SF 2705

as introduced - 90th Legislature (2017 - 2018) Posted on 03/16/2018 08:18am

A bill for an act
relating to environment; modifying environmental agency permitting, rulemaking,
and fees; providing for watershed credit exchange program; modifying compliance
requirements; appropriating money; amending Minnesota Statutes 2016, sections
103G.2242, subdivision 14; 115.03, subdivision 5, by adding subdivisions; 115.035;
Minnesota Statutes 2017 Supplement, section 116.07, subdivision 4d; proposing
coding for new law in Minnesota Statutes, chapter 115.

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

Section 1.

Minnesota Statutes 2016, section 103G.2242, subdivision 14, is amended to
read:

Subd. 14.

Fees established.

(a) Fees must be assessed for managing wetland bank
accounts and transactions as follows:

(1) account maintenance annual fee: one percent of the value of credits not to exceed
$500;

(2) account establishment, deposit, or transfer: 6.5 percent of the value of credits not to
exceed $1,000 per establishment, deposit, or transfer; and

(3) withdrawal fee: 6.5 percent of the value of credits withdrawn new text begin not to exceed $1,000 new text end .

(b) The board may establish fees at or below the amounts in paragraph (a) for single-user
or other dedicated wetland banking accounts.

(c) Fees for single-user or other dedicated wetland banking accounts established pursuant
to section 103G.005, subdivision 10i, clause (4), are limited to establishment of a wetland
banking account and are assessed at the rate of 6.5 percent of the value of the credits not to
exceed $1,000.

(d) The board may assess a fee to pay the costs associated with establishing conservation
easements, or other long-term protection mechanisms prescribed in the rules adopted under
subdivision 1, on property used for wetland replacement.

Sec. 2.

Minnesota Statutes 2016, section 115.03, subdivision 5, is amended to read:

Subd. 5.

Agency authority; national pollutant discharge elimination system.

new text begin (a)
new text end Notwithstanding any other provisions prescribed in or pursuant to this chapter and, with
respect to the pollution of waters of the state, in chapter 116, or otherwise, the agency shall
have the authority to perform any and all acts minimally necessary including, but not limited
to, the establishment and application of standards, procedures, rules, orders, variances,
stipulation agreements, schedules of compliance, and permit conditions, consistent with
and, therefore not less stringent than the provisions of the Federal Water Pollution Control
Act, as amended, applicable to the participation by the state of Minnesota in the national
pollutant discharge elimination system (NPDES); provided that this provision shall not be
construed as a limitation on any powers or duties otherwise residing with the agency pursuant
to any provision of law.

new text begin (b) An activity that conveys or connects waters of the state without subjecting the
transferred water to intervening industrial, municipal, or commercial use does not require
a national pollutant discharge elimination system permit. This exemption does not apply to
pollutants introduced by the activity itself to the water being transferred.
new text end

Sec. 3.

Minnesota Statutes 2016, section 115.03, is amended by adding a subdivision to
read:

new text begin Subd. 12. new text end

new text begin Watershed credit exchange. new text end

new text begin (a) The agency, in cooperation with the Board
of Water and Soil Resources, may establish a watershed credit exchange program. The
purpose of the program is to provide assistance to permittees to meet water-quality-based
effluent limits, wasteload allocations, or storm water discharge requirements.
new text end

new text begin (b) In administering a watershed credit exchange program, the agency and the Board of
Water and Soil Resources may cooperate with other governmental and nongovernmental
organizations.
new text end

new text begin (c) The watershed credit exchange program may include the following program elements
consistent with the requirements of subdivision 10 and related provisions in other state or
federal laws:
new text end

new text begin (1) criteria for participating in the exchange;
new text end

new text begin (2) requirements for generating watershed credit;
new text end

new text begin (3) requirements for using watershed credits;
new text end

new text begin (4) verifying watershed credits;
new text end

new text begin (5) tracking watershed credits;
new text end

new text begin (6) financial management of the watershed credit exchange;
new text end

new text begin (7) roles of other agencies and local governments;
new text end

new text begin (8) roles of any nongovernmental entity;
new text end

new text begin (9) periodic evaluation of watershed credit compliance;
new text end

new text begin (10) coordinating with other state and federal programs; and
new text end

new text begin (11) other applicable elements.
new text end

new text begin (d) The agency, in cooperation with the Board of Water and Soil Resources, may construct
pilot programs before establishing a statewide watershed credit exchange program.
new text end

Sec. 4.

Minnesota Statutes 2016, section 115.03, is amended by adding a subdivision to
read:

new text begin Subd. 13. new text end

new text begin Watershed credit exchange account established. new text end

new text begin (a) The commissioner of
management and budget must establish a dedicated watershed credit exchange account.
Related revenue from the following sources must be deposited and credited to the account:
new text end

new text begin (1) legislative appropriations;
new text end

new text begin (2) government grants;
new text end

new text begin (3) private grants or gifts;
new text end

new text begin (4) credit sales; and
new text end

new text begin (5) interest attributable to money in the watershed credit exchange account.
new text end

new text begin (b) Upon approval of a spending plan by the commissioner of management and budget,
funds in the account may be used by the Board of Soil and Water Resources and the
commissioner of the agency for creating watershed credits, creating local watershed credit
exchanges, and other program management costs.
new text end

Sec. 5.

Minnesota Statutes 2016, section 115.035, is amended to read:

115.035 EXTERNAL PEER REVIEW OF WATER QUALITY STANDARDS.

(a) deleted text begin When the commissioner convenes an external peer review panel during the
promulgation or amendment of water quality standards, the commissioner must provide
notice and take public comment on the charge questions for the external peer review panel
and must allow written and oral public comment as part of the external peer review panel
process. deleted text end new text begin Every new or revised water quality standard must be supported by a technical
support document that provides the scientific basis for the proposed standard and that has
undergone external, scientific peer review. Water quality standards in which the agency is
adopting, without change, a United States Environmental Protection Agency criterion that
has been through peer review are not subject to this paragraph. new text end Documentation of the external
peer review panel, including the name or names of the peer reviewer or reviewers, must be
included in the statement of need and reasonableness for the water quality standard. deleted text begin If the
commissioner does not convene an external peer review panel during the promulgation or
amendment of water quality standards, the commissioner must state the reason an external
peer review panel will not be convened in the statement of need and reasonableness.
deleted text end

new text begin (b) Every technical support document developed by the agency must be released in draft
form for public comment before peer review and before finalizing the technical support
document.
new text end

new text begin (c) The commissioner must provide public notice and information about the external
peer review through the request for comments published at the beginning of the rulemaking
process for the water quality standard, and:
new text end

new text begin (1) the request for comments must identify the draft technical support document and
where the document can be found;
new text end

new text begin (2) the request for comments must include a proposed charge for the external peer review
and request comments on the charge;
new text end

new text begin (3) all comments received during the public comment period must be made available to
the external peer reviewers; and
new text end

new text begin (4) if the agency is not soliciting external peer review because the agency is adopting a
United States Environmental Protection Agency criterion without change, that must be
noted in the request for comments.
new text end

new text begin (d) The purpose of the external peer review is to evaluate whether the technical support
document and proposed standard are based on sound scientific knowledge, methods, and
practices. The external peer review must be conducted according to the guidance in the
most recent edition of the United States Environmental Protection Agency's Peer Review
Handbook. Peer reviewers must not have participated in developing the scientific basis of
the standard.
new text end

new text begin (e) The type of review and the number of peer reviewers depends on the nature of the
science underlying the standard. When the agency is developing significant new science or
science that expands significantly beyond current documented scientific practices or
principles, a panel review must be used.
new text end

new text begin (f) In response to the findings of the external peer review, the draft technical support
document must be revised as appropriate. The findings of the external peer review must be
documented and attached to the final technical support document, which must be an exhibit
as part of the statement of need and reasonableness in the rulemaking to adopt the new or
revised water quality standard. The final technical support document must note changes
made in response to the external peer review.
new text end

deleted text begin (b) deleted text end new text begin (g) new text end By December 15 each year, the commissioner shall post on the agency's Web
site a report identifying the water quality standards development work in progress or
completed in the past year, the lead agency scientist for each development effort, and
opportunities for public input.

Sec. 6.

new text begin [115.455] EFFLUENT LIMITATION COMPLIANCE.
new text end

new text begin To the extent allowable under federal law, for a municipality that constructs a publicly
owned treatment works facility or for an industrial national pollutant discharge elimination
system and state disposal system permit holder that constructs a treatment works facility to
comply with a new or modified effluent limitation, compliance with any new or modified
effluent limitation adopted after construction begins that would require additional capital
investment is required no sooner than 16 years after the date the facility begins operating.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2017 Supplement, section 116.07, subdivision 4d, is amended
to read:

Subd. 4d.

Permit fees.

(a) The agency may collect permit fees in amounts not greater
than those necessary to cover the reasonable costs of developing, reviewing, and acting
upon applications for agency permits and implementing and enforcing the conditions of the
permits pursuant to agency rules. Permit fees shall not include the costs of litigation. The
fee schedule must reflect reasonable and routine direct and indirect costs associated with
permitting, implementation, and enforcement. The agency may impose an additional
enforcement fee to be collected for a period of up to two years to cover the reasonable costs
of implementing and enforcing the conditions of a permit under the rules of the agency.
Any money collected under this paragraph shall be deposited in the environmental fund.

(b) Notwithstanding paragraph (a), the agency shall collect an annual fee from the owner
or operator of all stationary sources, emission facilities, emissions units, air contaminant
treatment facilities, treatment facilities, potential air contaminant storage facilities, or storage
facilities subject to a notification, permit, or license requirement under this chapter,
subchapters I and V of the federal Clean Air Act, United States Code, title 42, section 7401
et seq., or rules adopted thereunder. The annual fee shall be used to pay for all direct and
indirect reasonable costs, including legal costs, required to develop and administer the
notification, permit, or license program requirements of this chapter, subchapters I and V
of the federal Clean Air Act, United States Code, title 42, section 7401 et seq., or rules
adopted thereunder. Those costs include the reasonable costs of reviewing and acting upon
an application for a permit; implementing and enforcing statutes, rules, and the terms and
conditions of a permit; emissions, ambient, and deposition monitoring; preparing generally
applicable regulations; responding to federal guidance; modeling, analyses, and
demonstrations; preparing inventories and tracking emissions; and providing information
to the public about these activities.

(c) The agency shall set fees that:

(1) will result in the collection, in the aggregate, from the sources listed in paragraph
(b), of an amount not less than $25 per ton of each volatile organic compound; pollutant
regulated under United States Code, title 42, section 7411 or 7412 (section 111 or 112 of
the federal Clean Air Act); and each pollutant, except carbon monoxide, for which a national
primary ambient air quality standard has been promulgated;

(2) may result in the collection, in the aggregate, from the sources listed in paragraph
(b), of an amount not less than $25 per ton of each pollutant not listed in clause (1) that is
regulated under this chapter or air quality rules adopted under this chapter; and

(3) shall collect, in the aggregate, from the sources listed in paragraph (b), the amount
needed to match grant funds received by the state under United States Code, title 42, section
7405 (section 105 of the federal Clean Air Act).

The agency must not include in the calculation of the aggregate amount to be collected
under clauses (1) and (2) any amount in excess of 4,000 tons per year of each air pollutant
from a source. The increase in air permit fees to match federal grant funds shall be a surcharge
on existing fees. The commissioner may not collect the surcharge after the grant funds
become unavailable. In addition, the commissioner shall use nonfee funds to the extent
practical to match the grant funds so that the fee surcharge is minimized.

(d) To cover the reasonable costs described in paragraph (b), the agency shall provide
in the rules promulgated under paragraph (c) for an increase in the fee collected in each
year by the percentage, if any, by which the Consumer Price Index for the most recent
calendar year ending before the beginning of the year the fee is collected exceeds the
Consumer Price Index for the calendar year 1989. For purposes of this paragraph the
Consumer Price Index for any calendar year is the average of the Consumer Price Index for
all-urban consumers published by the United States Department of Labor, as of the close
of the 12-month period ending on August 31 of each calendar year. The revision of the
Consumer Price Index that is most consistent with the Consumer Price Index for calendar
year 1989 shall be used.

(e) Any money collected under paragraphs (b) to (d) must be deposited in the
environmental fund and must be used solely for the activities listed in paragraph (b).

(f) Permit applicants who wish to construct, reconstruct, or modify a project may offer
to reimburse the agency for the costs of staff time or consultant services needed to expedite
the preapplication process and permit development process through the final decision on
the permit, including the analysis of environmental review documents. The reimbursement
shall be in addition to permit application fees imposed by law. When the agency determines
that it needs additional resources to develop the permit application in an expedited manner,
and that expediting the development is consistent with permitting program priorities, the
agency may accept the reimbursement. The commissioner must give the applicant an estimate
of costs to be incurred by the commissioner. The estimate must include a brief description
of the tasks to be performed, a schedule for completing the tasks, and the estimated cost for
each task. The applicant and the commissioner must enter into a written agreement detailing
the estimated costs for the expedited permit decision-making process to be incurred by the
agency. The agreement must also identify staff anticipated to be assigned to the project.
The commissioner must not issue a permit until the applicant has paid all fees in full. The
commissioner must refund any unobligated balance of fees paid. Reimbursements accepted
by the agency are appropriated to the agency for the purpose of developing the permit or
analyzing environmental review documents. Reimbursement by a permit applicant shall
precede and not be contingent upon issuance of a permit; shall not affect the agency's decision
on whether to issue or deny a permit, what conditions are included in a permit, or the
application of state and federal statutes and rules governing permit determinations; and shall
not affect final decisions regarding environmental review.

(g) The fees under this subdivision are exempt from section 16A.1285.

new text begin (h) The fees under this subdivision are subject to legislative approval under section
16A.1283.
new text end

Sec. 8. new text begin APPROPRIATION.
new text end

new text begin $1,542,000 in fiscal year 2019 is appropriated from the general fund to commissioner
of the Pollution Control Agency for the watershed credit exchange program. Of this amount,
$114,000 must be transferred to the Board of Water and Soil Resources and $1,200,000
must be deposited in the dedicated watershed credit exchange account for establishing
credits and providing grants or contracts for related services. The commissioner of the
Pollution Control Agency, in cooperation with the Board of Water and Soil Resources, may
construct pilot programs before establishing a statewide watershed credit exchange program.
new text end