1.1                          A bill for an act 
  1.2             relating to the environment; requiring new procedures 
  1.3             for water quality standards review; proposing coding 
  1.4             for new law in Minnesota Statutes, chapter 116. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [116.542] [PURPOSE.] 
  1.7      The purpose of sections 116.543 to 116.548 is to provide a 
  1.8   review of the overall economic impact and costs relative to 
  1.9   benefits and an assessment of risks to humans, aquatic 
  1.10  organisms, and wildlife of certain water quality standards 
  1.11  proposed or adopted by the Minnesota pollution control agency. 
  1.12     Sec. 2.  [116.543] [DEFINITIONS.] 
  1.13     Subdivision 1.  [SCOPE.] For the purposes of sections 
  1.14  116.543 to 116.548, the definitions in this section have the 
  1.15  meanings given. 
  1.16     Subd. 2.  [AGENCY.] "Agency" means the Minnesota pollution 
  1.17  control agency. 
  1.18     Subd. 3.  [APPLICATION.] "Application" of a water quality 
  1.19  rule by the agency includes any order, permit, denial of permit, 
  1.20  variance, denial of a variance, schedule of compliance, or other 
  1.21  action by the agency by which it imposes a water quality rule 
  1.22  pursuant to the agency's authority under section 115.03, 
  1.23  subdivision 1, clause (e). 
  1.24     Subd. 4.  [COST-BENEFIT ANALYSIS.] "Cost-benefit analysis" 
  1.25  means identifying and comparing the environmental, social, and 
  2.1   economic benefits to the environmental, social, and economic 
  2.2   costs of each of the probabilities of occurrence as identified 
  2.3   by risk analysis.  It includes, but is not limited to: 
  2.4      (1) a description of the persons and classes of persons who 
  2.5   will probably be affected by a rule or application of a rule, 
  2.6   including those who will bear the costs of the policy or action 
  2.7   and those who will benefit; 
  2.8      (2) a description of the environmental impact on water 
  2.9   organisms and wildlife affected by the rule or application of a 
  2.10  rule; 
  2.11     (3) the probable costs to the agency and to any other state 
  2.12  or federal agencies or political subdivisions of the state, of 
  2.13  application and enforcement of the rule, and any anticipated 
  2.14  effect on state revenues; 
  2.15     (4) the probable impact on municipality sewer rates and 
  2.16  fees charged to users as a result of the application and 
  2.17  enforcement of the rule; 
  2.18     (5) a determination of whether there are less costly 
  2.19  methods or less intrusive methods for achieving the purpose of 
  2.20  the rule or the application of the rule; and 
  2.21     (6) an assessment of any differences between the rule and 
  2.22  existing federal rules, regulations, or guidelines and a 
  2.23  specific analysis of the need for and the reasonableness of each 
  2.24  difference. 
  2.25     Subd. 5.  [ENTITY.] "Entity" means a university, a research 
  2.26  institution, or another person selected to conduct the risk and 
  2.27  cost-benefit analyses of rules submitted to it. 
  2.28     Subd. 6.  [EXISTING WATER QUALITY RULES.] "Existing water 
  2.29  quality rules" means water quality rules that have been finally 
  2.30  adopted by the agency. 
  2.31     Subd. 7.  [MUNICIPALITY.] "Municipality" means a home rule 
  2.32  charter or statutory city or a local unit of government 
  2.33  permitted by the agency to discharge wastewater. 
  2.34     Subd. 8.  [PERSON.] "Person" has the meaning given in 
  2.35  section 116.06, subdivision 17. 
  2.36     Subd. 9.  [PROPOSED WATER QUALITY RULES.] "Proposed water 
  3.1   quality rules" means water quality rules, including amendments 
  3.2   to existing rules, proposed by the agency but not yet finally 
  3.3   adopted. 
  3.4      Subd. 10.  [RISK ANALYSIS.] "Risk analysis" means 
  3.5   identifying the probabilities of occurrence, including adverse 
  3.6   human health and environmental effects, resulting from adoption 
  3.7   or application of a water quality rule as well as from the 
  3.8   failure to adopt or apply a water quality rule. 
  3.9      Sec. 3.  [116.544] [REVIEWS OF EXISTING RULES AND 
  3.10  APPLICATIONS OF RULES.] 
  3.11     (a) A municipality may at any time petition the agency for 
  3.12  submission of an existing water quality rule or an application 
  3.13  of a rule to an entity for risk and cost-benefit analysis if it 
  3.14  is affected by the agency's application of any existing water 
  3.15  quality rule. 
  3.16     (b) The petition must be in writing and specify all 
  3.17  challenged water quality rules and all challenged applications 
  3.18  of those rules. 
  3.19     (c) Within 90 days of receipt of a petition, the agency and 
  3.20  municipality shall select an entity to perform the duties 
  3.21  required by this section and section 116.545.  If the 
  3.22  municipality and agency cannot agree, they shall request the 
  3.23  American Arbitration Association to provide them with three 
  3.24  names of potential arbitrators.  The agency and the municipality 
  3.25  shall each strike one person from the list.  The remaining 
  3.26  person shall decide who will be the entity selected.  
  3.27     (d) The agency shall forward the petition to the entity 
  3.28  within 30 days after the entity has been selected. 
  3.29     (e) The entity shall complete its analysis and publicly 
  3.30  issue its factual findings and recommendations within one year 
  3.31  thereafter unless the agency and the municipality agree to a 
  3.32  longer period of time.  The factual findings and recommendations 
  3.33  shall be in writing, and they must: 
  3.34     (1) agree with the rule and/or application; or 
  3.35     (2) reject the rule and/or application and offer 
  3.36  alternatives to the rule and/or application, in whole or in part.
  4.1      (f) The entity shall, with the agency's participation, 
  4.2   notify affected and interested parties of its review and provide 
  4.3   an opportunity for the public to comment concurrently with peer 
  4.4   review of the draft report.  The entity shall consider public 
  4.5   comments in its final report. 
  4.6      (g) Upon the issuance of the entity's factual findings and 
  4.7   recommendations, the agency shall proceed as described in 
  4.8   section 116.546 or 116.547. 
  4.9      Sec. 4.  [116.545] [REVIEWS OF PROPOSED RULES.] 
  4.10     (a) A municipality may petition the agency for submission 
  4.11  of a proposed water quality rule to the entity for risk and 
  4.12  cost-benefit analysis within 30 days of publication in the State 
  4.13  Register of the agency's notice of intent to adopt rules or 
  4.14  notice of hearing. 
  4.15     (b) The petition must be in writing and specify all 
  4.16  challenged water quality rules in the proposed rules. 
  4.17     (c) Upon receipt of the petition, the agency shall publish 
  4.18  a notice of withdrawal in the State Register of the challenged 
  4.19  rule, but may adopt, or proceed to a hearing on, those rules 
  4.20  that are not being challenged. 
  4.21     (d) The agency, entity, and municipality shall then proceed 
  4.22  as described in section 116.544, paragraphs (c) to (g). 
  4.23     Sec. 5.  [116.546] [DUTIES OF THE AGENCY UPON RECEIPT OF 
  4.24  THE ENTITY'S FACTUAL FINDINGS AND RECOMMENDATIONS.] 
  4.25     (a) Upon the issuance of the entity's factual findings and 
  4.26  recommendations and if the entity recommends a rule change, the 
  4.27  agency shall within 180 days publish a notice of intent to adopt 
  4.28  a rule or a notice of hearing in accordance with sections 14.05 
  4.29  to 14.28.  The proposed rule shall: 
  4.30     (1) incorporate the alternative rules as recommended by the 
  4.31  entity; or 
  4.32     (2) reject, in whole or in part, the alternative rules as 
  4.33  recommended by the entity. 
  4.34     (b) If the agency rejects any portion of the entity's 
  4.35  alternative rules, it must proceed directly to a hearing 
  4.36  pursuant to sections 14.14 to 14.20 and in its notice of hearing:
  5.1      (1) specify those of the entity's factual findings with 
  5.2   which it disagrees; 
  5.3      (2) specify, and identify the source of, its data which is 
  5.4   inconsistent with the entity's data; and 
  5.5      (3) explain in detail the reasons for rejecting the 
  5.6   entity's recommendations. 
  5.7      (c) At the hearing described in paragraph (b), the findings 
  5.8   of fact of the entity shall be given equal weight as the 
  5.9   findings of fact of the agency. 
  5.10     Sec. 6.  [116.547] [JUDICIAL REVIEW.] 
  5.11     (a) A municipality may seek judicial review pursuant to 
  5.12  sections 14.63 to 14.69 if it is affected by an application by 
  5.13  the agency of a water quality rule.  The review may occur only 
  5.14  after a rule has been adopted under section 116.546 or if no 
  5.15  rule change is recommended by the entity, after the entity's 
  5.16  findings and recommendations have been issued under section 
  5.17  116.544. 
  5.18     (b) The scope of review shall be in accordance with section 
  5.19  14.69 except that applicable findings of fact of the entity 
  5.20  shall be given equal weight as the findings of fact of the 
  5.21  agency. 
  5.22     (c) During the time the entity is analyzing the rule or 
  5.23  application, the rule or application may be applied by the 
  5.24  agency, but the agency may not issue an order based on the rule 
  5.25  or application during that period that would require any capital 
  5.26  expenditures for construction of new or expanded wastewater 
  5.27  treatment facilities if the agency finds that: 
  5.28     (1) the municipality provides the best treatment possible 
  5.29  with existing facilities; 
  5.30     (2) the municipality meets all other provisions of its 
  5.31  permit; 
  5.32     (3) the municipality's effluent is not acutely toxic as 
  5.33  determined by comparison of effluent quality to the appropriate 
  5.34  standard of final acute value or by a whole effluent toxicity 
  5.35  test of the effluent; and 
  5.36     (4) water quality standards are maintained in the receiving 
  6.1   stream downstream from the municipality's discharge. 
  6.2      Sec. 7.  [116.548] [REVIEW COST PAID BY MUNICIPALITY.] 
  6.3      A municipality bringing a petition must pay the full cost 
  6.4   incurred by the entity to analyze and issue its factual findings 
  6.5   and recommendations.  The cost of the entity's analysis must be 
  6.6   agreed to by the municipality and the entity before costs are 
  6.7   incurred.