A few weeks ago, Frank Tursi came upon a typical summer scene: four or five young children frolicking happily in shallow wading pools fed by a stream of water making its way down the sand at Atlantic Beach. Tursi was furious–at the town, not at the children.

As the Cape Lookout Coastkeeper for the N.C. Coastal Federation, Tursi knew exactly where the water was coming from–and that it contained high concentrations of bacteria that could make the children very sick.

Like a lot of coastal towns, Atlantic Beach has a big stormwater run-off problem. Rain falls on land that used to contain trees and soil and other natural features that would absorb it, filter it, funnel it to creeks and wetlands. But now houses, roads and parking lots cover the landscape, and it doesn’t take much rain to cause a flood. When six inches fell in two days during early June, town officials cranked up their pumps and looked for somewhere to put it. In a move that’s landed them in trouble with state regulators, they cut a trench through the dunes and channeled the water out to sea.

With it went fertilizer washed off lawns, oil, gas and other toxins off roads, feces from pets and wildlife and many other substances–one big pool of pollutants for the unknowing tourists’ children.

North Carolina’s stormwater run-off problem is growing with every new house, road, parking lot, mall, and other “impervious surface” sprouting up. Its volume scours creekbeds, killing resident wildlife and plants, eroding banks and dumping sediment, while its toxic contents cause a wide range of problems. Stormwater is the top contributor to water-quality degradation in many bodies of water, including Jordan Lake, which provides drinking water for much of the Triangle. It makes oysters and clams unsafe to eat in 360,000 acres of our state’s coastal waters now permanently closed for shellfishing and in thousands more acres that close temporarily after rainfalls.

As residential and commercial growth consume undeveloped land, the pollution experts are clear on one thing: Like Atlantic Beach leaders have learned the hard way, it’s not a problem for which solutions are easily retrofitted.

“Across the state, we’re going to have to get serious about trying to eliminate stormwater,” says Tursi. “We’re going to have to do a better job in the way we develop the land.”

To that end, the N.C. Environmental Management Commission spent nearly four years drafting plans to minimize the effects of stormwater run-off in the state’s most rapidly developing counties. A citizen board of experts, the EMC worked with water-quality specialists on staff at the N.C. Department of Environment and Natural Resources, tapping scientific research, hosting stakeholder meetings and public hearings, considering concerns from landowners and local governments.

And then, under political pressure from opponents who had ferociously fought the building limits and other stormwater controls it considered unfriendly to their bottom line, a little-known commission derailed the plan.

The stormwater rules are just one recent example of how an obscure board, called the Rules Review Commission, has become a startling trump card for the business community to advance its political agenda, sometimes in direct conflict with the public’s well-being. The board has spiked rules aimed at protecting patients from pharmacists’ errors and ergonomics standards aimed at preventing occupational injuries for workers across the state. Its very presence discourages state agencies from proposing new rules or even updating old ones out of fear that existing ones would be gutted in the process.

The commission’s authority means after the legislature debates and votes, after state agencies and other executive branch bodies translate state and federal laws into practical applications known as rules, even if they lose along the way, powerful special interests control the board at the very end of the political process–a board with the power to outright reject, or eviscerate with editing, regulations developed in the public interest.

Created by the N.C. General Assembly to curb what some lawmakers saw as regulators gone wild, the RRC is supposed to evaluate rules only on the basis of narrow legal criteria. But since an industry-friendly legislature gave the board veto power 10 years ago and appoints all the members, policymakers charged with protecting citizens’ interests and public advocacy leaders say the commission has become yet one more political battlefield where private interests rule–particularly those whose profit margins are adversely affected by environmental regulations on development.

“It’s not complicated. It’s not a secret conspiracy; it’s all pretty clear,” says Dan Besse, a member of the EMC. “The reason that board exists is to rein in these crazies who put public health and the environment in front of the development lobby’s interests.”

The defeat of the stormwater rules in January 2004 was a major victory for those interests. But on June 15, a Wake County Superior Court judge struck down the decision, saying the rules board “erred, acted arbitrarily and exceeded its statutory authority” in rejecting the stormwater rules. In two other pending lawsuits, plaintiffs are challenging the RRC on an even broader scope, saying its power is so great as to be unconstitutional, and calling for the courts to rein it in.

This is the story of how the Rules Review Commission came to power and how that control contributes to the advancement of private business agendas. A separate story on the next page looks in detail at the members of the board and the political, professional and personal connections that guarantee industry a friendly audience in their decision-making.

A voluminous book of state rules and regulations governs your everyday life, probably without your noticing. The sanitation grade posted in your favorite restaurant, safety standards that protect your mother in her nursing home or your children on their playground, the types of pollutants permitted in your tap water–all came about through a rigorous public process known as rule-making.

Rule-making generally begins with the staff members of a state agency, who have expertise in a particular field, devising practical applications for new or existing state or federal laws.

The proposed rules then go through a lengthy process of public reviews and revisions. In some cases, like the stormwater rules, they are the subject of years of stakeholder meetings, public hearings, special-interest lobbying, objections and compromises. The final versions eventually go before whichever oversight or regulatory board is in charge of rules for that particular area, where they are debated and eventually adopted.

Lastly, the Rules Review Commission evaluates the proposed rules on three criteria: if they fall within the statutory authority given the agency by the General Assembly; if they are clear and unambiguous; and if they are reasonably necessary to fulfill a duty delegated to that agency.

In 2000, for example, after employers decried former state labor commissioner Harry Payne’s ergonomics standards, meant to protect workers from repetitive-motion injuries and other occupational hazards, the RRC rejected the proposal on the objection that the labor department lacked the statutory authority to enforce them.

Except for a few exempt bodies such as the state university system, a small number of regulatory boards such as the Utilities Commission and a few other exceptions, rules for almost every area of state government come before the commission: environmental protections; state personnel issues; public health, safety and welfare standards; licensure requirements for professions such as law, real estate and medicine; and many other areas.

Because its charge covers such a wide spectrum of content and delves into such legal minutiae, discussion topics at the monthly meetings can vary wildly.

Joe DeLuca, the board’s staff attorney since 1989, remembers one particularly quirky discussion about the habits of honeybees. Some years ago, the N.C. Department of Agriculture proposed a rule for truckers transporting bees through the state, requiring them to leave their motors running whenever they stopped to rest. DeLuca recalls having to explain to the mystified commission members that apparently the engine vibrations kept the bees calm and prevented swarming.

At another recent meeting, during debate over licensure requirements proposed by the N.C. Real Estate Commission, a conversation about what constitutes “moral turpitude” ensued. Board member Jeff Gray assured his colleagues that in his years of practicing administrative law in North Carolina, he’d come across the question so many times that he’d finally compiled a chart of all the crimes that qualify as moral turpitude, which he’d be glad to share.

The board generally considers between 100 and 150 new or revised rules each month, many of them technical changes that don’t affect content. They approve all but a handful, and only a tiny fraction ever make headlines. Often, the commission’s meeting room in the United Methodist Building on Glenwood Avenue in Raleigh is full of empty chairs. Notable exceptions, though, bring out standing-room only audiences and plenty of lobbying.

One recent example was a debate over Duke University’s proposal to test artificial blood on accident victims–in which the commission approved a rule change to allow the study to go forward, despite criticism that it was not in the public’s interest.

Though almost all agencies come before the commission at one time or another, a small group tends to be more active in rule-making. The Environmental Management Commission, the citizen board that oversees a large section of the Department of Environment and Natural Resources’ work, is one rule-making body that appears frequently on the board’s agenda. With a charge to protect North Carolina’s air and water quality and land resources, the EMC is also the body that most often lies in the crosshairs of the N.C. Home Builders Association, the N.C. Association of Realtors and N.C. Citizens for Business and Industry–three powerhouse special interests that often share common anti-regulatory agendas and which, along with road-builders, developers and other growth industries, critics sometimes collectively label “the sprawl lobby.”

One of the EMC’s most crucial successes of the last decade demonstrates how its public policy agenda and private development interests clash in the state rule-making arena.

As part of its compliance with the federal Clean Water Act in the mid-1990s, the agency developed proposals to protect wetlands, the thousands of acres of fragile ecosystems that help control flooding, filter pollutants and provide habitat for many wildlife species across the eastern half of our state. Facing widespread destruction by developers, wetlands were considered a top environmental priority by DENR and the EMC. The proposal to restrict the drainage of wetlands went through a laborious process of public input that included a series of compromises among the various competing interests.

In July 1996, the comprehensive set of protections reached their final clearinghouse at the RRC.

In the face of strong-arm lobbying by pro-growth groups, commission members looked for reasons to reject the wetlands provisions, embarking on a convoluted syntax debate. A transcript of that meeting–which does not name individual members–shows the board squirming under political pressure while they debated whether wetlands even legally qualified as “waters of the state.”

“If we can’t even agree on what water is, this is pretty bad,” said one board member.

Also influencing the debate was a recent decision by lawmakers that encouraged the commission to be more proactive in curbing rules.

“In the past year, the legislature has made it clear that they want you to be an activist commission,” staff attorney Bobby Bryan told the board.

In the end, RRC members sided with industry. Using the strongest measure then at their disposal, they agreed to formally object to the wetlands rules. Such objections were noted in the official record, but the agency could–and did–enact them over the objection.

In the six weeks after the restrictions went on the books–but before state regulators began enforcing them–developers drained about 20,000 acres of wetlands.

Nearly a decade later, environmental advocates who promoted those protections still shudder at the idea of how many more acres would have been lost, if, along with the penchant to do so, the Rules Review Commission had the power to stop the agency’s plan altogether.

It hadn’t gone into effect yet, but seven months earlier, in language buried in the back of a budget bill in the 11th hour of the 1995 legislative session, the commission had been given just that.

Developer and Wake County Democrat Sen. J.K. Sherron and Brunswick County Democrat Rep. David Redwine led the charge to give the rules commission more power. Finding fertile ground in a conservative legislature that leaned pro-industry and anti-regulation, groups like the N.C. Home Builders Association, N.C. Citizens for Business and Industry and the Manufacturers and Chemical Industry Council argued that too many rules were hindering economic development and job creation.

With direct input from and support by the very industries that stood to profit from fewer rules, Sherron set out to cut the red tape.

Mike Carpenter, the home builders’ chief political strategist, helped draft the legislation.

“We told him, ‘It’s a good idea. We’d like to participate,’” Carpenter told The News & Observer at the time.

In addition to giving the Rules Review Commission veto power, the legislation set up a complicated series of hoops that rule-makers had to clear with regard to investigating and reporting the fiscal impacts of all new rules–a move opponents labeled “paralysis by analysis” that rendered rule-making much more difficult and time-consuming.

The 1995 change went into effect for all new rules proposed after Dec. 1 of that year. Since then, with support from the business lobby groups, lawmakers have made several subsequent key changes to the legislation known as the Administrative Procedures Act, which sets up the Rules Review Commission’s structure and operations. In incremental steps over the last 10 years, lawmakers have tightened restrictions on rule-making even further, such as applying new limits on temporary rules, those measures put into place to address an issue while more permanent solutions wend through the lengthy public process.

Both House Speaker Jim Black (D-Mecklenburg) and Senate President Pro Tem Marc Basnight (D-Dare)–the two leaders who appoint the commission members–say they support the Rules Review Commission’s increased power and believe there’s a need to rein in rule-making.

“It’s the opinion of some in the business community that some of the agencies go too far in making their rules,” says Black. “I think it’s appropriate for us to have a board of legislative appointees looking at that.”

In the first few years after the 1995 change, the average number of proposed rules dropped by about half. Since then, records show that overall, the number of rules has continued to drop over the last decade, though it fluctuates up and down from year to year. Between July 1, 2003, and June 30, 2004, the RRC reviewed 1,271 new or amended rules–its lowest annual total since 1996-97.

Basnight says fewer proposed rules show the commission is doing its job.

“The agencies are more conscious and more concerned about what they write,” Basnight says. “My biggest concern is that people understand: Rules govern many facets of their life, and the common man should have a place in this government. I believe they bring that kind of view.”

Some agency leaders say the RRC’s charge to curb rule-making translates into a legislative directive to boost growth and limit regulations on industry at any price.

“The very creation of the RRC and the powers given to it says something about the business community’s influence–you won’t find any card-carrying environmentalists on that commission,” says David Moreau, a UNC planning professor who has chaired the EMC for 12 years. “This is a strange animal to create and give it veto power.”

Longtime environmental activist and former DENR secretary Bill Holman has a pet name for the animal. He calls it “a wholly owned subsidiary of the North Carolina Home builders Association.”

Even though the number of rules the commission outright rejects is a small percentage, its perceived pro-industry bias limits rule-making by its very existence.

“This whole process has dampened the enthusiasm of agencies to even try to address problems because they know the roadblocks that lie ahead,” says Todd Miller, executive director of the N.C. Coastal Federation. “This board is perfectly designed to do what they are supposed to do.”

One roadblock is the sometimes-endless tinkering with language changes, which results in long delays.

“One problem with the way the law is written is that they can take as many bites of the apple as they want,” says Moreau, a respected expert and noted author on water resources and pollution. “This is a board with no expertise in what we’re proposing, and they keep asking for more and more changes.”

Others say they see a trend that raises disturbing questions.

“The Rules Review Commission has gotten dangerously close to looking at rules and asking, ‘Are they a good idea? Is this good public policy?’” says Ran Coble, executive director of the N.C. Center for Public Policy Research. “That’s what the legislature is for.”

Though other public and private interests clash there, too, the Rules Review Commission has become a well-worn battlefield where business interests that profit from residential and commercial growth fight for their aggressive and well-funded agenda. And when it comes to the RRC’s evaluation of environmental protections, the growth industry has two distinct advantages over its opponents: Its leaders authored a lot of the board’s operating procedures, and its influence over the legislators who appoint the board members has grown steadily over the last 10 years.

“Changes to the Administrative Procedures Act have had the effect of driving all the decision-making back to the legislature, where the development lobby, because of campaign finance, has disproportionate influence,” says Grady McCallie, a policy analyst with the N.C. Conservation Network, a broad coalition of 120 environmental, community and justice groups across the state.

Over the same decade that the Rules Review Commission’s power has grown, land developers, home builders, road-construction firms, real estate brokers and other growth industries have continued to gain political leverage through campaign donations and lobbying expertise.

Between 1994 and 2004, the Realtors PAC and the home builders’ PAC increased their donations to legislative campaigns by nearly five-fold, according to an analysis by Democracy North Carolina, a non-partisan, nonprofit watchdog group that monitors money in politics.

“All the money from individual developers, real estate dealers, road builders, contractors–it adds up to a large pile, and it’s generally homogenous money, toward a common pro-growth, anti-regulation agenda,” says Bob Hall, the research director for Democracy North Carolina. “Among all the special-interest sectors, the sprawl lobby is the single largest source of campaign money in North Carolina politics.”

In the 2004 election cycle, the Realtors PAC invested $275,880 in legislative campaigns, and the home builders put in $261,692, a combined total of $537,572, compared to a total of $117,335 10 years ago. Roughly three out of four legislators received money from those two groups during the last two election cycles, according to Democracy N.C.’s analysis of data from the State Board of Elections.

The home builders’ association’s executive vice president and general counsel, Mike Carpenter, and its government affairs director, Paul Wilms, regularly rank in the top 50 most influential lobbyists in an annual survey done by the N.C. Center for Public Policy Research, an independent nonprofit.

In its most recent report for the 2003 session, only four organizations had two or more lobbyists ranked in the top 50–the home builders, N.C. Citizens for Business and Industry, the governor’s office and BellSouth.

“When you’re talking about 567 registered lobbyists, anybody who’s got two lobbyists ranked in the top 50 has got a lot of clout,” says Coble, the policy group’s executive director.

It shows. In a nationwide study by Smart Growth America in 2002, two Tar Heel metro areas landed in the top three cities with the highest sprawl factors: the Triad, at number 2, and the Triangle, at No. 3.

The N.C. Home Builders Association brags openly about its political power on its website, noting that not one bill that the group opposed in the 2003-04 session succeeded, while every one of its initiatives did: “The tenacity and skill with which NCHBA’s governmental affairs staff carries out the legislative priorities and directives of NCHBA’s legislative committee is an awesome spectacle to witness … It is safe to say that no other trade association has as broad a spectrum of issues in the General Assembly as NCHBA, and none are as successful or influential.”

That influence gives the home builders’ group confidence that it doesn’t have to accept unfavorable regulations, says Besse, who has served on the EMC since 1993.

“Most other industries are more willing to approach it from a negotiating standpoint, and you can work with that,” Besse says. “Where the development lobby differs is they say, ‘If we can’t compromise this out, we won’t accept this-and-such; we’ll just go to the legislature.’”

Among other ways that it advances a pro-growth agenda, that kind of leverage also ensures that industry leaders have the ear of those who appoint the Rules Review Commission members, resulting in a sympathetic board whose own interests and expertise line up with the industries much more often than they do with the environmentalists or the public policymakers.

In making his appointments, Black says he is careful to be even-handed between environmental and development interests, noting that state agencies in general and DENR in particular are “very pro-environment.”

“If it isn’t heavy-laden on one side or the other, everybody’s unhappy,” he says. “Everyone wants an upper hand … If you don’t have some balance, nothing would ever be built anywhere.”

Black’s current appointees to the Rules Review Commission are: Gaston County golf course and subdivision developer Graham Bell, a former legislator; Jennie Jarrell Hayman, the daughter of a former legislator, the wife of a partner in a large corporate law firm in Raleigh and the head of two family-owned real-estate investment companies; and retired Johnston Community College President John Tart, another former legislator and a former Wayne County commissioner.

The speaker appoints five of the 10 seats, which all have two-year terms. Black only has three current appointees because the speakership was split between Black and Rep. Richard Morgan (R-Moore) in 2003, when the last round of appointments took place. Morgan appointed two members: Dana Simpson, a corporate lawyer and lobbyist who was a member of Morgan’s legislative staff, and Lee Settle, a retired restaurant-industry executive in Pinehurst who just helped found a venture-capital bank in Durham.

The Senate president pro tem, Marc Basnight, appoints the other five: Gastonia attorney Jim Funderburk; Raleigh development attorney Jeff Gray; Raleigh attorney Thomas Hilliard III; Greensboro corporate attorney Robert Saunders; and Elizabeth City banker, real estate and insurance executive David Twiddy.

In making his five appointments, Basnight says he generally delegates that work to his staffers, and relies heavily on the recommendations of his fellow representatives.

“I don’t personally handle it. Members bring names to the staff, and the staff reviews the list,” Basnight says, asking for a run-down of the list of his current appointees. After hearing the names, Basnight says he hasn’t heard complaints that the RRC is out of balance.

“I’d be happy to look into it,” he says.

A review of nominations, applications, recommendations and other public documents pertaining to RRC appointments over the last five years shows active campaigns for certain nominees. Raleigh attorney Jeff Gray, who often represents home builders and developers and led the RRC’s rejection of the stormwater pollution controls, received nominations from numerous members of the General Assembly with industry-friendly voting records.

Though less visible than the minimal paper trails that document the appointment process–but perhaps even more influential–is informal political networking.

“If someone tells me in the hallway they want to be reappointed, is there a public record?” says Allen Rogers, who tracks appointments in Black’s office. “Often, it’s verbal.”

In the same way that business interests seem to influence who is appointed, they apparently also ensure that industry critics aren’t.

Files in Black’s and Basnight’s offices show that aside from Hilliard, only one other applicant with any background in environmental issues was even considered during the last five years.

Dan McLawhorn, a former DENR attorney, received letters of recommendation asking Basnight to appoint him in 2003 from state Sen. Daniel Clodfelter (D-Mecklenburg) and then-Sen. Eric Reeves (D-Wake).

Holman, the former DENR secretary, also recommended McLawhorn, calling him “an expert on environmental, fisheries, coastal management and public trust law” and noting that he helped write the Administrative Procedures Act on which the RRC is built.

“He’d add great depth to the commission,” Holman wrote.

Basnight declined to appoint him, however.

“It doesn’t surprise me that politics is the name of that process,” says McLawhorn, who’s now a city attorney in Raleigh. “Though I would hope for a better balance than that board has now.”

RRC member Thomas Hilliard III says he and his colleagues are “very, very cognizant of the fact you can’t vote on rules where you might have some stake.”

“You have to, at some point, trust in the integrity of the members,” Hilliard says. “You can’t investigate the interests and the holdings of everyone to an infinitesimal degree. I don’t believe anyone has anything other than altruistic motives to do the right thing. I’m not convinced there’s some sinister element here.”

Some environmental advocates confess they haven’t sought seats because they have so little hope of success, mostly because the main criterion Black and Basnight rely on in making appointments is recommendations from lawmakers, and the small cadre of environmental advocates and progressives on Jones Street are outflanked by big-business lobbyists and donors–and their recipients who are willing to put forth names.

“We’re just outnumbered,” says Dan Whittle, an attorney with Environmental Defense, a nationwide advocacy group with 10,000 North Carolina members.

The current rule-making process is so biased toward industry that the only way it will change is through the courts, says Jane Preyer, the southeast regional director for Environmental Defense.

“We’ve been waiting for a legal case to blow it open,” she says.

That could happen any day.

In 1999, after a pharmacist working a 16-hour shift dispensed an incorrect prescription, the N.C. Board of Pharmacy proposed a rule limiting shifts to a maximum of 12 hours and requiring half-hour meal breaks for druggists–a plan that raised objections from corporate drug-store owners. The rules commission struck down the plan on the argument that the pharmacy board lacked the statutory authority to set such specific workplace restrictions. The pharmacy board filed suit seeking to overturn the commission’s veto and contended that a citizen body appointed solely by the legislature with final authority over executive-level agencies’ rules breaches the separation of powers clause.

“Their ability to stop rules adopted by executive branch agencies violates the constitution,” says Denise Stanford, the lead attorney for the pharmacy board. “We’re contending that rules review is impeding the executive branch’s ability to enforce the law.”

A Wake County Superior Court judge ruled for the commission on the issue of breaks for pharmacists but declined to take up the constitutionality question. The pharmacy board pursued its argument at the N.C. Court of Appeals in April.

Two private-interest groups have filed court briefs supporting the Rules Review Commission’s position and authority: N.C. Citizens for Business and Industry and the N.C. Retail Merchants Association. The Southern Environmental Law Center went on the record supporting the pharmacy board’s opinion about the commission’s unconstitutionality.

A ruling is expected within a few months.

Two other lawsuits arose from the Rules Review Commission’s rejection of the Environmental Management Commission’s proposed stormwater pollution rules in January 2004.

Like the wetlands protections enacted in 1996, the stormwater regulations had the potential for widespread effect on residential and commercial development practices and profit margins, and drew fierce opposition from growth interests from the start. Unlike the wetlands rules, the Rules Review Commission held the power to stop them from being implemented.

The fight began in 1999, after the federal government mandated stormwater pollution control, leaving it up to the states to decide how. A taskforce of stakeholders convened to begin discussing how to best protect North Carolina’s waters from the effects of stormwater pollution, also known as non-point-source pollution. The N.C. Home Builders Association’s representative to the committee blasted the proposal before it even left the launch pad.

“Yes, water quality can always be improved, but not primarily on the back of the development community,” Dent F. Allison, a building supplier, wrote in a dissenting opinion attached to the group’s final report in October 2000. “It would appear to be a thinly veiled means to limit growth statewide.”

Three years later, after many more meetings, hearings, comments and revisions, the Environmental Management Commission brought its final set of proposed regulations to the Rules Review Commission. The rules board sent them back for revisions. Meanwhile, industry reps flooded the commission members with letters and e-mails opposing the restrictions–lobbying that found fertile ground.

“The RRC has tended to strongly defer to the interpretation of affected industries,” says Besse, an attorney by trade who also serves on the Winston-Salem City Council. “And the development lobby has been the most aggressive in seeking to brand administrative rules with their particular interpretation.”

Moreau points out that, unlike the RRC, where there are no particular requirements to be appointed, seats on the EMC are assigned to appointees with certain qualifications in various fields, such as medicine, engineering, agriculture or industrial manufacturing.

That ensures they come from diverse backgrounds; the EMC currently includes a builder, an urban planner and a petroleum dealer, to name just three examples. That balance, Moreau says, means that many agendas are recognized during the lengthy public hearings and debates, leading to rules that encompass many compromises–a far cry from the radical anti-development agenda industry lobbyists often paint of environmental regulations.

“We had three years of public hearings, of balancing public interests and private interests,” Moreau says.

Conversely, the rules commission’s lack of diversity results in a pro-industry approach that stems from the political leanings of the legislature–and the special interests that wield the most influence there, says McCallie, a policy analyst with the N.C. Conservation Network.

“There’s no requirement that they start from a middle place. They aren’t elected; they don’t have a constituency,” McCallie says. “They are well-intentioned folks who come to the table with a particular bias, and there’s no counterbalance.”

Opponents, who had already mounted an enormous three-year-long protest campaign while the stormwater proposal wound through the EMC, renewed their battle at the RRC.

In January 2004, the EMC brought forward a revised proposal, arguing that it had addressed the RRC’s concerns and criticisms. The RRC staff attorneys recommended approval. The commission rejected it by a 4-1 vote. Carrying the motion were Gray, Bell, Hilliard and Tart. Hayman, the chairwoman, voted in the minority without offering a rationale. Two members, attorneys Saunders and Simpson, recused themselves without stating a reason publicly. Saunders works for a large corporate law firm; Simpson is married to the director of government affairs for the N.C. Association of Realtors, which lobbied vociferously against the proposed rules. Two of the three remaining members were absent and one seat was vacant at the time, according to RRC staff.

“Everybody thinks there’s some big conspiracy that I’m an anti-environmentalist because I made the motion in the stormwater rules,” says commission member Jeff Gray, a development attorney who, along with Bell, was publicly accused of having a conflict of interest between the RRC vote and his profession. “But what I am is a real stickler for administrative law. Procedurally, I thought they’d made an error … We were protecting the public’s interests. The content was irrelevant; it was the process.”

After the Rules Review Commission stopped the EMC from enacting its proposed rules in January 2004, legislators took over the process and eventually adopted a much weaker set of stormwater protections that is now in place.

Two months after the vote, the EMC and a coalition of environmental advocacy groups filed separate suits in Wake County Superior Court challenging the RRC’s decision.

In the first, the Environmental Management Commission sought a judicial opinion only on the RRC’s rejection of the rules. In his June 15 ruling, Judge Donald Stephens dealt a blow to the RRC’s power, supporting the EMC’s arguments across the board and remanding the rules back for reconsideration.

“Clearly, the ruling shows that the RRC’s actions to handcuff the Environmental Management Commission’s efforts to regulate stormwater were arbitrary and capricious–and were driven by political pressures rather than sound science and legal imperatives,” says Miller, of the Coastal Federation, which is one of the plaintiffs in the second suit.

Along with Miller’s group, Environmental Defense, the N.C. Shellfish Growers Association and N.C. Trout Unlimited contend the RRC “illegally” stopped the proposed stormwater rules, adversely affecting North Carolina’s waterways and wildlife, as well as its commercial fishing economy. But the plaintiffs take it one step further than the EMC’s case, calling for the Rules Review Commission’s power to be struck down on the argument that a citizen body appointed entirely by legislators and given final authority over rules adopted by executive-level agencies is unconstitutional.

“When you talk to folks in the legislature, they perceive the RRC–and it functions as–a way to rein in the executive branch,” says Amy Pickle, an attorney at the Southern Environmental Law Center, which is representing the coalition. “They are asked to do something that’s essentially a policy judgment call.”

Because of the overlapping arguments, the coalition’s suit has been on hold pending the outcome of the pharmacy board and the EMC cases. With last month’s ruling in the EMC case, lawyers for the environmental groups will now push to have their arguments heard, Pickle says.

The pending lawsuits showcase two high-profile examples of how the rules commission thwarts an agency’s rule-making by directly rejecting rules. Two other controversial RRC rulings also escalated to court challenges of its constitutionality: a group of hospitals and nursing homes arguing that the RRC was inappropriately blocking the state Department of Human Resources from controlling the offering of medical services in 1997, and former labor commissioner Harry Payne’s proposed ergonomics standards in 2000. Siding with Payne, the Charlotte Observer called the RRC “a flawed experiment out of control.”

Payne’s suit was dropped by his Republican successor, Cherie Berry; the hospitals’ suit was settled without addressing the constitutionality question.

It remains to be seen whether the courts will settle that question this time around, but judicial observers and RRC critics both say the time is ripe for a ruling.

“It’s inevitable that it will keep coming up. It’s come up now in three or four instances,” says Richard Whisnant, a former DENR attorney who’s writing a book about rule-making in North Carolina. “The question for the courts is: Is this a separate decision-making body, or is it a legislative veto? And that’s a hard question.”

In the meantime, the current configuration of the RRC–and its political leanings–make protecting the public’s interests a lot more difficult.

One particular power the RRC wields has kept the EMC from updating the wetlands protections that just barely escaped its veto power 10 years ago. The RRC can re-evaluate the whole content of existing rules if an agency asks for even minor changes. EMC members know if they crack open the wetlands chapter, the RRC has the power–and plenty of political pressure–to wipe out the protections entirely.

“The dynamic of what has happened,” Dan Besse says, “is that rules just don’t get put forth when it’s clear that they can’t be both effective and accepted by this gatekeeper that’s completely controlled by private interests.”

If you eat, drink, work or breathe, you should care
Eaten in a restaurant lately? Work for the state? Hold a professional license of any sort, or hired someone with one? Send your kids to day care? Breathing Tar Heel air or drinking Tar Heel water?

The N.C. Rules Review Commission wields the power to approve or strike down proposed regulations affecting citizens and businesses in big and small ways every single day. They include public sanitation standards for restaurants, workplace regulations, licensing requirements for doctors, nurses, dentists, lawyers, real estate agents, safety standards for day care centers, and environmental regulations on business and industry.