natural Resources plans to hear this bill tomorrow.
  • Sedimentation Civil Penalty Reforms. In an effort to move situations of sedimentation control violations toward more education-focused enforcement, SB 552 Sedimentation Control Civil Penalty Reforms limits the amount the State or a locally-delegated sedimentation/erosion control program may charge for certain violations. The bill, which has not yet received a hearing, also requires in-person service of certain first-time penalties.
  • Conservation Easements. One provision in this year's omnibus North Carolina Farm Act of 2015 would provide a mechanism for property owners and governmental entities that are parties to a perpetual conservation agreement to petition the Council of State to remove that agreement. This measure passed three Senate committees last week and was given initial approval by the full Senate on Monday night. With expected final approval in that chamber on Tuesday, it would next move to the House for consideration.

This article will highlight water supply measures of interest to cities and towns that are before state lawmakers this legislative session. Clicking on any bill title will take you to the League's bill tracking service, which includes a tracking level for the bill and information on bill status pulled from the N.C. General Assembly website.

  • DENR Study of IBT Laws. HB 718 DENR Study of IBT Laws directs an agency study of the limited circumstances under which the state's interbasin transfer of water laws may be relaxed. This bill did not receive a hearing in the House before the crossover deadline, so if it advanced, the language would likely do so as a measure in an omnibus regulatory reform bill.
  • Cape Fear Water Resources Availability Study. HB 186 Cape Fear Water Resources Availability Study would require the legislative Environmental Review Commission to study the aggregate uses of groundwater and surface water in or affecting the Cape Fear River Basin by all users. This bill passed the House last month and moved to the Senate, where it has not yet received a committee hearing.
  • Alternative WQ Protection for Falls Lake. HB 630 Alternative WQ Protection for Falls Lake evaluates whether the SolarBee in-lake nutrient removal devices that are currently being tested in Jordan Lake would also merit testing in Falls Lake, and directs the Department of Environment and Natural Resources (DENR) to reassess the Falls Lake Rules to determine if any portions of the Rules are unnecessary. This bill passed the House last month and now awaits Senate consideration.
  • Aquatic Weed Study. Appearing in identical companion bills, a provision in HB 430/SB 422 Omnibus County Legislation would direct a legislative study of noxious aquatic weeds that endanger water supplies. The House version of the bill passed that chamber last week after facing some controversy over an unrelated provision. To advance, the Senate must now take action on the bill.
  • Interconnection of Public Water Systems. As originally filed, SB 547 Interconnection of Public Water Systems would have allowed DENR to mandate local water systems to interconnect with nearby systems as a condition for system construction or alteration, without taking into account issues such as:
    • Which system would be financially responsible for the interconnection?
    • Would the bill punish systems that planned well by forcing them to merge with a system that had not?
    • How would DENR determine which systems would interconnect?

With the help of the League, SB 547 was amended to include provisions to encourage water systems to look toward future interconnection by allowing DENR to serve a role in identifying and facilitating eventual voluntary interconnections of public water systems through information gathering. Although it passed one committee, the bill must receive a favorable vote from a second committee before advancing to a full Senate vote.

This article will highlight wastewater measures of interest to cities and towns that are before state lawmakers this legislative session. Clicking on any bill title will take you to the League's bill tracking service, which includes a tracking level for the bill and information on bill status pulled from the N.C. General Assembly website.

  • Plastic Pipe Preference. SB 397 Open & Fair Competition/Water & Wastewater would have prohibited public entities that seek state funding for water, wastewater, or stormwater projects from using their best professional judgment in the selection of piping materials. In doing so, this proposal would override local standards and specifications that have been developed over time based on past experience. Because material selection can be location- and application-sensitive, local conditions and requirements should be the primary factors when considering pipe materials on any project. This bill was not voted on in time to survive the cross-over deadline.
  • Land Application of Biosolids. HB 61 Local Control/Land Application of Biosolids would limit the land application practices of wastewater treatment facilities and disrupt well-established law that leaves regulation of biosolids at the state and federal levels. By allowing county boards to dictate how residuals from wastewater utilities are disposed, the bill could prove costly for municipal utilities if they are forced to change their treatment processes. The League held numerous discussions with legislators in advance of a House committee meeting to ensure they understood the impacts of the proposal on municipal wastewater management. After intense questioning by those committee members during committee debate, in an unusual procedural move, the meeting was quickly adjourned before a vote could be taken on a motion for an unfavorable report. The motion, had it been successful, could have killed the bill for the remainder of the two-year legislative session. Instead, this bill simply was not voted on in time to survive the crossover deadline.

This article will highlight general utility operations bills of interest to cities and towns that are before state lawmakers this legislative session. Clicking on any bill title will take you to the League's bill tracking service, which includes the tracking level for the bill and information on bill status pulled from the N.C. General Assembly website.

  • Municipal Eminent Domain Restriction. As originally drafted, HB 875 Restrict Municipal Eminent Domain would have required county commission approval of all municipal condemnation actions outside a municipality's corporate limits, with limited exceptions. The original bill essentially gave county commissioners a veto over municipal officials' decisions, a policy the League opposed. After intense pressure from the League members and a rare vote against a favorable committee report, the bill's primary sponsor modified the bill so that it only applied in Ashe and Watauga counties and brought the bill up for a hearing in a different committee. During that second committee hearing, a representative of the Town of Boone testified that the bill appeared to be aimed at stopping a multi-year, multi-million dollar effort already underway to develop a new water intake for the Town, which would also serve the Town of Blowing Rock. Ultimately, the bill passed the House as a local bill and now awaits Senate consideration.
  • Quick-take Condemnation. In March, the House passed HB 127 DOT Condemnation Changes, a bill that would enhance awards for plaintiffs' attorneys in quick-take condemnation cases at the expense of taxpayers. The N.C. Department of Transportation and local governments use the quick-take condemnation procedure to more quickly bring online public infrastructure such as water and sewer projects, saving project costs. While the League appreciates the willingness of the bill sponsor, Rep. Skip Stam, to meet and discuss concerns regarding this language, the League continues to believe that the House measure would encourage plaintiffs' attorneys to bring cases to trial, likely delaying projects while running up legal fees. The Senate assigned this bill to the Senate Transportation Committee, with a serial referral to the Senate Judiciary I Committee. Last session, a similar measure passed the House and stalled in the Senate.
  • Utility Line Relocation Costs. Furthering a League priority legislative goal, the House included in its budget proposal an item that would provide financial relief to cities under 50,000 in population by requiring DOT to pay some or all of the costs of relocating municipal water and sewer lines when state road construction forces those utility lines to be moved. The provision would set up a tiered system where municipalities with a population under 10,000 would pay none of the costs and those between 10,000 and less than 50,000 would pay either 25 or 50 percent of the costs. Current law requires all cities over 5,500 in population to pay the full costs of utility line relocation, while other types of entities, including counties, water authorities, and other utility districts, share none of these costs. The League-supported budget provision would implement the tiered system proposed in HB 771 DOT/Utility Relocation Costs, approved last month by the House Transportation Committee.
  • Utility Easement Reservation/Street Closing. As one of this year's regulatory reform bills, HB 836 Local Government Regulatory Reform contains a League-suggested provision to clarify the types of easements a municipality may reserve when closing a street, including easements for utilities, drainage, landscaping, and others. The bill passed the House and awaits consideration by the Senate.
  • Performance bonds. The League successfully suggested changes to HB 721 Subdivision Ordinance/Land Develop. Changes, which passed the full House last month. The changes will preserve municipalities' ability to effectively recover the costs of incomplete infrastructure from developers through performance guarantees such as bonds and letters of credit. The bill sponsors agreed to League-suggested modifications that would set the amount of performance guarantees at 125% of the estimated cost of completion, up from the original proposed amount of 110%. The House-approved version of the bill also dropped stormwater-related performance guarantees after originally including them. This change meant that municipalities could continue current practices in requiring guarantees for the performance of post-construction stormwater devices. Also, among other provisions, the bill lists the types of financial assurance a developer may choose from: bonds, letters of credit, or an "equivalent security." The bill now heads to the Senate for its consideration.
  • Water/Sewer Availability Fee. Aiming to clarify existing law, HB 874 Cities/Availability Charge/Improved Property would allow municipalities to charge an availability fee to properties that would qualify for issuance of a building permit and where the municipality has already installed a water/sewer line. The bill has not yet received a hearing in the House.
  • Subterranean Pipe Drawings. Still awaiting its first hearing, HB 635 Property-List Subterr. Pipes/Plat & As-Built adds requirements for property owners who are installing water/sewer or stormwater infrastructure. Under the bill, a local government may withhold issuance of building permits until the property owner gives the local government information regarding the location, size, and materials of those pipes and devices.

The N.C. Division of Water Resources (DWR) pushed forward with the expansive "periodic review of rules" process mandated by HB 74 Regulatory Reform Act of 2013, holding stakeholder meetings beginning in late March. The agency intended these discussions with affected parties to assist in preparing proposals for the state's lead environment board, which HB 74 tasked with re-adopting nearly all of the state's water quality rules. The League participated in most of these meetings; an overwhelming majority of these rules regulate municipalities.

The environment board, N.C. Environmental Management Commission (EMC), promulgates over 1,200 of the state's 23,000-plus rules. Included among its 1,200 rules are 273 rules addressing water quality. As part of the legislatively-mandated rule review process, legislators specifically directed a review of these water quality rules first. Those rules include many regulations affecting cities and towns, such as the rules governing wastewater discharges, stormwater programs, buffers, reclaimed water, land application of biosolids, and various nutrient management strategies.

Stakeholder Input to Readoption

With the 2B, 2H, 2T, and 2U water-related rules already through the rule review process and determined to be “necessary with substantive public interest” -- a categorization requiring re-adoption of the rules -- DWR announced an extensive stakeholder process to assist in preparing any changes to the rules prior to re-adoption by the EMC. Specifically, DWR scheduled five stakeholder meetings, organized by rule topic and scheduled bi-weekly on Tuesdays between March 24 and May 19.

The purpose of the stakeholder meetings is to gain perspectives on early versions of the rules and take additional suggestions and questions that may improve these early drafts. Following these stakeholder meetings, the agency and the EMC will provide more opportunity for feedback before the EMC considers draft rules and initiates the formal rulemaking process this fall. This stakeholder process was the first opportunity to look at the DWR staff-level proposals. It is anticipated that there will continue to be changes to the proposed rule language throughout the entire re-adoption process.

Below is summary of stakeholder discussions of interest to cities and towns:

  • March 24 - Standards and Classification Rules. The early draft rules offered to the stakeholders for discussion included three areas: (1) procedures for assignment of water quality standards, (2) classifications and water quality standards for surface waters and wetlands, and (3) assignment of stream classifications. At this meeting, DWR staff members explained that they were very early in the drafting and re-adoption process, and that the drafts of various rules were likely to change several times before final consideration for formal rulemaking. Overwhelmingly, most of the draft changes offered to the rules discussed during this meeting included changes to meet Rules Review Commission (RRC) requirements, formatting changes, and corrections to outdated names or changes in organizational structures.

    The agency staff also stated a goal to simplify and consolidate these rules into a more digestible, streamlined presentation. For example, DWR proposed to move a number of definitions from within individual rules to a larger set of definitions proposed within the umbrella rule definitions of 15A NCAC 02B .0202. However, stakeholders acknowledged during these discussions that consolidation and simplification would not be completely or easily achieved. For example, for discussion during this meeting, a large amount of deleted text associated with water supply watershed rules was intended to be moved to the 2H water supply watershed program rules, but a discussion of the draft versions of the the watershed rules would not be held until a later meeting. In addition to consolidation efforts, DWR also proposed modifications to make reading the rules easier by locating most of the pertinent rules within the same section. To that end, DWR staff proposed to move a number of the 15A NCAC 2B .0100 rule’s components to each individual water body classification category.
  • April 7 - NPDES Wastewater and Stormwater Rules. The discussion of the National Pollutant Discharge Elimination System (NPDES) rules consisted of agency staff members reviewing their proposed rule changes to basin discharge requirements for the Neuse Nutrient Sensitive Water, Randleman Lake, Jordan Lake, and Falls Lake rules. Most changes were either updates for consistency with federal rules or technical changes, and the stakeholders did not offer a great deal of feedback.
  • April 21 - Reclaimed Water, Wastewater, and Remediation/Residuals Rules. Of most interest to municipalities, at this third stakeholder meeting, DWR staff members proposed changes to the reclaimed water rules that would for the first time allow as a permitted activity reclaimed water to be used inside a building for toilet flushing. However, without further changes, this rule change could burden design engineers and require changes to the plumbing code to ensure safe installation. In another proposed change, DWR suggested different rule language to reduce reporting requirements for municipalities with local authority for reclaimed water programs, reducing permitting burden for those local programs. And finally, of importance in the rules governing wastewater residuals, the agency's proposed language would eliminate setback requirements to property lines where the adjacent property is under the same ownership. The League sought this last item for a number of years.
  • May 11 - Stormwater, Water Supply Watershed, and Buffer Rules. At this meeting, agency staff did not have the majority of the stormwater rules ready for presentation and discussion because of work still underway to develop "minimum design criteria." These new stormwater device design guidelines will encompass all the regulatory requirements for siting, design, construction, and maintenance of stormwater best management practices--requirements typically found in existing rules. Of the stormwater rules presented to stakeholders at this meeting, the majority of the agency's proposed changes were reorganizations for clarity. Therefore, the rule requirements substantively remained the same. In regards to the buffer rules discussed at this meeting, the agency's draft did not propose a consolidation of the separate rules, primarily because some of the watershed management strategies have different goals. All the same, many stakeholders expressed frustration over the draft rules' lack of clarity, specifically, that the draft rules did not clearly state activities that the rules would prohibit in the buffers.

The League has participated in each stakeholder discussion through the assistance of Jay Sauber, a Raleigh-based water quality expert. The League contracted with Sauber to assist in assuring positive changes for municipalities in this process with the support of the League's Regulatory Technical Assistance Fund.

The EMC voted to send to rulemaking changes made to the state's groundwater compliance boundary and corrective action rules to provide clarity or consistency, an action long supported by the League...Regulators sent out for public notice their proposed categorization of the sedimentation control rules as part of the periodic review of rules process, with the comment period ending July 26...The NCDP Scientific Advisory Committee (SAC) held its first meeting early this month to start discussing its role in nutrient criteria development, and members expressed the need for the Criteria Implementation Committee to act in concert with the SAC... The N.C. Court of Appeals will hear oral arguments in the lawsuit regarding the legislative transfer of Asheville's water system on June 3...Clean Water for North Carolina brought legal action to challenge a provision of the state's hydraulic fracturing laws that gave the MEC the power to determine whether local ordinances illegally restrict drilling and other activities, claiming that the legislature violated the separation of powers doctrine by impermissibly giving legislative authority to the MEC to determine whether to preempt a local ordinance...DENR’s Office of Land & Water Stewardship released a non-regulatory draft N.C. Aquatic Nuisance Species Management Plan for public review, which will provide guidance for inter-agency cooperation with other public and private partners to minimize ecologic and economic risks associated with aquatic nuisance species...In April, the N.C. Division of Coastal Management approved required federal consistency submissions for seismic surveying on offshore oil and gas resource development...The N.C. Coastal Resources Commission’s Science Panel released for public review a draft of the five-year update of its controversial 2010 report on sea level rise in NC and will accept public comment until December 31...Fayetteville officials filed a petition for a contested case to appeal the EMC's decision to approve Cary, Apex, Morrisville and Wake County's IBT certificate modification...EPA announced that the new NAAQS standard for ozone will be released in October, an action that could potentially affect North Carolina's federal transportation funding...In the meantime, EPA also announced its final action (effective June 22, 2015) to approve N.C.’s 2014 SIP revision to address the base year emissions inventory and emissions statement requirements for the State's portion of the bi-state Charlotte Area's 2008 8-hour ozone NAAQS nonattainment area…In late March, EPA released proposed guidelines regarding shale gas wastewater disposal, recommending a zero discharge standard to prevent POTWs from accepting shale gas-generated wastewater...EPA also released health advisory values for algal cynotoxins in drinking water and will release recommendations for state drinking water monitoring and treatment soon...Two U.S. House bills, one of which has passed and gone to the U.S. Senate, would block the enactment of EPA's controversial CWA jurisdictional rule, and President Obama has committed to vetoing both...In addition, continuing an annual pattern, the President's FY15-16 budget requested a $53 million cut to the clean water state revolving loan fund in 2016... DC's water utility is considering the use of "social impact bonds" to help finance green infrastructure stormwater projects...At the same time, EPA officials promoted the benefits of DC's stormwater runoff reduction trading program, believing it to be a model to promote stormwater retention retrofits... A federal District Court rejected an environmental group's request to force EPA to review Florida's impaired water's rule because petitioners failed to justify that all aspects of Florida's rule were subject to federal review, holding that section 303 of the Clean Water Act (CWA) only allowed for EPA review of portions of the state's impaired water rule that revised water quality criteria...A Maryland appellate court reaffirmed that the CWA “maximum extent practicable" standard does not require MS4s to have strict compliance with water quality standards, dismissing arguments from environmental groups that the CWA required MS4s to have technology-based effluent limitations.