HF 2616

as introduced - 88th Legislature (2013 - 2014) Posted on 03/06/2014 03:46pm

A bill for an act
relating to natural resources; modifying water appropriation provisions; providing
for administrative penalties for water appropriation violations; amending
Minnesota Statutes 2012, sections 103G.251; 103G.271, subdivisions 5, 6;
103G.281, subdivisions 1, 2, by adding a subdivision; 103G.301, subdivision 2;
proposing coding for new law in Minnesota Statutes, chapter 103G.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 103G.251, is amended to read:

103G.251 INVESTIGATION OF ACTIVITIES deleted text begin WITHOUT PERMIT
deleted text end new text begin AFFECTING WATERS OF THE STATE new text end .

Subdivision 1.

Investigations.

If the commissioner determines that an investigation
is in the public interest, the commissioner may investigate new text begin and monitor new text end activities being
conducted new text begin with or new text end without a permit that may affect waters of the state.

Subd. 2.

Findings and order.

(a) With or without a public hearing, the commissioner
may make findings and issue orders related to activities being conducted new text begin with or new text end without a
permit that affect waters of the state as otherwise authorized under this chapter.

(b) A copy of the findings and order must be served on the person to whom the
order is issued.

(c) If the commissioner issues the findings and order without a hearing, the person to
whom the order is issued may file a demand for a hearing with the commissioner. The
demand for a hearing must be accompanied by the bond as provided in section 103G.311,
subdivision 6, and the hearing must be held in the same manner and with the same
requirements as a hearing held under section 103G.311, subdivision 5. The demand for
a hearing and bond must be filed by 30 days after the person is served with a copy of
the commissioner's order.

(d) The hearing must be conducted as a contested case hearing under chapter 14.

(e) If the person to whom the order is addressed does not demand a hearing or
demands a hearing but fails to file the required bond:

(1) the commissioner's order becomes final at the end of 30 days after the person is
served with the order; and

(2) the person may not appeal the order.

(f) An order of the commissioner may be recorded or filed by the commissioner in
the office of the county recorder or registrar of titles, as appropriate, in the county where
the real property is located as a deed restriction on the property that runs with the land
and is binding on the owners, successors, and assigns until the conditions of the order
are met or the order is rescinded.

Sec. 2.

Minnesota Statutes 2012, section 103G.271, subdivision 5, is amended to read:

Subd. 5.

Prohibition on once-through water use permits.

(a) Except as provided
in paragraph (c), the commissioner may not deleted text begin , after December 31, 1990, deleted text end issue a water
use permit to increase the volume of appropriation from a groundwater source for a
once-through cooling system deleted text begin using in excess of 5,000,000 gallons annually deleted text end .

(b) Except as provided in paragraph (c), once-through system water use permits
using in excess of 5,000,000 gallons annually deleted text begin , deleted text end must be terminated by the commissioner
deleted text begin by the end of their design life but not later than December 31, 2010 deleted text end , unless the discharge
is into a public water basin within a nature preserve approved by the commissioner and
established prior to January 1, 2001. Existing once-through systems must not be expanded
and are required to convert to water efficient alternatives within the design life of existing
equipment.

(c) Notwithstanding paragraphs (a) and (b), the commissioner, with the approval of
the commissioners of health and the Pollution Control Agency, may issue once-through
system water use permits on an annual basis for aquifer storage and recovery systems that
return all once-through system water to the source aquifer. Water use permit processing
fees in subdivision 6, paragraph (a), apply to all water withdrawals under this paragraph,
including any reuse of water returned to the source aquifer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2015.
new text end

Sec. 3.

Minnesota Statutes 2012, section 103G.271, subdivision 6, is amended to read:

Subd. 6.

Water use permit processing fee.

(a) Except as described in paragraphs
(b) to deleted text begin (f) deleted text end new text begin (g) new text end , a water use permit processing fee must be prescribed by the commissioner in
accordance with the schedule of fees in this subdivision for each water use permit in force
at any time during the year. Fees collected under this paragraph are credited to the water
management account in the natural resources fund. The schedule is as follows, with the
stated fee in each clause applied to the total amount appropriated:

(1) $140 for amounts not exceeding 50,000,000 gallons per year;

(2) $3.50 per 1,000,000 gallons for amounts greater than 50,000,000 gallons but less
than 100,000,000 gallons per year;

(3) $4 per 1,000,000 gallons for amounts greater than 100,000,000 gallons but less
than 150,000,000 gallons per year;

(4) $4.50 per 1,000,000 gallons for amounts greater than 150,000,000 gallons but
less than 200,000,000 gallons per year;

(5) $5 per 1,000,000 gallons for amounts greater than 200,000,000 gallons but less
than 250,000,000 gallons per year;

(6) $5.50 per 1,000,000 gallons for amounts greater than 250,000,000 gallons but
less than 300,000,000 gallons per year;

(7) $6 per 1,000,000 gallons for amounts greater than 300,000,000 gallons but less
than 350,000,000 gallons per year;

(8) $6.50 per 1,000,000 gallons for amounts greater than 350,000,000 gallons but
less than 400,000,000 gallons per year;

(9) $7 per 1,000,000 gallons for amounts greater than 400,000,000 gallons but less
than 450,000,000 gallons per year;

(10) $7.50 per 1,000,000 gallons for amounts greater than 450,000,000 gallons but
less than 500,000,000 gallons per year; and

(11) $8 per 1,000,000 gallons for amounts greater than 500,000,000 gallons per year.

(b) For once-through cooling systems, a water use processing fee must be prescribed
by the commissioner in accordance with the following schedule of fees for each water use
permit in force at any time during the year:

(1) for nonprofit corporations and school districts, $200 per 1,000,000 gallons; and

(2) for all other users, $420 per 1,000,000 gallons.

(c) The fee is payable based on the amount of water appropriated during the year
and, except as provided in paragraph (f), the minimum fee is $100.

(d) For water use processing fees other than once-through cooling systems:

(1) the fee for a city of the first class may not exceed $250,000 per year;

(2) the fee for other entities for any permitted use may not exceed:

(i) $60,000 per year for an entity holding three or fewer permits;

(ii) $90,000 per year for an entity holding four or five permits; or

(iii) $300,000 per year for an entity holding more than five permits;

(3) the fee for agricultural irrigation may not exceed $750 per year;

(4) the fee for a municipality that furnishes electric service and cogenerates steam
for home heating may not exceed $10,000 for its permit for water use related to the
cogeneration of electricity and steam; and

(5) no fee is required for a project involving the appropriation of surface water to
prevent flood damage or to remove flood waters during a period of flooding, as determined
by the commissioner.

(e) Failure to pay the fee is sufficient cause for revoking a permit. A penalty of
new text begin $150 per month or new text end two percent per month new text begin , whichever is greater, new text end calculated from the
original due date must be imposed on the unpaid balance of fees remaining 30 days after
the sending of a second notice of fees due. A fee may not be imposed on an agency,
as defined in section 16B.01, subdivision 2, or federal governmental agency holding a
water appropriation permit.

(f) The minimum water use processing fee for a permit issued for irrigation of
agricultural land is $20 for years in which:

(1) there is no appropriation of water under the permit; or

(2) the permit is suspended for more than seven consecutive days between May 1
and October 1.

new text begin (g) The commissioner may waive the water use permit processing fee for
installations that use storm water runoff from impervious surfaces. The commissioner
shall consider the following criteria in determining whether to waive the fee: (1) the
extent to which the proposed use directly offsets the use of groundwater; (2) the extent
to which the proposed use does not adversely impact surface waters; (3) the extent to
which the proposed use is consistent with other local watershed and water management
plans or permits; and (4) the extent to which the proposed use implements measures to
minimize the volume of water used.
new text end

deleted text begin (g) deleted text end new text begin (h) new text end A surcharge of $30 per million gallons in addition to the fee prescribed in
paragraph (a) shall be applied to the volume of water used in each of the months of June,
July, and August that exceeds the volume of water used in January for municipal water
use, irrigation of golf courses, and landscape irrigation. The surcharge for municipalities
with more than one permit shall be determined based on the total appropriations from all
permits that supply a common distribution system.

Sec. 4.

Minnesota Statutes 2012, section 103G.281, subdivision 1, is amended to read:

Subdivision 1.

Measuring and records required.

new text begin (a) new text end The state, a political
subdivision of the state, a person, partnership, public or private corporation, or association
may not appropriate or use waters of the state without measuring and keeping a record of
the quantity of water used or appropriated as provided in section 103G.271 or 103G.275.

new text begin (b) The records required under this section must be available for inspection at
reasonable times by the commissioner and must be preserved and available for seven years.
new text end

Sec. 5.

Minnesota Statutes 2012, section 103G.281, subdivision 2, is amended to read:

Subd. 2.

Measuring equipment required.

An installation for appropriating
or using water must be equipped with a flow meter to measure the quantity of water
appropriated within the degree of accuracy required by rule. new text begin By January 1, 2017, an
installation for appropriating or using water that is conveyed through a pipe must be
equipped with a tamper-proof flow meter, as approved by the commissioner. Measuring
devices are subject to inspection by the commissioner. For other installations, new text end the
commissioner deleted text begin can deleted text end new text begin may new text end determine other methods to be used for measuring water quantity
based on the quantity of water appropriated or used, the source of water, the method of
appropriating or using water, and any other facts supplied to the commissioner.

Sec. 6.

Minnesota Statutes 2012, section 103G.281, is amended by adding a
subdivision to read:

new text begin Subd. 4. new text end

new text begin Penalties for noncompliant reporting. new text end

new text begin (a) The commissioner may
assess penalties for noncompliant reporting of water use information as provided in this
section. The penalty is $300 or two percent of the annual water use permit processing
fee, whichever is greater.
new text end

new text begin (b) A person with three or more noncompliant reporting incidents under this
subdivision within a five-year period shall have the applicable water appropriation permit
terminated. After 365 days from the date of termination, the applicant may apply for
reinstatement of the permit, subject to the permit application fee. Termination under this
subdivision is exempt from section 103G.271, subdivision 3.
new text end

Sec. 7.

new text begin [103G.299] ADMINISTRATIVE PENALTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Authority to issue penalty orders. new text end

new text begin The commissioner may issue
an order requiring violations to be corrected and administratively assessing monetary
penalties for violations of sections 103G.255 to 103G.298, any rules adopted under those
sections, and any standards, limitations, or conditions established in a department permit
for water appropriation. The order must be issued as provided in this section and in
accordance with the plan prepared under subdivision 12.
new text end

new text begin Subd. 2. new text end

new text begin Amount of penalty; considerations. new text end

new text begin (a) The commissioner may issue
orders assessing penalties of up to $20,000 for violations identified during an inspection or
other compliance review.
new text end

new text begin (b) In determining the amount of a penalty the commissioner may consider:
new text end

new text begin (1) the willfulness of the violation;
new text end

new text begin (2) the gravity of the violation, including damage to humans, animals, air, water,
land, or other natural resources of the state;
new text end

new text begin (3) the history of past violations;
new text end

new text begin (4) the number of violations;
new text end

new text begin (5) the economic benefit gained by the person by allowing or committing the
violation; and
new text end

new text begin (6) other factors as justice may require, if the commissioner specifically identifies
the additional factors in the commissioner's order.
new text end

new text begin (c) For a violation after an initial violation, including a continuation of the initial
violation, the commissioner must, in determining the amount of a penalty, consider the
factors in paragraph (b) and the:
new text end

new text begin (1) similarity of the most recent previous violation and the violation to be penalized;
new text end

new text begin (2) time elapsed since the last violation;
new text end

new text begin (3) number of previous violations; and
new text end

new text begin (4) response of the person to the most recent previous violation identified.
new text end

new text begin Subd. 3. new text end

new text begin Contents of order. new text end

new text begin An order assessing an administrative penalty under
this section must include:
new text end

new text begin (1) a concise statement of the facts alleged to constitute a violation;
new text end

new text begin (2) a reference to the section of the statute, rule, order, or term or condition of
a permit that has been violated;
new text end

new text begin (3) a statement of the amount of the administrative penalty to be imposed and the
factors upon which the penalty is based; and
new text end

new text begin (4) a statement of the person's right to review of the order.
new text end

new text begin Subd. 4. new text end

new text begin Corrective order. new text end

new text begin (a) The commissioner may issue an order assessing a
penalty and requiring the violations cited in the order to be corrected within a time period
specified by the commissioner.
new text end

new text begin (b) The person to whom the order was issued must provide information to the
commissioner before the 31st day after the order was received demonstrating that the
violation has been corrected or that appropriate steps toward correcting the violation have
been taken. The commissioner must determine whether the violation has been corrected
and notify the person subject to the order of the commissioner's determination.
new text end

new text begin Subd. 5. new text end

new text begin Penalty. new text end

new text begin (a) Except as provided in paragraph (b), if the commissioner
determines that the violation has been corrected or appropriate steps have been taken to
correct the action, the penalty must be reduced to an amount that covers the costs borne by
the department in pursuing the action. Unless the person requests review of the order under
subdivision 6 or 7 before the penalty is due, the penalty in the order is due and payable:
new text end

new text begin (1) on the 31st day after the order was received, if the person subject to the order
fails to provide information to the commissioner showing that the violation has been
corrected or that appropriate steps have been taken toward correcting the violation; or
new text end

new text begin (2) on the 20th day after the person receives the commissioner's determination under
subdivision 4, paragraph (b), if the person subject to the order has provided information
to the commissioner that the commissioner determines is not sufficient to show that the
violation has been corrected or that appropriate steps have been taken toward correcting
the violation.
new text end

new text begin (b) For a repeated or serious violation, the commissioner may issue an order with
a penalty that is not forgiven after the corrective action is taken. The penalty is due by
31 days after the order was received, unless review of the order under subdivision 6 or
7 has been sought.
new text end

new text begin (c) Interest at the rate established in section 549.09 begins to accrue on penalties
under this subdivision on the 31st day after the order with the penalty was received.
new text end

new text begin Subd. 6. new text end

new text begin Expedited administrative hearing. new text end

new text begin (a) Within 30 days after receiving
an order or within 20 days after receiving notice that the commissioner has determined
that a violation has not been corrected or appropriate steps have not been taken, the
person subject to an order under this section may request an expedited hearing, using
the procedures under Minnesota Rules, parts 1400.8510 to 1400.8612, to review the
commissioner's determination. The hearing request must specifically state the reasons
for seeking review of the order. The person to whom the order is directed and the
commissioner are the parties to the expedited hearing. The commissioner must notify the
person to whom the order is directed of the time and place of the hearing at least 20 days
before the hearing. The expedited hearing must be held within 30 days after a request for
hearing has been filed with the commissioner unless the parties agree to a later date.
new text end

new text begin (b) All written arguments must be submitted within ten days following the close of
the hearing. The hearing must be conducted under Minnesota Rules, parts 1400.8510 to
1400.8612, as modified by this subdivision.
new text end

new text begin (c) The administrative law judge must issue a report making recommendations about
the commissioner's action to the commissioner within 30 days following the close of the
record. The administrative law judge may not recommend a change in the amount of the
proposed penalty unless the administrative law judge determines that, based on the factors
in subdivision 2, the amount of the penalty is unreasonable.
new text end

new text begin (d) If the administrative law judge makes a finding that the hearing was requested
solely for purposes of delay or that the hearing request was frivolous, the commissioner
may add to the amount of the penalty the costs charged to the department by the Office of
Administrative Hearings for the hearing.
new text end

new text begin (e) If a hearing has been held, the commissioner may not issue a final order until at
least five days after receipt of the report of the administrative law judge. The person to
whom an order is issued may, within those five days, comment to the commissioner on the
recommendations, and the commissioner must consider the comments. The final order
may be appealed in the manner provided in sections 14.63 to 14.69.
new text end

new text begin (f) If a hearing has been held and a final order issued by the commissioner, the
penalty must be paid by 30 days after the date the final order is received unless review of
the final order is requested under sections 14.63 to 14.69. If review is not requested or the
order is reviewed and upheld, the amount due is the penalty, together with interest accruing
from 31 days after the original order was received at the rate established in section 549.09.
new text end

new text begin Subd. 7. new text end

new text begin Mediation. new text end

new text begin In addition to review under subdivision 6, the commissioner
may enter into mediation concerning an order issued under this section if the commissioner
and the person to whom the order is issued both agree to mediation.
new text end

new text begin Subd. 8. new text end

new text begin Penalties due and payable. new text end

new text begin The commissioner may enforce penalties that
are due and payable under this section in any manner provided by law for the collection
of debts.
new text end

new text begin Subd. 9. new text end

new text begin Revocation and suspension of permit. new text end

new text begin If a person fails to pay a penalty
owed under this section, the commissioner has grounds to revoke a permit or to refuse
to amend a permit or issue a new permit.
new text end

new text begin Subd. 10. new text end

new text begin Cumulative remedy. new text end

new text begin The authority of the commissioner to issue a
corrective order assessing penalties is in addition to other remedies available under statutory
or common law, except that the state may not seek civil penalties under any other provision
of law for the violations covered by the administrative penalty order. The payment of a
penalty does not preclude the use of other enforcement provisions, under which penalties
are not assessed, in connection with the violation for which the penalty was assessed.
new text end

new text begin Subd. 11. new text end

new text begin Deposit of fees. new text end

new text begin Fees collected under this section must be credited to the
water management account in the natural resources fund.
new text end

new text begin Subd. 12. new text end

new text begin Plan for use of administrative penalties. new text end

new text begin The commissioner must
prepare a plan for using the administrative penalty authority in this section. The
commissioner must provide a 30-day period for public comment on the plan. The plan
must be finalized within six months after the effective date of this section.
new text end

Sec. 8.

Minnesota Statutes 2012, section 103G.301, subdivision 2, is amended to read:

Subd. 2.

Permit application and notification fees.

(a) A fee to defray the costs
of receiving, recording, and processing must be paid for a permit application authorized
under this chapter, except for a general permit application, for each request to amend or
transfer an existing permit, and for a notification to request authorization to conduct a
project under a general permit. Fees established under this subdivision, unless specified in
paragraph (c), shall be compliant with section 16A.1285.

(b) Proposed projects that require water in excess of 100 million gallons per year
must be assessed fees to recover the costs incurred to evaluate the project and the costs
incurred for environmental review. Fees collected under this paragraph must be credited
to an account in the natural resources fund and are appropriated to the commissioner.

(c) The fee to apply for a permit to appropriate water, in addition to any fee under
paragraph (b), and for a permit to construct or repair a dam that is subject to dam safety
inspection is $150. The application fee for a permit to work in public waters or to
divert waters for mining must be at least $150, but not more than $1,000. The fee for a
notification to request authorization to conduct a project under a general permit is $100.

new text begin (d) A penalty of $300 shall be assessed for each calendar year, up to a maximum of
seven years, in which an unauthorized appropriation of water occurred. A penalty may
not be imposed on an agency, as defined in section 16B.01, subdivision 2, or federal
governmental agency holding a water appropriation permit. This penalty is in addition to
any other fee or penalty assessed.
new text end

Sec. 9. new text begin WATER REUSE REPORT; ENVIRONMENTAL QUALITY BOARD.
new text end

new text begin By January 15, 2015, the Environmental Quality Board shall report on water reuse
to the chairs and ranking minority members of the senate and house of representatives
committees with jurisdiction over environment and natural resources policy. The report
shall identify barriers to reuse, jurisdictional conflicts, analysis of statutes and rules, and
the development of recommendations to support water reuse and aquifer recharge.
new text end