Vermont Legislature SmartTranscripts:

[Rep. Sarah "Sarita" Austin (Clerk)]: We are now live. Good afternoon,

[Rep. Amy Sheldon (Chair)]: and welcome to the House Environment Committee and a new session for 2026. Today, we're going to begin our deep dive into water with our legislative counsel, Michael O'Grady. Welcome back, Michael.

[Michael O'Grady (Legislative Counsel)]: Hi. My name is Michael O'Grady. I'm with the legislative counsel. I am going to stand to do this PowerPoint because I wanna be able to point to certain things on the screen, and I just think that's easier to do from a standing perspective.

[Rep. Amy Sheldon (Chair)]: And I actually I just wanna before you start, ask members to take a deep breath, be open. We have a lot of time with Michael, and I want us to really I had a chance to look at the PowerPoint earlier, and it really helped me. So what I want us to do is we're just like level set with our understanding of water law and where we are in Vermont. So feel free to ask questions. And then we're gonna hear from two other witnesses this afternoon. Have We an unlimited amount of time, but I do want folks to feel comfortable really absorbing what's being presented.

[Michael O'Grady (Legislative Counsel)]: So the chair asked me to do an overview of water and water law water issues in the state. And I'm gonna do my best, but I'm not gonna be able to address everything. And the PowerPoint doesn't include everything I'm going refer to. If you want something that I'm referring to but that's not in the PowerPoint or linked to in the PowerPoint, let me know. I can provide you that resource. But there's so much in this subject matter that I couldn't really put everything into a PowerPoint. And you'll you'll see that as I go through. With that said, ask questions. If something is you know, I'm talking about something and you think it relates to something of interest to you, ask me a question. I should be able to to at least respond and give you information related to this. So let's start. So when the chair asked me to talk about water, was like, what's the best way to, you know, start out organizationally? And I think the best way is to look at ANR at the Department of Environment Environmental Conservations divisions and what they do. You'll see generally there's a lot of, you know, entries here, but it really lists about 12 to 15 divisions at DEC. And when you look at how many of them are involved with water, five of them are involved with water. So five out of 15 divisions at DEC are water related. Now I'm gonna focus on drinking water and groundwater, watershed management, and water investment. But Vermont PFAS, that's a big deal right now. And how to respond to that, how to deal with it in groundwater, how to provide safe drinking water, That's a big deal. Village wastewater solutions, you're all talking about housing right now. Wastewater is a big, big driver of housing. So again, I'm not gonna talk about it specifically today, but that's a pretty important division at DEC. So let's talk about the drinking water and groundwater. So first, the mission of this division is to protect human health and the environment for current and future generations and protect the quality and quantity of groundwater and regulate wastewater disposal. Well, that's great. But when you look at the specifics of this division, they do a lot. They do PFAS and drinking water. They do public drinking water. And that's just not your municipal public system. It's any public drinking water system. And that includes schools. That includes business offices. That includes basically any place where people are gonna be served by a well and that they're gonna be there for a general specific amount of time or expected amount of time or a certain amount of people will be coming in and out of that structure. So that's they do that. They do wastewater system and potable water supply. That's your wells and your septic. They do indirect discharge. That's when you're you're discharging onto the ground, and it's not necessarily into a water or otherwise. This is very important for community based septic systems. That's basically what a community based septic system is given a permit under indirect discharge. But if you're gonna have housing on community based systems, indirect discharge is the permit that you're gonna need. Underground injection control, discharging waste into the ground. Groundwater, just extraction of it, use of it, irrigation. So those are the major things that this division does, and they do a lot. How do I know that they do a lot? Because this division issues the most permits of any division at ANR, and nobody knows that. And they do really pretty well. You know? Even though you're hearing from constituents about the cost of a septic system or I can't put my well in because my neighbor overshadowed my property, this division issues most of its permits, like, 93% of the time on time. So and it's I'm not talking about, like, five permits or 10 permits. It's, like, close to a thousand permits a year.

[Rep. Rob North (Member)]: What do you mean by your neighbor overshadowed your property?

[Michael O'Grady (Legislative Counsel)]: So underneath the wastewater system and portable water supply program, you need to have certain isolation distances around your well or your wastewater system. If you put your well in first, your isolation distance can extend onto neighboring property, and they cannot do certain activities in that area. And that's called overshadowing.

[Rep. Amy Sheldon (Chair)]: Can you give us an example of an underground injection?

[Michael O'Grady (Legislative Counsel)]: Well, we don't do it much in Vermont. But they're you know, the the most recent kind of high profile one was out of Hawaii. There was a wastewater plant that was injecting waste into the ground, into wells in the ground, and they thought that it was being dealt with. But it turns out that it was seeping out into the ocean. And so that's you there's all types of injection, underground injection, for waste or water. Or or sometimes when you're gonna store gas, you can store gas under an underground injection control.

[Rep. Amy Sheldon (Chair)]: But we don't do that here.

[Michael O'Grady (Legislative Counsel)]: We don't do much of it at all. We have a program. It's a delegated EPA program, but we don't do much of it in Vermont. Next division I wanna talk about is water investment. You know, like, what what is this? You know? Do we really need a whole division for water investment? When you look at this program, the answer is clearly yes. Because the first thing that they do is that they coordinate the investment of state and federal funding and all types of clean water and drinking water infrastructure in your town's municipal discharge system treatment plan, in your town's public water system, and community based water systems, either water or wastewater. They do all of that, and they used to only provide their assistance to municipalities, but the federal government has started basically allowing more activities to be refunded underneath their money, which allows the state to fund more programs. So you'll get some private private funding for wastewater and water underneath this program as well. But but what are they what are they investing? You know? What what is the state and federal funding? Well, the first big source is under the Safe Drinking Water Act and the Federal Clean Water Act. One of the main components of both of those acts is it gives money to the states. Every year, the state gets money from the federal government based on our population. So that puts us, like, you know, down there on the list of of states that receive funding. But in 2025, drinking water got $40,000,000. 2025, clean water got $20,000,000. We generally get between 20 and $30,000,000 a year for both of those programs every year from the feds. That sounds like a lot, but it's not enough. It's so much not enough that ANR had to come up with a rule on how it was gonna prioritize applications for this money. And then so they have a a stand alone rule that grants points to applicants and creates a list that that municipalities or applicants climb each year as as other projects. Like, each year, you get an additional point for the the year you've been in the application process. And that drives awards to these municipalities, your municipalities, pretty much every year. Now one of the things that people like to think about is like, oh, we have this money and, hey, we wanna prioritize housing. So this year, we're gonna say that housing from now on is gonna get priority over everything else. And that's when your town managers come to you and say, hey, I've been in this program waiting for seven years, and now you're gonna tell me I have to wait another five to get this money to to redo my public water system? So remember that the money is there. It's there for your towns. It's there for your water and wastewater, but it can't just be grabbed. And when you try to grab it, which I've tried to draft, your towns tell you don't do that. Now another aspect of this this division, there's two kind of unusual aspects of this division. They run the dam safety program, And they Ben Green, they do the rules. They do the inspections. They're doing the permitting. Water investment does that. And why does water investment do that? Because the other kind of unusual aspect of this division is they house facilities engineering. This whole program used to be called facilities engineering, and nobody knew what the heck it was. What is facilities engineering? It's literally the engineers for the entire agency. They are the people that design things for the state, for a and r, like state parks, like water systems for state lands. There are engineers that do that, and they help they help the dam safety program. The dam safety program needs its own people, But that's why dam safety is here because the engineers are here, because the engineers helped move this money. So the engineers, dam safety, water investment, you know, you would think which two things don't belong together. Well, they actually do belong together. And then the next one, this is the diva. This is what everybody knows. This is the high profile stuff. This is the stuff you hear from your constituents about. This is the stuff in the media. It's the brown water pictures. It's the CSOs. It's all of that. This is watershed management.

[Rep. Amy Sheldon (Chair)]: It's It's a diva? Yeah.

[Michael O'Grady (Legislative Counsel)]: It's CAFOs. It's lakes and ponds or wake boats, aquatic nuisance. That's that. Monitoring and assessment. You might not know what that means, but that's where you get TMDLs. That's where they go out and they assess whether or not the state is meeting its water quality standards. And then if not, determine what the plan should be. Rivers. That's stream alteration. That's NFIP, National Flood Insurance Program. It's river corridors. It's it's buffers. Stormwater, you've all heard stormwater. We'll talk about that in a little bit. Wastewater, wetlands. We're gonna talk about wetlands a little bit later. This is the high profile stuff. Now remember, the groundwater division issues more permits than these people do. These people, this division, they get all they get all the glory and the not so. And why? Why do they do that? Sorry. Well, they're responsible for protecting, maintaining, enhancing, and restoring quality of Vermont's surface water. When later on, you'll see how much of that is in the state. And it's inherent in this effort to support both healthy ecosystems and public uses, Vermont's 800 lakes and ponds and 23,000 miles of rivers and streams and 300,000 acres of wetlands. Those numbers are a little, little out of date, but we'll come back to them a little later on. So there are three specific high profile wetlands, rivers, and lakes. Then we talked about stormwater and wastewater. We talked about monitoring assessment. Now stormwater and wastewater, they run permitting programs. You're all familiar with those permits. I I believe we'll talk about them in a minute. But they also provide operational support services. They talk to people about how to do what they need to do, what permits they need to do, how to get money. This isn't just a regulator. It's somebody that supports the regulated community as well. Now, why are we doing this? Why? There's the underlying, well, we all need to drink water. We all need to discharge our own water. We all need to eat, which requires water, etcetera. But there are specific federal requirements under both the Federal Cleaning Water Act, federal Safe Drinking Water Act that require states to do this. I talked to you already about how the state regulates public water supplies and public water systems. That's because it's required by the Safe Drinking Water. The Safe Drinking Water Act doesn't want people going into buildings, going into structures, drinking water for public use and it being unhealthy or contaminated. So they develop standards that the states have to follow in order to properly run public water systems. Now EPA has what's called override authority for drinking water. They can come in and say, hey, you're doing this wrong. We want you to do it this way. But generally, they kind of delegate these programs to the states. So the states can adopt stronger standards if they want, as long as they're otherwise compliant with the Safe Drinking Water Act. And you've seen this. PFAS, when it first was an issue in Bennington, the state was one of the first states to come up with a PFAS drinking water standard. The feds have subsequently gone way past what Vermont did. Vermont was at a 20 parts per million standard. The feds, over the past three or five years, went to five parts per million for five different types of PFAS. So we were kind of first in time, but we're no longer the most stringent or most protective.

[Rep. Amy Sheldon (Chair)]: Is it parts per trillion?

[Michael O'Grady (Legislative Counsel)]: It is parts per trillion.

[Rep. Amy Sheldon (Chair)]: That was from the vice chair just amplifying his notes.

[Michael O'Grady (Legislative Counsel)]: And I should know that because the groundwater protection strategy and rule is up for Elcar approval on Thursday, and the main changes are about lowering the PFAS standards to the federal standards.

[Rep. Amy Sheldon (Chair)]: That's what's being proposed in that rule?

[Michael O'Grady (Legislative Counsel)]: Yes. Yes. With some other technical change. And the other federal requirements come from the federal Clean Water Act. And the federal Clean Water Act does a lot of things, and I'll talk about that in a minute. But it was first enacted in 1948, and it was called the Federal Water Pollution Control Act, and that's still technically its name. Well, does anybody know what happened in, like, the late sixties and early seventies that spurred the Clean Water Act? The first caught fire. The Cuyahoga River caught fire. And then and they couldn't put it out. It burned for three days. And, apparently, it wasn't unusual for rivers to catch fire back prior to the Clean Water Act, but it was unusual that they couldn't put it out for three days. And then Time magazine put a picture of it on the front cover of Time magazine, and that led to a lot of popular sentiment for regulation of clean water and discharges to clean water. The Federal Water Pollution Control Act prior to 1972 was kind of a a it wasn't really regulator based. It was like, hey. Businesses, you're required to do this. These are the things that you need to do to take on, and there wasn't a lot of enforcement of it. After 1972, EPA became involved, was created, and became the enforcer of multiple different aspects of the clean water. And so the Clean Water Act is intended to prevent, reduce, and eliminate pollution in the nation's water in order to restore restore and maintain the chemical, physical, and biological integrity of the nation's water. And it does that in multiple ways. It requires states to adopt water quality requirements. It requires permitting. It requires wetlands regulation. It requires funding. Remember, we talked about the funding. And there are other requirements as well. And we'll talk about one of the others a little bit later. So let's talk about the permitting. So these are called NIPTIS permits. Federal Clean Water Act has a National Pollutant Discharge Elimination System permit system. And there's generally five or six of them. I used to say five because I never included the CAFO program because we weren't actually permitting. But now I say six because last year you came up with five. And you'll only see five here because six is on the next page. Six six is a big one. So it's discharges from point sources. So discharges from a pipe, from your wastewater treatment plant, from a ditch, from a conveyance. Those types of discharges require a perm. Construction stormwater permit, if you are going to to disturb one acre or more of land and just earth disturbance, and it's pretty much any kind of earth disturbance other than farming, then you have to comply with what's called the stormwater general permit. It's practices that you implement to control the runoff from that property. The multisector general permits also have stormwater permit. This is controls for different categories of businesses. You know, think about it. If you're running a concrete plant, you have dust and waste, and and if it rains, you need to control that so that that doesn't run into your surface waters or groundwater. Municipal separate storm sewer permit, it's also a storm water permit. This is a requirement that municipalities of certain sizes implement certain stormwater controls, like street sweeping, like emptying catch basins, like education. So this is generally only for municipalities of a certain size, and I'm going to talk about how it's been used in Vermont. And then last, the concentrated animal feeding operation permit for certain farms that have an actual discharge or proposing an actual discharge. We've dealt with that last year. You're gonna see some requested changes from EPA this year, really kind of technical, but this isn't going away. You're gonna be coming back to this program kind of regularly until it gets up and and really operating smoothly. So what's that sixth permit? It's called residual designation authority, which means nothing when you look at it, just on a language. But this is EPA and ANR. ANR has this authority to to decide that certain discharges that might not require a permit under these five still require a permit. So when do they get to say that something that's not otherwise jurisdictionally requiring a permit needs a permit? Three three areas. The discharge contributes to a violation of water quality standard. So the surface water that is discharging to is impaired, and this discharge is contributing to that impairment. And our EPA gets to say, hey. You need a permit even though you didn't need a permit under the other permits. The other is the discharge is a significant contributor of a pollutant to water. It's not even an impaired water. It's a significant contributor to any water. And then last, controls that are needed for the discharge based on waste to load allocations that are part of the TMDL that address the pollutants of concern. Does anybody does this trigger anybody? Does anybody believe, oh my

[Rep. Rob North (Member)]: god, triggers them. Why

[Michael O'Grady (Legislative Counsel)]: am I asking? Because when the state had to come up with controls to meet the EPA TMDL for Lake Champlain, they had to come up with a waste load allocation to show that the water was moving from impaired for phosphorus to something that was not impaired. And they developed a ton of waste load allocations that were not regulatorily required by the Clean Water Act. Is anybody thinking of one yet? The three acre permit.

[Rep. Sarah "Sarita" Austin (Clerk)]: Mhmm.

[Michael O'Grady (Legislative Counsel)]: Three acre permit is part of that waste load allocation. Now that three acre permit wasn't wasn't required under residual designation authority. But if you take that three acre permit out of the waste load allocation, then you don't meet the TMDL any. And remember, it's not the state's TMDL. It's EPA's TMDL. What's the easiest thing for EPA to do if you repeal the three acre permit? Ho ho ho, everybody still needs a permit because you're all part of a wasteland allocation. We have the list. We know who you're gonna be. So if you're gonna amend the three acre permit, you're gonna have to be very careful about how you replace that waste load allocation so that EPA is agreeable to it. Otherwise, they have RDA. They can just say, well, it's great that you don't want it, but we do. And there you go. So you're in a bit of a box finding out what that waste load allocation substitute is gonna be really important. And the secretary has said that, but she said it in very, very nice ways. Right? And but I'm I'm telling you, it's not so nuts. So Clean Water Act permitting, it it it operates largely through those five programs with VRDA six as a hook. EPA may delegate that permitting to a state, and in '74, EPA delegated it to ANR. Approximately 47 states have been delegated. And one of the things that's you know? What does New Hampshire do? You know? New Hampshire doesn't do all these permits. They didn't get delegated for everything. Maine didn't get delegated for everything. And so you will hear people saying, we can just go we can just do what new Maine and New Hampshire did. But if you do that, you have to give up everything. You don't have you don't get to pick and choose. And I know that because twelve, thirteen years ago, ANR tried to get rid of underground injection control and said, We don't want it anymore. We don't wanna be delegated anymore. And EPA said, That's fine. Give us everything else. And we basically said, oh, well, we'll keep underground injection control. So think about that. Somebody said, let's do what New Hampshire does. Let's do what Maine does. Well, that means giving up state control these per per And to

[Rep. Amy Sheldon (Chair)]: be clear, those states are still permitting. It's just the EPA is still

[Michael O'Grady (Legislative Counsel)]: permitting it. Doing the permits. And EPA still, on a delegated state, retains oversight over the the state. So if and this has happened. The the state regulator says, hey. Wastewater treatment plant, you need to meet this standard. And EPA said, no. That's not good enough. They need to meet this standard. And so EPA can come in and say to a state, you're not you're not regulating adequately. But now outside of the Clean Water Act, there is multiple specific state created programs. These are not driven by the Clean Water Act, not driven by the State Drinking Water Act. These are policy decisions that the general assembly made to regulate these activities because the general assembly determined it was necessary to protect surface water, environment, and public health. The first is the state stormwater operating permits. This is where if you're going to construct or expand new impervious surface by a half acre or more, you need to get an operating permit from ANR. That's an ongoing permit that is intended to ensure that storm water running off your property is properly controlled. There's state permitting for activities in significant wetlands or buffers, and we're going to talk about that in a second. There's stream alteration permits for altering the course of the water course. After Irene, you saw tons and tons of equipment in the rivers. And to an extent then, municipalities had authority to allow that. There was this really, really old statute that said municipal public works officials could approve flood control and dredging. And so one of those town managers were like, k, Go for it. And that was not appropriate according to ANR, and so that old authority has been removed. And if you're gonna be doing activity in a water course, you're gonna need a stream alteration permit. You're probably gonna look at this in the DEC bill because they want a little bit of refinement of that program. Lakeshore land permits, this was almost the apocalypse when we were going through it. Property owners were infuriated. It requires some vegetative buffer around Lakeshoreland to help control water runoff. And it is was a very difficult program to enact, but it has been running relatively smoothly and been relatively successful. And then the state also has its own large farm and medium farm permit. After last year, if you're not a CAFO, you still may need to get a permit from the Agency of Agriculture in order to run your farm. And if you don't need a permit, need to comply with the required agricultural practice. So another aspect of the Clean Water Act is its water quality. And this requires every state to establish its own standards for how the waters are going to be measured for water quality. And then the state has to regularly assess whether the state waters meet those standards. If they don't, they have to develop a plan, usually a TMDL. There are a couple of other alternatives, but usually it's a TMDL to clean up waters that don't meet the standards. So what are the standards? Generally, the standards are based on the uses of the water. So what are the traditional uses of water in Vermont? And the Vermont Water Quality Standards have said it's public water supply, it's aesthetics, it's irrigation, it's fishing, it's boating, it's aquatic biota, swimming, aquatic habitat. Now you can add other things to this list. Like, you're in the Tennessee Valley, one of the things that's on this list is hydroelectric power. If if you're out in Washington, of the things is hydroelectric power and maybe even nuclear water cooling control. So that's one of you can add things as designated uses. To take a use away, though, is hard. To say that, oh, we need this activity and this activity is going to impair this use, why don't we just get rid of that use so there won't be an impairment? That's hard. There's a process under the Clean Water Act called a use attainability analysis. You have to look and see whether or not you can meet that use and do that activity. And if you can't, you have to show what the significant economic justification is to eliminate that use. Not easy.

[Rep. Amy Sheldon (Chair)]: Sarita? So

[Rep. Sarah "Sarita" Austin (Clerk)]: AI uses a tremendous amount of water. And I'm just wondering, how is that regulated? Who says whether you can use public water for cooling down computers or the technology?

[Michael O'Grady (Legislative Counsel)]: So so a and ANR will be doing that. So say you're drawing it from surface water, you have to discharge that water at some point. When you do that, that discharge needs to meet a certain standard. And that happened at Yankee. When Yankee was operating, they were bringing in water from the Connecticut, discharging it after it had cooled its reactor, and it had to meet a thermal standard before it could be discharged back in. If it's groundwater, it really depends on whether or not you use it all. Say it goes to steam, and then it's steamed off, well, pretty much the thing that you're gonna be regulated under that kind of activity is your extraction, how much you are extracting. If you're extracting more than, 43,000 gallons a day, something like that, you need a permit. It's called a large volume groundwater permit. And then when you release steam, you're potentially going to need an air pollution control permit. So depending on your activity, you're likely going to be regulated by ANR. And if you're just pulling the water out and then applying it to land, well, a couple of years ago, you created a surface water permit.

[Rep. Sarah "Sarita" Austin (Clerk)]: Okay. That's discharge, but what about use? I mean, can anybody just use, you know, water in terms of I mean, I understand they have to get a discharge, but who kind of regulates?

[Michael O'Grady (Legislative Counsel)]: That's that's a great question because I'll come back to that in one

[Rep. Sarah "Sarita" Austin (Clerk)]: minute. Mhmm.

[Michael O'Grady (Legislative Counsel)]: So when the states come up with the water quality standard, they they base their standards on classification of the water. So each class water has different standards for what it's going to need to do in order to meet those those traditional designated uses. So a higher water quality classification means that you are achieving those uses at a higher rate or a higher standard. And it's kind of intuitive in how the waters are classified. So in A1 water, the top, it's waters under natural condition that have significant ecological value. They're meeting everything, and they're meeting it at a high level. Similarly, Class A2 that are suitable for public water source with only some disinfection or other required treatment. B1, waters in which one or more uses are demonstrably and consistently higher quality than Class B2. And then Class B2, it's good, but it's not as good as the other three. And so the Vermont Water Quality Standards basically have different standards for the different classes. And that's important because, well, most of the waters in Vermont are classified as B2. Guess who did that? You all did that. The General Assembly said, we're gonna start with the default that all waters are good. We're not gonna start with the default that all waters are that high. And but according to the annual report 2023, a 139 waters currently are b two, but have standards are meeting standards that qualify for a higher classification, and they should be reclassified. Why should they be reclassified? Because underneath the Clean Water Act and state law, if a water meets a standard for an existing use, that use must be maintained and protect protected. If it does not meet the standard, then the water is impaired, and you have to bring that water back to the standard. So this is not just a concept. This is a requirement. It's called the antidegradation policy. So if you can't let water be degraded so that it used that it used to, that it once supported is no longer supported. You have to maintain that use, and you have to make sure that that water quality maintains that use, you can't let it degrade. Anti degradation. So our state water quality standards have an anti degradation policy, but federal law requires both the policy and an implementation. And you've asked for that implementation in rule since 2016. And it's not in rule. It's in a procedure at ANR. So one of the issues that's I'll just say it's ongoing is implementation of the anti degradation policy, whether it should be by rule or some other method.

[Rep. Amy Sheldon (Chair)]: Michael, were you finished? Go ahead. Sure. On the 139 waters that currently meet a higher standard, don't they still have to meet that higher standard when someone comes in looking for a discharge?

[Michael O'Grady (Legislative Counsel)]: Yeah, you can't let it degrade past that higher standard. If it's meeting it, they have to to continue to meet it. But how they do that It's not is not really transparent as it should be because you didn't have an implementation that went through a public process. They adopted that procedure pretty much on their own. And so you don't have these gentlemen providing comment on what it should do and how transparent it should be. And so it's there. They say they implement it.

[Rep. Amy Sheldon (Chair)]: We don't know how.

[Michael O'Grady (Legislative Counsel)]: And could it be better? But it's not it's not it's not all bad. It's really not. Because the Clean Water Act requires ANR to go out every two year and to assess all the waters to determine what their status is. And they look at 7,100 miles of rivers and stream. You know, earlier, you saw that there were 800 lakes. Well, now there's 446 lakes that are 10 acres or more and 206 that are over. So we should get five acres. There's 242,000 acres of lakes, reservoirs, and ponds, 300,000 acres of freshwater. Most of them meet the state standards. Some do not.

[Rep. Rob North (Member)]: And there are

[Michael O'Grady (Legislative Counsel)]: lists for those waters that don't meet standards. The big list is called the three zero three list. And that's the list of waters that are impaired but don't have a TMDL and that need a TMDL. Now water doesn't have to be impaired for the entire length and breadth or surface of the water. Just segments of that water can be determined to be impaired. And so when you look at the three zero three list, it's pretty long. It's pretty long. But it's not the full river. It's a segment of the river. It's a part of the lake, a segment of the lake. But it's still pretty long. And the other one, the list I wanted to point out is the altered water. It used to be called stressed waters. I like to stress the waters better if they were stressed. But now now now they're altered. It's when something like an aquatic invasive or a flow issue, like drought, affects that water and and and creates pressure on the designated uses for the the species in that water. So it's not necessarily impaired, but it's stressed. And you know how stress works, ultimately. So that's that list as well, and there are a couple of other lists also. But even though it's okay, pretty good, most waters are meeting standards, it's not all funky to worry. And many of these water quality issues remain, whether it's anti degradation implementation, whether it's three acre and how to to balance that waste load allocation and the equity of it. It's CAFO. I said that that's going to be coming back to you from time to time regularly. Reclassification, what's going to happen with those 139 waters? Should they be reclassified when? How? That's gonna be a big rule if it is. But other issues that are ongoing need to be addressed by the general assembly, the courts, or the relevant agencies. And and they include something called section four zero one. Remember earlier, I said that there's other aspects of the Clean Water Act that aren't permitting, aren't water quality standards aren't funding. This isn't really a permit. It's just the state saying that something meets the water quality standards. And what is the something? It's when a proposed federal license or permit involves an activity that may discharge into waters of The United States. This is called a four zero one SERP. And you'll see here, it's any time that there's going to be any activity that results discharge into navigable water, the permitting agency, the federal permitting agency, has to seek a certification from the state which the discharge originates, that it meets all of these numbers. All those numbers are the Clean Water Act requirements for water quality standards, excellent limitations, product, biota. So it's basically meeting the water quality standard. And the state is supposed to provide it within a reasonable period of time, which shall not exceed one year. Now, the courts have given states some leeway there, But the administration has been trying to push back on that. So this can be a controversial issue. And so ANR DEC is the entity that runs the CIP four zero one CERT program. And you'll see if you're going to need a permit from the Army Corps of Engineers for Rivers and Harbors Act or Army Corps of Engineers for wetland discharge, or FERC for hydroelectric power license. So if you need any of those permits from the Feds, you have to go to ANR to get a four zero one certification. Now, it doesn't mean that you have to meet all the standards exactly when you apply for cert. ANR can say, hey, you meet most of our standards, but you don't need this one. But if you do this with your activity, you'll meet our standard. So it's approval and sometimes with conditions, and actually most of the times with condition. And those conditions can cause some digestive issues. It can cause some regulatory issues. It's like because, for example, you're looking at right now, you're required to study over the past four years about whether the state should assume ownership of the Green River Dam and dike in order to maintain the Green River State Park. Well well, why why were you looking? Because the water and light had a had a dam at Green River that was producing hydroelectric power, but their FERC license was up. Now, FERC licenses can range from five years to forty years. So Marsville had I think they had a thirty five year permit. But what happens in thirty five years? I mean, I've been here for almost twenty five, and I've seen a ton of shit happen. And you're gonna see things that change a lot in thirty five years. And among those are the water quality standards and how those are going to be applied to a hydroelectric project using a surface water for its power. And when ANR reviewed the Green River application for a renewal of its FERC permit, they said, hey, you you generally meet the standards, but we need these conditions for you to implement in order to meet all of the standards. And one of them was about aquatic habitat. So in the wintertime, Morrisville was drawing down the lake, down the reservoir, in order to have it operate. They were allowed to draw down up to about 10 feet. And that allowed them to continue operating in an economical way without to generate power, without creating issues for its future or driving up rates for its ratepayer. Well, ANR and its four zero one first said, no. You can't draw it down. Can't draw it down in the wintertime anymore because it's clear that there's aquatic habitat that's available that when you draw it down by that, you damage, and therefore, the water is impaired for aquatic habitat. They subsequently went to say, oh, 1.5, and Green and Morrisville said, oh, we'll we'll we'll be happy with six. And they litigated that. And the Supreme Court said that AMR had the authority to require the 1.5. And Morrisville said, well, we can't operate it economically anymore. And so they surrendered their FERC license. They no longer have a license to generate power. And this study was to look at what options there are. One of the options is the state takes ownership, runs the dam, maybe gets a hydroelectric permit of its own, maybe not. But the Green River State Park would continue. Morrisville, Power And Light, Water And Light wouldn't have the liability issues that come with owning a dam, which we'll probably talk about later in the session. And so but this this report didn't recommend anything. It just said these are your four alternatives. It's, like, classic. Classic. And and but one of the things that they're recommend or one of the alternatives, remove the dam. Take the dam out. If the dam's a liability, then take it out. What's that to to Green River State Park? That would require redesign of that park. So so there that's how four zero ones can affect activity in your it's not a permit. It's not a license. It's just a certification that you meet a certain standard, but it can really affect how an activity is ongoing. And remember, FERC licenses, five to four years, how many more of these are gonna happen? What other dams that are producing electricity right now will be subject to something like this. It's a real possibility. And you'll see there's controversy over the four zero one and whether or not it's weaponized. There was members of congressional New York districts who wanted Governor Hochul to basically use water quality certifications to kill the natural gas pipeline, which, of course, drove certain people in the current administration a little bit crazy. And they were like, no. You have to use water quality certifications to ensure water quality, not as a land use tool. It's not something that you can use as an alternative regulatory device. And that's what this letter from Peggy Brown from May 2025 said, don't do that. Focus on using it for water quality. But at the same time, the current administration is are holding public stakeholder processes to look at whether or not the certification process should go back to what it was a couple of years ago. The advocates are basically saying, is like an attorney general from Washington, a huge state with huge hydroelectric power. They're like, Don't change it. We know how it works. We know how it works in Washington. You don't need to keep ping ponging it back and forth. Just keep it the way it is because we know how to do it because we've been doing it this way for fifty years. But you still have this concern about this weaponization, which is which is real. It's it's real. Now let's talk wetlands and the executive order promoting housing construction rehabilitation. I think most of you, if not all of you, are aware of it and how it intended in eastern part or part of it to streamline environmental review, especially with regard to development in wetlands. And the key provisions in the EO said that CRABS two wetlands are limited to those features identified on the most current Vermont significant wetlands inventory, and no state wetland permits are required for impacts to unknock past two wetlands. We'll talk about why that's an issue in a second. The other thing that the EO said is that the buffer zones around class two wetlands are reduced to 25 p. Said the projects must comply with federal wetland requirements, and then ANR shall commence rulemaking to ensure that those wetlands are established and ruled prior to the expiration of its executive order. Well, this is a significant policy decision. But you are the supreme policymakers for the state. That's what the Constitution said. You are the one that make the policy decisions, and then you delegate authority to state agencies to implement that. Well, here's Before I get to the statute, when ANR looked at the EO, they basically said that they couldn't do it immediately. They couldn't do what the EO says do immediately, and that they need to amend rule in order to implement that EO. And they say, till the rule is adopted and the current rules are in phase. So they were they realized, hey. We can do this on our own. We have to go through a process. But but statute controls over. So even if they adopt rules, those rules have to be consistent with statute. And that's important because statute says if a person's going to conduct or allowed to conduct an activity in a significant wetland, get approval from DEC to do so. And a significant wetland means any class one or class two wetland. Class one wetland is only created by rule. It is not easy to do, and it has significant restrictions on what you can do in a class one wetland. So there's not a ton in class one wetlands, and you don't mess with them because of the significant restrictions on that. So what we are talking about are class two wetlands. So what's a class two wet? It's a wetland other than a FAST one or class three wetland. And I wrote that, and I read that. It's a wetland identified on the Vermont Significant Wetlands Inventory Map. It's on the map. Like the EEO said. Hey, things that are on the map are gonna be are gonna be still subject to the permit. Or the secretary determines to merit protection pursuant to section nine fourteen, which is where the secretary can develop determinations that land is a wetland, based upon evaluation of the functions and values that are set forth in statute for what a wetland is. So what does that mean? So right now, you look at the map and you see the map. Now not this map is positive. You still have to, if you're gonna develop, go out and assess your property to see whether it's a wetland because it could meet those functions and values and could, according to the secretary's merit protection, your wetlands determination. Because the maps then and now are not a 100% accurate. Back when this was drafted, there were farm roofs on the maps. There were swimming pools on the maps. And then there were large swamps that weren't on the maps. So using the maps as a dispositive determiner then and still now creates questions. In addition, you, the General Assembly, defined what a buffer zone is for a class two wetland. You said it's 50 feet from the border of the wet land unless the secretary determines otherwise under section nine four nine fourteen. Section nine fourteen is when the secretary determines according to the functions and values whether or not a wetland exists. So that's not supposed to happen anymore. So how do you get to reduce a 50 foot buffer if you're not doing the wetlands determination? Because the EO tells you not to do the wetlands determination. So how? I I I really don't understand that. And that misunderstanding or lack of understanding was communicated to your legislative leadership, And they asked the attorney general for an advisory opinion on whether or not the CEO had conflicts with statute, whether or not it created separation of powers issue. And they agreed. They said the statute applies to significant wetlands, which include a class two wetland that's either one identified on the map or that the secretary determines requires protection. That's statute. You can't change that just by rule or by an EO. Neither the secretary nor the governor, however, can unilaterally create new categorical exceptions to wetlands permitting, like a 25 foot buffer instead of a 50 foot buffer, because statute requires that permitting exemptions be created by rule. So if you're going to allow housing in a non mapped wetland, where if you're gonna allow a 25 foot buffer instead of a 50 foot buffer for class two, the AG said, you you gotta do that within the confines of your authority, which might include rule, but the EU wasn't a rule. But at the same time, they don't give the secretary authority to immediately and categorically half the statutory 50 foot presumptive wetland zone. And I I need to remind you that even if they go to 25 feet, even if they say that the statute allows them to adopt rules that define allowed uses or to lower a buffer, the statute is still gonna say 50 feet. The statute's still gonna say the secretary has authority to determine. You're still gonna have potential conflict between the statute and rule depending on what they draft. And they have a draft out there. And it adds the construction, residential housing projects, and related utilities as an allowed use in a weapon. There are a lot of allowed uses, but this is the longest allowed use I've ever seen.

[Rep. Amy Sheldon (Chair)]: And it allows construction Mhmm. Go ahead. Say that again. It allows construction in a wetland.

[Michael O'Grady (Legislative Counsel)]: It allows construction in a wetland if you're in one of these areas designated downtowns, etcetera, tier one or tier b, tier one a or tier one b, if you're eligible for interim housing exemptions under Act two fifty. And the project is located 25 feet or more outside of a class II level, so they just have the buffer. And or it's in a continuous, unmapped class II weapon, or it's in any unmapped class II weapon. So the secretary's determination is gone. The authority to determine whether or not an unmapped FAST two wetland is unnecessary for this type of development. And this is just a draft, but I I do think you're gonna have continued conflict with statute, at least with with interpretations that that just look at the statute versus the rule. I do think if you want to do this, I would recommend making some statutory changes. But that's if you want to do it. Remember, you're the supreme policymaker. You get to make those decisions. And I'm just not making this up. This is a cartoon from ANR's own website where it shows what the existing wetlands will say. Hey, this is the wetland on the map. This is the wetland not on the map. You have to send out a wetland professional to do the delineation. Our residential project has to either avoid that wetland or be outside the 50 foot bucket. But but this is what they're proposing. It's only there's a wetland on the map. You don't need to send the wetlands profess professional out to do the delineation. You can actually construct in that wetland as long as you're 25 feet away from the mapped wetland. So you have your cattails growing through your patio there in the web. This is what they want to do. This is pretty basic. So that's, again, for you to determine if you, the supreme policymaker, want this to happen. You you are the one that that can and what's another issue that's out there right now? Sackowitz's question.

[Rep. Amy Sheldon (Chair)]: Pardon? Representative Sackowitz. Yeah. Just going back to that slide for a second, Michael. So, again, I just wanna make sure I'm clear that this 25 feet feet here on this on this cartoon is is 25 feet from where the map says the border is, not necessarily where that wetland actually is.

[Rep. Sarah "Sarita" Austin (Clerk)]: Like, the wetland could really be in a very different spot

[Michael O'Grady (Legislative Counsel)]: Very good.

[Rep. Sarah "Sarita" Austin (Clerk)]: Yeah. Because we're relying on maps, which we know aren't always accurate, that that's what we're gonna use as our our reference here.

[Michael O'Grady (Legislative Counsel)]: And and you also have to remember that the the person I know that told me this used a certain term. She said that wet wetlands breathe. They expand and they contract. They expand and they contract. It doesn't mean that when they're contracted, the the area out there that that's wet one that's expanded isn't a wetland. It's still a wetland. But if they breathe, they change, and so you won't have that change reflected on the map.

[Rep. Amy Sheldon (Chair)]: They change more now with drought to flood to drought to flood.

[Michael O'Grady (Legislative Counsel)]: So, again, that's a decision for you all to make.

[Rep. Amy Sheldon (Chair)]: Representative Austin.

[Rep. Sarah "Sarita" Austin (Clerk)]: I'm just wondering, flooding. I mean, in terms of is there another map for flooding, you know, for flood zones or flooding that how do they align with this or not align with this?

[Michael O'Grady (Legislative Counsel)]: Great question. They they do potentially align with this. So a couple of years ago, two years ago, you looked at two programs in the state that are related to flooding. One is the national flood insurance program. You had just gotten through a couple of years of flooding where municipalities were really taxed with how they would respond to the FEMA NFIP requirements. They said they didn't have the expertise, and those municipalities that did have the expertise said it was really difficult anyway. And so you asked the ANR to to con to to complete a a study committee to look at whether or not the state should take on NFIP and how they should take on NFIP. Because other states do that. Other states, especially smaller states, regulate the national flood insurance program from a state level so your municipalities don't have to take on that responsibility. The other thing you did is what's called river corridor development permitting. Now the river corridor is wider or should be wider the NFIP flood zone. So NFIP is about inundation flooding. It's like the Mississippi, like, oh, it rained in Minnesota three weeks ago, so we know Arkansas is gonna be flooded in two and a half weeks. And so you can predict where it's gonna be and how it's gonna rise. It sounds like Vermont doesn't get that kind of flooding, but the flooding that really does damage in Vermont is called fluvial erosion flooding. It's those specific, discrete, very high volume events that pour tons of water on an area in a short amount of time and scour out that area, blow out your roads, etcetera, etcetera. And that's those risks are mapped through what are called river corridor maps. You directed the agency to start permitting development in those mapped corridors. So wetlands can be in those mapped river corridors. They can be in the NFIP flood zone. So they do overlap. And honestly, the river corridor development permit, they're probably going have to decide whether or not you don't need to go get a wetland permit if you're in the river corridor. You just need the river corridor permit, and that's enough. So that's that's how they are. It's how I mean

[Rep. Sarah "Sarita" Austin (Clerk)]: it's Yes. Thank you.

[Rep. Rob North (Member)]: Representative North. Well, just just to clarify on that. So so the flood zone, the river quarter maps, and the and the wetland maps are separate and distinct maps, but permitting relative to each is separate and distinct. Mhmm.

[Michael O'Grady (Legislative Counsel)]: Right. So for for NFIP, you don't necessarily need a permit. You need to comply with FEMA's rules, and your municipality has to have an ordinance that complies with FEMA's rules. So a couple of years ago, somebody decided that well, FEMA decided that Vermont wasn't complying with FEMA's rules because Vermont municipalities don't regulate or till last year, didn't regulate farm. And FEMA said, well, farming is development. Because if you look at the definition of FEMA's definition of development, it's anything anything that's gonna change the elevation of that flood zone by, I think it's like six inches. And so it can be farming. It can be storage. Putting your hay bales, putting your logs, your cut logs. Those are all potentially development to FEMA and municipalities weren't regulating. So you had to do this whole kind of backwards somersault to regulate that at the state level in order to to appease FEMA. But they are all they're all different program.

[Rep. Rob North (Member)]: I guess I'm trying to make a point that the that the the changes in the way development is proposed to occur relative to wetlands shouldn't take into account what might happen during the flood, because that flood plain is a different thing than a wetland. If we're talking about 25 foot buffers from a wetland. A wetland is a wetland, not a wetland when it floods. So it's just the wetland is a wetland and the flood zone. Two separate things.

[Michael O'Grady (Legislative Counsel)]: But if a wetland's in a river corridor area, do you you wanna build?

[Rep. Rob North (Member)]: Agreed. There would be two or maybe three Right. Permits required depending on Or

[Michael O'Grady (Legislative Counsel)]: you figure out a way to streamline that so that maybe you don't need two permits if you're in a river corridor.

[Rep. Amy Sheldon (Chair)]: They are separate now.

[Rep. Rob North (Member)]: And can I ask a completely separate, but kind of just a technical legal question? Which slide is this on? Back when you're talking about the title 10 VSA kind of two that talks about the the definition of a class two wetland. Just from a technical legal standpoint, where it says class two wetland means a wetland other than class one or class three, that colon, and then there's two things. Second one of which the secretary determines to merit protection pursuant. It doesn't say doesn't say anywhere that that the secretary shall determine the merit. It's almost like that's an option.

[Michael O'Grady (Legislative Counsel)]: It is an option.

[Rep. Rob North (Member)]: It's an option. If some other mechanism comes in place and determines that something is or isn't a wetland, since this is just this isn't a shell, it's just an option. So it's it's not it's not violating, is it? Or and I'm just asking for a technical legal question.

[Michael O'Grady (Legislative Counsel)]: It it would depend, I think, on the facts on the ground for each case. Right? Like, if you said, oh, I've looked at it, looked at the maps, and my parcel was in a wetland, went forward construction. Turns out your parcel wasn't a wetland. You you haven't violated anything. But if you go forward and you build in that wetland, it was a weapon, but it was unmapped, you potentially have violated that. You you conducted an activity or allowed an activity in your class two weapon without the secretary's authority?

[Rep. Amy Sheldon (Chair)]: I think going I get your question, and I think that the linchpin is the functions and values. Secretary has the obligation to protect the functions and values of a wetland, whether it's mapped or not. The way I get it because I have the same thought. Like, well, this allows the secretary to decide. But the secretary is and the way we've been using this section of statute, and also I think based on the functions and values, is their staff goes out and decides, based on functions and values of evaluation, is this a wetland or not? And then the secretary has determined it is. So it isn't actually optional, but it is oddly worded from a normal person's

[Michael O'Grady (Legislative Counsel)]: You also understand that that DEC, they traditionally have enforced this pretty tight. So they'll go out and look at an activity, and one of the things so see if it meets the functions and values, whether it's on the map. The other thing they look at is whether it's an activity that's an allowed use. So for example, you can have a horse corral and a wetland, but you can't have a dog park because the rules say you can have a horse corral, but the rules don't say you can have dog park. And so it can be pretty refined in how they look at the activity whether or not they require. Those are

[Rep. Rob North (Member)]: the rules developed through the rules procedures.

[Michael O'Grady (Legislative Counsel)]: Yep. Yep.

[Rep. Sarah "Sarita" Austin (Clerk)]: There's

[Michael O'Grady (Legislative Counsel)]: 29 allowed uses, I think. When you break them all down, there's a few exceptions, exemptions, but I can't even explain that. So let's talk about the other big issue that you might hear about or that courts will have to address. And it's subsurface. And you probably have seen media that there was a citizen suit that was brought against the farm in that said that the subsurface tile drains from that farm included pollutants that were not permitted under the federal Clean Water Act. In order to discharge pollutants under the Clean Water Act, you need a permit for discharge of wastewater. It's and and let's talk about how the clean water citizenship provision works. It says any citizen can bring a claim against someone that they believe is violating the Clean Water Act or against the administrator or delegated state when they're not doing something that's nondiscretionary. But when you are going to file a citizenship, you have to give that regulator notice, and you have to give them time to respond in an appropriate way to exercise their enforcement or to do what they have as a nondiscretionary duty. The citizen, the advocates bringing us gave A and R authority, gave A and R notice of the suit, and A and R didn't do any. And why? Because it's kind of novel. Because the question of subsurface tile drains is ping pong back and forth. Is it, in some instances, a discharge into a conveyance that goes into water and therefore requires a permit? Yes. In some cases, no, it's not going directly into a water or no because there's no actual introduction of the pollutant from outside of the soil. And therefore, is it an irrigated return flow or is that an agricultural stormwater exemption? There is a case in California just, whatever, late August, September that said, no, it's discharge. But it's really factually different. It was like a large agricultural watershed with this weird aquifer that they use subsurface tile drains not to impact. So this is going to be a novel question in Vermont. And if it's determined that subsurface tile drains need permits,

[Rep. Rob North (Member)]: got whole impact.

[Michael O'Grady (Legislative Counsel)]: So you're probably going to need a lot of money. Somebody is

[Rep. Amy Sheldon (Chair)]: And clean water.

[Michael O'Grady (Legislative Counsel)]: And so that's a I mean, I was, like, I was pretty excited. It's like, woah. This is novel. I like the novel stuff. I have no I have no interest in how it gets resolved. I'm just interested in that it's novel. I don't care one way or the other, but it's going to be pretty interesting to see how it plays out. And there are still so many other issues. It's everywhere. I mean, they're they're there with the water. You got you got the damn safety rules, which are a little late, but they're coming. You got the repair and fireworker rules, which we were just talking about. NFIP, you have the the wastewater system and potable water supply permitting for housing. Our septic and well permitting systems is a health based standard. It's not just a default length. It's not, hey, your isolation distance is 75 feet for everyone. Ours is based on what risk is posed by your system based on the site condition and the size and the type. And so that can limit housing. And so people are saying, hey, let's look at a way to refine that. You got PFAS standards. There's there's drinking water, groundwater. It's gonna happen on Thursday, but you also have to look at surface water discharge standards. The people from Lake Mount, from Magog, they don't like that that there's potential for PFAS, even treated PFAS to be discharged into their surface water.

[Rep. Amy Sheldon (Chair)]: It's so wrong.

[Michael O'Grady (Legislative Counsel)]: You have the flood response and resilience, which is ongoing and really ongoing depending on what town you're in. We skipped over Lake Champlain TMDL implementation, but that's a big driver of everything. Have three acre, we talked about that, aquatic nuisance control, use of waters, weight books, water supply, public access, and then drought. And what that did to public water systems and agriculture, whether it recurred, You're going to see a bill probably on the floor in a couple of weeks about setting up a special fund to provide farmers with funding when they have weather related losses. So it's everywhere. Chloride. Chloride's not on there? Yes, salt. Anyway,

[Rep. Amy Sheldon (Chair)]: that was awesome. Thank you, Michael. Any final questions for legislative council before we take a break? Okay, let's take a oh, yes. Representative Hoyt.

[Rep. Michael Hoyt (Member)]: It's my first day.

[Rep. Amy Sheldon (Chair)]: Hoyt. I just wanna we're calling you, but also get your name in my head. Representative Hoyt.

[Rep. Michael Hoyt (Member)]: What's a TMDL?

[Michael O'Grady (Legislative Counsel)]: It's an acronym for total maximum daily load, and it's the target when your water is impaired. Say, let's use Champlain. I don't use Connecticut. You're from down there. The Long Island Sound is impaired for it's it's got a hypoxic zone. And so there's it's just a dead zone, and it's due to nitrogen. And so, ultimately, there will be a target that Vermont will need to reach for nitrogen reduction in order for the sound. So so that target is it's really just a wasteland allocation. We're gonna be allocated an amount of nitrogen that that the state will need to reduce in order to meet the Long Island Sound targets to to eliminate that hypoxic zone. What we will do, I don't know. I mean, large sources are wastewater treatment plants, stormwater runoff. The state has done a lot on both of those for nitrogen control. You can't apply nitrogen fertilizer anymore as a residential user, And and farmers are very sensitive to it now as well. And so I don't know what's gonna be required for Vermont. But, ultimately, according to EPA, which is coordinating that TMDL, we're gonna get a target that we're gonna have to meet. Thank you.

[Rep. Amy Sheldon (Chair)]: Alright. Let's take a ten minute break. Come back at ten minutes to three, and we'll hear from Jared and John.