Funding of EIS Preparation by the Clean Water Management Trust Fund

February 20, 1998

Mr. David McNaught, Director Clean Water Management Trust Fund 2313-B Executive Park Circle Greenville, N.C. 27834

Re: Advisory Opinion: Funding of EIS preparation by the Clean Water Management Trust Fund pursuant to N.C.G.S. § 113-145.1, et seq.

Dear Mr. McNaught:

By letter of February 9, 1998, you requested advice from this office on two questions related to a grant application submitted to the Clean Water Management Trust Fund (CWMTF) by Craven County on behalf of a four-county task force on regional wastewater management alternatives. It is our understanding that the Craven County grant application requests funding from CWMTF for preparation of an Environmental Impact Statement (EIS) on a proposal to create a regional wastewater collection, treatment and disposal system.

The questions that you raise with respect to the application are restated and answered below:

1. Is preparation of an Environmental Impact Statement on a proposed regional wastewater collection, treatment and disposal system and the alternatives for wastewater disposal available to such a system properly within the authorized purposes of CWMTF grant funds under N.C.G.S. § 113-145.3?

Response: The preparation of an Environmental Impact Statement is not, in itself, one of the authorized uses of CWMTF grant funds under N.C.G.S. § 113-145.3, but EIS preparation may be included in funding for a project that otherwise qualifies for grant funds under the statute.

The preparation of an EIS addresses the requirement of the North Carolina Environmental Policy Act, N.C.G.S. § 113A-1 through 113A-13, (N.C.E.P.A.). The N.C.E.P.A imposes the following duty on state agencies:

Every State agency shall include in every recommendation or report on any action involving expenditure of public moneys or use of public land for projects and programs significantly affecting the quality of the environment of this State, a detailed statement by the responsible official setting forth the following:

a.

The environmental impact of the proposed action;

b.

Any significant adverse environmental effects which cannot be avoided should the proposal be implemented;

c.

Mitigation measures proposed to minimize the impact;

d.

Alternatives to the proposed action;

e.

The relationship between the short-term uses of the environment involved in the proposed action and the maintenance and enhancement of long-term productivity ; and f. Any irreversible and irretrievable environmental changes which would be involved in the proposed action should it be implemented.

N.C.G.S. § 113A-4 (2). As the text of the statute indicates, an EIS is prepared after a project proposal has been developed as a means of assessing its potential environment effects. Thus, EIS preparation follows the initial planning process in which alternatives are considered and rejected and focuses on an assessment of the selected alternative.

Against this background, EIS preparation in itself does not appear to fit within any of the enumerated purposes of CWMTF grants as set out in N.C.G.S. § 113-145.3. Those purposes include the following:

(1)

To acquire land for riparian buffers… .

(2)

To acquire conservation easements or other interests in real property for the purpose of protecting and conserving surface waters and urban drinking water supplies.

(3)

To coordinate with other public programs involved with lands adjoining water bodies to gain the most public benefit while protecting and improving water quality.

(4)

To restore previously degraded lands to reestablish their ability to protect water quality.

(5)

To repair failing waste treatment systems… .

(6)

To repair and eliminate failing septic tank systems, to eliminate illegal drainage connections, and to expand waste treatment systems if the system is being expanded as a remedy to eliminate failing septic tank systems or illegal drainage connections….

(7)

To improve stormwater controls and management practices.

(8)

To facilitate planning that targets reductions in surface water pollution.

(9)

To fund operating expenses of the Board of Trustees and its staff.

Of those, EIS preparation clearly does not fall within the purposes set out in (1) through (7) or (9).

As to (c)(8), the language most strongly suggests that the legislative intent was to make grant funds available for land use planning aimed at reducing surface water pollution. It could also be read to authorize funds for planning related to other authorized grant purposes (e.g., land acquisition projects or projects designed to eliminate failing septic tank systems and illegal drainage connections). EIS preparation does not serve a planning function within the general understanding of that term, however, since the EIS is prepared only after a preferred alternative has been selected. For that reason, EIS preparation cannot be considered "planning" within the meaning of N.C.G.S. § 113-145.3(c)(8).

Although EIS preparation is not, standing alone, one of the authorized purposes for CWMTF grant funds, EIS preparation could be funded as part of a larger grant for a project that falls within one of the statutory categories. For example, EIS preparation, where necessary, could be funded as part of a broader grant for expansion of a waste treatment system in order to eliminate failing septic systems or illegal connections In this context, the authority to fund EIS preparation would be implied under the statute as necessary to discharge the CWMTF Board’s duties under the N.C.E.P.A. to report on the environmental impacts of projects funded by CWMTF grants.

2. Is the construction of a regional wastewater system one of the authorized purposes of CWMTF grant funds?

Response: Construction of a regional wastewater system may be funded only if the construction meets the criteria set out in N.C.G.S. § 113-145.3(c)(5) or (6).

As cited above, N.C.G.S. § 113-145.3(c) authorizes funding for two categories of projects related to wastewater treatment systems. Under N.C.G.S. § 113-145.3(c)(5), the CWMTF can provide funds to repair failing waste treatment systems under the following conditions: (i) an application has first been submitted to the Clean Water Revolving Loan and Grant Fund and denied during the latest review cycle; (ii) the repair is a reasonable remedy for resolving an existing waste treatment problem; and (iii) the repair is not for the purpose of expanding the system to accommodate future growth. CWMTF grants may also be used, pursuant to N.C.G.S. § 113145.3(c)(6), to repair and eliminate failing septic systems, to eliminate illegal drainage connections, and to expand waste treatment systems for purposes of eliminating those problems. Priority for such grants are to be given to economically distressed units of local government.

Based on the details of the grant application, the CWMTF Board may determine which category most appropriately includes the proposed regional wastewater system. In either case, the primary statutory limitation on such grants is that expansion must be for purposes of eliminating existing wastewater treatment and disposal problems. The statute clearly prohibits the use of CWMTF grants for expansion of a wastewater treatment system to accommodate future growth.

Thus, the CWMTF has authority to grant funds for expansion of existing wastewater collection, treatment, and disposal systems in the four-county area to the extent the expansion addresses existing waste treatment and disposal problems such as failing septic tank systems and illegal discharges. CWMTF grants cannot be used to address needs related to anticipated future growth in the region.

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

signed by:

Daniel C. Oakley Senior Deputy Attorney General

Robin W. Smith

Assistant Attorney General