News: CJ Exclusives

Delayed VW settlement may lead to new separation-of-powers spat

Szoka sees parallels between Cooper's handling of VW settlement money and Atlantic Coast Pipeline fund

Owners of Volkswagen cars that are covered under a national consent decree between the automaker and the Environmental Protection Agency could have their vehicles replaced or the engines modified to meet emission standards. Car dealerships such as Durham Volkswagen, pictured, would be affected. (CJ photo by Dan Way)
Owners of Volkswagen cars that are covered under a national consent decree between the automaker and the Environmental Protection Agency could have their vehicles replaced or the engines modified to meet emission standards. Car dealerships such as Durham Volkswagen, pictured, would be affected. (CJ photo by Dan Way)

State Rep. John Szoka, R-Cumberland, is worried $92 million from a national Volkswagen consent decree over Clean Air Act violations might get tangled up in another separation-of-powers showdown between Gov. Roy Cooper and the General Assembly.

With the nasty battle over the governor’s foiled attempt to create a $57.8 million Atlantic Coast Pipeline escrow fund fresh on his mind, Szoka, co-chairman of the Joint Legislative Commission on Energy Policy, has other cause for concern.

Like members of the Energy Policy Commission who shared their anxieties at a Nov. 8 meeting, Szoka is wary about potential impacts from the governor amending his lawsuit in the Cooper v. Berger case (starting at page 35) to include the VW money.

In the suit, Cooper contends the General Assembly’s insistence the VW money pass through the normal legislative appropriations process is unconstitutional. He claims the General Assembly’s move would prevent him from performing his core constitutional function “to take care that the laws be faithfully executed.”

Volkswagen entered into a consent decree after admitting it installed illegal software equipment on vehicles. The devices allowed vehicles to cheat on emission testing even though the vehicles actually put out up to 40 times the legal limit of nitrogen oxide.

Nearly 19,000 of those vehicles were licensed in North Carolina, entitling the state to some of the environmental mitigation fund to reduce air pollution.

Cooper named the state Department of Environmental Quality as the lead agency to develop and implement the state’s VW environmental mitigation plan. The national trustee overseeing the $2.7 billion settlement on Jan. 29 approved North Carolina as a beneficiary and DEQ as the lead agency.

Cooper says the federal action gives him control of the money because DEQ is an executive branch agency under his purview, and the court directed the agency to spend the money specifically to reduce nitrogen oxide emissions.

The VW case is not the only one in which the governor is seeking to forcefully assert a constitutional right for the governor’s office to determine how some spending is decided.

When he amended the Cooper v. Berger suit he also claimed constitutional authority over how to spend various federal block grants. He challenged the General Assembly’s authority to redirect those grants to purposes different from his plans.

More recently the General Assembly passed House Bill 90 to take over the pipeline fund Cooper tried to create without the legislature’s approval. Cooper could file suit to regain control of the money.

“I’m frankly tired of seeing everything end up in the court of law. I don’t know the governor’s mind, but he may be trying to tie things up,” Szoka said, adding it would be counterproductive to bog down the VW settlement in court.

Szoka can’t understand why Cooper isn’t following an existing precedent on how to spend federal settlement money — the federal Master Settlement Agreement with tobacco companies that has pumped nearly $3 billion into North Carolina.

“It was debated in the House. It was debated in the Senate,” Szoka said, and the governor had a cooperative role in the process of creating a plan to use the tobacco money. “It wasn’t solely the governor saying, ‘I’m in charge.’”

Aside from the legal issues, he’s concerned Cooper waited so long to name DEQ as the lead agency for the VW money.

“I think we lost almost a whole year” of planning, Szoka said, which may put North Carolina behind other states.

DEQ spokeswoman Jill Lucas said the state’s mitigation plan should be posted this month on the Volkswagen Settlement website for public comment. A series of public information sessions will be scheduled across the state.

The state should meet the timeline for submission to the federal trustee for review and approval by June or July.

Lucas declined to say whether Cooper’s lawsuit might reduce the state’s share of mitigation funds, referring the question to Senate leader Phil Berger, R-Rockingham, and the governor.

“The draft mitigation plan will be inclusive to all fuel types,” Lucas said, with 15 percent of the allocation devoted to zero emission vehicle supply equipment, such as electric vehicle charging stations.

In addition, the Diesel Technology Forum, a manufacturers trade association, on Jan. 8 sent a letter to DEQ, following up on another letter sent in October 2016 to former Gov. Pat McCrory urging use of mitigation funds to buy diesel equipment and engines.

Allen Schaeffer, Diesel Technology forum executive director, said in his letter to DEQ that federal Environmental Protection Agency and U.S. Department of Transportation studies show heavy-duty vehicles and equipment produce the highest amounts of nitrogen oxide in North Carolina. He asserts replacing them would get the biggest bang for the buck.

“The state will undoubtedly receive many arguments and proposals for investing in various alternative fuels and technologies, or charging infrastructure investments for electric vehicles,” Schaeffer wrote.

“In nearly all these cases the costs would be higher, the incremental [nitrogen oxide] benefits would be lower, and they would accrue over a longer term than any clean diesel replacement options,” he wrote.

Meantime, on Tuesday, March 6, representatives of the propane industry addressed the Energy Policy Commission. They urged the General Assembly to consider using some of the VW settlement to “repower” existing school buses with propane-fueled engines along with purchasing new propane-fueled buses. The propane advocates said their method of powering school buses pollutes even less than new diesel technologies.