NC House environmental bill is likely unconstitutional. A committee passed it anyway.

An environmental bill under consideration at the General Assembly that’s ostensibly about dirt is so freighted with questionable provisions that it could violate the U.S. Constitution, direct environmental permit holders to break federal law, and attract a court challenge.

House Bill 579, sponsored by Rep. Mark Brody, a Union County Republican, narrowly passed the House Environment Committee by an 8-7 vote on Tuesday. 

Two Democrats, Amos Quick and Cecil Brockman, who could have been the deciding votes, were absent, as were three Republicans, Jimmy Dixon, Ray Pickett and Diane Wheatley.

Brody is a general contractor whose industry is regulated by the very water quality rules he’s trying to change. In yesterday’s House Environment Committee, he acknowledged that he was personally motivated to file the legislation. “I’ve met with DEQ and my frustration level forced me to sit down and write this bill,” Brody said.

A fellow Republican, Ted Davis, Jr. of New Hanover County, told Brody, “I have a problem with voting for a bill with constitutional issues.”

“You’re really wreaking havoc on the water quality regulations in this state,” Rep. Pricey Harrison, a Guilford County Democrat, said.

The seven-page bill seeks to wrest control of some portions of the Clean Water Act not only from state regulators, but the EPA itself. For example, it would purport to prohibit the NC Department of Environmental Quality from including federal rules in its own rules without approval from the General Assembly. 

DEQ’s practice is a routine and known as “incorporation by reference.”

“I want to allow the General Assembly to see those incorporations by reference and act accordingly,” Brody said. 

But these incorporations by reference are not secret; state lawmakers — and the public — can read them at any time. DEQ rules specifically cite the federal provisions they are incorporating.

Even if state lawmakers disagree with federal rules, they can’t change them. That authority falls to the EPA or Congress. When states disagree with EPA rules, they can sue, but that action is filed by the attorney general, who is part of the executive branch.

HB 579 would also require state lawmakers to ratify “memorandums of agreement” between DEQ and the EPA, as they pertain to water quality. The agreements regulate the type and amounts of pollutants that industry, water and wastewater utilities, and even some private landowners can discharge into rivers, streams and creeks.

The EPA is in charge of the discharge permits under the Clean Water Act, but authorizes states to administer them via these agreements. Nationwide, governors of 47 states and the U.S. Virgin Islands have signed agreements with the EPA for the discharge program.

“I want the General Assembly to see what’s going on when DEQ saddles us with an agreement we can’t amend,” Brody said in justifying the bill language. “When the federal government imposes something on us, we as states should be able to make them more efficient while using those goals.”

However, by seeking to usurp federal powers, the General Assembly’s actions potentially collide with the U.S. Constitution’s “Supremacy Clause,” Jennifer McGinnis, an attorney with the Legislative Analysis Division, told the committee.

The Supremacy Clause establishes that states must comply with federal law — not the other way around. Congress passed the Clean Water Act in 1972, under the Nixon administration.

And state legislatures can’t sign agreements about federal discharge permits because of the separation of powers requirement, a backbone of the federal and state constitutions.

“The Clean Water Act over and over and over again mentions the governor, not the legislative body of the state,” McGinnis said.

When lawmakers encourage lawbreakers

The legislation could also end up directing some discharge permit holders to break the law. If a state fails to adequately run its discharge permit program, the EPA can assume control over it. Should that happen in North Carolina, Brody’s bill would require DEQ to continue issuing permits — essentially operating as business as usual.

That is illegal. If the EPA takes over DEQ’s discharge permits, the state cedes its authority to do so. Permit holders that accepted DEQ permits under these circumstances would violate federal law, McGinnis said, and could be penalized.

As for the “dirt” portion of the bill, it involves two permits that are arcane to most people outside the homebuilding and construction business: an NCGO1, required by the EPA and DEQ under the Clean Water Act, and a sedimentation and erosion control permit issued by state and local officials. 

Both permits regulate runoff from construction sites, but in different ways.

Until 2019, they were one permit; the EPA then separated them. The legislature’s nonpartisan Program Evaluation Division determined that the two permits had distinct functions and should remain separate.

Since then, Brody has fought to merge the two to expedite permit reviews and approvals. The bill would require DEQ to “initiate discussions” with the EPA about sedimentation and erosion permits “to minimize unnecessary costs.”

“DEQ, you can’t avoid us anymore,” Brody said, adding that some development permits “for six months have been sitting on somebody’s desk.”

Chances are that those desks are empty. DEQ currently has a 20% employee vacancy rate, with the Division of Water Resources being particularly hard-hit. 

As of last November, there was a 22.5% backlog for all discharge permits, state records show.

“I understand the frustration with delays of getting permits,” said Rep. John Autry, a Mecklenburg County Democrat. If the legislature appropriated more funding to the agency, “those permits might be secured sooner.” 

Neither Brody nor any of his companies have permits pending before DEQ, according to state data. In Union County — part of Brody’s district — developer David Cuthbertson’s companies, True Homes and Dependable Homes, filed for two permits this month, according to DEQ’s Environmental Permit Tracker. 

Based on the permit applications, there have been no delays, although they are still under review.

Considering Brody’s line of work, it’s not unusual for him to receive campaign contributions from fellow homebuilders. But Cuthbertson was among Brody’s largest individual contributors, giving the campaign $2,000 in both 2018 and 2020, and $5,000 last September, according State Board of Elections data.

The bill would also allow local governments to issue a federal permit usually overseen by the state. However, DEQ has no authority to delegate this responsibility to local governments.

Other provisions in the bill: 

• A new 17-member Environmental Policy Council would review the effectiveness of federal laws and state and local programs, and propose changes to the legislature. The governor would have three appointments; the General Assembly, eight. Representatives of DEQ and three agency commissions would also have a seat.

• A requirement that DEQ request a consultation with the EPA on any proposed changes to federal regulations “that would impact the State’s administration of federal programs.” The purpose of this consultation would be to allow the state to have “an opportunity for meaningful collaborative input on development of regulations that it may be charged with administering.” This meeting would have to be held before the proposals are published in the Federal Register, the public repository for all federal rules. Although not a formal process, the EPA often notifies state regulators of proposed rules.

“It’s a constitutional guarantee that people can redress their government,” Brody said. “That’s what we’re attempting to do.”

DEQ did not comment at the committee meeting. Committee co-chair Rep. Frank Iler (R-Brunswick) said he did not allocate time for an agency representative to speak.

The bill now goes to the House Committee on Regulatory Reform.