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06.26.2023 | Legal Advisory

On June 21, the Massachusetts Department of Environmental Protection (MassDEP) issued final regulations addressing nitrogen pollution caused by septic systems on Cape Cod. The regulations will require landowners in “Nitrogen Sensitive Areas” on the Cape to upgrade their septic systems within seven years, unless the landowner’s town applies for a watershed permit to comprehensively address nitrogen pollution. The new rules go into effect on July 7 and will impact most Cape Cod towns. 

Background

Nitrogen pollution has long been a concern for many of Cape Cod’s waterbodies. Excessive nitrogen in a waterbody can cause eutrophication, which is when invasive plants and algae enter an environment and deprive the existing plants and animals of oxygen needed to survive. MassDEP believes that septic systems are a significant contributor to this excessive nitrogen.

MassDEP has been considering regulatory approaches to address nitrogen from septic systems since at least 2017 when it created a Title 5/Groundwater Discharge stakeholder group to consider revisions to its septic regulations (known as the “Title 5” regulations), including a subcommittee created specifically to address potential regulatory approaches for nitrogen. During this review, the Conservation Law Foundation (CLF) sued MassDEP in 2021 to force the Department to address nitrogen pollution on Cape Cod. CLF paused the suit in 2022 after MassDEP began the rulemaking process that resulted in these new regulations. MassDEP received over 1,000 written and oral comments during the public process, which included five public hearings.

Regulations

The regulations establish a three-part regulatory scheme to address nitrogen pollution on Cape Cod. 

Designating Nitrogen Sensitive Areas on Cape Cod—The first is to redefine “Nitrogen Sensitive Areas.” In addition to areas around public drinking supplies (which were previously regulated for nitrogen), these areas include any area on Cape Cod with a limit on the amount of nitrogen that can enter a waterbody without affecting its environmental quality (known as a “Total Maximum Daily Limit” or “TMDL”). MassDEP has posted the covered areas on its website. The regulations also establish a public process for MassDEP to designate other areas as Nitrogen Sensitive Areas.

Upgrade Septic Systems—The second part (unless exempted as discussed below) requires property owners in these sensitive areas to upgrade or replace septic systems using what the regulations call “Best Available Nitrogen Reducing Technology” within seven years. Any new construction within these areas must also install upgraded systems within six months of the regulations’ July 7 effective date. The requirement does not apply to “upgrades with Department approved nitrogen reduction technology that were installed in the 10-year period before the effective date of these regulations.”

Exemption for Towns with Watershed Permits—The third part provides an exemption to the upgraded septic system requirements if the landowner’s town applies for and implements a watershed permit for the affected Nitrogen Sensitive Area. A watershed permit will have a 20-year term and “enables communities to design and implement wastewater solutions tailored to the specific watersheds and communities’ needs.” The goal of such permits is to reduce controllable excess nitrogen by 75 percent in the initial 20-year permit term. A common solution a town can implement is to connect more homes to centralized wastewater treatment facilities, which are more effective than septic systems at treating nitrogen. Other alternative approaches could include aquaculture, permeable reactive barrier walls, and fertilizer reduction. The regulations specifically reference an existing watershed permit developed by Orleans, Chatham, Harwich, and Brewster to reduce nitrogen pollution in Pleasant Bay.

Costs and Possible Funding

The new regulations will have a substantial cost impact on affected landowners and towns. MassDEP estimates that upgraded septic systems will cost homeowners about $25,000 - $35,000, although the actual cost could be much higher. These systems also have annual operation expenses. Towns opting for a watershed permit could spend tens of millions (or more) on sewer infrastructure and plant improvements, among other ways to reduce excess nitrogen. Ultimately, these costs will be passed on to ratepayers and taxpayers.

MassDEP cited several possible sources for funds for septic systems and watershed projects, including the Massachusetts State Revolving Fund/Clean Water Trust, the Cape and Island Water Protection Fund, and the Southeast New England Program Watershed Implementation Grant. Governor Healey and the Legislature are also considering tax credit proposals to help offset the costs of new septic systems. Governor Healey proposed tax rebates of between $6,000 and $12,000 for septic system upgrades in her tax relief program released earlier this year. The Senate, in its recently passed tax proposal, increased the maximum potential rebate to $18,000.

Impacts and Analysis

The regulations are a significant expansion on MassDEP’s regulation of septic systems. Until now, there were no state regulations addressing nitrogen in septic systems, except near drinking water wells. The new regulations cover most of Cape Cod, a much wider area. For now, the regulations apply only to the Cape (MassDEP removed draft regulations proposing a process for certain non-Cape areas), but MassDEP could expand the regulation’s reach in the future. 

Like the current Title 5 regulations, the new requirements will be enforced in the first instance by local Boards of Health (in conjunction with MassDEP). Affected Boards of Health should assess their current local rules and amend them to be consistent with these new state requirements and/or clarify where the local rules are more stringent and will continue to be in effect.

The regulations also pose a novel question of state regulatory law. MassDEP acknowledges that it “does not have legal authority to require municipalities to obtain Watershed Permits.” Presumably, requiring watershed permits without funding would violate the state’s Local Mandate Law, M.G.L. c. 29, §27C, which prevents an agency from imposing a cost on a Town unless it (or the Legislature) provides the funding to comply with it. So, in essence, MassDEP is using its regulatory authority over septic systems to “incentivize” towns to opt into a watershed permit that MassDEP cannot mandate. During the comment period, some commenters raised whether MassDEP instead should have sought authority from the Massachusetts Legislature and the necessary funding for towns to comply.

This advisory was prepared by Matthew Connolly, Eliza Cox, Michael Leon, Matthew Snell, and Sarah Turano-Flores in Nutter’s Real Estate Department. If you would like additional information, please contact any member of our Real Estate Department or your Nutter attorney at 617.439.2000.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.