Does the NC Environmental Policy Act require the state to prepare an environmental impact document when developing a fishery management plan under the Fisheries Reform Act of 1997, or when adopting the rules that implement those plans?

Plain-English summary

The Fisheries Reform Act of 1997 (FRA) gave the NC Department of Environment and Natural Resources authority to develop fishery management plans (FMPs). FMPs are planning documents, not directly enforceable against individuals. The Marine Fisheries Commission then adopts rules under Chapter 150B (the Administrative Procedures Act) to actually implement the FMPs.

The question put to the AG was whether NC's Environmental Policy Act required preparation of an environmental impact document for either step: the FMP development itself, or the implementing rulemaking. Senior Deputy AG Daniel C. Oakley and Assistant AG Robin W. Smith answered no to both.

The key statutory text is N.C.G.S. § 113A-4. It requires environmental documents for any "action involving expenditure of public moneys or use of public land for projects and programs significantly affecting the quality of the environment of [the] State." Two prongs have to be met:

1. An agency action (a final decision on a specific project), AND
2. The action must involve expenditure of public monies or use of public land for the specific project or program being decided.

The Department of Administration's implementing rules at T01 NCAC 25.0108(b)(1) define "action" as "licensing, certification, permitting, the lending of credit, expenditures of public monies, and other similar final agency decisions the absence of which would preclude the proposed activity." That definition is project-specific: it describes the final decision that lets a particular activity move forward.

The implementing rules at T01 NCAC 25.0108(b)(3) define "public moneys" to exclude "agency resources used solely to process licenses and permits; lend credit; or to provide technical services." That carve-out tells you two things: NCEPA review is triggered by a state-funded project, not by the agency's overhead in handling permits; and pure administrative or policy functions don't count.

The illustrative example the AG used: an NPDES permit issued by the Division of Water Quality to a private industry discharger does not trigger NCEPA review even though state resources fund the program. The action is final and is permitting, but the project being permitted is privately funded. Compare an NPDES permit issued to a local government wastewater facility, which does trigger NCEPA review because the permitted project itself uses public money.

Applied to FMPs and rulemaking:

• FMPs themselves are planning documents, not "final agency decisions" on any specific project. They precede the rulemaking that will translate planning targets into binding rules. Nothing about FMP development uses public money for a specific environmental project.
• Rulemaking under the APA is policy-making, not project decision-making. Adoption of a rule is not a final decision on a specific project or program in the NCEPA sense; it sets the framework that will govern future specific decisions.

The AG noted that the Department of Administration has consistently interpreted NCEPA this way since 1986, when the implementing rule on public moneys was put in place. That long-standing executive interpretation gets substantial weight under cases like Matter of Broad and Gales Creek Community Ass'n (300 N.C. 267) and Carpenter v. N.C. Dept. of Human Resources (107 N.C. App. 278), especially where the agency has acted on the interpretation for years (State ex rel. Utilities Comm'n v. The Public Staff, 309 N.C. 195).

The AG closed by noting the procedural protections that already exist. The APA imposes notice and hearing requirements on rulemaking, with public comment opportunity. So while NCEPA doesn't require an environmental document for the rulemaking, the public still gets a chance to weigh in.

Currency note

This opinion was issued in 1998. 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.

NCEPA and its implementing rules have seen revisions since 1998. The Fisheries Reform Act has also been amended multiple times. The current Department of Environmental Quality (formerly DENR) operates under updated guidance. Anyone responsible for environmental review of state planning or rulemaking today should pull the current Article 1 of Chapter 113A, the current Title 1 NCAC Chapter 25 rules, and check for later case law.

Common questions

Q: What exactly is NCEPA?
A: The NC Environmental Policy Act, codified at N.C.G.S. § 113A-1 et seq. It is NC's analog to the federal National Environmental Policy Act (NEPA). NCEPA requires state agencies to consider environmental consequences before taking actions that affect the environment. The main vehicle is an "environmental document" (state EIS-equivalent) prepared and circulated for public comment.

Q: When does NCEPA actually require an environmental document?
A: When a state agency makes a final decision on a specific project or program that uses public money or public land and that significantly affects the environment. All three prongs matter: final agency decision, specific project, public funding or land.

Q: Why aren't fishery management plans subject to NCEPA?
A: Because FMPs are planning documents, not final decisions on specific projects. The FMP says, in effect, "this is how we're going to think about managing X fishery." Specific decisions (catch limits for next year, gear restrictions, area closures) come later through rules under the APA, and those rules are also planning-level (regulatory) decisions rather than project decisions. NCEPA was designed to attach to physical-impact projects (building this road, permitting that discharge), not to the regulatory framework that governs them.

Q: But fishery rules clearly affect the environment. Doesn't that matter?
A: Yes, and that is the natural intuition. But NCEPA is not triggered by every state action that affects the environment; it is triggered by state actions that meet the statutory definition (final decisions on specific projects using public money or land). The state's compliance with NCEPA is more limited than the federal NEPA scheme, which extends to "major federal actions" defined more broadly. NCEPA's narrower scope is by design.

Q: What public process do fishery management plans get instead?
A: The APA. Chapter 150B requires notice and hearing on proposed rules and lets affected parties comment. The Marine Fisheries Commission and the Environmental Management Commission have their own enabling statutes that may require additional process beyond the APA basics. The opinion's point is that this APA-based public participation is sufficient under existing NC environmental review law for FMP rulemaking.

Q: Could a court reach a different result?
A: The AG noted that the Department of Administration's interpretation has been in place since 1986 and is entitled to substantial deference under NC administrative-law cases. A challenger arguing that an FMP rule should have had an environmental document would face the dual burdens of dislodging the agency's long-standing interpretation and showing that the rule actually triggers NCEPA on a fresh reading. Both are tall orders. Most NCEPA litigation in NC focuses on whether a particular permit decision was correctly analyzed, not on whether rulemaking itself should be subjected to NCEPA.

Background and statutory framework

NCEPA was adopted in 1971, after NEPA but before many state analogs. Its scope is narrower than NEPA. It applies to state agency actions that meet the public-money/public-land prong; private projects that need state permits but use private money are typically outside NCEPA's reach (with the wrinkle that the permitting agency may still trigger review for adjacent actions involving public expenditures).

The Department of Administration administers NCEPA at the state level. Its implementing rules at Title 1 NCAC Chapter 25 set out the definitions and procedures. The 1986 codification of the "public moneys" exclusion (carving out resources used for permitting, lending credit, or technical services) was the agency's clear signal that NCEPA was not meant to cover routine administrative agency functions.

The Fisheries Reform Act of 1997 was a major restructuring of NC's marine fisheries management framework. It created the FMP system as the planning vehicle and assigned rulemaking authority to the Marine Fisheries Commission. The AG opinion essentially confirms that this two-step structure (plan, then rulemake) operates outside NCEPA, leaving the APA as the public process anchor.

The opinion is also a useful clarification of the federal/state asymmetry in environmental review. NEPA reaches further into agency planning and rulemaking than NCEPA does. The same fishery management decisions, if made by a federal agency, might require a NEPA Environmental Impact Statement at the rulemaking stage. NC's environmental review is more compact and project-focused. People familiar with NEPA practice should not assume NCEPA works the same way.

Citations

• N.C.G.S. § 113A-4 (NCEPA requirement: environmental document for state actions involving public money or public land for projects/programs significantly affecting state environment)
• N.C.G.S. § 113-182.1(a) (Fisheries Reform Act of 1997; FMP authority and rulemaking through MFC under Chapter 150B)
• N.C.G.S. Chapter 150B (Administrative Procedures Act; notice and hearing on rulemaking)
• T01 NCAC 25.0108(b)(1) (Department of Administration rule defining "action" for NCEPA purposes)
• T01 NCAC 25.0108(b)(3) (Department of Administration rule defining "public moneys" to exclude resources used solely to process licenses/permits, lend credit, or provide technical services)
• Matter of Broad and Gales Creek Community Ass'n, 300 N.C. 267, 266 S.E.2d 645 (1980) (NC Supreme Court; agency interpretation of its enabling statute entitled to substantial weight)
• Carpenter v. N.C. Dept. of Human Resources, 107 N.C. App. 278, 419 S.E.2d 582 (1992) (NC Court of Appeals; deference to agency interpretation)
• State ex rel. Utilities Comm'n v. The Public Staff, 309 N.C. 195, 306 S.E.2d 435 (1983), appeal after remand, 320 N.C. 1, 358 S.E.2d 35 (1987) (NC Supreme Court; long-standing agency interpretation acted upon for years receives particular deference)

Source

• Landing page: https://ncdoj.gov/opinions/application-of-the-nc-environmental-policy-act-to-development-of-fishery-management-plans/

Original opinion text

• Does the North Carolina Environmental Policy Act apply to the development of fishery management plans (FMPs) under the Fisheries Reform Act of 1997 (FRA)?
• Does the NCEPA apply to development and adoption of rules to implement the fishery management plans?

The FRA authorizes the Department of Environment and Natural Resources to develop fishery management plans (FMPs). N.C.G.S. § 113-182.1(a). The FMPs will be planning documents that are not directly enforceable against individuals or agencies. Instead, the FRA directs the Marine Fisheries Commission to adopt rules to implement the FMPs pursuant to Chapter 150B of the General Statutes. N.C.G.S. § 113-182.1(a).

In response to your inquiry, we provide the following advisory opinion. The answer to your question may be summarized as follows:

No. The North Carolina Environmental Policy Act (NCEPA) requires preparation of environmental documents in support of actions involving the expenditure of public monies or use of public lands that may significantly affect the environment of the State. Neither the development of a fishery management plan nor the adoption of rules implementing such a plan is an "action" involving the expenditure of public monies or use of public lands within the meaning of the NCEPA. Therefore, neither the development of a fishery management plan nor the subsequent adoption of rules to implement the plan requires preparation of an environmental document pursuant to N.C.G.S. § 113A-4.

Under the NCEPA, State agencies must report on the environmental impacts of any "action involving expenditure of public moneys or use of public land for projects and programs significantly affecting the quality of the environment of [the] State." N.C.G.S. § 113A-4. The question that you have raised is essentially whether either the preparation of a fishery management plan or adoption of rules to implement the plan is an "action" requiring preparation of an environmental document under N.C.G.S. § 113A-4.

Rules adopted by the Department of Administration pursuant to the NCEPA define "action" to include "licensing, certification, permitting, the lending of credit, expenditures of public monies, and other similar final agency decisions the absence of which would preclude the proposed activity". T01 NCAC 25.0108(b)(1). [Emphasis added.] This definition describes "action" in terms of decisions applying established policy and rules to a specific project proposal.

It is also important to note that the requirement for an environmental document is not triggered by every agency "action" affecting the environment, but only by "an action involving the expenditure of public moneys or use of public land for projects or programs significantly affecting the quality of the environment". Thus, there must be both: 1) an agency "action" (such as permit approval or the location of a new highway corridor); and 2) use of public monies or public land in the project that is the subject of the agency action.

This again suggests that the agency "action" must be distinguished from the project or program requiring public funds or use of public lands. The fact that a state action is publicly funded does not in itself trigger application of the NCEPA; the state action must constitute a final decision on a project that will require either public funding or use of public lands. Consistent with this interpretation, the implementing rules adopted by the Department of Administration pursuant to the Act define "public moneys" to exclude agency resources used solely to process licenses and permits; lend credit; or to provide technical services. T01 NCAC 25.0108(b)(3). This has two implications. First, it reinforces the conclusion that review under the NCEPA is triggered only by a state agency decision affecting a specific publicly funded project (or a project involving use of public lands). Second, it makes clear that executive agency functions alone, even though they are publicly funded, never trigger review under the NCEPA.

As the rule has been applied, a decision by the Division of Water Quality (DWQ) to approve an NPDES permit does not require an environmental document if the permit authorizes a discharge by private industry even though public resources fund both the Environmental Management Commission in its development of rules applicable to the NPDES program and DWQ's permit review. Although there is a state "action", there are no public monies or public lands involved in the activity that is the subject of the action. By contrast, approval of an NPDES permit for a local government facility requires an environmental document under the NCEPA because the permitted facility is publicly funded.

Executive interpretation and implementation of the NCEPA have consistently made a distinction between: 1) the use of public monies to fund a project that involves use or alteration of the physical environment; and 2) use of public resources to support administrative and policy functions. State agency actions related to activities in the first category require review under NCEPA; actions in the second category do not. Interpretations of a statute by the agency charged with its implementation are generally given substantial weight. See, e.g., Matter of Broad and Gales Creek Community Ass'n., 300 N.C. 267, 266 S.E.2d 645 (1980); Carpenter v. N.C. Dept. of Human Resources, 107 N.C. App. 278, 419 S.E.2d 582 (1992). This is particularly true where the interpretation has been followed and acted upon for many years. State ex rel. Utilities Comm'n. v. The Public Staff, 309 N.C. 195, 306 S.E.2d 435, appeal after remand, 320 N.C. 1, 358 S.E.2d 35 (1983). In this case, the rule defining "public moneys" to exclude resources used in permitting and other administrative functions has been in place since 1986 and supports a consistent executive interpretation of the statute.

In the history of the state environmental review program (since adoption of the NCEPA in 1971), the Department of Administration has never interpreted the Act to require preparation of an environmental document for a proposed agency planning or rule-making initiative. As discussed above, rules implementing the Act indicate that such policy-making functions do not require review under the NCEPA. Both the statutory language and consistent executive interpretation indicates that the NCEPA requires review only of projects that are publicly funded or use state lands. The development of public policy, whether through a planning process or rulemaking, precedes the "action" that triggers the application of the NCEPA and in itself does not require review under the Act.

As a result, we conclude that rulemaking, as the policy-making phase of state agency decision making, does not require review under the NCEPA. Under the Fisheries Reform Act of 1997, development of fishery management plans precedes actual rulemaking and thus is even further removed from the type of "action" that triggers review. Neither plan development nor rule adoption constitutes a "final agency decision" with regard to a specific project or program involving the use of public monies or public lands. Such policy development likewise does not directly involve use of "public monies" as that term has been defined in T01 NCAC 25.0108(b)(3).

We would also note that the Administrative Procedures Act (APA), Chapter 150B of the General Statutes, imposes notice and hearing requirements on agency rulemaking. The APA rulemaking process provides the public with both information on proposed rules and an opportunity to comment prior to final adoption. In this regard, the APA provides a process for public participation in rulemaking comparable to the public review opportunities that are afforded by the NCEPA with regard to specific project decisions.

Thank you for your inquiry. Please advise us if we can be of further assistance.

Daniel C. Oakley
Senior Deputy Attorney General

Robin W. Smith
Assistant Attorney General

cc: Daniel F. McLawhorn
Chrys Baggett