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06.03.2024 Legal News

Carolinas Environmental Legislative Update

Both the North and South Carolina legislatures have recently adopted statutes affecting environmental issues in their respective states. This update highlights the most significant developments in North and South Carolina.

North Carolina

The return of a Republican supermajority to the North Carolina General Assembly saw the return of significant environmental policy changes through legislation. Three laws from 2023’s long session are particularly important: (1) the 2023 NC Farm Act (Senate Bill 582); (2) the Regulatory Reform Act of 2023 (House Bill 600); and (3) the State Budget Act (House Bill 259). A brief summary of the changes is below:

2023 NC Farm Act

Wetlands - Following the United States Supreme Court’s decision in Sackett v. EPA, which significantly reduced the extent to which wetlands are “waters of the United States” that are subject to federal Clean Water Act jurisdiction, the General Assembly modified North Carolina’s definition of wetlands to bring the state’s definition in line with the Clean Water Act. The net effect of the change is to practically eliminate the state’s authority over “state-only” or “isolated” wetlands. Going forward, jurisdictional determinations from the Corps of Engineers will effectively define the scope of wetlands permitting obligations in North Carolina.

Regulatory Reform Act of 2023

Deadlines for Energy-Infrastructure and Dredging 401 Certifications – The act establishes a 60-day “shot clock” for projects that do not require a public hearing and a 90-day shot clock for projects that do. If the North Carolina Department of Environmental Quality (NCDEQ) does not take action on the 401 Certification application by the deadline, the request is deemed approved. The change is intended to prevent 401 certifications from delaying future energy infrastructure projects.

Procedural Requirements for CAMA Guidelines – The Coastal Area Management Act (CAMA) contains references to “guidelines” established by NCDEQ for obtaining a CAMA permit. The act requires NCDEQ to publish those guidelines on its website, to prevent developers from being “surprised” by obstacles to obtaining a permit that are not publicly available.

Independent Brownfields Investigation – The act prohibits NCDEQ’s Brownfields Redevelopment Section (BRS) from taking adverse action against a prospective developer who performs sampling of environmental media at a project site without obtaining advance approval from BRS. The provision is intended to eliminate delays associated with obtaining approvals for written sampling plans.

Riparian Buffer Relief for RDU Airport – The act eliminates any requirement for the RDU Airport authority to obtain advance approval for riparian wetland impacts (established by the Neuse River Buffer Rules) associated with the expansion of the airport. The airport authority is still required to provide mitigation for any such impacts, though.

Reaffirmation of the NC Administrative Procedure Act – The act restates that no agency may enforce a policy, guidance document or other interpretive statement that has not been through notice-and-comment rulemaking procedures.

Citation to Legal Authorities for Permit Conditions – The act requires NCDEQ to clearly state the statutory or regulatory authority for any condition it includes in a permit.     

State Budget Act

NC Administrative Procedure Act Reform – The 2023 budget includes modifications to the North Carolina Administrative Procedure Act that are intended to close a loophole in the state’s rules-review procedure. During 2022, the Environmental Management Commission adopted temporary rules intended to codify NCDEQ’s authority to require permits for isolated and state-only wetlands impacts. When NCDEQ attempted to make these rules permanent, the North Carolina Rules Review Commission rejected them. However, because the Rules Review Commission had previously not objected to the temporary rules, and by not formally requesting that the Rules Review Commission return the permanent rules to the Environmental Management Commission, the Environmental Management Commission engineered a situation in which the temporary rules remained in effect. While the specific issue of NCDEQ’s authority over isolated and state-only wetlands is resolved by the 2023 Regulatory Reform Act, the budget act closes this loophole.

Right to Apply for and Obtain a Permit – The budget act prohibits NCDEQ from denying a permit to an applicant because the applicant has not yet obtained another required permit for its project. The new provision is intended to prevent a recurrence of NCDEQ’s denial of a permit for the MVP Southgate pipeline because the pipeline’s owners had not yet obtained a permit required for the pipeline in another state.

Prohibitions on RGGI and the Advanced Clean Trucks Act – The act prohibits the Environmental Management Commission from adopting rules that would allow North Carolina to join the Regional Greenhouse Gas Initiative or that would implement California’s Advanced Clean Trucks Rule.

Preconstruction Activities While Awaiting a Clean Air Permit – The budget establishes a new safe harbor for certain facilities awaiting the issuance of a construction permit for sources of air pollutant emissions. The language allows existing air emissions sources to begin construction of the emission source itself (rather than clearing, grading, etc.) once NCDEQ determines that the permit application for the modification is complete. However, the source may not start operating the modification until NCDEQ issues the construction permit. NCDEQ has publicly stated its view that this new provision may be contrary to the federal Clean Air Act. Despite NCDEQ’s concerns, Session Law 2024-1 requires the department to seek approval for a state implementation plan (SIP) modification to implement the change. Note that this new safe harbor provision does not apply to facilities that are subject to major source NSR permitting, sources that are subject to residual risk hazardous air pollution (HAP) emissions rules or sources that are subject to case-by-case MACT permits. 

Odds and Ends

Changes to Environmental Management Commission Appointments (Senate Bill 512) – The legislation reassigns the right to make two appointments to the Environmental Management Commission from the governor to secretary of agriculture. In the beginning of 2024, the secretary of agriculture exercised this authority to appoint two new members to the commission. The commission subsequently elected a new chairperson.

Wastewater Capacity (Senate Bill 678) – The legislation modifies the assumptions that wastewater treatment facilities must make regarding the volume of wastewater generated by new developments. In particular, it reduces the amount of wastewater assumed to result from each new bedroom to 75 gallons per day. Previously, wastewater treatment plants assumed that 120 gallons of wastewater would be generated by each new bedroom.

South Carolina

This year continues to be a busy one for environmental legislation in South Carolina. Between the current session’s consideration of bills related to public water system notification requirements and maximum contaminant levels for PFAS compounds, to the complete restructuring of the South Carolina Department of Health and Environmental Control (DHEC), South Carolina’s environmental regulatory landscape may look very different by year-end.

First, House Bill 3478, currently before the legislature and titled the “Safe Water Act,” would require public water systems to provide a comparison of water quality used in the previous billing cycle to State Water Quality Standards pursuant to the Federal Safe Drinking Water Act (SDWA). The Safe Water Act is currently pending before the House Committee on Agriculture, Natural Resources and Environmental Affairs. South Carolina public water systems are already required to provide similar information to users on an annual basis in annual Consumer Confidence Reports. The SDWA currently provides that public water systems must promptly notify consumers if their water supply has become contaminated by a pollutant, which could cause immediate illness. Water systems must provide such consumer notice within 24 hours if a violation of water quality standards occurs, which has “the potential to have serious adverse effects on human health as a result of short-term exposure.” These notifications are required to be made through local media, to contain information about potential adverse health effects, to announce steps taken to correct the violation, and to provide information on alternative water supplies (e.g. boiled water advisories, etc.). For violations presenting less immediate threats, the Consumer Confidence Report notification is sufficient. Critics of HB 3478 may call the additional monthly notification requirement unnecessary, given the already robust protocol of the SDWA.

Next, House Bill 3498, currently before the legislature, would require DHEC to establish maximum contaminant levels (MCLs) for certain pollutants in public water systems. HB 3498 is also currently pending before the House Committee on Agriculture, Natural Resources and Environmental Affairs. Under the Bill, within 100 days of its effective date, DHEC would be required to promulgate MCLs for public water systems for the following: perfluorooctanesulfonic acid (PFOS), perfluorooctanoic acid (PFOA), and other per- and polyfluoroalkyl substance (PFAS) compounds; chromium-6; 1, 4 dioxane; and any other public water system pollutants for which at least 2 other states have established MCLs or issued public health guidance. When promulgating these MCLs, DHEC would be required to refer to other state MCLs, look to studies and scientific evidence used by those other states, data maintained by the Agency for Toxic Substances and Disease Registry (ATSDR), and the latest peer-reviewed science and independent or governmental agency public water system studies. MCLs promulgated pursuant to the Bill would be required to protect public health and vulnerable populations, such as pregnant and nursing mothers, infants, and children. The MCLs would be required to comply with any EPA MCL or health advisory. To ensure compliance with this requirement, DHEC would be obligated to review the related science and literature on an annual basis. Critics of HB 3898 cite to the arbitrary nature of the requirement to promulgate a MCL because two other states have done so (or issued public health guidance), regardless of the scientific basis for such a regulation. Also, the 100-day timeframe for implementation of MCLs is sure to stretch the limits of DHEC’s ability to review existing studies or even begin to conduct independent analysis of the new MCLs.

Finally, and most significantly, during the previous session the South Carolina legislature approved the most extensive regulatory restructuring in the State’s modern history. As a result of a combination of 2023 legislative actions, in 2024, the South Carolina Department of Health and Environmental Control, which currently regulates both public health and environmental health, will be split into two distinct cabinet agencies; the Department of Public Health and the Department of Environmental Services. The Department of Public Health (DPH) will be run by a governor-appointed Director and will make, adopt, promulgate, and enforce regulations providing for:

  1. The thorough sanitation and disinfection of all passenger cars, sleeping cars, steamboats, and other vehicles of transportation in this State and all convict camps, penitentiaries, jails, hotels, schools, and other places used by or open to the public;
  2. The sanitation of hotels, restaurants, cafes, drugstores, hot dog and hamburger stands, and all other places or establishments providing eating or drinking facilities and all other places known as private nursing homes or places of similar nature, operated for gain or profit;
  3. The safety and sanitation in the harvesting, storing, processing, handling and transportation of mollusks, fin fish, and crustaceans;
  4. The safety, safe operation and sanitation of public swimming pools and other public bathing places, construction, tourist and trailer camps, and fairs;
  5. The care, segregation, and isolation of persons having or suspected of having any communicable, contagious, or infectious disease; and
  6. The thorough investigation and study of the causes of all diseases, epidemic and otherwise, in this State, the means for the prevention of contagious disease and the publication and distribution of such information as may contribute to the preservation of the public health and the prevention of disease.

The Department of Environmental Services (DES) will be run by a governor-appointed director and will be comprised of a:

  1. Division of Air Quality;
  2. Division of Land and Waste Management;
  3. Division of Water;
  4. Division of Regional and Laboratory Services, which includes the Office of Emergency Response and the Office of Onsite Wastewater and Enforcement; and
  5. Division of Coastal Management.

DES will be tasked to:

Make, adopt, promulgate, and enforce reasonable rules and regulations from time to time requiring and providing for:

  1. The classification of waters;
  2. The control of disease-bearing insects, including the impounding of waters;
  3. The control of industrial plants, including the protection of workers from fumes, gases, and dust, whether obnoxious or toxic;
  4. The use of water in air humidifiers;
  5. The regulation of the methods of disposition of garbage or sewage and any like refuse matter in or near any village, town, or city of the State, incorporated or unincorporated, and to abate obnoxious and offensive odors caused or produced by septic tank toilets by prosecution, injunction, or otherwise; and
  6. The alteration of safety glazing material standards and the defining of additional structural locations as hazardous areas, and for notice and hearing procedures by which to effect these changes.

The DHEC restructuring will take effect July 1, 2024, at which time the South Carolina Department of Health and Environmental Control will cease to exist.