When an asphalt plant company started construction work before getting its air quality permit from the Division of Air Quality, did Henderson County's local building inspector have to revoke the building permit under the mandatory-revocation provisions of state law?

Plain-English summary

This opinion came up in a real-world dispute. Tar Heel Paving ("THP") wanted to build an asphalt plant in Henderson County, North Carolina. The county Inspections Department issued THP a building permit on January 1, 2001. But THP had also started doing some construction-related work at the site before it had obtained an air quality permit from the Division of Air Quality ("DAQ"). The Henderson County code enforcement officer asked the NC Department of Insurance (which has statutory engineering oversight of building permits at the state level) whether the building permit had to be revoked under N.C. Gen. Stat. § 153A-362.

Section 153A-362 has both permissive and mandatory revocation provisions. Building inspectors may revoke permits for any of several reasons. Building inspectors shall (mandatory) revoke permits for substantial departures from approved plans, refusal or failure to comply with applicable state or local laws or regulations, or false statements in securing the permit. The question was whether THP's pre-air-permit construction activities triggered the "failure to comply with applicable state law" mandatory revocation provision.

The AG said no, the permit did not have to be revoked.

The analysis turned on what "commence construction" means under § 153A-357. The Division of Engineering of the Department of Insurance has long interpreted "commence construction" in § 153A-357 to mean pouring the footings, not earlier site preparation. Under this longstanding interpretation, a builder can do all of the following without a building permit: clear land, lay gravel, compact soil, lay vapor barriers, dig footings. The point of formal "construction" begins when concrete is poured for the footings. Section 153A-357 requires a building permit and any other applicable state permits before that pouring takes place.

So the first question was whether N.C.G.S. § 143-215.108 (the air quality statute) required THP to obtain an air permit before pouring footings, or only before some later step. If the air permit was needed before pouring footings, THP's pre-permit construction activities would have been done while the footings were not yet poured, which means the "commence construction" line had not been crossed, which means § 153A-357 had not been violated.

The opinion noted that this is a question for DAQ, the agency that administers the air quality statute. Under Britthaven v. N.C. Dep't of Human Resources, courts traditionally defer to an agency's interpretation of the statute it administers. Under High Rock Lake Assoc. v. EMC, courts defer to agency expertise in fact-finding under the whole record review standard. The Department of Insurance and the local Inspections Department should follow the same deferential approach.

DAQ had reviewed THP's situation and had elected not to issue a Notice of Violation or to initiate an enforcement action. That decision reflected DAQ's professional judgment, applying its specialized expertise, that the pre-permit activities did not violate § 143-215.108 in this particular case. With no underlying air-quality violation, the building permit did not need to be revoked under § 153A-362.

The opinion's forward-looking practical guidance: in future cases where the timing of air permits and building permits intersect, the Inspections Department should consult with DAQ before issuing a building permit, to confirm whether an air permit will be required before footings are poured. If yes, the Inspections Department should withhold the building permit until the air permit is obtained.

Currency note

This opinion was issued in 2001. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. The Department of Insurance's role in building permit oversight has been reorganized over the years, the air quality permitting framework has been substantially updated, and federal Prevention of Significant Deterioration / New Source Review rules have evolved. Anyone working with a current building-permit-and-air-permit timing question should consult current statutes, the current Division of Air Quality (now part of the Department of Environmental Quality), and the State Building Code Council guidance.

Background and statutory framework

The two permits and their different triggers. A facility like an asphalt plant typically needs at least two permits: a building permit from the local Inspections Department under Chapter 153A of the General Statutes, and an air quality permit from the Division of Air Quality under Chapter 143, Article 21B. The building permit governs the structural and safety aspects of the building itself; the air permit governs the air emissions from the facility's operation. The two permits have different administering agencies, different statutory frameworks, and different timing triggers.

The § 153A-357 "commence construction" line. Section 153A-357 prohibits a person from commencing construction of a building without a building permit. The Division of Engineering of the Department of Insurance has interpreted "commence construction" to mean pouring the footings (the concrete bases on which the building's structural elements rest). Site preparation activities that precede footing-pouring (land clearing, grading, gravel laying, soil compaction, vapor barrier laying, footing excavation) are allowed without a building permit.

The footing-pouring line is a sensible administrative choice. Site preparation activities are easily reversed; concrete foundations are not. Drawing the construction line at concrete pouring matches the practical reality of when the building project becomes hard to undo.

The § 143-215.108 air permit trigger. The companion 2001 AG opinion (see nc/2001-02-08-air-permit-required-at-construction-start.md, also enriched in this corpus) addressed the question of when § 143-215.108 requires an air permit. The answer is at the start of permanent on-site construction of an emission source. The federal PSD program definition of "begin actual construction" includes installing building supports and foundations, laying underground pipework, and constructing permanent storage structures. Site preparation activities like land clearing and grading generally do not trigger the air permit requirement.

The intersection of the two timing lines. In a typical case, the two timing lines do not collide. Site preparation can happen without either a building permit or an air permit. Pouring the footings triggers both the building permit requirement (because that is when construction "commences" under § 153A-357) and likely the air permit requirement (because that is the start of permanent on-site construction of an emission source). The builder should have both permits in hand before pouring.

But the lines can diverge in unusual situations. Site preparation that includes permanent on-site assembly of source components (perhaps laying permanent dedicated pipework, or constructing permanent storage tanks) could trigger the air permit before reaching the footing-pouring stage. In such cases, the air permit requirement attaches earlier than the building permit requirement.

THP's specific factual situation. The AG opinion does not describe in detail what THP did before getting its air permit. The factual investigation was performed by the Henderson County code enforcement officer. DAQ had reviewed the situation and decided that the pre-permit activities did not warrant a Notice of Violation or enforcement action. That deference-worthy decision by the agency with subject-matter expertise was the key fact for the AG's analysis.

Britthaven and High Rock Lake deference. Britthaven, Inc. v. North Carolina Dep't of Human Resources (1995) holds that appellate courts traditionally accord deference to an agency's interpretation of the statute it administers. The doctrine is similar to federal Chevron deference (though North Carolina has its own evolving body of doctrine). High Rock Lake Assoc. v. Environmental Management Comm. (1981) holds that judicial review of agency decisions under the whole record test defers to the agency's specialized expertise on facts within its administrative competence. Both cases support the AG's conclusion that DAQ's enforcement judgment about its own statute should govern. The Department of Insurance, the local building inspector, and (if a court reviewed the revocation question) the courts, should all defer to DAQ on the air permit timing question.

Why the AG declined to override DAQ's enforcement judgment. The mandatory revocation provision in § 153A-362 requires a violation of an applicable state law. The "applicable state law" here was the air permit statute, § 143-215.108. Whether that statute was violated in this case depends on whether the air permit was required before THP's pre-permit activities took place. That is precisely the kind of question DAQ administers and decides through its enforcement discretion. With DAQ's expert decision being that no violation warranted enforcement, the predicate for mandatory building-permit revocation was not established. Forcing revocation in the face of DAQ's contrary judgment would substitute the AG's or the building inspector's interpretation for the air-quality expert agency's.

The forward-looking consultation recommendation. The opinion's practical advice (consult with DAQ before issuing future building permits where air permit timing is in question) reflects sensible inter-agency practice. The building inspector and DAQ each operate within their respective domains; consultation prevents the inspector from issuing a building permit that prejudges the air permit question and forces a later revocation. Building the consultation into the permit-issuance workflow avoids the dispute pattern that produced this opinion.

The implicit defense of regulatory pragmatism. The opinion is also a quiet defense of regulatory pragmatism. THP appears to have started some pre-permit site work. DAQ looked at it and decided not to enforce. Forcing the building inspector to revoke the building permit in the face of DAQ's enforcement decision would punish THP for activities that DAQ, the relevant regulator, considered acceptable. That kind of cross-agency punishment would undermine confidence in the regulatory system. The AG's deferential approach lets each agency administer its own statute and prevents one agency's permit machinery from being weaponized to enforce another agency's standards without the other agency's agreement.

Common questions

Q: When does construction "commence" for purposes of a North Carolina building permit?
A: Under the Division of Engineering of the Department of Insurance's longstanding interpretation cited in the 2001 AG opinion, construction commences when the footings are poured. Pre-pouring activities (land clearing, grading, soil compaction, vapor barriers, digging footings, laying gravel) are site preparation and do not require a building permit. Verify with the local Inspections Department for any current variations.

Q: Do I need an air quality permit before I do site preparation work?
A: Generally no. The federal PSD program and North Carolina's implementing rules define "begin actual construction" as initiation of permanent on-site construction activities (foundations, supports, permanent pipework, permanent storage structures). Site preparation that precedes those activities typically does not trigger the air permit requirement. See the related 2001 AG opinion on air permit timing for detail.

Q: What if I started building before getting all my permits and got caught?
A: The consequences depend on which permit you skipped and which agency is enforcing. The local building inspector can issue a stop-work order and assess penalties under § 153A-362 if you violated § 153A-357. The Division of Air Quality (now within DEQ) can issue Notices of Violation, assess civil penalties, and pursue criminal enforcement in serious cases for § 143-215.108 violations. The agencies coordinate to some extent, but each has its own enforcement framework.

Q: Does this opinion say it's OK to start construction without permits?
A: No. The opinion's holding is narrow: in this specific case, DAQ decided that THP's pre-permit activities did not warrant enforcement, so the local building inspector was not required to revoke the building permit. Builders should obtain all required permits before doing anything that could be construed as commencing construction. The opinion's forward-looking advice is precisely that: in future cases, consult with DAQ first to determine permit timing.

Q: What does the "regulatory deference" doctrine mean in practical terms?
A: It means that when one agency administers a statute (DAQ for air permits), other officials (the AG, the building inspector, courts on review) generally accept the administering agency's reasonable interpretation and reasonable enforcement decisions about that statute. Officials do not substitute their own views for the expert agency's. This deference applies to both legal interpretations (what does the statute mean?) and enforcement decisions (when to pursue violations).

Q: Can a Notice of Violation from one agency trigger a permit revocation from another agency?
A: In principle yes, when the violation is of a state law applicable to the activity being permitted. § 153A-362 mandates building-permit revocation for failure to comply with "applicable State or local laws or local ordinances or regulations." If DAQ issued a Notice of Violation against THP for an air permit violation, that could have triggered building-permit revocation. But because DAQ did not pursue enforcement, the predicate was not present here.

Citations

Statutes
- N.C. Gen. Stat. § 153A-362 — local building inspector authority to revoke building permits; mandatory revocation for substantial departures from approved plans, failure to comply with applicable state or local laws, or false statements.
- N.C. Gen. Stat. § 153A-357 — requirement of building permit before commencing construction; "commence construction" interpreted by Department of Insurance Division of Engineering as pouring the footings.
- N.C. Gen. Stat. § 143-215.108 — air quality construction permit requirement; subject of DAQ's specialized expertise.

Cases
- Britthaven, Inc. v. North Carolina Dep't of Human Resources, 118 N.C. App. 379, 455 S.E.2d 455 (1995) — appellate courts accord deference to the interpretation of a statute by the agency created to administer that statute.
- High Rock Lake Assoc. v. Environmental Management Comm., 51 N.C. App. 275, 276 S.E.2d 472 (1981) — deference given to specialized expertise of agency on judicial review of agency decisions under the whole record test.

Source

• Landing page: https://ncdoj.gov/opinions/revocation-of-permit/

Original opinion text

Reply to: ANNE GOCO KIRBY INSURANCE SECTION

(919) 716-6610 FAX NO. (919) 716-6757

May 22, 2001

Grover Sawyer
Deputy Commissioner Chief Engineer
North Carolina Department of Insurance
Engineering Division
410 N. Boylan Avenue
Raleigh, NC 27603

Re: Advisory Opinion; Revocation of permit pursuant to N.C. Gen. Stat. § 153A-362

Dear Mr. Sawyer:

On February 22, 2001, you forwarded a letter from Samuel J. Laughter, a Code Enforcement Officer from the Henderson County Inspections Department [Inspections Department] as a request from the North Carolina Department of Insurance for a formal interpretation of the requirements for revocation of permits under N.C.G.S. § 153A-362 as it pertains to Tar Heel Paving's [THP's] permit for construction of an asphalt plant. In his letter, Mr. Laughter requested an interpretation of the requirements for revocation of permits under G.S. § 153A-362 as it pertains to the permit he issued on January 1, 2001 to John L. Pace, President of THP. Relevant to this inquiry is the fact that THP had not obtained a permit [AQ Permit] from the Division of Air Quality [DAQ] prior to undertaking some construction activities at the facility site.

N.C.G.S. § 153A-362 provides that:

The appropriate inspector may revoke and require the return of any permit by giving written notice to the permit holder, stating the reason for the revocation. Permits shall be revoked for any substantial departure from the approved application or plans and specifications, for refusal or failure to comply with the requirements of any applicable State or local laws or local ordinances or regulations, or for false statements or misrepresentations made in securing the permit. A permit mistakenly issued in violation of an applicable State or local law or local ordinance or regulation also may be revoked.

(Emphasis added). The issues raised by Mr. Laughter's letter are 1) whether THP's construction activities prior to obtaining an AQ Permit violate the requirements of G.S. § 153A-357 and 2) if so, whether G.S. § 153A-362 requires the Inspections Department to revoke the building permit for these violations. For the reasons stated below, it is our opinion that the Inspections Department should not regard THP's construction activities as a violation of these statutes and thus should not revoke the permit.

The building permit could not be issued in accordance with G.S. § 153A-357 if G.S. § 143-215.108 required the builder of this asphalt plant to obtain an AQ Permit prior to commencing construction of the building. It has been the longstanding opinion of the Division of Engineering of the North Carolina Department of Insurance that construction of a building or other structure does not "commence" within the meaning of N.C.G.S. § 153A-357 until the footings are poured. Thus, the builder can engage in site preparation activities (such as land clearing, laying gravel, compacting the soil, laying vapor barriers, and digging the footings) without a building permit before pouring the footings. However, before the builder can pour the footings, and thus commence construction, G.S. § 153A-357 requires the builder to obtain a building permit and any other permits required to be obtained at that time by any other applicable State law.

In determining whether G.S. § 143-215.108 required THP to obtain an AQ Permit prior to commencing construction, deference should be given to the opinion of the state agency charged with the responsibility for enforcing the State's air quality statutes and regulations. See Britthaven, Inc. v. North Carolina Dep't of Human Resources, 118 N.C. App. 379, 384, 455 S.E.2d 455, 460 (1995) (interpretation of a statute by an agency created to administer that statute traditionally accorded deference by appellate courts); High Rock Lake Assoc. v. Environmental Management Comm., 51 N.C. App. 275, 279, 276 S.E.2d 472, 475 (1981) (deference given to specialized expertise of agency on judicial review of agency decisions under the whole record test). On the facts of this particular case, DAQ has elected not to issue a Notice of Violation or to initiate an enforcement action against THP. Therefore it is our opinion the Inspections Department should not regard the construction activities in question as a violation of either G.S. § 143-215.108 or G.S. § 153A-357 and thus should not revoke the building permit.

In conclusion, it is our opinion that G.S. § 153A-362 does not require the Inspections Department to revoke the building permit issued to THP. Because the timing of the permit requirements of the air quality program may vary from those of G.S. § 153A-357, the Inspections Department should consult with the DAQ on cases such as this in the future before issuing a building permit in order to confirm whether DAQ would require the builder of that particular project to obtain an AQ Permit prior to pouring the footings. If it does, then the Inspections Department should deny issuance of the permit until an AQ Permit is obtained.

Very truly yours,

Reginald L. Watkins
Senior Deputy Attorney General

Anne Goco Kirby
Assistant Attorney General