Highlights of Environmental Regulatory Updates from the 2023 North Carolina Budget Conference Report

On September 22, 2023, the North Carolina Budget (NC Budget) conference report was passed in the NC House and Senate.  Although the 2023-2024 NC Budget encompasses a multitude of provisions covering a range of topics, important highlights include updates on cap-and-trade requirements for carbon dioxide (CO₂) emissions, requirements for emissions from new motor vehicles, air permit issuance timelines, pre-permitting activities, stormwater permitting, expedited permitting for certain programs, and permit fees.

Article 21B, Section 12.5(a) of Chapter 143 of the North Carolina General Statutes has been amended to include provisions that will now prohibit cap and trade requirements for carbon dioxide (CO₂) emissions.  This amendment will prohibit any government entity from requiring an electric public utility or entities who operate an electric generating facility primarily for their own use (e.g., a cogeneration plant at a university or industrial facility) to participate in a program that requires the facility to obtain allowances for the offsetting of CO₂ emissions (also known as cap-and-trade programs).  Additionally, this amendment prohibits North Carolina from entering into an agreement with other states that would require participation in a program requiring acquisition of allowances to offset CO₂ emissions by electrical generating facilities.  Similar cap and trade requirements for CO₂ emissions have been implemented in other states through the Regional Greenhouse Gas Initiative (RGGI), for example. This amendment has the effect of prohibiting the NC Division of Air Quality (DAQ) from continuing work on the rule they initiated in 2021 that would have entered the state into the RGGI program.

Article 21B, Section 12.6(a) of Chapter 143 of the North Carolina General Statutes has been amended to prohibit state agencies from adopting or enforcing standards relating to the control of emissions from any new motor vehicles (or their engines), including requirements that mandate the sale or purchase of zero-emission vehicles or electric vehicles. The prohibition in this section does not affect NC’s vehicle emissions testing and maintenance program.  However, the emissions inspection requirements were also reduced and now are only in effect in Mecklenburg County.

Article 21B, Section 12.11(a) of Chapter 143 of North Carolina General Statute 143-215.108(d)(2) has been revised to include specific language surrounding the timing of air permit application review.  The North Carolina Division of Air Quality (NC DAQ) shall now issue, deny, or publish a permit for public notice and comment within 90 calendar days of receipt of an administratively complete application for a minor modification or within 270 calendar days for a major modification.  Article 21B, Section 12.11(c) defines administratively complete as meaning “that all information required by statute, regulation, or application form has been submitted to the Department (NC DAQ) for the purpose of processing a permit application.”

Article 21B, Section 12.11(e) of Chapter 143 of North Carolina General Statute 143-215.108A has been revised and now includes the activities that a person who has filed for an application to construct or operate an air contaminant source or has applied for an air permit modification may complete in section (b)(1) of the standard.

Article 21B, Section 12.12(a) of Chapter 143 of North Carolina General Statue 143-214.7 has been amended by adding two new subsections to the standard.  Subsection (b)(5) of the regulation establishes a 70-day timeline in which a stormwater permit application shall be reviewed, and a new permit shall be issued.  An initial review to determine whether the application is administratively complete is to be completed within 10 days of receipt of the application; thus, the 70-day timeline begins once the application is deemed administratively complete.  If any additional information is needed, the applicant has 30 days to respond to the request (this can be submitted electronically).  If the necessary information is not provided within the specified timeframe, the application can be deemed denied and the applicant must resubmit a complete application.  If the applicant provides the necessary information within the allotted timeframe, the North Carolina Environmental Management Commission (Commission) has 30 days to perform its technical review and issue the permit, deem the application denied, or issue an additional information request.  Subsection (b)(6) states that all issued stormwater permits pursuant to this General Statute shall be issued for a term not to exceed eight years.

Article 21B, Section 12.13(a) of Chapter 143 of North Carolina General Statue 143B-273.13 has been amended to allow the North Carolina Department of Environmental Quality (NC DEQ) the authority to create express permitting options for programs outside of those listed below.

• Stormwater permits under Part 1 of Article 21 of Chapter 143 of the General Statutes
• Stream origination certifications under Article 21 of Chapter 143 of the General Statutes
• Water quality certification under Article 21 of Chapter 143 of the General Statutes
• Erosion and sedimentation control permits under Article 4 of Chapter 113A of the General Statutes
• Permits under the Coastal Area Management Act (CAMA), Part 4 of Article 7 of Chapter 113A of the General Statutes

NC DEQ is now able to grant express permitting options for any area deemed to be a need or where it determines an express permitting option would create greater efficiencies for the permitting process.  NC DEQ is to set fees for express application review under the express review program at a level sufficient to cover all program expenses.

Article 21B Section 12.14(a) of General Statute 143-215.3D has been amended and includes updated permit fees.  Annual permit fees for discharge and non-discharge permits under General Statute 143-215 are listed in the table below.

It is important to note that initial application fees for new discharge and non-discharge permits are equal to the annual fee for said permit.  If the permit is issued, the application fee shall be applied as the annual fee for the first year that the permit is in effect.  Permit fees are not refunded if the application is denied.

ALL4 can help your facility with determining how these regulatory updates affect your facility and can assist with any action items that need to be completed as a result of these changes.  For any assistance or further questions regarding the 2023 North Carolina Budget conference report or compliance with NC air or stormwater regulations, please reach out to Thomas Timms at ttimms@all4inc.com or 919-694-7541.