Can people who live downstream in another state and would lose water because of a North Carolina interbasin transfer participate in the EMC permit hearing or challenge the certificate after it's issued?

Plain-English summary

When a North Carolina entity petitions the Environmental Management Commission for a certificate to move water from one river basin to another (an interbasin transfer), people downstream who depend on that water can be affected even if they live across state lines. The Director of the Division of Water Resources asked: do out-of-state downstream users have any procedural standing in North Carolina's permitting process?

Senior Deputy AG Daniel C. Oakley answered yes, in two ways.

First, at the public hearing required under N.C.G.S. § 143-215.22I(d) and (e), the statute permits "anyone wishing to submit comments on the proposed water transfer" to speak. That clause has no residency limitation. An out-of-state water user can show up (or write in) and put their objections on the record.

Second, after the Commission issues or denies the certificate, the NC Administrative Procedure Act (Chapter 150B) lets any "person aggrieved" file a petition for a contested case hearing under N.C.G.S. § 150B-23(a). The aggrieved-person test is defined in N.C.G.S. § 150B-2(6) and applied in Empire Power Company v. NCDEHNR, 337 N.C. 569 (1994). It asks whether the person or group is "directly or indirectly affected substantially in his or its person, property, or employment, by an administrative decision." Like the public-hearing right, this is not tied to North Carolina residency. The standard rests on actual injury, not citizenship.

The opinion is short and structural, but it is the door through which out-of-state objectors come into the NC water-permit process. The practical implications are significant when an interbasin transfer would draw water from a basin shared with Virginia, South Carolina, or Tennessee.

Currency note

This opinion was issued in 1995. 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. The interbasin transfer statute has been amended several times since 1995, and the NC APA contested-case framework has been modified. Federal interstate-water-allocation cases (notably Supreme Court decisions in the Florida-Georgia and Texas-New Mexico disputes) have also developed the doctrine around interstate water rights. Anyone confronting a current NC interbasin transfer should consult current N.C.G.S. § 143-215.22I and the most recent NCAC rules of the Environmental Management Commission.

Background and statutory framework

North Carolina's interbasin transfer law was a response to growing intra-state competition for water. The Piedmont's reservoirs and the coastal plain's aquifers serve different communities; moving water from one basin to another is sometimes the only way to supply a growing city, but it can dewater the donor basin. The General Assembly required Commission approval for any transfer above the statutory threshold, with a public hearing process designed to surface objections before a certificate issues.

The opinion's reading of "anyone" in the public-hearing clause is consistent with the plain text. The harder question is contested-case standing. The aggrieved-person definition in § 150B-2(6) is North Carolina's version of the federal "injury in fact" rule but uses the broader "substantial" qualifier. In re Assessment of Sales Tax gave the term an expansive interpretation half a century before Empire Power reaffirmed it. The AG's application here treats the standing test as residency-neutral, focusing on the substantive injury rather than the petitioner's address.

The opinion does not directly address the federal McCarran Amendment, state sovereign immunity, or the interstate compact doctrine, all of which may further complicate any out-of-state objector's path. The AG was answering a procedural question about access to NC's own administrative process; he was not opining on the merits of any particular transfer or on whether NC could be sued in federal court by another state for water diversion.

Common questions

Does the AG's analysis mean an out-of-state objector can win a contested case?

No. It means they can file one. The contested case hearing then turns on the merits and on whether the petitioner can prove the substantial-injury element of aggrieved-person standing. A downstream user in Virginia could lose on standing if their alleged injury is too remote, too speculative, or not substantial enough to meet the test. The AG opinion only confirms that residency itself is not a bar.

What kinds of injuries qualify as substantial under the test?

The opinion does not enumerate examples. The cases it cites talk in general terms about adverse effect on legal rights, property, or person. In a water transfer context, a downstream municipality's loss of reservoir yield or a downstream industry's loss of intake-water reliability would plausibly qualify. A diffuse interest in "the river" generally would be a harder sell.

Could two states resolve this dispute through their own interstate agreement instead?

Yes, and that is often what happens with interstate water. If North Carolina and a neighboring state both want certainty about how transfers will be handled, they can negotiate a compact under federal authority. But absent a compact, the NC AG's reading is that the state's own administrative process remains open to out-of-state participants who meet the aggrieved-person test.

Source

• Landing page: https://ncdoj.gov/opinions/ability-to-challenge-decisions-of-the-environmental-management-commission/

Citations

• N.C.G.S. § 150B-23(a)
• N.C.G.S. § 143-215.22I
• N.C.G.S. § 150B-2(6)
• Empire Power Company v. NCDEHNR, 337 N.C. 569 (1994)
• In re Assessment of Sales Tax, 259 N.C. 589, 131 S.E.2d 441 (1963)

Original opinion text

June 22, 1995

Mr. John Morris
Director, Division of Water Resources
Department of Environment, Health and Natural Resources
512 North Salisbury Street
Raleigh, North Carolina 27604

RE: Advisory Opinion: Ability to Challenge Decisions of the Environmental Management Commission Concerning Interbasin Transfers of Water; N.C.G.S. 150B-23(a) and N.C.G.S. 143-215.22I

Dear Mr. Morris:

You have requested guidance from this office concerning the ability of affected downstream users of water, who reside in another state, to participate in the decision-making process of the Environmental Management Commission, or to otherwise challenge its certificates authorizing interbasin transfers of water under N.C.G.S. 143-215.22I.

Pursuant to the requirements of N.C.G.S. 143-215.22I(d) and (e), the Commission must hold a public hearing on any petition for a certificate authorizing transfers of water, above certain amounts as provided in N.C.G.S. 143-215.22I(a). The ability to provide comments at the public hearing is granted to "anyone wishing to submit comments on the proposed water transfer." N.C.G.S. 143-215.22I(e). This ability is not restricted by any requirement that a person be a resident of North Carolina.

Once the Environmental Management Commission, or its designee if there is one, determines to grant the requested certificate, in whole or in part, or to deny it, current North Carolina law would allow aggrieved persons to seek a contested case hearing before the agency. The North Carolina Administrative Procedure Act, N.C.G.S. 150B-1 et seq., "confers procedural rights and imposes procedural duties, including the right to commence an administrative hearing to resolve disputes between an agency and a person involving the person's rights, duties or privileges." Empire Power Company v. NCDEHNR, 337 NC 569, 583 (1994). Aggrieved persons may file a petition for a contested case under N.C.G.S. 150B-23(a). As with public hearing participation, the ability to request a contested case is not restricted by any requirement that a person be a resident of North Carolina. However, the requesting person does have to meet traditional standing requirements. These are clearly set out in Empire Power as follows:

"'Person aggrieved' means any person or group of persons of common interest directly or indirectly affected substantially in his or its person, property, or employment, by an administrative decision." N.C.G.S. Section 150B-2(6). Under the predecessor judicial review statute, which did not define the term, the Court gave it an expansive interpretation:

The expression "person aggrieved" has no technical meaning. What it means depends on the circumstances involved. It has been variously defined: "Adversely or injuriously affected; damnified, having a grievance, having suffered a loss or injury, or injured; also having cause for complaint. More specifically the word(s) may be employed meaning adversely affected in respect of legal rights, or suffering from an infringement or denial of legal rights."

In re Assessment of Sales Tax, 259 N.C. at 595, 131 S.E.2d at 446 (quoting 3 C.J.S. Aggrieved, at 509 (1973)). Empire Power at 588.

I hope this is responsive to your questions. If you need further information, please feel free to contact me.

Daniel C. Oakley
Senior Deputy Attorney General