If you want a sense of just how complicated and drawn-out state rulemaking can get, look no further than the North Carolina Environmental Management Commission’s water quality committee.
More than a year has passed since the committee began kicking around a rule that would, as initially proposed, limit industrial discharge of forever chemicals across the state.
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Any such rule has been passionately debated time after time, meeting after meeting, only to be tabled again and again, heightening the collective frustrations of thousands of North Carolinians and the water utilities that serve them.
Now, if adopted by the full commission, the rule will also have to get the General Assembly’s approval.
The proposed rule would trigger a threshold established under House Bill 402, known as the “Regulations from Executive in Need of Scrutiny (REINS)” Act, a new law that has drawn sharp criticism from environmental and health advocates who argue it will stifle an already daunting rulemaking process and create significant obstacles to addressing pollution.
The North Carolina Department of Environmental Quality, which recommends rules to commissions, including Environmental Management, echoed similar sentiments in an emailed statement responding to a request for comment late last month.
“The Department of Environmental Quality and its Commissions’ rules provide essential public health protections. They help ensure that our air, water and land are clean and safe throughout North Carolina while giving businesses and municipalities the certainty they need to make fiscal decisions. The new law will make it significantly more difficult, and it will take longer, to create new protections against environmental harms like PFAS and other forever chemicals. These rulemaking changes also add significant uncertainty for businesses, municipalities and our residents.”
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The REINS Act establishes a tiered system for rules based on their projected financial impact. If a rule exceeds a certain threshold, that rule can no longer be approved simply by a majority vote of a rulemaking board or commission.
Rules projected to cost $1 million over five years must receive a two-thirds majority vote of the rulemaking body. Any rule with an impact of $10 million or more over five years must receive unanimous approval. If a proposed rule is expected to cost $20 million or more over five years the rule must be formally approved by the General Assembly before it can take effect.
Since 2020, the North Carolina Office of State Budget and Management has reviewed fiscal and regulatory impact analysis of 31 proposed rules that exceed REINS Act thresholds.
In all, 15 of those proposed rules OSBM has reviewed in the last five years were projected to have impacts of $1 million or more over five years, according to information provided by that office.
Seven proposed rules had projected costs of $10 million or more and nine rules had projected financial impacts of $20 million or more.
The Environmental Management Commission, Commission for Public Health, Building Code Council, and Wildlife Resources Commission were among the rulemaking bodies who considered those proposed rules.
North Carolina has more than 300 boards and commissions that oversee a range of issues that will be affected by the law, one Republican leaders have argued would enhance government accountability and protect residents and businesses from overregulation.
The state is one of the latest to adopt measures modeled after the federal Regulations from Executive in Need of Scrutiny Act, which establishes a congressional approval process for a “major rule,” including one likely to have an annual effect on the economy of $100 million or more.
“I think what we’re looking at is a lot of gridlock around topics that have not made as much progress as they should have so far,” said Grady O’Brien, North Carolina Conservation Network’s water policy manager.
One of the starkest examples of that, he said, are rules relating to per- and polyfluoroalkyl substances, or PFAS.
DEQ’s initial rule proposal to the Environmental Management Commission included health standards for eight PFAS in groundwater and surface water. The commission’s committees pared down that number down to three chemical compounds – PFOA, PFOS, which the U.S. Environmental Protection Agency lists as likely carcinogens, and GenX, a compound specific to Chemours’ Fayetteville Works facility in Bladen County.
Under the proposed rule DEQ initially presented to the water quality committee, the state would have been given the ability to enforce limits on dischargers for PFAS. Critics of the current proposed rule argue it lacks the teeth the state needs to be able to ensure industries are actually reducing releases of the chemical compounds into surface water including the Cape Fear River, the drinking water source for tens of thousands of North Carolinians.
The proposed draft rule, which could go to a vote of the full commission in November, would require industries that discharge PFAS into surface water and industries that discharge those chemicals to publicly owned treatment works to monitor for PFOA, PFOS, and GenX.
As is, the proposed rule’s projected financial impact is $129.5 million over the next six years, which means the rule requires both a unanimous vote of the full commission and legislative review.
“So, things have gone from frustrating and slowed down to looking almost impossible when you’re going to need a unanimous vote, which kind of empowers one person on whatever board or commission in question, one person can shut something down that has this $10 million threshold over five years,” O’Brien said.
The law excludes economic benefits associated with a proposed rule and, critics point out, as current rules go up for periodic review, rules that have been on the books for decades that fall within the new thresholds could be stripped from the books.
Braxton Davis, executive director of the North Carolina Coastal Federation, which publishes Coastal Review, said rulemaking “already involves an extensive process, including fiscal impact analysis and public input.”
“It often takes a year or more from the time a rule is drafted until it becomes effective – even when rules are being relaxed,” Davis said. “If the commissions’ rulemaking process becomes even more challenging, it may force the General Assembly to act on new issues and information to an extent that would be much better suited for the executive branch to address, at least initially.”
Davis, former director of DEQ’s Division of Coastal Management, said that, in his experience, regulatory commissions have members that bring different expertise, experience and perspectives to the table.
“And, as with any board, it will be very difficult to achieve a unanimous vote on any significant rule changes,” he said.
Mary Maclean Asbill, senior attorney with the Southern Environmental Law Center’s Chapel Hill office, said the law will “pretty much shut down” environmental rulemaking.
“We’ve already seen over the past few years the erosion of separation of powers in North Carolina, where the conservative majority of the General Assembly has legislated changes to the composition of boards and commissions, taking away authority from the governor, or the executive branch, and giving it to themselves,” she said. “We have seen appointees to any number of environmental boards and commissions mimic the ideology of the legislature. By that I mean they are anti-regulation, anti-protection, anti-environmental protection and so it has already been difficult for the past few years for state agencies who are charged with protecting the health and environment of North Carolina to promulgate any rules or regulations that are protective of health and the environment. This is going to make it exponentially more difficult.”
Gov. Josh Stein vetoed the law, writing in his June 27 rejection of House Bill 402 that it would, “make it harder for the state to keep people’s drinking water clean from PFAS and other dangerous chemicals, their air free from toxic pollutants, and their health care facilities providing high quality care.”
The law, he wrote, would “impose red tape” and would make agencies, boards, and commissions, “less effective at protecting people’s health, safety and welfare.”
The General Assembly voted to override Stein’s veto.
