NCHBA Comment Ltr-EMC State Wetlands-102121

NORTH CAROLINA HOME BUILDERS ASSOCIATION
P.O. BOX 99090 ∙ RALEIGH, N.C. 27624-9090
PHONE [phone] ∙ TOLL FREE 1-800-662-7129 ∙ FAX [phone]
www.nchba.org ∙ www.21buildingexpo.com

October 21, 2021

Environmental Management Commission
North Carolina Department of Environmental Quality
217 West Jones Street
Raleigh, NC 27603

RE: Wetlands - NCHBA Public Comment on Proposed Permanent Rules 15A NCAC 02H .1301
(Revision) and 15A NCAC 02H .1400 (.1401 through .1405)

Members of the Environmental Management Commission:

On behalf of the more than 14,000 firms which comprise the North Carolina Home Builders
Association (NCHBA) we ask that the Commission not adopt the proposed permanent rules for
state wetlands (15A NCAC 02H .1301 and 15A NCAC 02H .1400 (.1401 through .1405)) and allow
the temporary rules to expire. In addition to this public comment, please also find within this
letter a formal request to the Commission to remand the November 1, 2019 amendment to the
definition of “Wetlands” as defined in 15A NCAC 02B .0202.

According to the Public Hearing notice issued by the Division dated September 22, 2021, it is
understood that the purpose of the Commission adopting a set of additional wetland rules is
due to the Federal Government narrowing of what is considered “Waters of the United States”
(WOTUS) and therefore creating a “subset of wetlands classified under North Carolina state
law” no longer subject to federal Clean Water Act jurisdiction. The Public Hearing notice claims
that the subset of wetlands deregulated by the Federal Government remains protected by the
state according to 15A NCAC 02B .0231 – Wetland Standard. The notice also claims that “as a
result of the new Federal Rule, there is no permitting mechanism available to authorize impacts
to these wetlands. To provide a regulatory mechanism to authorize impacts to wetlands that
are no longer federally jurisdictional and to provide regulatory certainty, DWR adopted
temporary rules and initiated permanent rulemaking.”

It is understood that based on the contents of the Public Hearing notice, along with the staff
presentations during the previous Commission meetings, the main argument to adopt a new
set of state wetland rules is that since the Trump Administration narrowed the definition of
WOTUS that the state has a responsibility to step in and regulate the formerly federal regulated
wetlands. After researching the events that led up to this proposal for the Commission to
adopt a new set of wetland regulations, we believe that the responsibility of the Commission to
regulate wetlands that were deregulated at a federal level is built upon a state wetland
definition that was not properly adopted in 2019 when the 15A NCAC 02B rules traversed
NCHBA Public Comment
Proposed Permanent Wetland Rules
Page 2

through the Rules Review process. Before adopting a new set of state wetland regulations, we
ask that the Commission seriously address the issue of whether legitimate authority exists to
regulate wetlands that are not considered WOTUS due to the lack of adherence to the rule-
making process required by law when previously altering the state definition of wetlands.

The basis of the proposed expansion of state wetland regulations currently subject to public
comment is the claim of state responsibility to regulate according to 15A NCAC 02B .0231. The
claimed responsibility within 15A NCAC 02B .0231 exists according to how “Wetlands” are
defined in section 15A NCAC 02B .0202 of the rules. While preparing to respond to the
proposed wetland rules currently under consideration by the Commission, we discovered that
the definition of “Wetlands”, as defined in 15A NCAC 02B .0202, was significantly and
substantially modified in 2019 during the Rules Review process.

Please note that before the 2019 readoption of rules the definition of wetlands found in 15A
NCAC 02B .0202 was as follows:

(71) Wetlands are "waters" as defined by G.S. 143-212(6) and are areas that are
inundated or saturated by an accumulation of surface or ground water at a frequency
and duration sufficient to support, and that under normal circumstances do support, a
prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands
generally include swamps, marshes, bogs and similar areas. Wetlands classified as
waters of the state are restricted to waters of the United States as defined by 33 CFR
328.3 and 40 CFR 230.3.

After the 2019 readoption of rules the definition of wetlands found in 15A NCAC 02B .0202 is as
follows:

(61) "Wetlands" are "waters" as defined by G.S. 143-212(6) that are inundated or
saturated by an accumulation of surface or ground water at a frequency and duration
sufficient to support, and that under normal circumstances do support, a prevalence of
vegetation typically adapted for life in saturated soil conditions. Wetlands do not include
prior converted cropland as defined in the National Food Security Act Manual, Fifth
Edition, which is hereby incorporated by reference, not including subsequent
amendments and editions, and is available free of charge at
https://directives.sc.egov.usda.gov/RollupViewer.aspx?hid=29340.

The significant language that was stricken from the definition of wetlands was as follows:
“Wetlands classified as waters of the state are restricted to waters of the United States as
defined by 33 CFR 328.3 and 40 CFR 230.3”. By removing this language from the state wetland
definition in 2019 the Commission has created regulatory uncertainty in eliminating the
important restriction to WOTUS that previously prevented an unconstrained connection to
Waters of the State.

NCHBA Public Comment
Proposed Permanent Wetland Rules
Page 3

While the plain text of the revised state definition of wetlands was available to the public
before adoption in 2019, the normal triggers that signal to the public a significant change to
state rules during the rule-making process were not present. We believe that not following the
proper process required by law caused a lack of knowledge surrounding the substantial change
to the state definition of wetlands that affected both the public and the Commission.
Regarding the Commission, we have been informed by several Commissioners that they were
not aware at the time of the vote of the substantial change to the definition of wetlands in
2019 during the readoption of the 15A NCAC 02B rules which may be a result of the lack of
adherence to the rule-making process required by statute.

In addition to the Commissioners lack of knowledge during the 2019 Rules Review readoption
of the 15A NCAC 02B rules, the Office of State Budget and Management also did not address
the substantial change to the definition of wetlands found in 15A NCAC 02B .0202 when
preparing the required Fiscal Note. While the Fiscal Note is detailed concerning many other
substantial changes to the 15A NCAC 02B rules, it fails to mention any reference to the
significant alteration of the definition of wetlands in the “Proposed Rule Changes:” or the
“Economic Impact of the Proposed Changes:” sections of the document. Specifically, under the
“Economic Impact Analysis” section of the Fiscal Note, the direct reference to 15A NCAC 02B
.0202 establish that the proposed changes were only “Revised language for clarity; revised
definition; reorganized texts, provided flexibility for sampling under various conditions; moved
some definitions to 2B .0621, 2B .0701 and 2B .0104 and 2B .0623(4).” The Fiscal Note indicates
that there is “no economic impact” and “no environmental impact” caused by the changes to
15A NCAC 02B .0202; therefore, both the public and the Commission did not have the
appropriate understanding of the fiscal impact to the citizens of North Carolina that would
result from significantly altering the state definition of wetlands.

In addition to the failure to disclose the economic and environmental impact caused by
significantly altering the definition of wetlands as required in the Fiscal Note, the publication
required by law to be placed in the North Carolina Register, including the Notice of Text, made
no mention of the significant alteration of the state definition of wetlands contained in 15A
NCAC 02B .0202. GS 150B-21.2 requires that “before an agency adopts a permanent rule, the
agency must comply with the requirements of GS 150B-19.1, and it must take the following
actions: (1) Publish a notice of text in the North Carolina Register. (2) When required by GS.
150B-21.4, prepare or obtain a fiscal note for the proposed rule.” GS 150B-21.2(c)(2) outlines
that the Notice of Text must include an “explanation of the reason for the proposed rule”. GS
150B-19.1(c)(2) outlines the requirement to publish “an explanation of the proposed rule and
the reason for the proposed rule”.

Although specifically required by GS 150B-19.1(c)(2) & GS 150B-21.2(a)(1) & (c)(2) the
publication, including the Notice of Text, that contained the Commission’s significant alteration
of the state definition of wetlands found within 15A NCAC 02B .0202 does not provide “an
explanation of the proposed rule” nor “the reason for the proposed rule”. The Notice of Text
given in the North Carolina Register is very detailed concerning several of the other substantial
NCHBA Public Comment
Proposed Permanent Wetland Rules
Page 4

changes to the rules but no “explanation” or “reason” for the significant rule change to the
state definition of wetlands that completely decouples state wetlands from WOTUS was given
to the public as required by law.

The alteration of the state definition of wetlands found in 15A NCAC 02B .0202 during the Rules
Review process was done so without completely following statute and without full knowledge
of the environmental and fiscal impact; therefore, we formally request that the Commission
remand the 2019 adoption of the state definition of “Wetlands” as defined in 15A NCAC 02B
.0202 in order to revert back to the previous state definition of wetlands until the complete
process for rule-making required by law is followed. Since the proposed wetland rules subject
to public comment are built upon the ability to regulate wetlands at a state-level according to a
definition that was adopted without following the process outlined in statute, we ask that the
Commission not adopt the new permanent rules and to allow the temporary rules to expire.
There is no basis to regulate at a state-level wetlands that the federal government deregulated
if the state definition of wetlands was not first improperly decoupled from WOTUS in 2019
during the Rules Review process. A remanded wetland definition will remove the need for
these new state wetland regulations currently under consideration.

We believe the regulated community deserves the opportunity to fairly debate, with full
knowledge of the fiscal impact, the benefits, and the consequences of broadly expanding the
state’s ability to regulate wetlands. We desire to work together with the Commission to ensure
that the necessary definition of wetlands is codified in rules that optimize the protection of
areas of environmental significance, respect the property rights of the citizen, and maximize
home affordability for North Carolina families.

The North Carolina Home Builders Association stands ready to work with the Commission to
provide a thoughtful solution to this state-regulated wetlands issue. Thank you for the
opportunity to provide these comments and thank you for your service to our State.

Sincerely,

Chris Millis
Director of Regulatory Affairs
North Carolina Home Builders Association
5580 Centerview Drive, Suite 415
Raleigh, NC 27606
[phone]