GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	2 

HOUSE BILL 886*
Committee Substitute Favorable 6/14/95

Short Title:  State Auth./Fed. Clean Water Act.	(Public)

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Sponsors:

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Referred to:  

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April 12, 1995

A BILL TO BE ENTITLED
AN ACT TO DIRECT THE APPROPRIATE STATE DEPARTMENTS HOW TO EXERCISE THE STATE'S AUTHORITY UNDER THE CLEAN WATER ACT AND TO ESTABLISH THE WETLANDS MITIGATION BANK AND WETLANDS RESTORATION FUND.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 143B-282(a)(1) reads as rewritten:
"(a)	There is hereby created the Environmental Management Commission of the Department of Environment, Health, and Natural Resources with the power and duty to promulgate rules to be followed in the protection, preservation, and enhancement of the water and air resources of the State.
(1)	Within the limitations of G.S. 143-215.9 concerning industrial health and safety, the Environmental Management Commission shall have the following powers and duties:
a.	To grant a permit or temporary permit, to modify or revoke a permit, and to refuse to grant permits pursuant to G.S. 143-215.1 and G.S. 143-215.108 with regard to controlling sources of air and water pollution;
b.	To issue a special order pursuant to G.S. 143-215.2(b) and G.S. 143-215.110 to any person whom the Commission finds responsible for causing or contributing to any pollution of water within such watershed or pollution of the air within the area for which standards have been established;
c.	To conduct and direct that investigations be conducted pursuant to G.S. 143-215.3 and G.S. 143-215.108(b)(5);
d.	To conduct public hearings, institute actions in superior court, and agree upon or enter into settlements, all pursuant to G.S. 143-215.3;
e.	To direct the investigation of any killing of fish and wildlife pursuant to G.S. 143-215.3;
f.	To consult with any person proposing to construct, install, or acquire an air or water pollution source pursuant to G.S. 143-215.3 and G.S. 143-215.111;
g.	To encourage local government units to handle air pollution problems and to provide technical and consultative assistance pursuant to G.S. 143-215.3 and G.S. 143-215.112;
h.	To review and have general oversight and supervision over local air pollution control programs pursuant to G.S. 143-215.3 and G.S. 143-215.112;
i.	To declare an emergency when it finds a generalized dangerous condition of water or air pollution pursuant to G.S. 143-215.3;
j.	To render advice and assistance to local government regarding floodways pursuant to G.S. 143-215.56;
k.	To declare and delineate and modify capacity use areas pursuant to G.S. 143-215.13;
l.	To grant permits for water use within capacity use areas pursuant to G.S. 143-215.15;
m.	To direct that investigations be conducted when necessary to carry out duties regarding capacity use areas pursuant to G.S. 143-215.19;
n.	To approve, disapprove and approve subject to conditions all applications for dam construction pursuant to G.S. 143-215.28; to require construction progress reports pursuant to G.S. 143-215.29;
o.	To halt dam construction pursuant to G.S. 143-215.29;
p.	To grant final approval of dam construction work pursuant to G.S. 143-215.30;
q.	To have jurisdiction and supervision over the maintenance and operation of dams pursuant to G.S. 143-215.31;
r.	To direct the inspection of dams pursuant to G.S. 143-215.32;
s.	To modify or revoke any final action previously taken by the Commission pursuant to G.S. 143-214.1 and G.S. 143-215.107; 
t.	To have jurisdiction and supervision over oil pollution pursuant to Article 21A of Chapter 143; and
u.	To administer the State's authority under 33 U.S.C. § 1341 of the federal Clean Water Act pursuant to G.S. 143-215.3(c1)-(c3) and G.S. 143-215.8 and to adopt rules implementing those sections."
Sec. 2.  G.S. 143-215.3 is amended by adding the following subsections to read:
"( c1)	General Exercise of Powers Granted Under Section 401 of the Clean Water Act. – Except as provided in subsection (c3) of this section, in determining whether to certify a federally issued permit or activity pursuant to 33 U.S.C. § 1341, the Commission shall consider only those provisions listed in 33 U.S.C. § 1341(a).  The Commission shall not duplicate the site specific application of any guidelines employed by the United States Army Corps of Engineers in evaluating permit applications under 33 U.S.C. § 1344 and applicable federal regulations.
(c2)	Classification of Wetlands. – Classifications of wetlands set forth in subdivisions (1) through (3) of this subsection shall apply to all wetlands except coastal wetlands defined in G.S. 113-229(n)(3) or wetlands within Areas of Environmental Concern established by the Coastal Resources Commission pursuant to G.S. 113A-113.
(1)	'Class I wetland' means any wetland located within 150 feet of the mean high waterline or normal water level of any perennial or intermittent water body as designated on the most recently published version of the United States Geological Survey 1:24,000 (7.5 minute) scale topographic map.
(2)	'Class II wetland' means any wetland located greater than 150 feet but less than 1,000 feet of the mean high waterline or normal water level of any perennial or intermittent water body as designated on the most recently published version of the United States Geological Survey 1:24,000 (7.5 minute) scale topographic map.
(3)	'Class III wetland' means any wetland not classified as a Class I or II wetland.
(c3)	Exercise of Authority Granted Under Federal Law With Regard to Wetlands. – The Commission shall exercise its authority with regard to the water quality certification for wetlands except coastal wetlands defined in G.S. 113-229(n)(3) or wetlands within Areas of Environmental Concern established by the Coastal Resources Commission pursuant to G.S. 113A-113 as follows:
(1)	The Commission shall grant the water quality certification for any project that will impact less than one acre of any wetlands. The Commission shall be notified of any project that impacts between one-third and one acre of wetlands in accordance with procedures developed by the Commission.
(2)	The Commission shall grant the water quality certification for any project that will impact between one and three acres of wetlands if it determines that the project will comply with the provisions listed in 33 U.S.C. § 1341(a) and if the requirements in this subdivision have been met:
a.	A Class I wetland requires minimization of impacts to wetlands for the protection of water quality and requires that the applicant agree to provide compensatory mitigation for any loss of wetlands resulting from the proposed project.  In conducting the minimization analysis required under this sub-subdivision, the Commission may consider: (i) the spatial and dimensional requirements of the project; (ii) the location of any existing structural or natural features that may dictate the placement or configuration of the proposed project; (iii) the purpose of the project and how the purpose relates to placement, configuration, or density; and (iv) the ability of wetlands to continue to support the existing uses after project completion. Mitigation shall be conducted based on the following ratios:
1.	Five-to-one ratio, acres mitigated to acres lost for any wetlands located within 150 feet of the mean high waterline or normal water level of a perennial water body.
2.	Three-to-one ratio, acres mitigated to acres lost for any wetlands located within 150 feet of the mean high waterline or normal water level of an intermittent water body.
b.	A Class II wetland requires that the applicant agree to provide compensatory mitigation for any loss of wetlands resulting from the proposed project based on the following ratios:
1.	Three-to-one ratio, acres mitigated to acres lost for any wetlands located greater than 150 feet and less than 1,000 feet from the mean high waterline or normal water level of a perennial water body.
2.	Two-to-one ratio, acres mitigated to acres lost for any wetlands located greater than 150 feet and less than 1,000 feet from the mean high waterline or normal water level of an intermittent water body.
c.	A Class III wetland may require compensatory mitigation for any loss of wetlands resulting from the proposed project on a one-to-one ratio, acres mitigated to acres lost, if the Commission finds that the loss of wetlands will result in a violation of any water quality standards.
(3)	The Commission shall grant the water quality certification for any project that impacts more than three acres of wetlands if it determines that the project will comply with the provisions listed in 33 U.S.C. § 1341(a).
(4)	The Commission shall grant water quality certification for any project that involves dredge or fill activities conducted in any wetlands that: (i) are inadvertently created on or after January 1, 1990, through any construction, mining, or other commercial activities, and (ii) are subject to the provisions of 33 U.S.C. § 1344.  The applicant shall provide information to the Commission documenting the date and nature of the activity that resulted in the inadvertent creation of wetlands."
Sec. 3.  Article 21 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-214.8.  Wetlands Mitigation Bank.
(a)	Policy, Purpose, and Intent. – The Department shall develop a Wetlands restoration, enhancement, and protection program to promote consistency among projects that utilize the assets of the Wetlands Mitigation Banking Program under subsection (b) of this section by governmental agencies or other persons.  The program shall be a statewide program for the acquisition, restoration, enhancement, and creation of wetland and riparian resources that contribute to the protection and improvement of water quality, flood prevention, fisheries, wildlife habitat, and recreational opportunities.  The purpose of the program is to restore wetlands functions and values across the State to replace critical functions lost through wetlands conversion and through current and future permitted impacts.  The implementation of this program shall include a statewide plan for wetlands restoration to be developed by the Department within the context of the basinwide planning initiatives, with the goal of protecting and enhancing water quality, flood prevention, fisheries, wildlife habitat, and recreational opportunities within each of the 17 major river basins in the State.  Further, it is the intent that this program be implemented to streamline the wetlands permitting process, minimize delays in permit decisions, decrease the burden of permit applicants of planning and performing compensatory mitigation for wetlands losses, and increase the ecological effectiveness of compensatory mitigations.
(b)	Wetlands Mitigation Banking Program. – There is established within the Department a Wetlands Mitigation Bank.  The Wetlands Mitigation Bank is part of the Wetlands Restoration, Enhancement, and Protection Program.  It is the intent of this section that all wetlands mitigation shall be coordinated by the Department consistent with the statewide plan for wetlands restoration and rules developed by the Environmental Management Commission unless specifically exempted by the Secretary of the Department.  The purpose of the Wetlands Mitigation Bank is to provide a repository for monetary contributions and donations or dedications of interests in real property to promote projects for the restoration, enhancement, preservation, or creation of wetlands.  The emphasis of mitigation is on replacing functions within the same river basin unless it has been demonstrated that restoration of other areas could be more environmentally beneficial.  Persons subject to permits or authorizations issued by the United States Army Corps of Engineers under 33 U.S.C. § 1344, may contribute to the Wetlands Mitigation Bank, on a voluntary basis, to comply with conditions to, or terms of, the permits or authorizations, provided that participation in the Wetlands Mitigation Bank will meet the requirements of mitigation by the United States Army Corps of Engineers.
(c)	Wetlands Restoration Fund. – The Wetlands Restoration Fund is established as a nonreverting fund within the Department. The Fund shall be treated as a special trust fund and shall be credited with interest by the State Treasurer pursuant to G.S. 147-69.2 and G.S. 147-69.3. The Department shall, at the discretion of the applicant, accept monetary payment into the Wetlands Restoration Fund in accordance with any authorizations established by the United States Army Corps of Engineers under 33 U.S.C. § 1344, provided that participation in the Wetlands Mitigation Bank will meet the requirements of mitigation by the United States Army Corps of Engineers.  The monetary payment shall be based on the per acre cost of restoring or creating a wetlands capable of performing the same or similar functions.  Receipts collected under this section shall be credited to the Fund and shall be used for wetlands and riparian area acquisition, restoration, and mitigation.  No funds shall be expended from this Fund for any purpose other than those directly contributing to the acquisition, enhancement, restoration, or creation of wetlands."
Sec. 4.  There is appropriated from the Highway Fund to the Wetlands Restoration Fund in the Department of Environment, Health, and Natural Resources, the sum of one million dollars ($1,000,000) for the 1995-96 fiscal year for the Wetlands Mitigation Bank created under Section 3 of this act.
Sec. 5.  There is appropriated from the General Fund to the Wetlands Restoration Fund in the Department of Environment, Health, and Natural Resources, the sum of two million dollars ($2,000,000) in recurring funds for the 1995-96 fiscal year and the sum of two million dollars ($2,000,000) in recurring funds for the 1996-97 fiscal year.
Sec. 6.  There is appropriated from the General Fund to the Department of Environment, Health, and Natural Resources, the sum of five hundred thousand dollars ($500,000) in recurring funds for the 1995-96 fiscal year and the sum of five hundred thousand dollars ($500,000) in recurring funds for the 1996-97 fiscal year for administrative and other expenses to implement the Wetlands Restoration, Enhancement, and Protection Program.
Sec. 7.  The Department shall prepare a biennial report beginning October 1, 1996, to the Environmental Review Commission on the Wetlands Restoration, Enhancement, and Protection Program and the Wetlands Mitigation Bank.  The report shall document the wetlands losses and gains and compensatory mitigation under this act.
Sec. 8.  The Coastal Resources Commission shall study the effect of impacts to wetlands adjacent to saltwater marshes and, if necessary, shall adopt rules to provide adequate protection to those adjacent wetlands.
Sec. 9.  This act becomes effective October 1, 1995, provided that the Commission shall initiate rule-making proceedings to implement this act upon ratification.  The Commission shall adopt rules to implement this act no later than December 31, 1996.