The Defenestration of DEHNR

In 2011, a story appeared that seemed to capture the essence of the N.C. legislative leadership’s feelings about DENR, the State environmental and natural resource regulatory agency. The story, first attributed to Speaker of the House Tom Tillis, said that an Appropriations Commitee co-chair, Rep. Mitch Gillespie, had drawn a bullseye on his legislative office window so that it lined up with his view of the Archdale Building, long time DENR headquarters. The story’s intrigue deepened when Rep. Gillespie left the legislature in 2012 to join Gov. Pat McCrory’s administration as an Assistant Secretary …. of DENR. By most accounts, Rep. Gillespie did a fine job while at DENR, as one might expect after his years of paying close attention to environmental issues and asking good questions on the legislative Environmental Review Commission.

But with Gov. McCrory’s signature on the 2015 Budget Bill, S.L. 2015-241, on September 18, DENR went away. It became the “Department of Environmental Quality.” Several of its formerly important functions were transferred to other departments. Over the last twenty-five years, the erosion in size and power of North Carolina’s main environmental agency has been so striking as to count as “defenestration,” with Rep. Gillespie’s office window bullseye adding a new layer of meaning to that term. But the erosion really began in the late 1990s, during the administration of Gov. Jim Hunt.

DEHNR–with the “H” in the middle–was formed by legislative action in 1989, S.L. 1989-727, a bill sponsored by a Representative named  Joe Hackney, later Speaker of the House. The bill abolished the old Department of Natural Resources and Community Development, transferred its functions to the new DEHNR, and added many new functions from the departments shown below to make a truly “big tent” agency:

• Governor’s Waste Management Board, Department of Human Resources.
• Radiation Protection Section, Division of Facility Services, Department of Human Resources.
• Radiation Protection Commission, Department of Human Resources.
• Division of Health Services, Department of Human Resources.
• State Center for Health Statistics, Department of Human Resources.
• Commission for Health Services, Department of Human Resources.
• Water Treatment Facility Operators Board of Certification, Department of Human Resources.
• Council on Sickle Cell Syndrome, Department of Human Resources.
• Perinatal Health Care Programs Advisory Council, Department of Human Resources.
• Governor’s Council on Physical Fitness and Health, Department of Human Resources.
• Commission of Anatomy, Department of Human Resources.
• Coastal Management Division, Department of Natural Resources and Community Development.
• Coastal Resources Commission, Department of Natural Resources and Community Development.
• Environmental Management Division, Department of Natural Resources and Community Development.
• Environmental Management Commission, Department of Natural Resources and Community Development.
• Air Quality Council, Department of Natural Resources and Community Development.
• Wastewater Treatment Plant Operators Certification Commission, Department of Natural Resources and Community Development.
• Forest Resources Division, Department of Natural Resources and Community Development.
• Forestry Council, Department of Natural Resources and Community Development.
• Land Resources Division, Department of Natural Resources and Community Development.
• North Carolina Mining Commission, Department of Natural Resources and Community Development.
• Advisory Committee on Land Records, Department of Natural Resources and Community Development.
• Marine Fisheries Division, Department of Natural Resources and Community Development.
• Marine Fisheries Commission, Department of Natural Resources and Community Development.
• Parks and Recreation Division, Department of Natural Resources and Community Development.
• Parks and Recreation Council, Department of Natural Resources and Community Development.
• Board of Trustees of the Recreation and Natural Trust Fund, Department of Natural Resources and Community Development.
• North Carolina Trails Committee, Department of Natural Resources and Community Development.
• Soil and Water Conservation Division, Department of Natural Resources and Community Development.
• Sedimentation Control Commission, Department of Natural Resources and Community Development.
• State Soil and Water Conservation Commission, Department of Natural Resources and Community Development.
• Water Resources Division, Department of Natural Resources and Community Development.
• North Carolina Zoological Park, Department of Natural Resources and Community Development.
• North Carolina Zoological Park Council, Department of Natural Resources and Community Development.
• Albemarle-Pamlico Study.
• Solid Waste Management Section, Division of Health Services’Department of Human Resources

The basic idea was to consolidate (almost) all of the environmental and natural resource functions of State government with the public health programs, many of which had overlapping regulatory aims and purposes with the environmental and natural resource agencies. I say “almost” in light of the fact that the Wildlife Resources Commission successfully resisted consolidation and emerged with a wierd “dotted line” relationship to DEHNR, under which it was listed administratively, in order to meet the statutory limit on the number of principal departments in State government, but with express statutory independence from the Secretary of DEHNR.

DEHNR as the “department of literally A to Z” (autopsies, done by the State Medical Examiner’s office, to the Zoo) had an eight-year run. During that time, many efforts were made to coordinate the work of the public health agencies and the environmental agencies, but in this writer’s opinion (I was the General Counsel for this big tent for five of those eight years) the shotgun marriage of public health and environmental protection was never fully consummated.  There are many reasons for that failure to mesh, chief among them in my eyes being different statutory authority and funding sources along with the strong esprit de corps in the public health world. The public health culture is a great attribute for binding together those who work expressly to protect public health, but it creates an insider/outsider, “us versus them” sense around agencies that have similar, complementary, but somewhat different regulatory objectives.  One important counter-example to this generalization about the failure of public health and environmental agencies to work well together was in the several years of extraordinary effort on a proposed license for a low-level radioactive waste disposal site in Chatham County. That big project required much sustained cross-disciplinary effort in DEHNR, and the teams and individuals involved worked admirably well together. There are other counter-examples, but I will cut off my own tangent at this point and save them for anyone who wants to take a deep dive into agency history.

In general, as I saw it, there was more active engagement between the environmental protection divisions of DEHNR and the natural resource divisions, which included Forestry, Marine Fisheries, Soil and Water Conservation, State Parks, the State Aquariums, the Museum of Natural Science and the Zoo.  Yet the missions of these divisions did depart from those of the environmental regulators, despite a shared interest in environmental education. In particular, Forestry and Marine Fisheries have always had a stronger interest in production than in protection for its own sake, and have always flirted with, if not succumbed to, the problems of regulatory capture that inevitably crop up when an agency regulates a more or less unified and strong group of producers. Soil and Water Conservation was historically deeply rooted in agriculture, and so its people were at least sympathetic and sometimes shared many of the production and marketing concerns of agribusiness. Parks, the Aquariums, the Museum and the Zoo all always had visitation goals as their primary concerns. So, while the intent of the 1989 consolidation was a good one, the mega-department DEHNR was not always a happy family.

Governor Hunt knocked the “H” out of DEHNR in January 1997, when he appointed Dr. David Bruton as Secretary of a newly expanded Department of Health and Human Services, which now included most of the health programs that had been transferred to DEHNR in 1989. Many in the public health world surely saw this as a restoration of the natural order of the world, and perhaps it was, but it was reputedly done as a condition of Dr. Bruton’s taking the job as Secretary of the Department of Human Services.  Which brings up an interesting and somewhat obscure fact about state government reorganization in North Carolina: the Governor, as part of the Executive Power in Article III of the Constitution, has some power independent of the legislature:

Administrative reorganization.  The General Assembly shall prescribe the functions, powers, and duties of the administrative departments and agencies of the State and may alter them from time to time, but the Governor may make such changes in the allocation of offices and agencies and in the allocation of those functions, powers, and duties as he considers necessary for efficient administration.  If those changes affect existing law, they shall be set forth in executive orders, which shall be submitted to the General Assembly not later than the sixtieth calendar day of its session, and shall become effective and shall have the force of law upon adjournment sine die of the session, unless specifically disapproved by resolution of either house of the General Assembly or specifically modified by joint resolution of both houses of the General Assembly.

N.C. Const. Art. III, Sec 5, paragraph 10.  I can imagine there were many people besides Dr. Bruton advising Gov. Hunt to make this change, which began the “defenestration of DEHNR.” But to my knowledge, those people did not include the senior management of DEHNR, nor was the change a topic of much legislative debate when it was first announced.

The transfer of the public health divisions from DEHNR to the new DHHS did result in several years of legislative discussion and debate about the environmental health functions, like public water supply and onsite waste disposal, which sit squarely in the scopes of both health and environmental agencies. See, e.g., S.L. 1998-76 (extending a study of the Division of Environmental Health to the 1999 Session). But the prevailing legislative sense in the decade from 1997 to 2007, when Rep. Hackney became Speaker, was to keep DENR together. There was even discussion, as noted in that same 1998 session law, of further consolidating the multiple appointed commissions that have much of the regulatory power within DENR.

As late as 2007, the support for environmental protection in the legislature was still strong enough to continue the work of a Commission on Global Climate Change, whose reporting deadline was extended by the 2006 session of the General Assembly to April 2008. While no comprehensive climate change legislation was enacted, several bills addressing energy efficiency did pass, following the path of the landmark Clean Smokestacks bill in 2002.

2008 marked the last real “pro-DENR as strong, large agency” gasp in the legislature. That year, S.L 2008-282, the studies bill, authorized the Environmental Review Commission to study the feasibility of a fulltime environmental commission, modeled on the Utilities Commission, in place of unnamed existing environmental regulatory programs.

But after the Great Recession of 2008, almost all legislative attention turned to deregulation, believed by some to be a path to economic growth. With the ascent of Republicans to the majority in both legislative houses, in 2011, DENR’s functions (and budget, a topic for later discussion) began melting away like chunks of the polar ice cap.

In 2011, DENR’s Division of Environmental Health (which included the residue of public health functions left after the 1997 transfer) was split between DENR (public water supply), Health and Human Services (onsite wastewater,  radiation protection), and Agriculture. Two other divisions in DENR that liked to think of themselves as “nonregulatory” were also transfered to the Department of Agriculture and Consumer Services: the Division of Soil and Water and the Division of Forestry. Governor Perdue choose not to defend DENR, at least publicly.

In 2012, there were further structural changes at DENR—the Geodetic Survey was moved to the Department of Public Safety, and there was also a robust debate on moving the Division of Marine Fisheries into a combination with the Wildlife Resources Commission. That change was ultimately put into a study and not completed.

In 2013, the legislature directed the integration of two divisions within DENR, the Division of Water Resources and the Division of Water Quality, with the merged entity called the Division of Water Resources. Many viewed this as more the “disintegration” of DWQ than anything else.  DWQ had been split from the old Division of Environmental Management, along with the Division of Air Quality, in the 1990s. It was the paradigmatic environmental protection agency, and likely as not the source of Rep. Gillespie’s ire when he put that bullseye on his window. The venerable Division of Water Resources, on the other hand, long proclaimed itself as a “nonregulatory” agency, although in this writer’s view, even the public provision of information and technical assistance serves a regulatory function, so I have always been and remain dubious about claims by public agencies that they are “nonregulatory.” I do get what they mean, though, when they claim “white hat” status for failing to use State power against individuals and firms.

DENR also moved its stormwater permitting to the Division of Land Resources (including erosion and sediment control) and added a new mining and energy program in Land Resources to tackle the creation of a regulatory program for fracking.

With the budget bill of 2015, “DENR” disappeared entirely, with the remaining environmental protection functions now called the “Department of Environmental Quality,” and the remaining natural resource functions (Parks, Aquariums, Zoo, Museum of Science) and the Clean Water Management Trust Fund going to the Department of Cultural Resources, henceforth the Department of Natural and Cultural Resources — a bit like its ancient predecessor, the Department of Natural Resources and Community Development. Thus ended the long experiment in “big tent” environmental, health and natural resource agencies in North Carolina.

What will be the consequences for the environment, public health and natural resources of the state? Rep. Gillespie and his colleagues, long wary of and even angry at DENR (or DEHNR), can feel some pride in having kicked out the jambs, or blown out the windows, or (choose your favorite demolition metaphor) of the mega-department. In normal modern politics, as in the corporate world and most any other bureaucratic setting, span-of-control and budget size are proxies for success, so the downsizing of DENR sends a clear message of dislike and distrust.

On the other hand, having personally witnessed the extreme managerial challenges for a very thin layer of management at DEHNR attempting to coordinate the work of so many divisions with divergent missions, I am not at all sure the result will be less potent environmental regulation in North Carolina. True that many other legislatively-driven changes, notably budget reductions, statutory authority reductions, and the larding up of regulatory processes with analytic requirements, will have that effect. But in the end, the environmental protection divisions remaining in DEQ have a much tighter focus, as a group, than they have had since the 1980s. Perhaps they will meet their budgetary, authority, process and personnel challenges and emerge as more efficient and effective regulators.