20061590 Ver 1_Buffer Determination Request_20030625

VESTED RIGHTS AND DEVELOPMENT:
GUIDANCE FOR DIVISION OF WATER QUALITY STAFF
June 25, 2003
The vested rights doctrine is a test of fairness to determine whether a
project has proceeded to such a degree that it would be unreasonable to impose
new changes in the law upon it. Although it may be applied generally to any
change in law, it has most often been applied to zoning law which has steadily
defined its criteria through statutes, ordinances and case law. The vested rights
concept has been explicitly incorporated into State law through subject-specific
session laws and State rules.
This document provides general guidance to DWQ staff and applicants
regarding DWQ's vested rights determinations. If the facts surrounding the
project differ from this guidance or involve a complex application of fact to law,
DWQ staff may solicit advice from the NC Attorney General's Office. If DWQ
has the authority to determine vested rights for certain rules, it may determine
that the facts surrounding the project would meet the vested rights criteria and
allow the project to proceed without complying with those rules. However, since
this a legal concept, if there is doubt about whether the facts surrounding the
project meet the vested rights criteria, then DWQ should solicit advice from the
NC Attorney General's Office. Once it has received advice, DWQ may be better
able to make its determination on whether to exercise its authority to recognize
vested rights and not impose its rules. Because the vested rights concept is a
legal concept, the issue may always be litigated in court. The determinations by
DWQ and the advice of the NC Attorney General's Office simply forecast, based
upon the evidence presented by the applicant, what a judge may decide if the
issue proceeded through litigation. All correspondence with respect to vested
rights should include this caveat.
This guidance does not cover all the specialized criteria included in
various session laws and rules to provide simple tests for determination of
vested rights for certain activities. For example, the determination of vested
rights for forestry projects is generally based on whether there is a valid timber
contract or deed signed before the effective date of the rules, rather than the four
general criteria of vested rights, and is generally a simpler decision since only
one document must be reviewed. If you have questions about a specific vested
rights program, contact the appropriate permitting authority for more information.
There are generally two categories of vested rights: 1) statutory vested
rights and 2) common law vested rights. Statutory vested rights exist because
North Carolina statutes grant the power to determine vested rights to local
governments as part of their overall zoning authority. See N.C. Gen. Stat. §
153A-344.1 and 160A-385 for specific language. Under the statutory vested
rights, the criteria are as follows:

(1) A site specific development plan;
(2) Reviewed after proper notice at aquasi-judicial public hearing; and
(3) Approved by the local government.
What constitutes a site specific development plan is defined by ordinance. Many
local governments have gone beyond simply defining the site specific
development plan that qualifies for a vested right and established a detailed
ordinance defining all criteria for a vested right. Under those circumstances, the
vested rights ordinance dictates the requirements to be met. For example, many
of the vested rights ordinances require an application and fee to establish a
vested right, separate from a subdivision approval application and fee, which
make these vested rights easy to recognize or rule out.
Common law vested rights exist because the courts have reviewed the
facts of various cases and developed criteria for the "fairness" test discussed
above when the government seeks to impose new rule requirements on an
entity. The four basic criteria (all of which must be met to make a determination
on vested rights applicability) are:
substantial expenditures
2. made in good faith
3. in reliance on a governmental permit and
4. a detriment resulting from changing the project to comply with the
new rules
All four of the criteria must be met because they build upon one another. Many
of DWQ's more recent rules adopt the common law criteria to recognize vested
rights and allow a project to avoid complying with the new rules.
Substantial Expenditures:
Substantial expenditures means the amount of money obligated to be
spent on the project. It may be proven by copies of checks, financial statements
or balance sheets that show money has been expended. It may also be proven
by contracts which bind the developer of the project to expend money. Case law
on the subject excludes the purchase price of the land since this does not tie the
development to any particular path. Case law also differentiates between
phases of a development. If substantial expenditures were made on one phase,
but not the remaining phases, only one phase meets this criteria.

Good Faith:
Good faith means that the substantial expenditures were made without
knowledge of the impending change in the rules. The good faith criteria is
focused on the timing of development plans. For example, it may be proven by
showing that asite-specific development plan was approved prior to the rules'
adoption.
Good faith also means that the project must continue to abide by such
terms and conditions of the original approval. If the project fails to abide by the
original terms and conditions of the approval, the activities are no longer
proceeding in good faith and the vested right may be forfeited and the new rules
may be imposed.
Reliance on Governmental Permit:
This criteria means that the substantial expenditures were made in good
faith on an appropriate approval that was received from a public entity. Since the
case law recognizes that a zoning approval (such as a subdivision approval)
must be obtained to receive a vested right against the imposition of new zoning
regulations, the law may be analogized to establish that a State water quality
approval must be obtained to receive a vested right against the imposition of new
water quality rules. For instance, this criteria may be met by showing that
activities proceeded in accordance with a 401 Water Quality Certification issued
prior to the effective date of a rule.
The governmental permit must also be valid. If a permit has expired, it is
no longer valid. If a permit has been issued contrary to the law or outside the
authority of the permitting agency, it is not valid. If a permit has been violated,
the violations are clearly not covered by the permit and cannot be considered
vested. A violation may also void the permit depending on the permit's
conditions. A violation also indicates that the development activities are no
longer proceeding in good faith.
The case law also establishes that if a project was exempt from a
governmental permit, the lack of a permit will not prohibit a vested right. For
instance, if the impacts of a project fell below the required reporting thresholds at
the time that the developer contacted the U.S. Army Corps of Engineers' in
regards to a 404 Permit, then the development would not have to show a 401
Water Quality Certification to be vested.
The governmental permit criteria limits the extent of vested rights because
only the site-specific development plan which obtained governmental approval
may be vested. If the approved development plans for a subdivision showed
only road layout and crossings, then only the road layout may be vested. If the
layout of residential lots were not shown on the approved plans, then the layout

of lots may not be vested. Therefore, the project may be required to redesign
the layout of lots, but not the roads.
Detriment:
Detriment means that the imposition of the new rules will prevent the
project from being completed as designed or will impose an unreasonable
burden on the developer. For example, if a project has an approved 401 Water
Quality Certification issued prior to the effective date of the rules showing a
commercial building footprint straddling a stream, then the project is vested
because it may not be able to be built any other way or it would impose a
substantial cost in redesigning the project. In the alternative, If the development
can occur without significant impact from the rules, then the project is not vested.
For instance, asite-specific development plan may show road and lot layouts,
but not individual building footprints. If a building may be constructed within the
approved lot layout and still comply with the buffer rules, then the project is not
vested.
DWQ staff in the Central Office will coordinate the agency's review of
requests for vested rights with the assistance of DWQ's Regional Office staff. If
an applicant wants to pursue vested rights, then DWQ staff should meet with the
applicant to discuss the legal framework of vested rights. If a clear-cut decision
cannot be made at this meeting, then DWQ staff should recommend either that
1) the applicant pursue a variance from the rules (Minor Variances are issued by
DWQ staff while Major Variances are issued by the Environmental Management
Commission) or 2) the applicant prepare a package of information which
attempts to address the four vested rights criteria listed above. Staff should
recommend that the applicant have an attorney assist in this process since it is a
complex legal issue. If DWQ, after reviewing the vested rights package, is still
unclear on how the vested rights criteria should apply to the project, then DWQ
will prepare a cover memo (if the package is complete) and send it to the N.C.
Attorney General's Office for review and advice.
Applicants who would like to request review of their project for vested
rights should submit a letter explaining the affected party's claim based on the
applicable vested rights criteria, including a description of the project and the
following information:
Documentation of financial expenditures and/or contractual
obligations;
2. A copy of asite-specific development plan approved prior to the
effective date of the new rules;
3. A copy of an approved permit for water quality impacts relevant to
the particular program from which the applicant is seeking vested

rights or an explanation of why the project was exempt from
obtaining such approvals;
4. Discussion of how (specifically} the new rules will be a detriment to
the project and a map showing project location, water bodies
(streams, ponds, wetlands), and potential restrictions created by
the new rules (e.g., buffer areas for buffer regulations)
The above information should be submitted to the appropriate permitting
authority in DWQ (e.g., Wetlands Unit, Parkview Building, 2321 Crabtree Blvd.,
Suite 250, Raleigh, NC 27604 for buffer determinations).

~O
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STATE OF NORTH CAROLIN~ Q ~ ~ IN THE OFFICE OF
i ADMINISTRATIVE HEARINGS
COUNTY OF WAKE 06 EHR 0953
George C. & Patricia C. Jones, )
Petitioner, Q F F I C E O F )
AQ`iiP11STR~1Tl'dE)
vs. N t 1~ R ! ~ G S ) PREHEARING STATEMENT
North Carolina Division of Water Quality, )
Respondent. ~
Now come the Petitioners George C. and Patricia C. Jones, by and through undersigned
counsel, and in compliance with the Office of Administrative Hearing's Order of May 26, 2006,
hereby submit this Order for Prehearing Statement as follows:
The Petitioners contend that the North Carolina Division of Water Quality ["DWQ"]
has improperly determined that surface waters located on the Petitioners' property at
11601 Appaloosa Run West, Wake County, North Carolina, are exempted from
buffer requirements. The effect of DWQ's decision is to prevent the Petitioners from
being able to build upon their property due to this determination.
2. Tre Petitioners first purchased their property in the early 1980's. At the time the
property was purchased, there had been no determination by DWQ that any surface
waters existed upon the Petitioners' property. (Indeed, there has never been any
indication on a United States Geological Survey Map of any such waters.) As such,
the Petitioners expended money over the years on this property with the expectation
that the property could be one day built upon and a home for the Petitioners
constructed.
It is the Petitioners' position that the "vested rights" doctrine provides them rights to
this property consistent with those they possessed at the time of purchase to permit
them to build upon the property. There are also equal protection concerns under the
North Carolina Constitution.
Petitioners incorporate herein by reference their response to Paragraph 1 above.
3. In addition to the Petitioners, the Petitioners may call Brad Phelps of Phelps-Dixon
Builders, LLC to testify.
4. The Petitioners at this time have not made any decision as to whether or not to pursue
discovery in this matter. Given that the dispute is primarily legal in nature, the
Petitioners are uncertain as to whether or not discovery is necessary. The length of
time provided by the Office of Administrative Hearings ["OAH"] in the Scheduling
Order is sufficient for the Petitioners to pursue discovery.
5. The hearing location in Raleigh, North Carolina is acceptable to the Petitioners.
6. The Petitioners estimate that this hearing should take no longer than one (1) day.

7. Not applicable.
8. A hearing the week of September 25, 2006 is acceptable to the Petitioners.
9. There are no other special considerations at this point that the Petitioners are aware of.
Petitioners reserve the right to amend this Prehearing Statement as appropriate.
This the~day of June, 2006.
Michael S. Harrell
N.C. Bar No. 17443
Of MANNING, FULTON & SKINNER, P.A.
Post Office Box 20389
Raleigh; North Carolina 27619-0389
Telephone: [phone]
Facsimile: [phone]

CERTIFICATE OF SERVICE
This is to certify that a copy of the foregoing Prehearing Statement was duly served this
date on counsel for all parties by forwarding a copy thereof enclosed in a postage-paid envelope,
deposited in the United States Mail, addressed as follows:
Donald W. Laton
North Carolina Attorney General's Office
Environmental Division, RM 323A
Old Education Building
114 West Edenton Street
Raleigh, North Carolina 27603
This the~~ay of June, 2006.
Michael S. Harrell
N.C. Bar No. 17443
Of MANNING, FULTON & SKINNER, P.A.
Post Office Box 20389
Raleigh, North Carolina 27619-0389
Telephone: [phone]
Facsimile: [phone]

PLEASE PRINT CLEARLY OR TYPE
STATE OF NORTH CAROLINA
k
IN THE OFFICE OF
ADMINISTRATIVE HEARINGS
COUNTY OF (1) V v Q ~
(a> G e o~-y e C . ~- P~~ri <i ~ C , Swt es )
(your name)
PETITIONER,
v
PETITION
FOR A
CONTESTED CASE HEARING
(3) IV o~ ~ro~ty~c~ ~ iV tS i~ t~S~ ~~ )
QJal1i cN~
RESPONDENT. )
(The State agency or board about which you are complaining) )
I hereby ask for a contested case hearing as provided for by North Carolina General Statute § 150B-23 because the Respondent has:
.. '(t3new' t~v staLe'~acts snowme"how you believe you have been harmed'uy the Mate agency or ooain.j
(4) Because of these facts, the State agency or board has: (check at least one from each column)
C, deprived me of property; exceeded its authority or jurisdiction;
ordered me to pay a fine or civil penalty; or ~ acted erroneously;
otherwise substantially prejudiced my rights; AND failed to use proper procedure;
~_acted arbitrarily or capriciously; or
~ Mailed to act as required bylaw or rule.
(5) Date: ;~ ~~~/ Z2 , ~~~ ~ (6) four Fhone number: (9 ~`~) ,Q~ ~ ~ - ~~~
(7) Print your full address: ux1 v\ i V'~ct ~ ~CW1 ~ 5 ~ ~ h ~ ~• ~, , Y - ~ • Y~a?t 2-~ 3~~1 } ~u~ e-Vy ~; ~ • ~ .
(8) Print your name: ~V ~ (L ~~e. ~ ~ .r ~m
~ ~
(9) Your signature:
Z~Gtq-b3
You must mail or deliver a COPY of this Petition to the State a~~cncy or board named on line (3) of this form. You should contact the agency or
board to determine the name of the person to be served.
CERTIFICATE OF SERVICE
I certify that this Petition has been served on the State agency or board names below by depositing a copy of it with the United States Postal Service
with sufficient postage affixed OR by delivering it to the named agency or board:
(l o) ~~a~ f~V, k-(~ Jv, e--~-- , 4~. C= , (11) N'~ c. O~~;s ~ ~ a~ wa~(-e,- C~t~(, ~Z.,
(na e of person served) (State agenc or board listed on line 3)
(12> l (o Z~ ~~~1 S~cv~c~ Ce,,,~e./~ 1~-A.(~~L,, N - L. Z~ 6~~- ~ 6 Z~
(street address/p.o. box) { (city) (state) (zip code)
(13)
(14)
(your signature)
When you have completed this form, you MUST mail or deliver the ORIGINAL AND ONE COPY to the Office of Administrative Hearings, 6714
Mail Service Center, Raleigh, NC ?7699-6714.
H-06 (11/99)
(If more space is needed, attach additional pages.)

t ~ ~
PIi,ED
OFFICE OF
ADMINISTRATIVE FiEARiNGS
Nuv 02 S 20 AM 2006
STATE OF NORTH CAROLINA IN THE OFFICE OF
ADMIIIISTRATNE HEARINGS
COUNTY OF WAKE 06 EHR 0953
Gearge C & Patricia C Jones )
Petitioner )
vs. ) NOTICE OF HEARING
North Carolina Division of Water )
Quality }
Respondent )
NOTICE IS HEREBY GNEN that the above-captioned case will be brought on for
hearing before the undersigned administrative law judge as follows:
DATE: December 18 & 19, 2006
TIME: 9:00 a.m.
PLACE: Office of Administrative Hearings
Lee House Hearing Room
422 N. Blount Street
Raleigh, NC
RECEIVEa
NOV 7 2006
N.C. ATTORNEY GENERAL
Enviro;lmental Division
1. This hearing will be conducted in accordance with G.S. Chapter 150B and the Rules of
Contested Case Hearings in the Office of Administrative Hearings, copies of which
maybe obtained at cost from Molly Masich, Director of APA Services or by accessing
the OAH Web page at http://www.oah.state.nc.us/hearings/#Chapter3.
2. Unless otherwise determined by the administrative law judge, the hearing will proceed
in the following sequence:
a. Call of the case
b. Motions and other preliminary matters
c. Stipulations, agreements, or consent orders entered into the record
d. Opening statements
e. Presentation of evidence; crass-examination
f. Final arguments
3. All parties are hereby notified to bring to the hearing all documents, records, and
witnesses needed to present the party's case.
NOTE: IF SPECIAL EQUIPMENT IS REQUIRED FOR THE PRESENTATION

OF EVIDENCE, THE PARTIES ARE RESPONSIBLE FOR MAKING
ARRANGEMENTS FOR THE EQUIPMENT.
4. Subpoenas maybe available to the parties pursuant to 26 NCAC 3 .0113 to compel the
attendance of witnesses or for the production of documents.
A party may represent himself or be represented by an attorney. A party who is
represented by an attorney must file a Notice of Representation within 10 days of
service of this Notice containing the name, address, and telephone number of the
attorney, unless the attorney has already corresponded with this Office concerning
this case.
TAKE NOTICE THAT A FAILURE TO APPEAR AT THE HEARING MAY RESULT IN:
A finding that the allegations of or the issues set out in this Notice maybe taken as
true or deemed proved without further evidence;
2. Dismissal of the case or allowance of the motion or petition;
3. Suppression of a claim or defense; or
4. Exclusion of evidence.
NOTICE OF CANCELLATION OF HEARING
THE PARTIES MUST NOTIFY THE OFFICE OF ADMINISTRATNE HEARINGS
AT LEAST~4 HOURS PR14R TO THE CANCELLATION OF THE CONTESTED CASE
HEARING. FAILURE TO GNE TIMELY NOTICE OF CANCELLATION MAY RESULT
IN A CHARGE TO THE PARTIES FOR THE COST OF THE COURT REPORTER OR
HEARING ASSISTANT. SEE 26 NCAC 3 .0123{f).
This the 2nd day of November, 2006.
DWO
Donald W. Overby
Administrative Law Judge

A copy of the foregoing was mailed to:
Michael S Harrell
Manning Fulton & Skinner, PA
PO Box 20389
Raleigh, NC 27619-0389
ATTORNEY FOR PETITIONER
Donald W. Laton
Assistant Attorney General
NC Department of Justice
9001 Mail Service Center
Raleigh, NC 27699-9001
ATTORNEY FOR RESPONDENT
This the 2nd day of November, 200b.
Office of inistrative Hearings
6714 Mail Service Center
Raleigh, NC 27699-6714
[phone]
Fax: {919) 733-3407