This legislative session, the NC Chamber has been heavily involved in advocating for specific positive regulatory changes in both the House and Senate’s Regulatory Reform bills, and policy provisions in the state budget impacting our regulatory climate.

The Senate and House are still negotiating the final Conference Report of the 2023-2024 Budget, and below are some provisions we have advocated for and support in the budget impacting our regulatory climate for job creators.

Senate Budget

1. Prohibition on Cap-and-Trade Requirements for CO2 Emissions
Currently the Environmental Management Commission is considering rules to require the state to join the Regional Greenhouse Gas Initiative (RGGI). This provision in both the House and Senate Budgets would prohibit the state from joining such a program. RGGI is a cap-and-trade program made up of several northeast states and would require that utilities and manufacturers which produce their own power purchase carbon credits to produce electricity. This regulatory scheme would guarantee a cost increase on our electric rates and would also harm our business climate for manufacturing, many of which produce their own power for their operations.

2. Prohibition on the EMC Adopting the Advanced Clean Truck Rules (ACT)
This Section in both the House and Senate budget would prohibit NC from adopting the Advanced Clean Truck Rules. The NC Environmental Management Commission (EMC) is in the process of rulemaking to adopt California emission standards for new heavy duty vehicles. (HDV) The ACT would mandate that HDV manufacturers must produce a certain percentage of zero-emitting vehicles in order to produce traditional diesel trucks. This program would significantly harm our manufacturing climate for heavy-duty vehicles and ultimately result in cost increases in new trucks. Due to the Clean Air Act’s Identicality Provision, there is no flexibility in these rules, and the NC EMC would have to adopt verbatim California’s burdensome rules in order for the EPA to approve them. The business community is making significant investment in electric and zero-emitting technology, and government mandates and intervention into the market would stifle the innovation and investments North Carolina manufacturers are leading the country in. We are proud to be the No. 1 state in the country for Heavy Duty Vehicle Manufacturing, Investment, and Jobs and we want to keep it that way.

3. Right to Apply for and Obtain a Permit
This section in the Budget would prohibit the Department of Environmental Quality (NC DEQ) or a local government from denying a permit based solely on the fact that an applicant has not yet obtained other state/local/federal permits for a project. Unfortunately, a critical MVP Southgate Pipeline project’s permit was denied by the state in 2021 and the department cited that the project had yet to obtain a permit in another state as a reason for the denial. This will ensure that this situation cannot be repeated.

4. Sedimentation and Erosion Control Permitting
This Section in the Budget would prohibit the state or a local government from denying a Sedimentation and Erosion Control permit if the applicant has not obtained other permits for a project. It would require that the permit be issued with a construction prohibition until all necessary permits are received.

5. Title V Air Permitting Efficiency

This section in the  Budget would require the NC EMC adopt rules to approve, deny, or issue a permit for public notice within 90 days of an administratively complete application for a minor modification, and 270 days for a major modification. It would also allow an aggrieved applicant to seek a contested case at the Office of Administrative Hearings. We believe this would speed up permitting timelines for applicants and ensure we are competitive for future economic development projects.

6. Title V Research and Development Exemption
This section in the  Budget would direct the NC EMC to create a Title V air permit exemption for research and development to promote in-state research at our manufacturers and businesses. Currently some R&D activities are considered major or minor permit modifications to test a new line or product and require additional regulatory hurdles.

7. Pre-Permitting Activities for Air Permits
This section in the Budget would expand approved pre-permitting activities an applicant or greenfield project developer can undertake while their air permit is being reviewed. This change will speed up project timelines and increase our attractiveness for new and expanding sites due to additional activities a business can undertake while a permit is being processed.

8. Repeal Authorization to Construct Forms to Publicly Owned Treatment Works
After a covered business obtains a National Pollutant Discharge Elimination System (NPDES) permit, they must obtain an Authorization to Construct (ATC) before they can start construction. NC DEQ is considering a new $1,000 fee for this process, and we believe the department does not have the authority to require the form and prohibit construction after all other permits are acquired. This would exempt all private entities from an ATC fee and form and speed up deployment of water and sewer infrastructure in North Carolina.

Regulatory Reform:

This year, the House and Senate each passed its own versions of regulatory reform. The Senate took their bill and combined it with the House’s version which passed earlier in the session. That bill, H600, is now in conference and is likely to be unveiled at the same time the budget conference report is completed.

Below are some of the top provisions we have advocated for and support in H600:

Section 4(a): Exemption of Linear Transportation Projects from Post-Construction Stormwater Rules
This section addresses a problem with DOT improvements adjacent to businesses with stormwater permits. This revision ensures that if a turn-lane is added for a business that that business shall not be required to capture stormwater from that DOT impervious surface, which is already in DOT rules, but not EMC rules.

Section 7.1(a): 401 Certifications
This section puts much needed shot-clocks on permitting for 401 Water Quality Certifications to ensure that projects such as natural gas pipelines and other activities requiring a 401 Certification are reviewed and approved within the 60-day shot clock in rule. Currently, that timeline is not being followed and we are aware of a department policy violating current rule by allowing a 120-day shot clock.

New Timeline:

• 30-day shot clock for a completeness check, with a deemed complete provision by day 30.
• 5 days after a permit is deemed complete, the department shall issue a public notice soliciting public comment.
• 60-day shot clock after the application is deemed complete, the department shall approve or deny the application. If the department fails to act within 60 days, the state waives its requirement to issue a waiver for a 401 Certification.

Section 10(a): New Procedural Requirements for Coastal Area Management Act (CAMA) Guidelines
This Section would require that all policies and guidelines for the CAMA program be made available to the public on the Department’s website in writing. It would also require that any policies in CAMA permits must cite the law under which the rule was adopted.

The business community is aware of some unwritten policies in the CAMA program being applied to certain businesses and permits. We want to ensure that any requirement on businesses seeking a CAMA permit is lawful and that the department has clear authority under the law to enforce such requirements.

Section 10.5: Require the Statutory or Regulatory Citation for Permits
This section would require that the Department of Environmental Quality include the statutory or regulatory authority for any permit condition added into a permit issued by the department. This would ensure that all conditions added to permits by the Department are lawful and within the bounds of our regulatory scope in rule.

Section 17: Clarify Brownfield Program Construction
The NC Chamber advocated for the following clarification in 130A-310.37(a) This Part is not intended and shall not be construed to: “Limit or preclude a prospective developer from performing an investigation of a Brownfields property without prior approval from the Department.”

The NC Chamber has many members which are directly involved in NC Brownfields Redevelopment Projects to clean up abandoned sites and re-develop them for new uses. We want to ensure that businesses participating in the NCBP have the ability to perform inspections and investigations of their property without prior approval from the Department to speed up projects. There is a significant need for reforms of the NC Brownfields Program, and we intend to advocate for broader and more impactful reforms in the 2024 short session.

We are still advocating for this bill as it is negotiated between the House and Senate Conference Committee and look forward to the final bill unveiling.