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As the 2012 election cycle rolls around, count on the rhetoric about burdensome regulations as job killers to escalate.

The perils of deregulation 

In North Carolina, a state with an unemployment rate higher than the national average, eliminating regulations has become such a talking point that it's now all but synonymous with job creation. As the 2012 election cycle rolls around, count on the rhetoric about burdensome regulations as job killers to escalate.

State lawmakers have already aggressively unfettered industry by making it more difficult for regulators to write new rules. Now in a rush to prove just how business-friendly they really are, legislators are threatening to quickly overturn key environmental regulations. This love affair with deregulation imperils both the state's cherished natural resources and the health and well-being of its people.

Late last month, when Forbes magazine named North Carolina the nation's No. 3 state for business, up from fifth place last year, there was a quick scramble to take credit for the rise in the rankings. Looking to capitalize on some good economic news, Gov. Bev Perdue's office fired off a press release that keyed in on the state's top ranking in "Regulatory Environment"—one of six criteria the magazine uses to measure the states. Perdue, who signed an executive order last year to review and eliminate redundant, outdated or overly burdensome rules, was happy to assume responsibility.

"These rankings clearly show that our commitment to creating a business-friendly climate is paying off. We've eliminated hundreds of unnecessary rules that place a burden on North Carolina businesses while still protecting our air, our water and public safety," Perdue said in the release.

Shortly after the announcement, GOP leaders in the Legislature said the governor was trying to take credit for reforms they passed this year. Sen. David Rouzer, R-Johnston, told WRAL that the governor's comments were "entertaining" and noted that she had vetoed Senate Bill 781, the GOP's sweeping regulatory reform bill. Perdue, he said, had to be "dragged to the dance kicking and screaming and now she wants to say she was the host."

Perdue's veto in late June of S781—The Regulatory Reform Act of 2011—was overridden less than a month later. The law took effect Oct. 1, setting in motion a massive review of all state rules and regulations. A lengthy and extremely complex piece of legislation, S781 requires nearly every state board, commission and department that makes any kind of rule or regulation to justify its benefits compared with the burden it places on businesses.

The bill is aimed at environmental regulations. It prevents the N.C. Department of Environment and Natural Resources (DENR), the Environmental Management Commission, Wildlife Resources Commission, Marine Fisheries Commission and other rule-making groups from "imposing a more restrictive [state] standard, limitation or requirement" than one set by the federal government.

During debate over the bill, environmental advocates warned that such a restriction would take us back to the era of the Hardison amendments of the 1970s and '80s, when staunchly pro-business Sen. Harold "Bull" Hardison, D-Lenoir, successfully handcuffed state regulators, preventing them from adopting any rule that exceeded federal standards. Now, as reports detail what rules could be in jeopardy, the impact of S781 could be far worse than first imagined.

In a review submitted in mid-October to the Legislature's Regulatory Reform Committee, DENR officials were required to describe which rules were more stringent than federal requirements and provide a justification for the program.

DENR's 120-page report includes nearly every major environmental protection initiative adopted over the past 30 years, including requirements on animal waste runoff, buffers and setbacks, controls on toxic air pollutants, mining rules, cleanup of contaminated water and soil, wastewater management systems and wetlands protection.

Sam Pearsall, director of the Southeast Land, Water and Wildlife Program for the Environmental Defense Fund, says he's worried that legislators will use the DENR report to point the way on how to further gut regulations.

"Everything's back on the table," Pearsall said. "I'm very concerned that this document will be perceived as a Christmas list and they'll go through it for things they want to roll back."

DENR Assistant Secretary for the Environment Robin Smith said developing the report was difficult, given how state and federal rules interact. The state, she said, enforces the federal Clean Air Act and Clean Water Act; many of the state's environmental laws are in place to meet the acts' federal requirements.

For example, the feds provide guidance in the form of national ambient air quality standards, but implementing rules to enforce the Clean Water Act, Smith said, is more complicated. "There isn't such an animal as a federal water quality standard," she said.

To enforce water quality standards, states must set up their own classification system for rivers, streams and other waterways. In North Carolina, enforcement has entailed writing special protections for specific areas, such as the Tar-Pamlico and Neuse River basins, which are home to major hog and poultry producers and large-scale agricultural operations. In these areas, state rules were created to require better management of waste lagoons and to limit the impact of animal waste and fertilizer runoff.

Dan Conrad, legislative counsel for the North Carolina Conservation Network, said in the new anti-regulation climate these kinds of specific rules could be in danger of repeal when the General Assembly reconvenes for the short session in May. Conrad said changes are likely to come in the form of further restrictions on drafting new regulations and legislation that would repeal rules for certain areas.

"We've already seen some of that in this past session," he said. This spring, he said, legislators changed DENR's classification of a stream in the mountains after a constituent complained it hampered a construction project.

The state's Air Toxics Program, which covers some types of chemical emissions not specified in federal standards, is one target of anti-regulation Republicans, including Rouzer and Rep. Mitch Gillespie, R-McDowell, who head the Legislature's Environmental Review Commission. They already have said they'll seek to change the air program because of complaints by paper mills, power companies and chemical manufacturers that it's overly burdensome.

"They're going to say it needs to be done for the economy and jobs, but it's a false choice," Conrad said. "You don't have to trade clean air for jobs."

And while the Legislature has increased the amount of paperwork, studies and staff time required to write new rules, it's also continued to slice away at the budgets for DENR and other agencies.

"They're adding all this stuff to do, and at the same time they've cut DENR by 40 percent over the past three years," Conrad said.

Somewhere, no doubt, Harold Hardison is smiling.

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