By Ana Zivanovic-Nenadovic

Two overarching issues that concern the N.C. Coastal Federation related to terminal groins were addressed at the latest Coastal Resources Commission meeting on Feb. 7: The need to make rules to enforce the requirements of the terminal groin law  that the N.C. General Assembly passed in 2011 and the suitability of using rules developed by the N.C. Division of Waste Management and applying its “Local Government Test” to satisfy the groin law requirement for financial assurance.

A central feature of the terminal groin law is the requirement that those building the structures prove that they have the financial ability to maintain and monitor them, fix any damage they might do to the environment or property and modify or remove them if needed. The law requires that groin applicants have bonds, insurance policies, escrow accounts or some other “financial instruments” that show they have the money to cover these costs.

In the latest of several letters to the commission about the need for new rules for terminal groins, the federation urged the commission to develop rules and standards to meet this very important requirement of the law and not rely on methods used by other agencies for entirely different purposes, such as waste management’s Local Government Test.

Bob Emory

The N.C. Division of Coastal Management, however, continues to insist that it does not have to go through the formal rule-making process to fairly administer the groin law.

Robin Hammond, assistant counsel at the N.C. Department of State Treasurer, spoke to the CRC at its meeting last week. DCM is “not quite there yet” in terms of its intent to apply the Local Government Test to satisfy the financial assurance test required by the terminal groins bill, she said. In short, while the state law on solid waste specifically identifies this test as a means of financial assurance, the groin bill doesn’t. She also added that with certain “tweaking” of the test the agency might be able to use it for the intended purpose.

DCM responded that it might work on a case-by-case basis with each groin applicant to satisfy the requirements. However, it stands to reason that any such negotiated agreement must have some common enforceable components, and that’s precisely why rule-making is necessary.  Otherwise, how will other engaged federal and state agencies and the public be able to participate in establishing these enforceable standards other than resorting to very time consuming and expensive lawsuits.  This position is particularly worrisome given that lawmakers intended that local voters should have a say in how much money is committed by their elected officials to build and insure the performance of a terminal groin.

In its presentation on terminal groin issues, DCM officials stated that the groin bill was written almost as a rule. However, when asked by one commissioner whether the bill instructs the agency how to assess mitigation costs toward the end of the project life cycle, the agency staff responded that such instructions were not given in the bill because it is “very open-ended.” Apparently, at the same time the agency interprets the terminal groin bill as a narrow, rule-like document, in other aspects it views it as a very open document.

While the groin bill is narrowly written in some respects, it contains many provisions that need further clarification if they are to be implemented and enforced in a fair and equitable manner. Rule-making is the official and formal process that allows for all interested parties to participate in devising standards that anticipate and resolve potential pitfalls in how laws are implemented. The legislature has been clear that agencies are not to rule by policy or guidance, but rather through formal laws and rules.

It remains to be seen how these issues will evolve in future commission’s meetings. CRC Chairman Bob Emory concluded the discussion with a quote that should drive lawmakers, who are constantly calling for clarity and consistency in state agency actions, absolutely crazy: “The agency [DCM] is asking us [the Commission] for flexibility rather than for specificity.”