Can North Carolina counties be forced to get federal stormwater permits even though the state, not the counties, owns the roads where most stormwater drains?
Plain-English summary
The North Carolina Association of County Commissioners had asked DENR whether counties had to obtain NPDES Phase II stormwater permits given a quirk of North Carolina's road system: the state's Department of Transportation owns and operates most road drainageways, not counties. If counties did not operate the largest stormwater conveyances in their territory, were they still required to get federal permits?
Senior Deputy AG James Gulick and Assistant AG Mary Penny Thompson said yes. The county's lack of ownership of road drainageways did not give it an exit from the federal Phase II program. Four independent scenarios could require a county to obtain a permit.
First, MS4 ownership. Counties typically own catch basins, ditches, and storm drains around jails, hospitals, municipal buildings, parks, and maintenance facilities. These are MS4s ("municipal separate storm sewer systems") under 40 C.F.R. § 122.26(b)(8). When such a county-owned MS4 sits in an urbanized area and discharges directly to receiving waters, the county must obtain a Phase II permit for that point source.
Second, interconnection with NCDOT's permitted system. NCDOT held a statewide Phase I stormwater permit. County-owned conveyances in urbanized areas often interconnect with NCDOT's drainageways. Under 40 C.F.R. § 122.26(b)(4) and (7), the permitting agency could include such interconnected conveyances when the county retained authority over one or more of Phase II's six minimum measures (public education, public notice, illicit discharge detection, construction controls, post-construction controls, pollution prevention). Counties exercise that authority through zoning and subdivision regulation under G.S. §§ 153A-330, 340, 341.
Third, DENR designation. Even outside urbanized areas, DENR has authority under 40 C.F.R. §§ 122.32(a)(2) and 123.35(b) to designate small MS4s as needing permits. Criteria include discharge to sensitive waters, high growth potential, high population density, contiguity to urbanized areas, and significant pollutant contribution. The federal rule's preamble explicitly contemplated designating "all MS4s within a county or township." 64 Fed. Reg. 68751.
Fourth, third-party petition. Under 40 C.F.R. § 122.26(f), any operator of a permitted MS4 may petition for a separate permit for a discharge entering its system, and any person may petition for a permit to address a discharge contributing to a water quality violation. The petition language is broader than the rule's definitional limitation to county-owned conveyances. The AG read the petition route as a meaningful additional avenue for forcing county permitting.
If a county was required to obtain a permit, it had three options: a jurisdiction-wide general permit, individual permits for each system, or a co-permittee arrangement with NCDOT or another existing permittee. The Phase II rule encouraged general permits on a county-wide basis. A "limited" co-permittee arrangement let a county tie into NCDOT's Phase I permit by referencing common stormwater management.
The opinion's broader framing matters. The federal rule's preamble (64 Fed. Reg. 68739) discussed "donut holes," small unregulated MS4s adjacent to or within larger regulated MS4s. NCDOT's permit alone would leave gaps where county conveyances drained to NCDOT roads without separate coverage. The Phase II program closed those gaps and counties were not exempt from the closure regardless of who owned the roads.
Currency note
This opinion was issued in 2002. 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 federal NPDES stormwater rules have been amended several times since 2002, and North Carolina's implementation framework continues to evolve. Anyone considering current Phase II obligations should consult the current C.F.R. provisions, current DENR rules, and any recent litigation or guidance before relying on this analysis.
Background and statutory framework
NPDES Phase I vs Phase II. Phase I (33 U.S.C. § 1342(p)(2)) covered MS4s serving populations of 100,000 or more. Phase II reached MS4s serving smaller populations. The 1999 rule (64 Fed. Reg. 68722) implemented Phase II for the previously-unregulated smaller systems and was the framework the 2002 opinion applied.
The six minimum measures. A Phase II permit requires a stormwater management program implementing six minimum measures: public education and outreach, public participation, illicit discharge detection and elimination, construction site runoff control, post-construction stormwater management, and pollution prevention/good housekeeping for municipal operations. Counties exercise some of these directly through their planning and zoning authority.
The NCDOT Phase I permit. NCDOT held a statewide NPDES Phase I stormwater permit (NCS000250) covering its road system. Counties were not required to be co-permittees at that time. The AG opinion observed that the Phase I framework left coverage gaps, particularly where county-owned conveyances drained to or interconnected with NCDOT's right-of-way.
The "donut hole" problem. Federal rule preambles use this term for small unregulated MS4s located next to or within regulated larger MS4s. Such gaps create both an equity problem (similar discharges remaining unregulated despite contributing to the same water quality impacts) and a coverage problem (the regulated MS4 alone cannot achieve the program's water quality objectives). Phase II was designed to fill those holes.
Counties' land-use authority. G.S. §§ 153A-340 (zoning), 153A-341 (zoning for water/sewerage), and 153A-330 (subdivision regulation) give counties substantial control over how development affects stormwater. The AG opinion drew on those statutes to explain why counties were natural Phase II permittees: they have the regulatory tools to implement post-construction controls and several other minimum measures, even where NCDOT owned the roads.
The petition mechanism's ambiguity. 40 C.F.R. § 122.26(f) language allows petitions for permits over "any discharge into" an MS4 (subsection (f)(1)) or "any discharge composed entirely of storm water" affecting water quality (subsection (f)(2)). This broader phrasing arguably allows third-party-driven coverage of any county discharge that reaches a permitted MS4 or affects water quality, even discharges not arising from a county-owned MS4. The AG flagged this as a possible avenue for petition-driven county coverage going beyond the definitional MS4 framework. NRDC v. Train (1975) and NRDC v. Costle (1977) supported a broad reading of the Clean Water Act's permit reach.
Common questions
Q: Did this opinion settle whether all 25 NC counties listed in the Phase II rule's appendix had to get permits?
A: Not fully. The 25 counties identified in the rule's appendix as being within urbanized areas were the most clear-cut candidates for required permitting. But the four scenarios the AG identified extended potentially well beyond those 25 counties. DENR's designation process and the petition mechanism could reach others.
Q: Could a county avoid Phase II permitting by transferring all of its drainage infrastructure to NCDOT?
A: The opinion did not address that hypothetical. Even if a county somehow had no MS4 ownership at all, the petition mechanism and DENR designation could still pull it under coverage based on stormwater discharge effects. A county's planning authority over land use is itself relevant to the minimum measures.
Q: How burdensome was Phase II compliance for small counties?
A: The opinion did not estimate costs. The federal rule allowed jurisdiction-wide general permits and "limited" co-permittee structures to keep administrative burden manageable. A county joining NCDOT's permit as a limited co-permittee would only be responsible for the measures not already covered by NCDOT's permit.
Q: Could a third party petition for the entire state?
A: The petition mechanism targets specific discharges or specific MS4s, not entire states. The AG read the petition language broadly enough to reach county-level coverage but did not suggest it could be used as a wholesale workaround to the regulated/unregulated distinction.
Citations
Federal statutes and regulations:
- 33 U.S.C. § 1342(p) (Clean Water Act stormwater provisions)
- 40 C.F.R. § 122.26 (NPDES stormwater definitions and provisions)
- 40 C.F.R. § 122.32 (Phase II MS4 requirements)
- 40 C.F.R. § 123.35 (state designation criteria)
- 64 Fed. Reg. 68722 (1999 Phase II rule)
State statutes and rules:
- N.C. Gen. Stat. § 153A-330 et seq. (county subdivision regulation)
- N.C. Gen. Stat. § 153A-340 (county zoning)
- N.C. Gen. Stat. § 153A-341 (zoning for water and sewerage)
- N.C. Admin. Code tit. 15A, r. 2H.0126
Cases:
- Natural Resources Defense Council v. Train, 396 F. Supp. 1393 (D.D.C. 1975), aff'd, NRDC v. Costle, 568 F.2d 1369 (D.C. Cir. 1977) (broad Clean Water Act permit reach)
Source
Original opinion text
Reply to: James C. Gulick or Mary Penny Thompson
Environmental Division
Tel: (919) 716-6600 Fax: (919) 716-6766
January 11, 2002
Coleen Sullins, Water Quality Section Chief
Bradley Bennett, Stormwater and General Permits Unit Supervisor
Division of Water Quality
1617 Mail Service Center
Raleigh, NC 27699-1617
Re: Advisory Opinion: Application of the NPDES Storm Water Phase II Program to Local Governments; N.C. Gen. Stat. § 214.7; N.C. Admin. Code tit. 15A, r. 2H.0126; 33 U.S.C. § 1342(p); 40 C.F.R. §§ 122.26, 122.32, 123.35
Dear Coleen and Bradley:
You requested written advice on two questions concerning the State implementation of the federal National Pollutant Discharge Elimination System ("NPDES") Storm Water Phase II Program as it relates to local governments. The questions arose from a request by the North Carolina Association of County Commissioners to review the federal rule and determine whether State implementation would require a county to obtain a permit, notwithstanding the county does not own or directly operate the largest storm water conveyance system in its jurisdiction, i.e., the State road system and its associated drainageways. In particular, you asked (1) whether a county may be required to obtain a NPDES Storm Water Phase II permit for the storm water conveyances within its jurisdiction notwithstanding that it does not own or operate roads and associated drainageways; and (2) if a county is required to obtain a permit, what permitting avenues would be available.
In regard to the first Issue our answer is "yes;" we conclude that there are four scenarios under which a county may be required by DENR to obtain a Phase II permit, notwithstanding that it does not own or operate roads and associated drainageways. The four scenarios arise when: (a) the county owns or operates a municipal separate storm sewer system ("MS4") in an urbanized area which discharges directly to receiving waters; (b) the county owns or operates a storm water conveyance in an urbanized area which is interconnected with a permitted MS4, but retains the authority to implement a measure of the program; (c) the State designates a county's MS4 as needing a permit, regardless of location; or (d) a third party successfully petitions the State to require county permitting. In response to the second Issue, if required to obtain a Phase II permit, a county may obtain a general permit, an individual permit or arrange to be copermittees with existing or new permittees.
Issue 1. The NPDES storm water permitting program has two phases, Phase I for large and medium MS4s and Phase II for smaller MS4s. Phase II permits require implementation of a storm water management program which is composed of six minimum measures. The minimum measures consist of (1) public education; (2) public notice; (3) illicit discharge detection and elimination; (4) construction controls; (5) post-construction controls; and (6) pollution prevention. In certain instances, only the county may be able to implement one or more of these six minimum measures. One such example of municipal control over a minimum measure is the requirement of post-construction controls, i.e., requiring maintenance of installed best management practices after construction is complete. To this end, a county may exercise control over its jurisdiction through the land use authorities granted to it by statute. Counties have broad authority to regulate and restrict the size of buildings; the percentage of lots occupied, the size of open spaces; the density of population; the location and use of buildings, structures, and land for trade, industry, residence or other purposes; and provide density credits or severable development rights for dedicated rights-of-way. N.C. Gen. Stat. § 153A-340. Counties may adopt zoning regulations designed to facilitate the adequate provision of water, sewerage and other public requirements. N.C. Gen. Stat. § 153A-341. Counties also regulate subdivisions by ordinance. N.C. Gen. Stat. § 153A-330 et seq.
North Carolina is one of the few states in which roads and adjoining drainageways are owned and operated by the state's department of transportation rather than by counties. Apparently for this reason, the Association of County Commissioners has questioned whether a county may be required to obtain a Phase II permit when a county does not own or operate the majority of storm water conveyances, namely road drainageways, in its municipal jurisdiction, despite their ability to implement the minimum measures contemplated under Phase II. However, it is our opinion that North Carolina counties may be required by DENR to obtain a permit under at least four scenarios, notwithstanding that they do not own or operate the majority of MS4s in their jurisdiction.
First, a county may be required by DENR to obtain a permit for any discrete system which it owns or operates in an urbanized area. Road drainageways are not the only MS4s in a county. Counties own or operate jail facilities, hospital complexes, municipal buildings, maintenance facilities and parks which contain catch basins, ditches, storm drains and other features of storm drainage which discharge directly to waters of the State without passing through another storm system such as NC DOT's road system. These MS4 point sources must obtain Phase II permits to discharge storm water directly to waters of the State.
Second, a county may be required by DENR to obtain a permit when its storm water devices are interconnected in an urbanized area with a permitted MS4 and the county retains authority to implement one or more of Phase II's six minimum measures. Under Phase I, the permitting agency could include storm water conveyances that did not themselves constitute a large or medium MS4 under the permit for a large or medium MS4 due to the interrelationship between the discharges of the smaller system and the MS4, including the physical interconnections between the storm sewers and other factors. 40 C.F.R. §§ 122.26(b)(4) and (7). DENR issued a statewide NPDES Phase I permit to the NC DOT for its roadways, but did not require counties to be permitted at that time. Without the county as a co-permittee, NC DOT's Phase I permit fails to provide program coverage outside of the right-of-way although those areas contain storm water conveyances that drain to the right-of-way.
Third, a county may be required by DENR to obtain a permit when the State permitting authority designates it for coverage, even if it falls outside of an urbanized area. 40 C.F.R. §§ 122.32(a)(2) and 123.35(b). The rule's preamble discusses this extended coverage by indicating that "Permitting authorities may also decide to designate all MS4s within a county or township, if they believe it necessary to protect water quality." 64 Fed. Reg. 68751. As the NPDES permitting authority, DENR is required to develop a process, as well as criteria, to designate small MS4s outside of the urbanized area which have the potential to result in exceedances of water quality standards or other significant water quality impacts. 40 C.F.R. § 123.35(b). Other significant water quality impact criteria may consist of discharge to sensitive waters, high growth or growth potential, high population density, contiguity to an urbanized area, significant contributor of pollutants to waters, and ineffective protection of water quality by other programs. 40 C.F.R. § 123.35(b)(1)(ii). DENR may also designate any small MS4 that contributes substantially to the pollutant loadings of a physically interconnected MS4 that is regulated by the NPDES storm water program. 40 C.F.R. § 123.35(b)(4). Therefore, even if a county lies outside an urbanized area or is only physically interconnected with another regulated MS4, it may be required to obtain a Phase II permit through the State's own designation process.
Fourth, a county may be required by DENR to obtain a permit when it is subject to a successful third party petition. Even if DENR itself does not designate a county as needing a Phase II permit, third parties may petition the permitting agency to do so. 40 C.F.R. §§ 122.26(f)(4) and 122.32(b). Under the petition process, any operator of a permitted MS4 may petition DENR to require a separate NPDES permit for a discharge entering the operator's MS4. 40 C.F.R. § 122.26(f)(1) (emphasis added). Moreover, any person may petition DENR to require a county to obtain an NPDES permit for a storm water discharge which contributes to a violation of a water quality standard or is a significant contributor of pollutants to receiving waters. 40 C.F.R. §§ 122.26(f)(2) (emphasis added).
The Phase II rule generally focuses on discharges from MS4s which, by definition, requires the county to own or operate the MS4. However, the language of the rule addressing the Phase II petition process addresses "any discharge into [an MS4]." This change in language creates some ambiguity as to the scope of coverage. In particular, it might be argued by the petitioning operator of a permitted MS4 that he must only show that the discharge reaches its system, not that the discharge comes from another MS4. The petition process also addresses "[any] discharge which is composed entirely of storm water which contributes to a violation of a water quality standard or is a significant contributor of pollutants to waters of the United States." In this instance, it might be contended that the third party must show that the discharge negatively affects water quality, without a requirement that the third party must show that the discharge emanates from an MS4.
It may be contended that the general intent of the statute would support such a construction. The structure of the CWA and its history indicate that all point sources should be permitted. See Natural Resources Defense Council (NRDC) v. Train, 396 F. Supp. 1393 (D.D.C. 1975), affirmed, NRDC v. Costle, 568 F.2d 1369 (D.C. Cir. 1977). With the adoption of the Water Quality Act of 1987, Congress amended the CWA and added section 402(p), which established the priorities, deadlines and permit requirements for storm water point sources, including MS4s. 33 U.S.C. § 1342(p).
The Phase II rule implements the Clean Water Act goal by seeking to provide comprehensive coverage of storm water control and to eliminate gaps in storm water coverage. As the rule's preamble states, "'Donut holes' are gaps in program coverage where a small unregulated MS4 is located next to or within a regulated larger MS4 that is subject to an NPDES permit under the Phase I NPDES storm water program. The existence of such 'donut holes' creates an equity problem because similar discharges may remain unregulated even though they cause or contribute to the same adverse water quality impacts. Using NPDES permits to regulate the unregulated discharges in these areas is intended to facilitate the development of a seamless regulatory program for the mitigation and control of contaminated storm water discharges in an urbanized area." 64 Fed. Reg. 68739. The rule's preamble dedicates an entire subsection, Section II.H., to describing the municipal role in Phase II. 64 Fed. Reg. 68748 through 68771. The rule's appendix goes on to identify twenty-five North Carolina counties as being fully or partially located within an urbanized area. 64 Fed. Reg. 68822. It appears that EPA anticipated that North Carolina counties would be covered by the Phase II program and did not anticipate that whole areas would be left out simply because NC DOT rather than local government maintained the road system. Thus, the petition process may extend county coverage to county storm water discharges regardless of whether the discharge emanates from a conveyance that is owned and operated by the county and otherwise meets the definition of a small MS4.
Issue 2. If a county is required to obtain a NPDES permit under Phase II, it has several permitting options. It may request a general permit for all systems and components within the county boundaries. The Phase II program encourages the use of general permits on a systemwide or jurisdiction-wide basis. Under Phase I, NC DOT received a system-wide permit for its road system. Under Phase II, a county could receive a jurisdiction-wide permit for the systems within the county. In this regards, an NPDES general permit can cover a category of dischargers within a defined geographic area which may be defined broadly to include political boundaries, e.g., an entire county. 64 Fed. Reg. 68739. For the storm water systems which interconnect with NC DOT road systems, a county could join NC DOT as a co-permittee in its Phase I permit which would have to be modified to include the Phase II minimum measures. The Phase II rule allows a newly regulated MS4 to join as a "limited" co-permittee with a regulated MS4 by referencing a common storm water management program. 64 Fed. Reg. 68739. A "limited" copermittee is only responsible for the measures not covered by the already-existing permit. Alternatively, a county could obtain its own Phase II permit for the systems that interconnect with NC DOT. Finally, a county may obtain or require individual permits for each system within its geographical area.
We trust this analysis proves helpful. If you have any questions or wish to discuss this matter further, please do not hesitate to contact us. With best wishes, we are
Very truly yours,
James C. Gulick
Senior Deputy Attorney General
Mary Penny Thompson
Assistant Attorney General
EP/51803-3/wp6.1