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League Bulletin

November 17, 2015

Since the last publication of EcoLINC, the lengthy 2015 session of the General Assembly finally adjourned at the end of September. To give cities and towns a full picture of what transpired this session, the League published its comprehensive End of Session Bulletin. This publication contains a status report on the most important bills to cities and towns considered this session. It also shows a largely successful session for the League membership, a result directly attributable to the extensive involvement of elected and appointed League members in making personal contacts with their legislators.

As the 2015 session came to an end, legislators ran through a final gauntlet of legislation that included the passage of a wide-ranging regulatory reform bill and a statewide bond referendum expected to lead to more infrastructure investment at the state and local level. Read more about the latest environmental legislative developments in the EcoLinc articles below. As legislators adjourned, they agreed to come back for the 2016 "short" session earlier than in previous short sessions; they are set to reconvene on April 25, instead of the typical early May date.

CityVision 2015

Soon after the the legislative session concluded, League members gathered in Winston-Salem for CityVision 2015, the League's annual conference. CityVision 2015 was an energized and enthusiastic kick-off of cities' vision for themselves for 2030 and was a great success, with attendees getting the chance to learn from a range of panel discussions, educational sessions and informative speakers. This vision kick-off resulted from the findings of a year-long League and UNC School of Government-led effort to examine how cities and towns can adapt to meet the demographic, financial and technological challenges ahead of them for the next 15 years. As part of that vision, attendees previewed this video focusing on the League's coming media campaign to highlight city-led economic development efforts.

In addition, the League recognized Representative Stephen Ross of Burlington and Senator Joel Ford of Charlotte as recipients of the League's Community Champion Award for 2015. The award recognized each legislator's dedicated support of North Carolina cities and towns during the 2015 legislative session. The League also honored Legislative Assistant Elise McDowell with the General Assembly Ambassador Award. This award recognizes a legislative staff member for professionalism and selflessness while carrying out his or her duties at the Legislature.

With the instillation of the League's officers for the 2015-2016 year, the conference also marked the annual transition of the League's leadership. Elkin Mayor Lestine Hutchens was sworn in as president; Zebulon Mayor Bob Matheny as 1st Vice President; and Jacksonville Mayor Pro Tem Michael Lazzara as 2nd Vice President. The League Board of Directors and membership also approved constitutional and bylaw changes intended to make the organization more nimble to meet the goals stemming from the visioning process.

Department of Environmental Quality

The past months also saw transition for the State's environmental regulatory department. When Governor McCrory signed the 2015-2016 state budget into law on September 18, the N.C. Department of Environment and Natural Resources officially became the N.C. Department of Environmental Quality (DEQ). This change of name reflects the fact that legislators narrowed the agency's focus to regulatory oversight and enforcement. They did so by moving the state’s natural resources attractions (the three coastal aquariums, state parks, Museum of Natural Sciences and N.C. Zoo) and two programs (the Clean Water Management Trust Fund and Natural Heritage Program) to what is now called the N.C. Department of Natural and Cultural Resources, formerly the Department of Cultural Resources.

Lawmakers engaged in a flurry of activity in the last weeks of September as the legislative session came to end, including the passage of laws containing environmental provisions of interest to cities and towns. This article details environmental related legislation that passed since the September 2015 edition of EcoLINC.

Regulatory Reform

In the final days of the legislative session, the House and Senate reached a compromise and passed its omnibus regulatory reform package, HB 765/S.L. 2015-286 Regulatory Reform Act of 2015. The final version of the bill incorporated changes that the League sought, converting to studies earlier provisions that would have foisted costs for electronics recycling onto municipal taxpayers and would have restricted municipalities in their choices for water, sewer and stormwater piping materials (read previous coverage about these provisions here). 

However, several sections of the final version of HB 765 sought to overhaul the state's various stormwater programs to the possible detriment of municipal stormwater programs. The section aimed at amending stormwater regulations (1) disallowed a local stormwater management program (approved under N.C. Gen. Stat. § 143-214.7) from exceeding the "model program" adopted by the N.C. Environmental Management Commission (EMC), and (2) listed restrictions regarding what must apply in the implementation of those stormwater programs. But its drafting resulted in many questions that the N.C. Department of Environmental Quality (DEQ) is left to resolve, including

  • What is the scope of the stormwater programs the EMC approves under N.C. Gen. Stat. § 143-214.7(d)?
  • What constitutes the "model program" that is adopted by the EMC that a stormwater program cannot exceed?

League members with stormwater programs are concerned about this provision and are interested in how it will be interpreted because local programs need flexibility to shape stormwater regulations in ways that makes sense based on local conditions and in order to comply with federally-required mandates.

DEQ also stated concerns about this provision in a memo that it sent to legislators in July, specifically requesting its removal and stating that "allowing local governments to exceed minimum state standards affords them the flexibility to align their stormwater requirements with their other ordinances, thereby streamlining the local permitting process." These comments resulted in the Senate removing the provision from the original version of HB 765 it passed in July (read more here). But unfortunately, the language reappeared in the final version of the bill approved by both chambers. Since the passage of HB 765, DEQ cheered passage of the whole regulatory reform package, stating that the final law included all its recommendations. Additionally, DEQ Assistant Secretary Tom Reeder recently released a video of support.

The final bill addressed other reforms that affect cities and towns, including amending the definition of “prospective developer” in brownfields redevelopment laws; extending a sunset date on an existing exclusion from stormwater laws for cluster mailboxes; requiring a study of the state's overall stormwater regulatory scheme; and requiring the study of whether activities related to the construction, maintenance, and removal of linear utility projects should be exempted from certain environmental regulations.

Local Government Regulatory Reform 

In addition to the regulatory reform package directed at state regulations, this session saw an omnibus reform package aimed directly at local governments. HB 44/S.L. 2015-246 Local Government Regulatory Reform 2015 was the final vehicle for these local reform measures and its final version passed in the last weeks of session, representing a compromise that the House and Senate worked many months to reach. Below are some of the provisions of interest to cities and towns.

Riparian Buffer Reform. The measure of most concern to cities and towns throughout each version of this bill was one addressing riparian buffer reforms that would have either restricted the ability of local governments to deviate from state riparian buffer rules or affected the applicability of the state's riparian buffer rules. To the relief of many cities and towns, the final version of the HB 44 allowed for local governments to require buffers to comply with and implement other state and federal requirements, but unfortunately still includes limitations on their buffer authority. These limitations include, among other things, preventing a local government from enacting, implementing, or enforcing an ordinance that establishes a buffer requirement that exceeds what is necessary to comply with those state and federal requirements, unless the Environmental Management Commission finds that the buffer is necessary for the protection of water quality. The N.C. Division of Water Resources (DWR) held an informational meeting last week for local governments that currently implement a state riparian buffer program. The presentation from that meeting can be found here.

Construction Notice. Additionally, HB 44 included a provision requiring local governments to notify property owners and adjacent property owners prior to the commencement of any construction project. A beneficial exception was added to the final version of the bill to allow for notice of a project to be given in any open meeting of the city or county. In addition, at the request of the League, HB 765 included a technical correction to limit the notice requirement only to new projects, not maintenance and repairs of existing facilities such as water lines and roads.

Public Water Supply Connections. Unfortunately, when the House and Senate released their final agreed-upon version of the bill, it included measures not previously seen in any version HB 44 or any other bill, including a provision related to a public water supplier’s ability to mandate connection to its system, a common practice that this new law now restricts. Specifically, the final version not only allowed for permits for wells for irrigation and non-potable water uses within service areas of a public water system, but also allowed for permits of drinking water wells if (1) the well is to serve any undeveloped or unimproved property, or (2) the public water system cannot provide water service to the property. The new provisions then prevented the public water supplier from later requiring that an owner of the drinking water well (permitted for one of the reasons above) connect to the public system. Although exceptions were given for when the public water supplier could mandate connection, the provision imposes a possible risk to the public water system's financial stability and impediment to its capital needs.

Delayed Rules. Another change in the final bill that had not been seen before included a provision that prohibits local governments from requiring compliance with regulations and rules for which the legislature delayed the effective date. Since the final budget package extended the Jordan Lake in-lake water quality monitoring and delayed the implementation of the Jordan Lake Rules for an additional three years, it seems like this provision may have been aimed at the local governments that enacted ordinances in preparation for compliance with the Jordan Lake Rules.

Preemption of Regulation of Hydraulic Fracturing

Provisions aimed at limiting local governments' ability to regulate oil and gas development activities were added to the final versions of two separate bills at the end of the this year's legislative session, allowing the measures to slip by without much attention. Both provisions appear to be a response to efforts by a handful of county governments to slow or delay hydraulic fracturing through the use of moratoria on those activities.

The Energy Modernization Act, passed in 2014, banned local ordinances that prohibited or had the effect of prohibiting hydraulic fracturing. Recently, a few North Carolina counties adopted ordinances imposing moratoria on approvals for oil and gas development, arguing that they were not prohibiting the activity but instead were giving the county time to develop a permit process for such operations. However, this year's technical corrections bill -- SB 119/S.L. 2015-264 GSC Technical Corrections 2015 (Sec. 56.2) -- sought to put an end to these efforts by changing the statutory language to instead invalidate local ordinances that regulate or have the effect of regulating oil and gas development. Legislators added these provisions to the bill as the last measure voted on before the legislature adjourned, which occurred in the middle of the night with no opportunity for public input or review.

Additionally, a provision related to special use permits added to the conference report for HB 765 Regulatory Reform Act of 2015 was aimed at local governments trying to limit hydraulic fracturing.

Bond Package to Support Local Infrastructure

Negotiations between the Governor's Office and legislators regarding the state's bond package also concluded in the final days of session. What emerged was HB 943/S.L. 2015-280 Connect NC Bond Act of 2015 -- a $2 billion bond package focused primarily on state infrastructure projects that will go before voters in the state’s upcoming March primary. The proposal included more than $300 million for grants and low-cost loans for local water and sewer projects. The legislation should achieve a key League priority of additional infrastructure investments that will benefit municipalities.

After almost a year of consideration, the U.S. Environmental Protection Agency (EPA) strengthened the national ambient air quality standards (NAAQS) for ground-level ozone in October to 70 parts per billion (ppb), a level that kept all of North Carolina in compliance. The decision means that the standards will not have detrimental effects on transportation funding for North Carolina cities and towns. The final standard was published in the Federal Register on October 26.

EPA announced its plan to change the standard in December and originally proposed reducing the current standard from 75 parts per billion (ppb) to somewhere in the range of 65-70 ppb. The change was of particular interest to League members because if an area exceeds air quality limits -- and is consequently designated as being in "nonattainment" -- then the federal air law can reduce federal transportation funding for local governments.

At that chosen 70 ppb level, the whole state will remain in compliance, otherwise known as "attainment," and since no area of the state will violate air quality standards, transportation funding for cities and towns will not be negatively affected. See previous EcoLINC coverage to learn more about federal ozone standards.

The N.C. Division of Energy, Mineral and Land Resources (DEMLR) and the N.C. Division of Water Resources (DWR) continued moving forward this month with the expansive "periodic review of rules" process mandated by HB 74 Regulatory Reform Act of 2013. Both divisions held stakeholder meetings throughout 2015, and appeared last week before the Water Quality Committee of the N.C. Environmental Management Commission (EMC) to provide plan details for formal rule re-adoptions.

Under the 2013 legislation, the EMC is tasked with re-adopting nearly all of the state's water program rules. The EMC promulgates over 1,200 of the state's 23,000-plus rules, of which 375 rules address water programs. As part of the legislatively-mandated rule review process, legislators specifically directed a review of these water rules first. These 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 Re-adoption

With the 2B, 2H, 2T, and 2U water-related rules already through the first step of the rule review process and determined to be “necessary with substantive public interest” -- a categorization requiring re-adoption of the rules -- DWR held five stakeholder meetings in the spring to assist in preparing any changes to the rules prior to re-adoption by the EMC. A summary of stakeholder discussions of interest to cities and towns was reported in the May edition of EcoLINC.

DWR then spent the summer and fall drafting updated rule language and began posting those updates to its rules review website in October. Currently, DWR has not completed all rule language, but the Division planned to continue to post updated language as it becomes available. As DWR officials explained in their update to the Water Quality Committee (WQC) of the EMC, they propose to significantly reorganize many of the rules. As for timing, the WQC will consider all these rules in January and the full EMC will be asked to approve the rule language and send it out for public comment next fall.

Running parallel to DWR's rule preparations, DEMLR also held stakeholder meetings to update the state's stormwater rules. The proposed rule package included new rules for the "Minimum Design Criteria" and Fast-track Stormwater Permitting Program required by S.L. 2013-82. The WQC approved the proposed changes last week. The full EMC will likely begin the formal rule re-adpotion process at its next meeting in January.

DWR released the preliminary results of water quality testing in areas of Jordan Lake where water treatment devices known as Solarbees were placed a year ago, and a copy of the state’s report was provided to the NCGA on Oct. 1...As part of legislative required study of beach erosion, DEQ's Division of Coastal Management announced it is seeking public comment on the study until December 31...In an action that gained significant media attention, the EMC voted to seek public comment on DEQ's primary plan to control carbon emissions required by EPA’s Clean Power Plan; this action came after DEQ joined other states in a court challenge of the plan, claiming that it would fundamentally change the way electricity is produced and lead to a 22% increase in the average utility bill in North Carolina...Governor Pat McCrory issued a joint letter with Virginia Governor Terry McAuliffe to U.S. Commerce Secretary Penny Pritzker calling for action to approve seismic surveying to locate and assess potential offshore oil natural gas resources...The State Water Infrastructure Authority (SWIA) recently issued its 2015 Annual Report to several committees of the General Assembly, providing an overview of its work, summarizing concerns and issues regarding the state’s water infrastructure, and providing recommendations to address those issues...DWR recently awarded more than $1.3 million in grants through its Water Resources Development Project Grant Program, with funding going to nineteen projects to help towns and counties restore streams, reduce flooding and erosion, aid in stormwater management, and provide recreation opportunities and benefit other water resources...Meanwhile, the N.C. Source Water Collaborative announced it is seeking nominations for its second annual Source Water Protection Awards to recognize projects that demonstrate innovative and collaborative solutions to protect North Carolina’s drinking water; applications are due December 1...EPA announced it is seeking proposals for its Urban Waters Small Grants, which funds projects that address urban runoff pollution through diverse partnerships that produce community benefits in underserved areas; the deadline to submit is November 20...EPA is also seeking nominations of candidates to be considered for appointment to its Local Government Advisory Committee, which provides advice to EPA on a broad range of issues affecting local governments...In addition, EPA published its final rule that requires electronic reporting of CWA NPDES permit program information; the rule is effective December 21...EPA Region 4 has warned DEQ that certain state level judicial decisions related to permits could threaten the state's delegation to implement federal CWA and CAA programs, due to concerns over restrictions in citizens ability to judicially challenge permits...EPA has backed off from earlier claims that it will change New Jersey's stormwater management rules for being inconsistent with federal NPDES permit requirements, but critics argue the rule modifications violate anti-backsliding provisions of the CWA because the changes reduce or eliminate riparian buffers, which leads to more pollution in waterways...With multiple legal challenges, a federal appeals court has placed on hold EPA’s Waters of US jurisdictional rule, and U.S. Senator Thom Tillis spoke on the Senate floor in favor of a resolution that would use Congressional Review Act disapproval authority to entirely scrap the CWA rule.