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Montana Administrative Register Notice 17-290 No. 24   12/24/2009    
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BEFORE THE BOARD OF ENVIRONMENTAL REVIEW

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 17.30.201 pertaining to permit fees

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NOTICE OF AMENDMENT

 

(WATER QUALITY)

 

TO:  All Concerned Persons

 

1.  On August 13, 2009, the Board of Environmental Review published MAR Notice No. 17-290 regarding a notice of public hearing on the proposed amendment of the above-stated rule at page 1335, 2009 Montana Administrative Register, issue number 15.

 

            2.  The board has amended ARM 17.30.201 as proposed, but with the following changes, stricken matter interlined, new matter underlined:

 

            17.30.201  PERMIT APPLICATION, DEGRADATION AUTHORIZATION, AND ANNUAL PERMIT FEES  (1) through (5) remain as proposed.

            (6)  The fee schedules for new or renewal applications for, or modifications of, a Montana pollutant discharge elimination system permit under ARM Title 17, chapter 30, subchapter 11 or 13, a Montana ground water pollution control system permit under ARM Title 17, chapter 30, subchapter 10, or any other authorization under 75-5-201, 75-5-301, or 75-5-401, MCA, or rules promulgated under these authorities, are set forth below as Schedules I.A, I.B, I.C, and I.D.  Fees must be paid in full at the time of submission of the application.  For new applications under Schedules I.A, the annual fee from Schedule III.A for the first year must also be paid at the time of application.  For new applications under Schedule I.B and I.C, the annual fee is included in the new permit amount and covers the annual fee for the calendar year in which the permit coverage becomes effective.

            (a)  Under Schedules I.A and I.B, the department shall assess a fee for each outfall, except that MS4 permit fees under Schedule I.A are based on population as provided in (6)(h).  An application fee for multiple outfalls is not required if there are multiple outfalls from the same source that have similar effluent characteristics, unless the discharges are to different receiving waters or stream segments, or result in multiple or variable (flow dependent) effluent limits or monitoring requirements.

            (b) remains as proposed.

            (c)  The department may assess an administrative processing fee under Schedule I.D when a permittee makes substantial alterations or additions, requiring significant additional review, to a sediment control plan, waste management plan, nutrient management plan, or storm water pollution prevention plan.

            (d) through (m) remain as proposed.

            (n)  A facility with a construction storm water no-exposure certification from the department must apply for and receive a new certification every five years in order to maintain a no-exposure status.

 

Schedule I.C  Application Fee for Storm Water General Permits

 

Category

Renewal Amount

New Permit Amount (includes initial annual fee)

Storm water associated with construction

1 to 5 acres

more than 5 acres, up to 10 acres

more than 10 acres, up to 25 acres

more than 25 acres, up to 100 acres

more than 100 acres

 

$   900

  1,000

  1,200

  2,000

  3,500

 

$     900

    1,000

    1,200

    2,000

    3,500

Storm water associated with industrial activities

small - 5 acres or less

medium - more than 5 acres, up to 20 acres

large - more than 20 acres

 

  1,200

  1,500

  1,800

 

    1,500

    1,800

    2,000

Storm water associated with mining, oil, and gas

small - 5 acres or less

medium - more than 5 acres, up to 20 acres

large - more than 20 acres

 

  1,200

  1,500

  1,800

 

    1,500

    1,800

    2,000

Traditional storm water municipal separate storm sewer system (MS4)

population greater than 50,000

population 10,000 to 50,000

population less than 10,000

 

 

  7,000

  6,000

  5,000

 

 

  10,000

    8,000

    6,000

County MS4 permit

  4,000

    5,000

Non-traditional MS4 permit

  2,000

   3,000

Storm water no-exposure certification

required once every five years

     300

       500

Storm water construction waiver

 

       400

 

            (o)  The minimum application fee under Schedule I.D for federal Clean Water Act section 401 certification is $4,000 400 or 1% of the gross value of the proposed project, whichever is greater, and the maximum fee may not exceed $20,000.  If a fee is submitted for a 401 certification and the department waives certification, without review, because the project will require a department permit or authorization identified in ARM 17.30.105(2)(b), the department will credit the fee towards the cost of the applicable permit or authorization.

 

            Schedule I.D remains as proposed.

 

                (7) and Schedule II remain as proposed.

                (8)  The annual permit fees are set forth in Schedules III.A, III.B, and III.C.  No annual fee is required for activities listed in Schedule I.D.

                (a)  Under Schedules III.A and III.B, the department shall assess a fee for each outfall, except that MS4 permit fees under Schedule III.A are based on population as determined by the latest decennial census from the United States Census Bureau.  An annual fee for multiple outfalls is not required if there are multiple outfalls from the same source that have similar effluent characteristics, unless the discharges are to different receiving waters or stream segments, or the discharges result in multiple or variable (flow dependent) effluent limits or monitoring requirements.  For ground water permits, the department shall assess a fee based on the annual average daily flow in gallons per day for each outfall.

 

            Schedules III.A and III.B remain as proposed.

 

            (b) through (d) remain as proposed.

 

Schedule III.C  Annual Fee for Storm Water General Permits

 

Category

Amount

Storm water associated with construction

1 to 5 acres

more than 5 acres, up to 10 acres

more than 10 acres, up to 25 acres

more than 25 acres, up to 100 acres

more than 100 acres

 

$ 700     650

   800     750

   1,200 1,150

   2,000 1,800

   3,000 2,800

Storm water associated with industrial activities

small - 5 acres or less

medium - more than 5 acres, up to 20 acres

large - more than 20 acres

 

   1,000

   1,200

   1,500

Storm water associated with mining, oil, and gas

small - 5 acres or less

medium - more than 5 acres, up to 20 acres

large - more than 20 acres

 

   1,000

   1,200

   1,500

Traditional storm water municipal separate storm sewer system (MS4)

population greater than 50,000

population 10,000 to 50,000

population less than 10,000

 

 

   5,000

   4,000

   2,500

County MS4 permit

   1,200

Non-traditional MS4 permit

   1,200

 

            (e) remains as proposed.

            (f)  The annual permit fee is assessed for each calendar year or portion of the calendar year in which the permit is effective.  The fee for the previous calendar year must be received by the department not later than 30 days after the invoice date.  The fee must be paid by a check or money order made payable to the state of Montana, Department of Environmental Quality.

            (9) through (9)(b) remain as proposed.

            (10)  The department shall give written notice to each person assessed a fee under this rule of the amount of the fee that is assessed and the basis for the department's calculation of the fee.  The fee is due 30 days after receipt the date of the written notice.  The fee must be paid by a check, money order, or electronic transfer payable to the state of Montana, Department of Environmental Quality.

            (11) through (11)(b) remain as proposed.

 

            3.  The following comments were received and appear with the board's responses:

 

            COMMENT NO. 1:  The public comment period should be extended because the regulated community did not have time to respond.

            RESPONSE:  Starting about three months prior to publication of the proposed rule notice in this rulemaking, the department conducted informal meetings with stakeholder groups.  The department showed the groups the cost and revenue projections for the discharge permit program and showed proposed specific fee adjustments that would cover the costs.  Informal comments were received from the stakeholder groups at that time, and the department made some changes to the fee proposal.  The proposed fees were then made available for general public comment in the published proposed rule notice.  Copies of the rule notice were mailed to all permittees and to parties, including all stakeholder groups, who had expressed an interest in rules pertaining to water quality.  The board believes that the informal and formal comment periods gave affected parties adequate time to review and respond to the proposed fee changes.

 

            COMMENT NO. 2:  In ARM 17.30.201(1), the definition of "outfall" is different than in the draft municipal separate storm sewer system (MS4) general permit.  The definitions should be the same.

            RESPONSE:  The definition of "outfall" in the MS4 general permit is based on the definition in the storm water permit rules at ARM 17.30.1102(14).  That definition governs the meaning of "outfall" for purposes of MS4 permits.  The definition of "outfall" in the revised fee rules is slightly different, but, because fees for MS4 permits are not based on the number of outfalls, there is no conflict with the definition in ARM 17.30.1102(14).

 

            COMMENT NO. 3:  Proposed Schedules I.A, I.C, III.A and III.C make it difficult to determine whether an MS4 would fall under the individual or general permit fee schedule.

            RESPONSE:  The fee rule does not contain the criteria for determining whether an MS4 falls under general or individual permit coverage.  The fee rule simply sets out the applicable fees for each type of permit.  The criteria for determining whether storm water discharges fall under general or individual permit coverage are set out in the storm water permit rules at ARM 17.30.1105(2).

 

            COMMENT NO. 4:  The proposed rules have deleted a footnote that limits fees for storm water outfalls to a maximum of five outfalls.  The maximum outfall language should be reinserted.  Language should be added to clarify how the per-outfall fee applies to MS4s under the proposed fee schedule.

            RESPONSE:  The footnote was eliminated in the proposed rules because application and annual fees for MS4 discharges will no longer be based on the number of outfalls.  For MS4 permits, the fees will be based on the MS4 population size.  See proposed ARM 17.30.201(6)(h).  Fees for construction storm water permits will also no longer be based on the number of outfalls.  Industrial activities and mining and oil and gas activities that have an individual storm water permit or with a storm water outfall integrated with an individual permit will continue to be assessed fees on a per-outfall basis.  ARM 17.30.201(6)(g).  In response to this comment, ARM 17.30.201(6)(a) and (8)(a) will be modified to clarify that the per-outfall charges in Schedules I.A and III.A do not apply to MS4 permits.

 

            COMMENT NO. 5:  A commentor opposes the fee increase for MS4s if it is based on outfalls, and believes that the fees are excessive given that the majority of the effort for carrying out the program rests with local jurisdictions.  The commentor also requests a reevaluation of construction-related permit fees, because the burden for inspection and compliance falls to the local jurisdiction with minimum involvement of the state.

            RESPONSE:  Under the revised fee rule, fees for MS4 permits are not based on the number of outfalls.  See Response to Comment 4.  Although the state MS4 permit requires cities to develop a storm water program, the department will continue to administer the state MS4 permit program.  Administration of the construction storm water permit program will also continue to be the responsibility of the department.  Consequently, the department still incurs significant costs for these programs.  However, as discussed in the Response to Comment No. 6, some of the proposed fees have been reevaluated and reduced.

 

            COMMENT NO. 6:  A number of commentors expressed concern about the substantial fee increase being proposed for permits.  It appears difficult for the department to justify the proposed increases.

            RESPONSE:  The proposed fee increases are necessary to account for an increase in overall costs to administer the discharge permit program.  For fiscal year 2010, the Legislature authorized a budget of approximately $2.4 million for personnel and operations of the water quality discharge permit program.  This amount is for expenses expected to be incurred in reviewing permit applications, review of modifications and renewals, monitoring permit compliance, providing compliance assistance, enforcing Water Quality Act requirements, developing water quality permit rules and guidance documents, file maintenance, and public information duties.  The Legislature appropriated $71,053 of state general fund monies for the program.  The remainder of the program costs must be met through other sources.  The program receives federal funding from the EPA Performance Partnership Grant (PPG) and nonpoint source grant funds of approximately $423,912.  The Water Quality Act requires the board to prescribe fees that are sufficient to cover the remainder of program costs.  Section 75-5-516(1), MCA.  For fiscal year 2010, the department projected that approximately $1.9 million would need to be raised through annual fees.

            As proposed, the fee rules would have generated $1.9 million in annual fee revenue, based on FY 2008 data.  This amount would have been an overall program funding increase of 40% compared to the previous year.  However, based on comments received, some of the proposed fee amounts have been revised and decreased to reflect an overall funding increase of approximately 25%.  The projected revenue from the revised fees will be $1.5 million, based on FY 2009 data.  This may not be enough to meet projected program costs, and the department will have to reevaluate the fees next fiscal year to determine if another fee increase is necessary.  However, this approach will provide some relief to fee payers by phasing in the fee increase.

 

            COMMENT NO. 7:  In the notice of proposed rulemaking, it was stated that it was not known if the $60,000 that the Legislature appropriated in state general fund for this program would be available.  The commentor noted that these funds were subsequently reinstated and are now available.

            RESPONSE:  At the time the notice of proposed rulemaking was issued, the department estimated that its general fund appropriation would be approximately $60,000, based on the appropriation for 2008.  At the time, the actual amount of the appropriation was not known and it was not known if it would be available for use by the permit program.  Subsequently the department learned that a general fund appropriation in the amount of $71,053 would be available.  However, even with the general fund appropriation, fees must raise approximately $1.6 million to meet program costs.

 

            COMMENT NO. 8:  Several commentors objected to the proposed fee increase for holders of construction storm water permits.  The fees associated with larger projects would see a fourfold increase in fees.  These fees are excessive.  The level of services provided has decreased in recent years.  In the case of storm water permits, storm water pollution prevention plans (SWPPPs) are no longer reviewed by the department.  Notice of Intent (NOI) forms are no longer reviewed for content, but only completeness.  The majority of construction sites do not even receive a department inspection.

            RESPONSE:  Because the new construction permit fees are based on acreage rather than on the number of outfalls, it is difficult to directly compare the new fees with the old.  However, based on a review of current storm water permit holders that have identified an area of disturbance of one to five acres, 94% will see a fee increase of 44% and 6% will see a fee decrease of 28 to 71%.  Of current storm water permit holders that have identified an area of disturbance of five to ten acres, 91% will see a fee increase of 75% and 9% will see a fee decrease of 15 to 78%.  Of current storm water permit holders that have identified an area of disturbance of 10 to 25 acres, 93% will see a fee increase of 28 to 156% and 7% will see a fee decrease of 15 to 49%.  Of current storm water permit holders that have identified an area of disturbance of 25 to 100 acres, 95% will see a fee increase of up to 300%, and 8% will see a fee decrease of 20%.  For current storm water permit holders that have identified an area of disturbance of over 100 acres, 100% will see a fee increase of 24 to 522%.

            The board is required by statute to establish fees that are commensurate with program costs.  See Response to Comment No. 6.  The proposed fee increases are necessary to account for an increase in overall costs to administer the discharge permit program, and specific permit fees are not necessarily based on the time required to administer that particular permit.  In general, the increases in storm water construction permit fees reflect the fact that this is the largest single group in the discharge permit program, having approximately 52% of the total permits.  The reason for the larger increase in fees for larger construction projects is that there is a direct correlation between the number of acres disturbed and the amount of sediment that can be released from a site.  Although the department cost is not higher for issuing permits for the larger projects than for the smaller projects, subsequent department costs for compliance review and enforcement tend to be higher for larger projects.

            One commentor's fee calculations show that the schedule for storm water construction permit fees needs clarification.  Under the current rules, the application fee for a new storm water construction permit with one outfall is $450, with an additional annual fee of $450 for the first and each subsequent year of permit coverage.  Under the current rules, the first year annual fee, which is due at the time of application, is shown in a separate schedule.  Under the proposed fee rule changes, Schedule I.C established an application fee of $900 for a one to five acre storm water construction permit.  This amount in Schedule I.C includes the first year annual fee.  The result is, for small construction projects, the initial fees (application and first year) are the same under the current and proposed fee schedules.  Subsequent annual fees for these projects are increasing from $450 to $650.  The rule will be revised to clarify that the "New Permit Amount" column in Schedule I.C includes the initial annual fee.  Proposed ARM 17.30.201(6) will also be revised to clarify that the initial annual fee is included in the new permit amount.

 

            COMMENT NO. 9:  Because sediment is normally the only pollutant of concern for construction activities, it appears that fees for construction permits are bearing an unfair burden, compared with activities that involve numerous pollutants of concern.

            RESPONSE:  The proposed fee increases are necessary to account for an increase in overall costs to administer the discharge permit program, and reflect the fact that construction storm water dischargers are the largest single group in the discharge permit program.  See Response to Comment No. 8.  The fact that sediment is the primary pollutant of concern in construction storm water does not reduce the severity of potential impacts.  Currently approximately 400 rivers and lakes are listed as impacted by sediment in Montana.

 

            COMMENT NO. 10:  A commentor asks whether the revenue shortfall has been distributed equitably across all permit fee payers.  To increase revenue by 40%, we would expect to see a 40% increase in the fees for all payers.  Instead, our analysis shows that transportation-related permit fees will increase by up to 2.7 times.  It appears that the transportation industry's contribution to the funding shortfall is disproportionate when compared to other industries.  The commentor requests to see background data showing the distribution of the fee increase among permit holders.

            RESPONSE:  As discussed in the Response to Comment No. 6, the fee increase will be lowered to seek an overall program funding increase of 25% instead of 40%.  The proposed fee rule distributes the fee increase throughout 26 different categories of department permits and authorizations.  Because of statutory fee caps, not all fee payers are subject to the increase.  The fees for 8% of current permit holders would remain unchanged because they have been capped by statute at a maximum amount.  The groups with statutory fee caps include concentrated animal feeding operations (CAFOs), suction dredges, and major dischargers that are currently at the statutory maximum of $3,000 per million gallons of discharge.  Another reason that increases are not distributed equally among fee payers is that some adjustment within categories has been proposed.  For example, for storm water and ground water permits, varied fee rates are proposed based on the size of the potential discharge.  Those adjustments are intended to have higher fees for permit holders with a greater potential to discharge pollutants.

            The board is required by statute to establish fees that are commensurate with program costs.  The proposed fee increases are based on costs to administer the entire discharge permit program, and specific fees are not necessarily based on the costs to administer that particular permit.  Fees must recover overall department costs for reviewing permit applications, review of modifications and renewals, monitoring permit compliance, providing compliance assistance, enforcing Water Quality Act requirements, developing water quality permit rules and guidance documents, file maintenance, and public information duties.

            The permits most often obtained by the transportation industry are for construction storm water discharges under the general permit fee Schedule I.C.  The extent of the increases and the reason for them are discussed in the Response to Comment No. 8.  In general, the increased fees for construction storm water permits reflect the fact that this group is the largest single group in the discharge permit program, having approximately 52% of the total permits.

            The information showing the distribution of fee increases among permit holders has been tabulated and is available for review as part of the department records, but will not be included in this Response.

 

            COMMENT NO. 11:  A commentor stated that if construction work was conducted on her 2.5 acre homestead she would be required to pay $1,600 for a storm water construction permit for the soil disturbance for a hay corral.

            RESPONSE:  The department recommends that a construction storm water permit be obtained whenever there is a reasonable possibility that a discharge of storm water may occur from a construction project.  However, the permit is only required if the area of disturbed land is one acre or more and a discharge is proposed.  In this example, a permit would not be required if the clearing and grading for the hay corral project impacted less than one acre.  If coverage under the construction storm water general permit were obtained, the application fee, which includes the annual fee for the year the authorization is issued, would be $900, which is the same as under the current rule.  Under the proposed rules, the annual fee for subsequent years will increase from $450 to $650.  The rule has been revised to clarify that the application fee and first year annual fee are combined in the New Permit Amount in Schedule I.C.  See Response to Comment No. 8.

 

            COMMENT NO. 12:  The construction storm water program is difficult for industry to use in the planning and development of oil and gas wells.  It is impossible to predict the exact number of wells required for maximum extraction.  The addition or subtraction of a well to or from a plan should not require a reapplication for a new permit with a new fee.  Drilling fewer wells in a plan should not be considered a significant modification of a permitted project.  The commentor also requested definitions for the following terms:  major/minor modification; flow dependent; major facility; significant additional review; stream segments; and substantial changes, alterations, and additions.

            RESPONSE:  The addition or subtraction of a well would not, in itself, require a modification to the construction storm water permit.  Under the proposed rule, the fees for these permits are based on the area of disturbed land.  The addition of wells would increase the actual acreage of disturbance, but the acreage categories for storm water construction permits are broad enough to allow for several additional wells before a permit modification would be required.  The categories are:  1 to 5 acres; >5 to 10 acres; >10 to 25 acres; >25 to 100 acres; and >100 acres.  If the addition of a well does not change the acreage category, the permittee would simply need to modify the SWPPP at the project site to reflect the current site conditions.

            The proposed rule also added ARM 17.30.201(6)(l) to address the concerns of the commentor.  This provision allows the modification of a construction storm water authorization within the first six months to be handled as a minor modification for a fee of $500, instead of the new permit amount shown in Schedule I.C.  This provision offers permit holders a simpler way to address unforeseen changes in the early phases of natural resource development.

            The term "minor modification" in Schedule I.D refers to a minor modification under ARM 17.30.1362.  All other permit modifications are considered "major."  The term "flow dependent" does not have a technical definition.  As used in ARM 17.30.201(6)(a), it refers to effluent limits or monitoring requirements that vary based upon flow.  The term "major facility" is used in the definition of "major permit" in ARM 17.30.201(2)(d).  A "major facility" is defined in ARM 17.30.1304(30) as a facility classified as such by the department in conjunction with the regional administrator.  This is consistent with the federal definition at 40 CFR 122.2.  A major facility is one that has a design flow greater than one million gallons/day (MGD), or a treatment facility that scores 80 or more points on the NPDES Permit Rating Worksheet, or a facility that is otherwise given this designation by EPA in consultation with the state permitting authority.  The term "significant additional review" is used in ARM 17.30.201(6)(b) to clarify when a resubmitted application will be assessed an additional review fee under Schedule I.D.  The term is not new, but is carried over from the current rules.  The term cannot be defined quantitatively.  In general, the resubmittal review fee will not be charged for processing clerical corrections, but will be charged where a resubmitted application requires substantive review.  The term "substantial changes" in ARM 17.30.201(6)(b) refers to changes that will require significant additional review.  The term "stream segment" means any segment of a stream as defined by intervening tributaries or other identifying landmark.  The term "substantial alterations or additions" is used in ARM 17.30.201(6)(c) to clarify when an administrative processing fee under Schedule I.D will be assessed for department review of a sediment control plan, waste management plan, nutrient management plan, or storm water pollution prevention plan.  In response to comments, this provision will be revised to clarify that the fee will be assessed where significant department review is required.  See Response to Comment No. 26.

 

            COMMENT NO. 13:  A commentor requested justification for assessing construction storm water permit fees by acreage rather than by the number of outfalls.  A small project that directly impacts surface water should be charged more than a large project that is miles from a perennial stream.  Why do minor modifications require such a substantial increase in fees?  Would a change in project ownership require a permit modification?

            REPONSE:  The actual size of the disturbed acreage is directly related to the amount of sediment that could be discharged from the construction site during a storm event.  See Response to Comment No. 8.  The same processing steps involved in issuing permits are also required for permit modifications, even modifications that are minor as described in ARM 17.30.1362.  Under ARM 17.30.1362(1)(d), a change in project ownership is a minor modification.

 

            COMMENT NO. 14:  A commentor expressed concern about the apparent raise in fees for CAFOs.

            REPONSE:  During the 2005 Legislative session the Water Quality Act was amended to include fees for CAFOs.  Pursuant to 75-5-803, MCA, the fees for CAFO general and individual permits are $600 for the application fee and $600 for the annual fee.  Since 2005 CAFO permit holders have been assessed the fee specified in the statute, and the lower fees shown in the current fee rule have not been applicable.  The proposed amendments to the CAFO fees in the fee rule simply incorporate the amount specified in statute.

 

            COMMENT NO. 15:  The large fee increases proposed will have a chilling effect on the natural resource industries.

            RESPONSE: The impact of the fee increase on the natural resource industries varies depending on how the current economic climate affects the particular industry.  In general, the amount of the fee increase should not be so large as to significantly impact a facility's financial status.  Some of the natural resource industries are not subject to the increases due to statutory fee caps.  In other cases the impact of the fees may be reduced because fees are based on discharge flows, which are less in times of low production.

 

            COMMENT NO. 16:  Permit fees should not be increased for the aluminum refinery.  Aluminum is a commodity whose price is set in the marketplace, and the facility has no control over it.  The proposed fee increase for this facility is contrary to the Governor's stated goal to protect quality jobs.

            RESPONSE:  The current fee rules were last revised in 2002 and have remained unchanged for more than seven years.  For this permittee, assuming three outfalls and the same annual average flow, the proposed rule would increase annual fees from $2,267 to $3,375.  The renewal fee, which is due about every five years, will increase by about 20% from $10,000 to $12,000.  This facility is current on its renewal fee and will not have to pay the increased fee for at least five years.  These fee increases, while not insignificant, should not in themselves significantly impact the facility's financial status.

 

            Comment NO. 17:  Permit application fees for sand and gravel mines are increasing from $450 to $1,200, and annual fees are increasing also. This is excessive, especially for dry sites that do not pose a threat to water quality.  If fees are supposed to reflect pollutant loading, sediment particles are not "pollutants" unless they enter water.

            RESPONSE:  The proposed fee increases are necessary to account for an increase in overall costs to administer the discharge permit program.  See Response to Comment No. 6.  Sand and gravel operations have a significant potential to cause pollution.  In addition to sediment, the general permit for sand and gravel mines addresses discharges of wash water, transport water, scrubber water, pit dewatering water, and other process water to state waters.  Pollutants of concern in process water include oil and grease, pH, and turbidity.

 

            COMMENT NO. 18:  A small wastewater district commented that the fees are too high and penalize the smaller communities to the point where users may no longer be able to afford the system.  Larger cities with more connections have a lower cost per connection than smaller towns.  A user in a system with 50 connections would pay $50 per year in permit fees alone, while a user in a large system (10,000 connections) may pay only $.50 per year for permit fees.  The fee schedule discriminates against smaller districts in Montana.  The department should abandon this type of fee schedule and research other means of producing money.

            RESPONSE:   Application fees for larger systems are higher than for smaller systems, and larger systems also pay more in annual fees based on volume of the discharge.  However, the commentor is correct that the annual cost per user can be significantly higher for small systems with few users, when compared with systems with more users.  The per-user inequity cannot be completely eliminated without imposing disproportionate costs on other categories of fee payers.  Eliminating the permit fee system altogether is not an option absent legislative change.  The amount of the per-user fee increase in small systems should not be prohibitive, however.  The annual fees for small public systems are increasing from $1000 to $1,500.  For a system with 50 users, this amounts to an increase of $10 per year per user.

 

            COMMENT NO. 19:  In an earlier draft version of the proposed rule, the term "determination of no significance" was used in ARM 17.30.201(3) and Schedule I.A.  This is changed in the current proposal to "determination of significance."  The commentor questions whether this has a substantive effect.

            RESPONSE:  The term "determination of significance" was used in the more recent draft because it is consistent with the terminology used in ARM 17.30.715, which establishes the criteria for determining nonsignificant changes in water quality.  The change does not have a substantive effect.

 

            COMMENT NO. 20:  Under the proposed Schedule I. D, the fee for Clean Water Act section 401 certifications is $4,000 or 1% of the value of the proposed project not to exceed $20,000.  How does the value of the project relate to DEQ's costs?  Fees should be tied to potential risk and administrative burden, not value of project.

            RESPONSE:  Review of 401 certifications can require significant staff time within the department and can involve several different work units within the agency.  Because there is no annual fee for 401 certifications, the application fee must address the costs of initial and any follow-up review.  Project value is the simplest method to reflect the complexity of the review and the corresponding review costs.  The rule will be revised to reduce the proposed $4,000 minimum fee to $400.

 

            COMMENT NO. 21:  A commentor requests clarification of whether the fees for Clean Water Act section 401 certifications will be assessed if certification is waived under ARM 17.30.105(2).

            RESPONSE:  The proposed ARM 17.30.201(6)(o) will be revised to clarify that if a fee is submitted for a 401 certification and the department waives certification, without review, because the project will require a permit or authorization identified in ARM 17.30.105(2)(b), the 401 fee will be credited toward the cost of the applicable permit or authorization.

 

            COMMENT NO. 22:  Under the proposed ARM 17.30.201(6) the new permit fee for certain permits covers the annual fee for the calendar year that the permit coverage becomes effective.  An applicant could pay for a new permit in December of one year and then be subject to an annual fee the next month.

            RESPONSE:  The commentor is correct.  Applicants are advised to time their applications to avoid unnecessary fees.  This comment is most pertinent to construction storm water authorizations, which are usually short-term.  Applications for these authorizations are usually received between February and June, coinciding with the construction season.

 

            COMMENT NO. 23: A commentor requests clarification of what was intended in proposed ARM 17.30.201(6)(a), which refers to "multiple or variable (flow dependent) effluent limits or monitoring requirements."

            RESPONSE: This language is in the current rules at ARM 17.30.201(5)(a).  It was moved to reflect the amended rule's new format, resulting in the language being underlined as new text.  The intent of the section is to provide a means to consolidate, for fee purposes, multiple outfalls that discharge to the same stream segment, require identical review and analysis, and result in the same effluent limits.  The outfalls in these cases, although identified as separate in the permit, will be consolidated for fee purposes, resulting in lower annual fees for the permit holder.

 

            COMMENT NO. 24:  Please define how you determine a different outfall per stream segment pursuant to ARM 17.30.201(6)(a).

            RESPONSE:  Outfalls are initially identified by the permit applicant in the application form.  The department permit reviewer analyzes the identified outfalls in terms of wastewater characteristics, process flow diagrams, and water quality data in the receiving stream segment, which is the part of the stream extending between designated tributary junctions.  A stream segment may have varying water quality characteristics requiring separate analysis to develop effluent limits, and each segment can be impaired for a variety of pollutants, which requires an analysis for each parameter.  The permit protects water quality by requiring effluent limits and monitoring for each receiving stream segment.  If the analysis results in identical effluent limits for two or more outfalls, and the outfalls discharge into the same receiving stream segment, the outfalls are grouped for fee assessment purposes. The process of "grouping" outfalls has been in effect since 1994 and is consistent with 75-5-516(2), MCA.

 

            COMMENT NO. 25:  In proposed ARM 17.30.201(6)(b), it is not clear why it would be necessary to charge an additional application fee if an application is denied for more than one year.

            RESPONSE:  If an amended application is submitted after 12 months or more of inactivity, the application would need extensive rereview.  Even if there were no operational changes to the facility, new data about the water quality of the receiving stream would need to be obtained and evaluated in order to set effluent limitations for the permit.

 

            COMMENT NO. 26:  Proposed ARM 17.30.201(6)(c) authorizes the department to assess an administrative processing fee when a permittee makes substantial alterations or additions to a sediment control plan, waste management plan, nutrient management plan, or storm water pollution prevention plan.  How much is the fee and what constitutes "substantial alteration?"  The department encourages permittees to actively monitor and amend these plans.  Charging them administrative fees for doing so is a deterrent to doing the right thing.

            RESPONSE:  The administrative processing fee, set out in Schedule I.D, is $500.  The fee will be charged when a change to a plan requires significant additional review time by the department.  Although "significant" additional review cannot be quantified, in general this fee will not be charged for processing of clerical corrections.  It will be charged where a resubmitted plan requires substantive review by the department.  For example, the administrative processing fee will generally not be assessed for processing voluntary updates of construction SWPPPs.  However, if the department identifies deficiencies in a SWPPP during a compliance inspection, the processing fee may be charged for review of the resubmitted SWPPP.  The fee will usually be charged when the department identifies a deficiency in a plan and reviews the corrected plan.  Department review of voluntary amendments of nonconstruction storm water plans may also trigger this fee if significant review time is required.  Nutrient management plan resubmittals for CAFOs will generally be charged this fee because the department must provide a public comment process for these plans.  In response to comments, the rule will be revised to clarify that the fee will be assessed where significant department review is required.

 

            COMMENT NO. 27:  ARM 17.30.201(6)(g) appears to be in conflict with ARM 17.30.201(6)(a).  Can they be combined to avoid confusion?

            RESPONSE:  The proposed ARM 17.30.201(6)(a) states that fees associated with individual permits and non-storm water general permits under Schedules I.A and I.B are assessed based on the number of outfalls.  ARM 17.30.201(6)(a) also provides that outfalls may be grouped, for fee purposes, in certain situations.  See Response to Comment 24.  ARM 17.30.201(6)(g) states that discharges composed entirely of storm water from industrial activities and mining and oil and gas activities may be incorporated into a facility permit under Schedule I.A, and in that event the storm water fees would be on a per-outfall basis.  There is not a conflict between these two provisions.

 

            COMMENT NO. 28:  In Schedule III.A the fee for non-contact cooling water appears to be limited to minor privately-owned treatment works.  This will result in higher fees for major dischargers of non-contact cooling water.

            RESPONSE:  The lower fee for "non-contact cooling water" was intended to apply to both public and private, major and minor, treatment works, as is the case under the current rules.  This was a formatting error, and Schedule III.A will be revised to make this change.

 

            Comment NO. 29:  In the proposed rule, ARM 17.30.201(8)(f) states that the annual fee is due "not later than 30 days after the invoice date."  Section ARM 17.30.201(10) states that the "fee is due 30 days after receipt of the written notice."  The commentor requests clarification as to which provision controls.  The commentor states that 30 days is not enough time to process payments from municipalities, and suggests 45-60 days.

            RESPONSE:  The current fee rule requires that annual permit fees be paid on March 1.  The proposed ARM 17.30.201(8)(f) eliminates the March 1 due date and requires payment not later than 30 days after the date of an invoice.  The "invoice" referenced in ARM 17.30.210(8)(f) was intended to be the same as the "notice" in ARM 17.30.210(10).  In response to this comment, the rule will be revised to eliminate inconsistency and duplication.  The term "notice" will be used instead of "invoice," and the 30 days for payment will run from the date on the notice, rather than the date of receipt.  The provisions regarding fee notices and due dates will also be consolidated into ARM 17.30.201(10).  Under both the current and proposed rule, interest and late fees begin to accrue after 30 days, but ARM 17.30.210(9) defers imposition of interest and late fees for 90 days after the due date.  See 75-5-516(5), MCA.  The additional 90-day grace period should address the commentor's concern about municipal payment processing times. 

 

            COMMENT NO. 30:  ARM 17.30.201(8)(f) requires payment by check or money order, which is not consistent with the department electronic payment known as eBill. 

            RESPONSE:  EBill is not currently available to the entire department. The rule will be modified to incorporate electronic payments when it becomes available.

 

 

 

 

Reviewed by:                                     BOARD OF ENVIRONMENTAL REVIEW

 

 

 

/s/ James M. Madden                          By:  /s/ Joseph W. Russell                     

JAMES M. MADDEN                                   JOSEPH W. RUSSELL, M.P.H.

Rule Reviewer                                               Chairman

 

Certified to the Secretary of State, December 14, 2009.

 

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