Coastal Policy to Remain Intact… for Now

Last of two parts

RALEIGH – Though Republicans who now control the N.C. General Assembly have vowed to cut through the regulatory red tape that is purportedly hindering businesses and job creation, don’t expect to see any immediate changes to coastal rules and regulations, said a leader in the state Senate.

Sen. Harry Brown

Senate Majority Leader Harry Brown, a Jacksonville Republican and co-chair of the committee that the legislature created last year to review all state regulations, said committee members are still trying to get a better understanding of rule-making and haven’t settled on any proposals for moving forward. He said he does not see any quick changes to coastal policy as a result of the committee’s review.

“Right now we’re still gathering information,” Brown said. “I don’t think any decisions have been made on what to do [on costal policy].”

Brown said the committee has focused on eliminating duplications and agency overlap and with trying to make rules easier to understand. Most of the complaints he and other legislators get aren’t so much about the rules and regulations themselves, he said, but in how they’re interpreted and how they impact projects. Sometimes agencies can be at odds over how certain rules should be implemented, Brown said, and those interpretations can be at odds with what legislators intended.

Everyone in the process, Brown said, “needs to understand them the same way.”

New Way on Rules

The legislature created Brown’s committee last year when it passed Senate Bill 781, a complicated and comprehensive package of steps for revamping how rules and regulations are written. Overseeing its implementation is the Joint Regulatory Reform Committee.

The bill tightens rule-making procedures and mandates a comprehensive review of rules in order to ferret out redundancy and inconsistencies. It also requires much more extensive studies of the cost of new rules to businesses, including an analysis of possible alternatives.

Though North Carolina has consistently ranked as having one of the top business climates in the country, Republicans in the legislature have contended that burdensome rules are stifling economic growth and killing jobs.

Environmental rules are a particular focus of S781. The law prevents new environmental rules from being tougher that any existing federal standard. The state Department of Environment and Natural Resources administers and enforces all state and federal environmental regulations. Its commissions devise rules meant to carry out federal or state laws. These include the Environmental Management Commission, Marine Fisheries Commission, Coastal Resources Commission, Wildlife Resources Commission, Commission for Public Health, Sedimentation Control Commission, Mining Commission and the state Pesticide Board.

By October 1, each of these were required to provide the new regulatory committee with a list of all permanent rules designating whether they were mandated by a federal regulation, analogous to one or neither.

While the bulk of the rules included in the department’s report were linked with enforcement of federal Clean Air and Clean Water acts and federal hazardous waste requirements, there was a considerable list of state-only rules. They included less controversial ones like those governing dam safety and some that have been fought over for years like the runoff rules in the Tar-Palmico and Neuse river watersheds.

Robin Smith, the department’s assistant secretary for the environment and its point person on regulatory reform, said so far there hasn’t been a response from the legislature on the list of rules it forwarded to the committee.

Changes Already

But that doesn’t mean that the legislature’s desire to change the way rules devised hasn’t had an impact already, she said. Other provisions in the law have reshaped the department’s approach to rules.

“Maybe the most noticeable impact is that it’s more complicated to do fiscal analysis,” she said.

Robin Smith says the new law has already affected the state’s environmental regulations.

The legislature lowered the cost threshold that triggers a detailed fiscal analysis, she said. A fiscal note is now needed if the cost of a new rule to an individual or business exceeds $50,000.

The law also requires the department to take a much harder look at alternatives.

One way that recently played out, Smith said, was a delay in new sandbag rules proposed by the N.C. Coastal Resources Commission after the State Budget Office, which reviews the fiscal notes, sent them back for further study of alternatives.

Smith said as a result of the additional scrutiny, the department has had to take on an economist and must do a much deeper policy analysis than before.

Another major hitch is the red flag raised by the U.S. Environmental Protection Agency about a provision in S781 that changes how contested rules are decided. Such cases are first heard by judges in state’s Office of Administrative Hearings. Before the law was passed, those judges made recommendations as to the outcome, but the final decision rested with the commission that created the rule. The new law made the judges final authority. Once the state process plays out, aggrieved parties can file a civil lawsuit.

Shifting final authority in contested cases, the EPA has determined, is a major change to the way the state administers federal environmental laws like the Clean Water Act, Smith said. Since federal law gives the EPA the right to object to rulings in contested cases, agency officials want some clarification on how the EPA’s views will be heard. They also say they will have to sign off on the change since it isn’t part of the agreement EPA has with the state that allows state regulators to enforce federal environmental laws. EPA officials aren’t comfortable with the new process and want more information about the resources and processes of the state hearing office, Smith said.

State and federal officials will have to reach some agreement soon. Under S781 the change takes effect on June 1 with or without EPA approval.

CAMA Permits

The only specific change to coastal rules spelled out in S781 has yet to be tested. The law exempts applicants of major permits under the Coastal Area Management Act, or CAMA, from having to undergo a comprehensive assessment of potential environmentaleffects. Smith said the department was “not uncomfortable” with the change given what a major CAMA application requires. “It’s such a broad interagency review,” she said. “It’s the kind of review you’d get with an EIS (environmental-impact statement).”

The scope of an EIS is, in fact, more extensive than the usual review for a major CAMA permit. If required under the state’s Environmental Policy Act, an EIS is done before an applicant applies for any permits. The applicant must explore various alternatives to the project, describing all their potential direct and secondary environmental effects and any steps needed to lessen them. The review can take up to two years and usually requires public meetings that allow people to suggest issues that the EIS should cover. The applicant is then obligated to explain how those issues were addressed. The intent of an EIS to is anticipate environmental problems before a project begins.

A major CAMA review is much narrower in scope and is generally limited to ensuring that CAMA regulations are met. Though as many 14 state and federal agencies review the permit, CAMA has no requirement for public meetings. While people can submit written comments, the applicant is under no legal obligation to address them. By law, the review must be completed in 75 days — 150 days in exceptional cases.

Smith said as yet no project has been proposed that falls under the major permit classification.

While the regulatory reform committee and the processes set in motion under S781 will guide most of the structural changes to rule-making, look for some changes in environmental protections to be written directly into law, possibly even in the coming short session, which starts in May.

Dan Conrad

Dan Conrad, legislative counsel for the N.C. Conservation Network, said over the past few years he’s noticed a trend toward greater specificity in legislation, with laws now spelling out in great detail the types of things to be taken into consideration while drafting rules to implement them.

New proposals on air toxics rules emerging from the legislature’s Environmental Review Commission are another example of that trend, as well as one of the first attempts to rolls back state requirements to the federal standards.

Legislators have also shown a willingness to write around certain rules and sometimes at a very local level. Last year, after complaints about setback requirements, the General Assembly approved the reclassification of a single mountain stream, removing it from the list of waterways that are significant trout habitats and thus loosening setback requirements for construction projects along it. That kind of behavior is the most worrisome, Conrad said, because the law denied the facts.

“There was no science involved,” Conrad said. “None.”