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10.19.2023 Legal News

North Carolina’s Wetlands Saga is Over (for now)

As a result of the North Carolina Farm Act of 2023 (Session Law 2023-63), North Carolina’s Department of Environmental Quality (NCDEQ or the Department) may now only regulate wetlands that are subject to federal Clean Water Act jurisdiction. While developers will certainly appreciate the absence of a source of delays and expense, only time will tell how the resulting losses of non-jurisdictional wetlands affect water quality.           

Since the U.S. Supreme Court’s 2001 decision in SWANCC, the Department has regulated wetlands primarily through its 401 certification program. In addition, NCDEQ had authority over “isolated wetlands,” i.e., wetlands without a significant nexus to federally regulated waters under 15A NCAC 02H.1300. These programs effectively gave the Department authority over most wetlands in the state.

The Trump administration’s 2020 Navigable Waters Protection Rule (NWPR) changed that dynamic. Because the NWPR withdrew federal jurisdiction over certain types of wetlands, NCDEQ would no longer need to issue a 401 certification for those impacts either. And, according to the Department, to the extent those non-jurisdictional wetlands did not meet the definition of an “isolated wetland,” NCDEQ lacked authority to authorize discharges of fill into them.        

To close this regulatory gap, the Environmental Management Commission (EMC) issued temporary rules authorizing NCDEQ to require permits in order to fill these now-unregulated wetlands (codified in 15A NCAC 02H.1400). However, when the EMC attempted to make the temporary rules permanent, the state’s Rules Review Commission (RRC) objected. The RRC believed the new rules would impose more stringent requirements than required by federal law – in violation of N.C.G.S. § 150B-19.3. This led to a year-long standoff between the EMC and the RRC, which the General Assembly recently settled.        

Section 15 of the 2023 Farm Act modifies the definition of a wetland for purposes of the state’s water quality standards in 15A NCAC 02B.0202. As revised, only those wetlands subject to federal Clean Water Act jurisdiction are subject to the state’s wetlands water quality standards. Accordingly, discharges of fill into non-jurisdictional wetlands cannot cause a violation of state water quality standards, and therefore, no permit should be required for those discharges. This change would appear to obviate the need for the “gap-filling” regulations previously in 02H.1400 as well as the historic “isolated wetlands” rules in 02H.1300. The Farm Act makes these changes effective immediately and requires the EMC to initiate rulemaking to modify the state’s administrative code to effect this change as well.