— A proposal to roll back environmental rules long loathed by developers would remove protections for critical amphibian nurseries sprinkled across the state, environmental advocates say.

The General Assembly's 60-page regulatory reform package, approved by the state Senate last week, affects so-called isolated wetlands, tiny plots of land disconnected from other waterways. Environmentalists say the habitats serve a vital function for wildlife and pollution control, especially farther from the coast, where other types of wetlands are more rare.

But developers argue rules on isolated wetlands are often arbitrarily applied by state regulators and cost too much, given the habitats' limited environmental value.

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"There aren't many isolated wetlands that are worth keeping," said Lisa Martin, chief lobbyist for the North Carolina Home Builders Association, which supports the bill. "This has nothing to do with swampy, marshy, boggy, wetlands most people think of when they think of wetlands."

The rule change in Senate Bill 734 is largely about acreage.

Under current regulations, developers west of Interstate 95 are allowed to essentially bulldoze up to one-tenth of an acre of these isolated wetlands on each project. To the east, where wetlands are more plentiful, the limit is one-third of an acre.

Hit that threshold, current rules say, and developers must show the state they've made every effort to leave the protected part of the land alone. In most cases where that's not possible, the state would require developers to mitigate the environmental damage – essentially paying the state a lump sum to restore a habitat somewhere else.

The bill currently before the state House would raise the threshold to 1 acre total, no matter where the project is located in the state.

Some of this land would trigger other state and federal regulations, but more than half of the development projects permitted for isolated wetlands in the last five years would have had no protection under the new rules – state or federal – according to data from the state Department of Environment and Natural Resources.

In fact, just one of those 47 projects would have fallen under the new isolated wetland regulations.

That's what concerns Derb Carter, Chapel Hill director of the Southern Environmental Law Center.

"Isolated wetlands, by their nature, are small," Carter said. "It's not surprising that raising the threshold would remove that protection from an increasing number of those wetlands."

All told, only about 14 acres on DENR's books would have lost isolated wetlands protection under the new rules. But both developers and environmental advocates say that number doesn't capture the full scope of the issue.

There's no map of isolated wetlands in the state, and Carter said there's no accounting of the acres spared when responsible developers avoid their destruction altogether.

"When you increase that threshold, there will be no requirement to avoid these areas," Carter said. "That will result in the vast majority of these wetlands being subject to loss."

Also left untracked, Martin said, are cases where developers abandon a deal without obtaining a permit because the cost of mitigation is too high.

This will also change under the Senate proposal.

Per state rules, developers must mitigate 2 acres for every acre of wetlands. At $39,000 to $69,000 per acre, those costs can add up quickly.

"It's causing people to walk away from land," Karla Knotts, vice president of Knotts Development, said in a phone interview from her Charlotte office.

She said the costs are intended to discourage developers from destroying environmentally sensitive areas but don't account for the steps builders take to comply with the rules.

"They want the charge to be so high that I am incentivized to not impact it," Knotts said. "But the rules are pretty clear. I wouldn't be at the mitigation stage unless I tried to avoid and minimize."

The Senate bill would change the two-to-one mitigation ratio to one-to-one.

Martin said that sets the environmental value of isolated wetlands, which she said are often little more than "mud holes," closer to their actual value.

But Carter said environmental value isn't the point of a higher mitigation ratio; it's to account for the possibility of failure.

"Even though best efforts are often made, it's difficult to recreate those functions," Carter said. "It means that, even for those few isolated wetlands that remain under the protection of isolated wetland rules, mitigation will come short of ever replacing the function of those that are destroyed."

Kevin Martin is a soil scientist and consultant who works with developers on wetland permitting. He also serves on the Environmental Management Commission, DENR's rule-making body.

Although he said he's skeptical of the water-quality functions often attributed to isolated wetlands, many of them can be home to sensitive aquatic or endangered wildlife.

"There are plenty of isolated wetlands that are basically doing nothing," he said. "But there are some out there that are pretty decent."

He said he's never had a problem working with regulators on the issue, but he said he's seen firsthand how costly it can be for builders working with protected natural habitats.

"We want to protect these things for the public good, but from a property rights perspective, the public isn't willing to compensate for that," Kevin Martin said. "It depends on what side of the fence you're on."