Oregon Department of Environmental Quality

ENTER NOTICE DATE

Notice of Proposed Rulemaking

Increase water quality permit fees to address increasing program costs.

Short summary 

DEQ is proposing the following Water Quality program changes:

◦  Permit fee increase of 2.9 percent for most of the existing permit fees

◦  New fees for municipal stormwater phase one and underground injection control major modifications

◦  Permit fee increases for existing offstream mining permit fees

Brief history

In 2002, DEQ convened the Blue Ribbon Committee on Wastewater Permitting (comprised of industry, environmental and local government representatives) to recommend improvements to DEQ’s water quality permit program. In 2004, the committee published a report containing a variety of recommendations, including increasing fee revenue by no more than three percent each year to address increasing program costs. The annual fee increase recommendation was adopted into law in 2005, and DEQ implemented fee increases in 2007, 2008, 2010, 2011 and 2012.

Currently, major modification fees do not exist for municipal stormwater phase one and underground injection control permits. The major modification fees are proposed in an effort to recover costs associated with future major modification requests.

The offstream mining permit (WPCF 600) regulates non-chemical offstream mining of metals (primarily gold). Currently, small operations pay no application or annual fee. Large operations pay a $207 application fee and no annual fee. Almost all of the permittees are small operations. There were approximately 200 permits in 2004; currently there are approximately 1,200 permits. The offstream mining fees are proposed in an effort to recover costs associated with administering the permit.

Regulated parties

Permit fee increase of 2.9 percent for most permit fees: individuals, private businesses and government agencies

Permit fees would increase for most National Pollutant Discharge Elimination System, Water Pollution Control Facility, and WPCF-Onsite septic system permits. Suction dredge (700-PM) permits would not be affected by the fee increase, since those permit fees are set in statute and can only be changed by the legislature. Graywater (2401 and 2402) permits would also not be affected by the fee increase in an effort to encourage graywater reuse permitting. Excludes WPCF 600 if new fees proposed

Major modification fees for municipal stormwater phase one and underground injection control permits: private businesses and government agencies

Offstream mining permit fees: individuals, private businesses

1.  Permit fee increase of 2.9 percent for most of the existing permit fees

What problem is DEQ trying to solve?

Program costs are estimated to increase 7.1 percent per full-time employee per fiscal year in the 2013-2015 biennium, when comparing the 2013-2015 Governor’s Balanced Budget to the 2011-2013 Legislatively Adopted Budget.  

To establish the amount of the proposed increase for fiscal year 2014 (July 1, 2013-June 30, 2014), DEQ analyzed expected cost increases for fiscal year 2014 relative to the costs for fiscal year 2013, per full-time employee. The projected increases in personnel services can be attributed to projected increasing costs of medical benefits, staff salaries, and the Public Employees Retirement System. The combined effects of the budget categories (see table below) represent a total increase of 7.1 percent in projected costs for fiscal year 2014.

How would the proposed rule solve the problem?  

The proposed rule solves only part of the problem of increased program costs. State statute authorizes the environmental quality commission to raise fees annually in an amount not to exceed the anticipated increase in the cost of administering the permit program or 3 percent, whichever is lower (Oregon Revised Statute 468B.051). The estimated program cost increase of 7.1 percent for fiscal year 2014 is greater than the maximum 3 percent allowed by law.

Also, the Blue Ribbon Committee recommended in its 2004 report permit fees comprise 60 percent of the total permit program budget, with public funds (federal, general) accounting for 40 percent. When including a 3 percent fee increase in the 2013-2015 Governor’s Balanced Budget, permit fees account for 62 percent of the total budget. A permit fee increase based on a 60:40 percent funding split is 2.9 percent. In an effort to meet the Blue Ribbon Committee recommendation, DEQ changed its permit fee increase proposal from 3 percent to 2.9 percent.

How will DEQ know the problem has been solved?  

An increase in general fund will account for the estimated 4.2 percent program cost increase in fiscal year 2014 that the proposed 2.9 percent permit fee increase would not cover. The problem of permit program cost increases can be “solved” by reducing costs listed in the table above, primarily through reducing personnel services costs (e.g. salaries, benefits), as this category accounts for almost three-fourths of the total program budget. However, DEQ does not control its personnel services costs; the Department of Administrative Services oversees these costs. Reducing the costs of services and supplies (e.g. rent, utilities) could also help “solve” the problem. VERIFY WITH ADAM

DEQ does not control the amount of federal and general funds received. DEQ can best manage its funding for the permit program by ensuring appropriate permit fees are assessed to its permit holders.

2.  New fees for municipal stormwater phase one and underground injection control major modifications

What problem is DEQ trying to solve?

Major modification fees do not exist for municipal stormwater phase one and underground injection control permits. DEQ is unable to recover costs associated with major modifications for these permit types.

How would the proposed rule solve the problem?  

DEQ is proposing major modification fees for these permit types equivalent to 50.1 percent of new permit application fees. Using this methodology will align the proposed major modification fees with existing major modification fees of other individual domestic permits. Through the proposed fees, DEQ would be able to recover costs associated with major modifications for municipal stormwater phase one and underground injection control permits. DEQ is proposing a major modification fee of $8,982 for municipal stormwater phase one permits and $5,106 for underground injection control permits.

How will DEQ know the problem has been solved?  

Not applicable.

3.  Permit fee increases for existing offstream mining permit fees

What problem is DEQ trying to solve?

Offstream mining small operations pay no permit fees. Large operations pay a $207 application fee and no annual fee. Almost all of the permittees for offstream mining are small operations. The current fees do not provide sufficient revenue to administer the offstream mining permit.

How would the proposed rule solve the problem?  

The proposed offstream mining fees are designed to recover costs associated with administering the permit. Include the workload analysis table. List the proposed fees here in a sentence.

How will DEQ know the problem has been solved?  

Not applicable.

Request for other options

During the public comment period, DEQ requested public comment on whether to consider other options for achieving the rule's substantive goals while reducing negative economic impact of the rule on business.

Federal relationship

"It is the policy of this state that agencies shall seek to retain and promote the unique identity of Oregon by considering local conditions when an agency adopts policies and rules. However, since there are many federal laws and regulations that apply to activities that are also regulated by the state, it is also the policy of this state that agencies attempt to adopt rules that correspond with equivalent federal laws and rules..."

Relationship to federal requirements

There are no applicable federal requirements. The proposed rulemaking affects fees for Oregon’s National Pollutant Discharge Elimination System and Water Pollution Control Facility permitting programs (OAR 340-018-0030(5)(c) Issuance of On-site Sewer Permit and OAR 340-018-0030(5)(d) Issuance of NPDES and WPCF Permits), which regulate wastewater discharges from industrial and municipal sources. This rulemaking does not alter any permit requirements other than the fee amounts.

Lead division            Program or activity

 Water Quality            Surface Water Management

      Chapter 340 action      

 Recommendation  Division  Rule  Title  SIP/Land use*

 amend  45  75  Permit Fee Schedule  Land use

 amend  71  140  Onsite System Fees  Land use

*  SIP – This rule is part of the State Implementation Plan.

*  Land use – DEQ State Agency Coordination Program considers this rule, program or activity a land use program.

Statutory authority

ORS 454.625, 468.020, 468.065

Statute implemented    

ORS 454.745, 454.755, 468.065, 468B.035, 468B.050, 468B.051 and 468B.195

Documents relied on for rulemaking  ORS 183.335(2)(b)(C)

Statement of Cost of Compliance  

1.  Impacts on general public

Though DEQ cannot determine the extent to which the proposed fees will impact each consumer, DEQ expects some impact on the public, primarily through an increase to the costs of goods and services offered by permit holders.

2.  Cost of compliance on small businesses (50 or fewer employees). ORS 183.336

For this section, DEQ used Oregon Employment Department information to calculate the impact of the proposed fee increases on small businesses. In 2006, the Oregon Employment Department found that 96 percent of Oregon businesses were small businesses. Although DEQ cannot determine the extent to which the 2.9 percent fee increases will impact each permit holder, DEQ expects that the fee increase will have impact on small businesses. Fiscal impact to a small business is dependent upon the type of permit issued, but application fee increases will range from $6 to $1,469 and annual fee increases will range from $2 to $2,724.

The proposed major modification fee for municipal stormwater phase one permits will not directly impact small businesses. Permits for municipal stormwater phase one are issued only to governments, but these governments and jurisdictions may raise fees to cover their additional costs. The proposed major modification fee for underground injection control permits would impact small businesses that pursue a major permit modification. Currently, a fee does not exist. The proposed fee is $5,106.

The proposed offstream mining fees would impact small businesses. Explanation needed for cost of compliance – depends upon the fees developed. Compare existing and proposed fees.

3. Impact on large businesses (all businesses that are not small businesses under #2 above)

DEQ estimates the 2.9 percent fee increase will impact approximately 150 large businesses, and that for these businesses, the fee increase is small compared to the overall yearly operating costs of permit holders.

Large businesses will not be subject to the proposed major modification fee for municipal stormwater phase 1 permits. DEQ estimates 18 of 62 expected underground injection control permit holders are large businesses and will be subject to the proposed major modification fee of $5,106. The estimate of 18 large businesses is based upon plans for future permit issuance. Currently, no large businesses have been issued an underground injection control permit.

Large businesses would not be subject to the proposed offstream mining permit fees.

4. Impact on other government entities other than DEQ

a.  Local governments  

For this section, a local government is defined as 1) a group of local government functions within a jurisdiction that each hold water quality permits (e.g., City of Portland – including Portland School District and Port of Portland – is counted as one local government); or 2) a single organization within a jurisdiction, if only one local government function holds a permit (e.g., includes but is not limited to water districts, cities, towns, ports, sanitary districts, library districts, counties, and school districts). This rulemaking will increase water quality permit fees by 2.9 percent for 301 local governments that hold approximately 571 permits.

DEQ has issued seven municipal stormwater phase 1 permits to local governments. Several of the municipal stormwater phase 1 permits include more than one local government under the permit. A total of 21 local governments will be subject to the proposed major modification fee for municipal stormwater phase 1 permits. In the case where a permit includes more than one local government, the major modification fee will be charged only once and divided among the local governments.

DEQ estimates 30 of 62 expected underground injection control permit holders are local governments and will be subject to the proposed major modification fee. The estimate of 30 local governments is based upon plans for future permit issuance. Currently, one local government has been issued a UIC permit.

Local governments would not be subject to the proposed offstream mining permit fees.

b.  State agencies    

Twenty-one Oregon state agencies hold about 133 water quality permits.

DEQ has issued one municipal stormwater phase 1 permit to a state agency, which will be subject to the proposed major modification fee. DEQ estimates 3 of 62 expected UIC permits to be issued to state government agencies. These state agencies will be subject to the proposed major modification fee. The estimate of three state agency permits is based upon plans for future permit issuance. Currently, no state agencies have been issued a UIC permit.

State governments would not be subject to the proposed offstream mining permit fees.

5. Impact on DEQ

The proposed 2.9 percent fee increase will generate approximately $145,000 to cover increased water quality program costs.

Requests by the permittee for major modifications are dependent upon many factors including available resources to the permittees and future changes/revisions to the permit. Due to uncertainty with the number of future major modification requests, DEQ cannot accurately predict additional revenue generated from the proposed major modification fees. Currently, eight municipal stormwater phase 1 permits have been issued, and 61 UIC permits are expected to be issued in the future. If each of these permits underwent one major modification requested by the permittee, additional revenue of $383,322 would be generated.

WPCF 600

Advisory committee

DEQ appointed an advisory committee and considered the committee’s recommendations on this fiscal and economic impact statement. In compliance with ORS 183.333, DEQ asked for the committee’s recommendations on:

•  Whether the proposed rules would have a fiscal impact,

•  The extent of the impact, and

•  Whether the proposed rules would have a significant impact on small businesses and compliance with ORS 183.540.

Housing cost

To comply with ORS 183.534, DEQ determined the proposed rules would have an effect on the development cost of a 6,000-square-foot parcel and construction of a 1,200-square-foot detached single-family dwelling on that parcel.

A builder of a 6,000 square foot parcel will be required to pay $243 for a construction stormwater permit, if the parcel is part of a common plan of development disturbing one or more acres. A builder of a 6,000 square foot parcel that is not part of a common plan of development disturbing one or more acres, will not be required to obtain a construction stormwater permit, and consequently will not be required to pay the $237 permit fee. While the fee will not likely have significant impact on new housing projects, the fee could impact projects by affecting construction costs that are agreed upon between a builder and the buyer. DEQ estimates that home builders will likely pass the permit cost to home buyers.

Fees

INSERT PROPOSAL.FEE.3.0~ here.

“It is the Commission's policy to coordinate the Department's programs, rules and actions that affect land use with local acknowledged plans to the fullest degree possible.”  

                              ORS 197.180, OAR 660-030

Land-use considerations

To determine whether the proposed rules involve programs or actions that are considered a land-use action, DEQ considered:

▪  Statewide planning goals for specific references. Section III, subsection 2 of the DEQ State Agency Coordination Program} document identifies the following statewide goal relating to DEQ's authority:

 Goal  Title

 5    Open Spaces, Scenic and Historic Areas, and Natural Resources

 6    Air, Water and Land Resources Quality

 11    Public Facilities and Services

 16    Estuarial resources

 19    Ocean Resources

▪  OAR 340-018-0030 for EQC rules on land-use coordination. Division 18 requires DEQ to determine whether proposed rules will significantly affect land use. If yes, how will DEQ:

◦  Comply with statewide land-use goals, and

◦  Ensure compatibility with acknowledged comprehensive plans, which DEQ most commonly achieves by requiring a Land Use Compatibility Statement.

▪  DEQ’s mandate to protect public health and safety and the environment.

▪  Whether DEQ is the primary authority that is responsible for land-use programs or actions in the proposed rules.

▪  Present or future land uses identified in acknowledged comprehensive plans.

Determination

DEQ determined that the proposed rules identified under the ‘Rules affected, authorities, supporting documents’ section above affect Oregon’s National Pollutant Discharge Elimination System and Water Pollution Control Facility permitting programs (OAR 340-018-0030(5)(c) Issuance of On-site Sewer Permit and OAR 340-018-0030(5)(d) Issuance of NPDES and WPCF Permits), which is an existing rule, program or activity that is considered a land-use program in the DEQ State Agency Coordination Program.

DEQ’s statewide goal and local plan compatibility procedures adequately cover the proposed rules. Oregon Administrative Rule 340-018-0050(2)(a) ensures compatibility with acknowledged comprehensive plans through submittal of a Land Use Compatibility Statement.

 Advisory committee

DEQ convened the Blue Ribbon advisory committee on [DATE]. [DESCRIBE COMMITTEE CHARTER]

The 16-member committee includes industry, environmental and local government representatives. The committee met ## times over ## months. The committee recommended that [SUMMARIZE RECOMMENDATION OR INVOLVEMENT AND LINK TO ANY FORMAL RECOMMENDATION.] The committee reviewed the fiscal impact statement, specifically impact on small businesses.

 EQC prior involvement

DEQ shared information about this rulemaking with the EQC in the Director's Dialogue mmm dd, yyyy.

Public notice

The mmm dd, yyyy Oregon Bulletin will publish the Notice of Proposed Rulemaking with Hearing for this proposed rulemaking. DEQ also:

•  Posted notice on DEQ’s webpage http://www.deq.state.or.us/regulations/proposedrules.htm on mmm dd, yyyy.

•  E-mailed notice to:

•  Approximately #### interested parties through GovDelivery on mmm dd, yyyy.

•  #### stakeholders on the [LIST OTHER MAILING LIST].

•  ## key legislators required under ORS 183.335 on mmm dd, yyyy. Key legislators included:

◦  Name, Title, Committee

◦  Name, Title, Committee

◦  Name, Title, Committee

•  Members of the advisory committee on mmm dd, yyyy.

•  Mailed the notice by U.S. Postal Service to ## interested parties on mmm dd, yyyy.

•  Sent notice to EPA on mmm dd, yyyy. 

•  Other

Public hearings

DEQ plans to hold ## public hearing(s). The table(s) below includes information about how to participate in the public hearings.

Before taking public comment and according to Oregon Administrative Rule 137-001-0030, the staff presenter will summarize the content of the notice given under Oregon Revised Statute 183.335 and respond to any questions about the rulemaking.

DEQ will add the names, addresses and affiliations of all hearing attendees to the interested parties list for this rule if provided on a registration form or the attendee list. DEQ will consider all oral and written comments received at the hearings listed below before finalizing the proposed rules. All comments will be summarized and DEQ will respond to comments on the Environmental Quality Commission staff report.

Delete the unused hearings tables below. After the team has finalized the information in the table(s), copy them into STAFF.RPT-6.0~. The staff report includes directions on ungrouping hidden rows and deleting rows specific to the notice.

Close of public comment period

The comment period will close on mmm dd, yyyy at ##:## p.m.

DEQ will prepare a response to all comments received during the public hearing and comment period and may modify the proposed rules. DEQ plans to recommend that the environmental quality commission adopt the rules at its June 16-17, 2011 meeting. DEQ will notify persons of the time and place for final commission action if they submit comments during the hearing or comment period or request to be placed on DEQ’s mailing list for this rulemaking. If the proposed rules are adopted, fees would become effective Nov. 1, 2013.