Storm water — The battle for a reasonable solution

by Lisa Martin, NCHBA Director of Regulatory Affairs

In the December 2003 Capitol Insider,NCHBA reported that the majority of the battle over the Phase II storm water rules was over due to the Rules Review Commission’s numerous objections and the apparent inability of the Environmental Management Commission’s (EMC) to revise the rules such that the objections could be overcome. Two years later, it is incumbent on NCHBA to report to you that, in spite of the numerous hours spent by NCHBA staff in negotiating a fair and effective legislative compromise, in spite of the federal deadlines being met and in spite of the 91 municipal Phase II general permits that have been issued so far, the Phase II storm water battle is far from over. Here is a recap of the events that have occurred since we last reported in 2003.

Phase II program history

On Dec. 11, 2003, the EMC revised the proposed Phase II storm water rules in an attempt to overcome objections raised by the Rules Review Commission. In January 2004, the Rules Review Commission unanimously decided that the EMC’s revisions did not overcome their objections and the Rules Review Commission returned the rules to the EMC.

At this point, the EMC was required to start all over again with rulemaking – a process that could have taken a year or more. Rather than start over, the EMC sued the Rules Review Commission on the basis of the Commission’s lack of statutory authority to return the rules to the EMC. As the litigation pursued, Senate leadership approached NCHBA and other affected parties during the 2004 legislative session and asked for our cooperation in drafting legislation that would allow the affected municipalities and the Department of Environment and Natural Resources to meet the federal Phase II deadlines.

Throughout the summer of 2004, NCHBA staff spent tireless hours negotiating Senate Bill 1210, which became an effective and reasonable solution to the federal Phase II storm water program implementation dilemma. Senate Bill 1210 remains in effect and does not sunset until Oct. 1, 2011. During the remainder of 2004 and throughout 2005, numerous municipalities and counties, in accordance with Senate Bill 1210, applied for and were granted Phase II storm water permits. Ordinances were enacted locally and, as required by Senate Bill 1210, land development activities in most municipalities would have been required to comply with postconstruction storm water control requirements starting in 2006.

Also during 2005, the litigation between the EMC and Rules Review Commission was completed. Superior Court Judge Donald Stephens ruled in favor of the EMC and required the Rules Review Commission to rereview the rules adopted by the EMC on Dec. 11, 2003. The Rules Review commission did so on Oct. 20, 2005 and again on Nov. 17, 2005. During these proceedings, the Rules Review Commission, citing Judge Stephens’

order and one ambiguous provision in Section 13 of Senate Bill 1210, reviewed the storm water rules as if neither Senate Bill 1210, nor the subsequent issuance of 91 municipal storm water permits existed.

On Nov. 17, 2005, the Rules Review Commission approved the EMC’s entire package of Phase II storm water rules against the strenuous objections of NCHBA, the North Carolina Association of Realtors and other parties.

So, what’s the problem?

NCHBA disagrees with Rules Review Commission’s interpretation of Section 13 of Senate Bill 1210 as having no effect on rules adopted for the same purpose. Such an interpretation runs counter to the indisputable legal doctrine that enactments of the General Assembly are paramount to agency rules.

NCHBA disagrees with the EMC’s and Rules Review Commission’s contention that rules are necessary. The fact that affected local governments are relying on general permits issued in accordance with Senate Bill 1210 and moving forward with effective storm water programs in the absence of rules proves that rules are not necessary.

In addition to the lack of necessity, NCHBA believes that the Rules Review Commission failed to object to a number of provisions that severely and unconstitutionally restrict vested rights established under G.S. §153A-344 and G.S.§160A-385. Specifically, the EMC’s rules limit the duration of a vested right to 12 months from the date of approval unless the project has “substantially commenced.” Vested rights law provides for a two-year vesting period (or longer as specified in the statutes), with no mention of substantial commencement. The EMC’s rules create an arbitrary “exception” to certain requirements; however, the factors that entitle the property owner to the exception (such as the date the property was purchased) are not related to the purpose of the rule and further restrict vested rights. The EMC’s lack of authority to restrict vested rights has nothing to do with the interpretation of Section 13 that makes Senate Bill 1210 moot. The unauthorized restriction of vested rights must be corrected by the General Assembly in the upcoming session.

There are numerous conflicts between the legislation and EMC’s rules. NCHBA believes it a preposterous assumption that the legislature intended for such conflicts in enacting Senate Bill 1210. These conflicts will lead to confusion and uncertainty for the regulated community and also for local governments and state officials tasked with reconciling the differences.

First, Senate Bill 1210 and the EMC’s rules conflict in how projects in the unincorporated areas of counties will be regulated. The legislation provides that development projects in unincorporated areas are required to comply with the Phase II post-construction storm water requirements only if they are located within a certain distance of a municipality regulated by the Phase II program. The EMC’s rules apply to a much greater area within the county unincorporated areas.

There is a conflict between Senate Bill 1210 and the EMC’s rules in the regulation of areas that drain to shellfishing (SA) waters. Both thelegislation and rules distinguish between lowdensity and high-density development. Lowdensity development is subject to less stringent storm water requirements. Senate Bill 1210 defines low-density development statewide as projects with less than 24 percent built-upon area. The EMC’s rules define projects in areas within one-half mile of and draining to SA waters as low density if the project has less than 12 percent built-upon area.