Did the NC Environmental Management Commission have legal authority to use funds from the High Unit Cost Wastewater Account to address failures of low-pressure pipe (LPP) sewer systems, given the 1994 budget bill's 'low wealth areas' language?

Plain-English summary

In 1994, Senator Marc Basnight (President Pro Tempore of the NC Senate) asked the Attorney General whether the Environmental Management Commission (EMC) had legal authority to grant up to $500,000 from the High Unit Cost Wastewater Account to repair failures of low-pressure pipe (LPP) sewer systems. The question turned on whether two pieces of 1994 legislation, the Chapter 696 amendment to G.S. 159G-10 and the Chapter 769 budget appropriation, could be read to authorize the grants.

Chief Deputy Attorney General Andrew A. Vanore, Jr. said yes. The two statutes had to be harmonized under the standard NC canon: "[T]here is a presumption against inconsistency, and when there are two or more statutes on the same subject, in the absence of an express repealing clause, they are to be harmonized and every part allowed significance." That canon came from the NC Supreme Court's then-recent decision in Empire Power Co. v. NCDEHNR (decided 9 days before this opinion).

Reading the two statutes together:

Chapter 696 (1994 short session amendment to G.S. 159G-10) authorized the EMC to establish "special periods" for considering grant applications received on or before December 31, 1994 from "any or all of the High-Unit Cost Wastewater Account, the General Wastewater Revolving Loan and Grant Account, or the Emergency Wastewater Revolving Loan Account," using temporary rules. Applications had to be preceded by a finding of "present or imminent serious public health hazard on account of the failure of a low-pressure pipe system." The General Assembly explicitly named the three accounts the EMC could draw from. That naming was deliberate; the General Assembly would not have specified the accounts if it had not intended that result.

Chapter 769 (1994 budget bill) appropriated $2 million to the High Unit-Cost Wastewater Account with the purpose described as: "Provide additional grants for high unit cost areas to reduce the cost of providing new and expanded wastewater treatment capacity in low wealth areas used consistently with bond funds." The phrase "low wealth areas" did not, on its face, exclude any particular counties.

The key analytical move was about the "low wealth areas" phrase. The existing grant law (G.S. 159G-6(b)(2)) already used a sliding eligibility scale based on relative wealth. The qualifying high unit cost in a poorer county like Hyde was lower than in a wealthier county like Orange. The 1994 budget bill's "low wealth areas" phrase did not introduce a new per-se exclusion. It simply re-affirmed the existing relative-wealth eligibility scale. So a project in a higher-wealth county could still qualify if its unit cost was high enough to meet that county's specific threshold.

Reading the budget bill's phrase to impose a new exclusion would have required rewriting EMC permanent rules and would have contradicted the explicit Chapter 696 authorization to use the High Unit Cost Wastewater Account for LPP emergencies. The AG concluded the EMC had acted within its authority.

Currency note

This opinion was issued in 1994. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

NC's wastewater grant and revolving loan programs have been significantly restructured since 1994. The Clean Water State Revolving Fund (administered through the NC Division of Water Infrastructure) is the modern federal-state framework. The High Unit Cost Wastewater Account and the Emergency Wastewater Revolving Loan Account have been merged, renamed, or replaced. Anyone with a current question about funding eligibility should pull current Chapter 159G or its successor and current Division of Water Infrastructure rules.

Common questions

Q: What is a low-pressure pipe (LPP) sewer system?
A: A wastewater collection technology used in rural and low-density areas where conventional gravity sewers are impractical. Each household has a small holding tank with a pump that periodically pressurizes the line to a central treatment plant. LPP systems can fail when pumps clog, lines leak, or treatment plants reach capacity, creating public health hazards if untreated wastewater backs up.

Q: Why was special authority needed for LPP grants?
A: The standard grant priority rules operate on a fixed annual schedule and ranking. An LPP emergency would not fit those priorities and might wait years for ordinary funding. The 1994 amendment to G.S. 159G-10 allowed the EMC to use temporary rules to handle LPP emergencies on a faster track.

Q: What was the "Empire Power" case?
A: An NC Supreme Court decision from September 9, 1994 (No. 570 PA 93) interpreting environmental statutes in pari materia. The AG cited it for the harmonize-statutes canon: when two statutes touch the same subject, courts read them together and give each its full effect.

Q: Could a wealthier county like Orange have qualified?
A: Yes, in principle, if a specific project's unit cost was high enough to meet the threshold for Orange County under the sliding scale. The sliding scale uses both county wealth and project unit cost to determine eligibility. A high-cost project in a higher-wealth county can qualify if the cost-per-customer is steep enough.

Q: What does "$500,000" cap reflect?
A: The EMC's announced grant cap for the LPP special-period grants. Total funds in the account were $2 million from the 1994 budget appropriation; the $500,000 figure presumably reflected the EMC's expected demand from LPP emergencies during the special grant period.

Q: Why did Senator Basnight ask the AG instead of acting in his legislative capacity?
A: As the body that wrote the appropriation, the General Assembly's intent matters in any later dispute about how it can be spent. Senator Basnight wanted confirmation that EMC's reading of the budget bill (allowing LPP emergency use) matched what the General Assembly meant. The AG's opinion provides cover for both EMC's decision and any later legal challenge.

Background and statutory framework

NC's wastewater grant and loan program in 1994 was structured around several accounts, each with its own purpose. The High Unit Cost Wastewater Account funded projects where the per-customer cost of conventional approaches was unusually high (often because of low population density or difficult terrain). The General Wastewater Revolving Loan and Grant Account funded routine projects. The Emergency Wastewater Revolving Loan Account funded emergencies.

G.S. 159G-6(b)(2) used a sliding eligibility scale that combined county wealth (typically measured by per-capita assessed property value, sales tax revenue, or similar indicators) with the project's projected unit cost. A poorer county like Hyde had a lower threshold to qualify for high-unit-cost funding; a wealthier county like Orange had a higher threshold. The scale was designed to direct funding to areas where local wealth could not bear the project cost without help.

The 1994 short session enacted two pieces of legislation that the AG had to reconcile. Chapter 696 amended G.S. 159G-10 to allow temporary-rule grants for LPP emergencies from any of the three named accounts. Chapter 769 appropriated $2 million to the High Unit Cost Wastewater Account with the "low wealth areas" purpose language. The AG's harmonization preserved the explicit Chapter 696 authority by reading the budget bill phrase as a re-affirmation of existing eligibility rather than a new restriction.

Citations

• N.C.G.S. § 159G-6(b)(2) (sliding eligibility scale based on relative county wealth and project unit cost)
• N.C.G.S. § 159G-10 (special periods for grant applications; amended by 1994 N.C. Sess. Laws ch. 696)
• 1994 N.C. Sess. Laws ch. 696 (authorizing temporary LPP emergency rules)
• 1993 N.C. Sess. Laws ch. 769, Title 1, Part 1, Sec. 3 (1994 budget bill $2 million appropriation to High Unit Cost Wastewater Account)
• Empire Power Co. v. NCDEHNR, No. 570 PA 93 (N.C. Sept. 9, 1994) (presumption against statutory inconsistency; harmonize when possible)
• People's Bank v. Loven, 90 S.E. 948, 172 N.C. 688 (1977) (General Assembly presumed to act with knowledge of existing law; not to do vain things)

Source

• Landing page: https://ncdoj.gov/opinions/grant-availability-for-low-pressure-pipe-sewer-system-failures/

Original opinion text

September 22, 1994

The Honorable Marc Basnight President Pro Tempore North Carolina State Senate Room 2007, Legislative Building Raleigh, NC 27601

RE: Advisory Opinion: Grant Availability for Low Pressure Pipe Sewer System Failures; G.S. 159G-10

Dear Senator Basnight:

The Environmental Management Commission has recently adopted temporary rules and provided up to $500,000 in High Unit Cost Wastewater grant funds for wastewater treatment projects necessary to correct failures of low pressure pipe (LPP) sewer systems in the State. You have asked this office to consider whether there is adequate statutory authorization for this funding.

For the reasons which follow, it is our opinion that the Environmental Management Commission acted within its authority.

During the 1994 Short Session, on July 6, 1994, the General Assembly amended G.S. 159G-10 in Chapter 696 of the Session Laws to allow the Environmental Management Commission to establish special periods for consideration of applications "received on or before December 31, 1994" from "any or all of the High-Unit Cost Wastewater Account, the General Wastewater Revolving Loan and Grant Account, or the Emergency Wastewater Revolving Loan Account" by use of temporary rules. The applications must be preceded by, and based upon, the finding of a "present or imminent serious public health hazard on account of the failure of a low-pressure pipe system" and must be submitted by a specified local government unit.

During the same session, on July 16, 1994, the General Assembly appropriated $2 million to the High Unit-Cost Wastewater Account through the omnibus budget bill. Chapter 769, 1993 Session Laws, Title 1, Part 1, Sec. 3. The purpose of the $2 million line item was described as follows: "Provide additional grants for high unit cost areas to reduce the cost of providing new and expanded wastewater treatment capacity in low wealth areas used consistently with bond funds." Senate and House Conference Report on Base Budget Reductions and Expansion Budget, adopted by reference in Chapter 769 at Title III, Part 43, Sec. 43.1(a). These funds are the only funds currently in that account. Your specific questions is whether this language would prevent the Environmental Management Commission's proposed use of the funds.

Rules of statutory construction lead us to the opinion that the Environmental Management Commission has acted within its authority. According to our Supreme Court "[T]here is a presumption against inconsistency, and when there are two or more statutes on the same subject, in the absence of an express repealing clause, they are to be harmonized and every part allowed significance, if it can be done by fair and reasonable interpretation." Empire Power Co., et al v. North Carolina Department of Environment, Health and Natural Resources et al (N.C. Supreme Court, September 9, 1994, No. 570 PA 93, slip opinion p. 30). Furthermore, the General Assembly is presumed to act with knowledge of existing law, and it will never be assumed, if any other conclusion is permissible, that it has done a vain or meaningless thing. People's Bank v. Loven, 90 S.E. 948 172 N.C. 688 (1977).

The existing grant law does not contain any per se exclusion of grant proposals from particular localities based on wealth. Rather, it contains a sliding eligibility scale based on relative wealth against which the unit cost of paying for the proposed project is measured. See G.S. 159G-6(b)(2). This means, for instance, that the qualifying high unit cost for a project in a poorer county, such as Hyde, is less than in another county of greater average wealth, such as Orange. The phrase "low wealth areas" in the 1994 budget bill does not contain within itself any guide to exclusion of any counties based on a particular level of wealth.

To read into that phrase a prohibition against grants based on some particular county wealth criterion would require a rewrite of the Environmental Management Commission's permanent rules. We do not believe the indefinite language compels that result. Rather, we read it as simply affirming the relative wealth eligibility scale in the existing law. The temporary emergency LPP rules do not remove the application of the eligibility scale under G.S. 159-6(b)(2). They simply displace various permanent priority rules when eligible LPP grant proposals are considered, as Chapter 696 explicitly authorized.

Thus, it is the opinion of this office that the Environmental Management Commission has established a proper mechanism for construing the two statutes in a manner which gives meaning to both. Specifically, G.S. 159G-10, as amended does authorize, inter alia, applications to the High Unit-Cost Account for LPP emergencies. The General Assembly would not have specified the exact accounts to be used, if it had not intended that result.

I trust this opinion is responsive to your question.

Andrew A. Vanore, Jr.

Chief Deputy Attorney General