State counsel briefs committee on Clean Water Act, Act 64, TMDLs and recent EPA findings on farm permitting

Michael O’Grady, identified in the meeting as state counsel, briefed the Natural Resources & Energy committee on federal and state water quality law, the Lake Champlain total maximum daily load (TMDL) process, and recent enforcement concerns tied to farm permitting and concentrated animal feeding operations (CAFOs).

O’Grady summarized the Clean Water Act’s twin regulatory tools: a permitting program (NPDES) for point‑source discharges and a water‑quality standards process that requires states to assess waters and prepare TMDLs for impaired waters. He said key legal terms — “pollutant,” “point source” and “navigable waters” (waters of the United States) — have long been litigated and clarified by court decisions and federal rulemaking.

O’Grady explained that Vermont has historically adopted standards that go beyond federal minimums (for example, including certain wetlands), and that Vermont has held delegated NPDES authority from EPA since the 1970s. He described the TMDL process: periodic assessments of waters, listing impaired segments, setting a load “budget” (TMDL) that apportions allowable pollutant loads from point and nonpoint sources, and then using implementation plans to meet the budget.

On state policy and Act 64 (the Vermont Clean Water Act), O’Grady described a package of measures the state adopted to address phosphorus and other sources affecting Lake Champlain and other basins. Act 64 expanded municipal stormwater controls (including the municipal roads general permit), tightened construction stormwater thresholds (state rule lowered to half an acre in some contexts), and required implementation of accepted agricultural practices and training for farmers and custom applicators. O’Grady said municipalities that were newly designated as subject to MS4‑type requirements were added so stormwater control obligations could be applied in basins with stormwater impairments.

O’Grady outlined the Clean Water Fund, funded by a property‑transfer tax surcharge, beverage container deposits and a share of meals & rooms tax, and estimated annual receipts of roughly $45–$60 million per year; the Clean Water Board recommends allocations and the legislature appropriates funds.

On enforcement and recent federal action, O’Grady described a 2022 petition by Conservation Law Foundation that led EPA to review Vermont’s CAFO/NPDES implementation. EPA identified seven areas where the Agency of Natural Resources (ANR) needed corrective action — inspections, permit issuance and other elements — and asked ANR for a corrective action plan. ANR submitted a plan in December; EPA responded that the plan was a “good start” but asked for more detail and, according to O’Grady, gave ANR additional time (the transcript referenced March 18) to provide further legislative or programmatic detail. O’Grady said EPA’s request could require policy decisions by the legislature and that options include refined definitions, clarified authority, or a structural change such as moving parts of the program between agencies. He emphasized that EPA could withdraw delegated NPDES authority if the corrective elements were not addressed; EPA’s withdrawal would require it to resume permitting across many program areas, a costly outcome.

Committee members asked how corrective steps would translate to on‑the‑ground changes for farms. O’Grady said ANR would likely need to inspect medium and large operations, and that if ANR identifies a discharge, the operator would be required to obtain an NPDES permit; permit terms generally prohibit discharge except in extreme flood events. He emphasized timelines are not yet final and that ANR and the legislature would need to resolve policy choices to satisfy EPA’s concerns.

O’Grady’s presentation concluded with an invitation to discuss possible legislative options and to provide more detailed material to EPA and the committee as they craft responses.