state of minnesota regional environmental …chapter 7001, governing stormwater permits, chapter...

This SONAR can be made available in an alternative format, such as large print, Braille and audio tape. To make a request, contact the Minnesota Pollution Control Agency, 520 Lafayette Road North, St. Paul, Minnesota

55155-4194(651) at 296-6300, toll-free (800) 657-3864, TTY (651) 282-5332 or (800) 657-3864.

STATE OF MINNESOTA POLLUTION CONTROL AGENCY

REGIONAL ENVIRONMENTAL MANAGEMENT DIVISION

STATEMENT OF NEED AND REASONABLENESS

In the Matter of Proposed Amendments to Minnesota Rules

Chapter 7001, Governing Stormwater Permits, Chapter 7002, Governing Water Quality Permit Fees,

and New Rules to be Codified as Chapter 7090, Governing the Stormwater Regulatory Program

September 3, 2004

Stormwater Regulatory Program Rule – SONAR i

TABLE OF CONTENTS PageI. INTRODUCTION............................................................................................................ 1 A. Background........................................................................................................................ 1 B. Stormwater Rulemaking Activities.................................................................................... 2 C. Request for Comment ........................................................................................................ 6 D. Public Participation and Stakeholder Involvement in the Permit Process......................... 7 E. Public Participation and Stakeholder Involvement in the Rule Process............................ 8 II. STATUTORY AUTHORITY ....................................................................................... 10 III. NEED FOR THE RULES ............................................................................................. 11 A. Chapter 7001 Permits and Certifications ......................................................................... 11 B. Chapter 7002 Water Quality Permit Fees ........................................................................ 11 C. Chapter 7090 Stormwater Regulatory Program............................................................... 12 IV. STATEMENT OF REASONABLENESS ................................................................... 15 A. Reasonableness of the Proposed Rules as a Whole ......................................................... 15 Regulatory Analysis: 1. Classes of Persons Probably Affected by the Proposed Rule ........................................... 15 2. Probable Costs to Agencies and Effect on State Revenues .............................................. 16 3. Determination of Less Costly or Intrusive Methods......................................................... 16 4. Description of Alternative Methods ................................................................................. 19 5. Probable Costs of Complying ........................................................................................... 19 6. Probable Costs or Consequences of Not Adopting Proposed Rule .................................. 19 7. Differences Between Proposed Rule and Federal Regulations ........................................ 20 8. Emphasis on Superior Achievement and Maximum Flexibility....................................... 29 9. Additional Notification to Persons or Classes That May be Affected.............................. 30 B. Reasonableness of the Individual Proposed Rule Parts ................................................... 30 1. Chapter 7001 Permits and Certifications .......................................................................... 30

7001.0040 Application Deadlines.............................................................................. 30 7001.1020 Definitions ............................................................................................... 31 7001.1035 Stormwater Permits.................................................................................. 32 7001.1040 Application Deadline for New Permits.................................................... 33

2. Chapter 7002 Water Quality Permit Fees ......................................................................... 33 7002.0220 Definitions ............................................................................................... 33 7002.0250 Application Fee........................................................................................ 34

3. Chapter 7090 Stormwater Regulatory Program................................................................ 35 7090.1010 Scope........................................................................................................ 35 7090.0020 Permit Process.......................................................................................... 35 7090.0030 Permit Requirements................................................................................ 35 7090.0040 Permit Fees............................................................................................... 36 7090.0060 Incorporation by Reference ..................................................................... 36 7090.0080 Definitions ............................................................................................... 38 7090.1000 Municipal Separate Storm Sewer System (MS4) Program ..................... 45 7090.1010 MS4 Permit Requirements....................................................................... 45 7090.1040 MS4 Minimum Requirements.................................................................. 56

Stormwater Regulatory Program Rule – SONAR ii

Page 7090.2000 Construction Program .............................................................................. 61 7090.2010 Construction Activity Permit Requirements............................................ 62 7090.2020 Construction Activity Conditional Exclusion.......................................... 66 7090.2030 Best Management Practices (BMPs) Required for Conditional Exclusion Projects............................................................................ 71 7090.2040 Construction Activity Minimum Requirements ...................................... 74 7090.2060 Subdivision Owner Registration ............................................................. 75 7090.3000 Industrial Program ................................................................................... 76 7090.3010 Industrial Activity Permit Requirements ................................................. 77 7090.3040 Industrial Activity Minimum Requirements............................................ 78 7090.3060 Conditional Exclusion for No Exposure .................................................. 78 7090.3080 No Exposure Certification ....................................................................... 83

V. CONSIDERATION OF ECONOMIC FACTORS...................................................... 83 A. Summary .......................................................................................................................... 83 B. Findings............................................................................................................................ 83 C. Qualifications ................................................................................................................... 85 1. Legal Requirements and Estimation Methods .................................................................. 87 A. Description of Proposed Rules’ Expected Costs ............................................................. 88 B. Scope, Distributive Impacts and Benefits of Proposed Rules.......................................... 90 C. Administrative Costs ........................................................................................................ 91 D. Aggregate Economic Impacts .......................................................................................... 92 E. About EPA’s Regulatory Impact Analysis (RIA) ............................................................ 95 F. Summary........................................................................................................................... 97 2. Quantitative Estimates ...................................................................................................... 97 A. Construction Sector.......................................................................................................... 98 B. Municipal Separate Storm Sewer Systems (MS4s) ....................................................... 105 C. Other Affected Sectors ................................................................................................... 112 D. State Administration and its Effect on State Revenues ................................................. 113 E. Distribution of Costs and Benefits ................................................................................. 115 F. Probable Costs or Consequences of Not Adopting the Proposed Rules......................... 117 G. References...................................................................................................................... 123

VI. ADDITIONAL NOTICE ........................................................................................... 124 A. Public Participation........................................................................................................ 124 B. Additional Notice Plan................................................................................................... 125

VII. NOTIFICATION TO THE COMMISSIONER OF AGRICULTURE............... 127

VIII. COMMISSIONER OF FINANCE REVIEW OF CHARGES............................ 127

IX. NOTIFICATION TO THE COMMISSIONER OF TRANSPORTATION......... 127

X. LIST OF WITNESSES, REFERENCES, AND APPENDICES.............................. 127 A. Witnesses ....................................................................................................................... 127 B. Appendices ..................................................................................................................... 128

XI. CONCLUSION........................................................................................................... 128

Stormwater Regulatory Program Rule – SONAR iii

APPENDICES Page A. Stormwater Design Team Members .............................................................................. 129 B. Stormwater Design Team 12/3/03 and 12/18/03 meeting notes on proposed rules ...... 130 C. MS4 Stakeholder Group ................................................................................................ 133 D. MS4 stakeholder 1/6/04 and 2/4/04 meeting notes........................................................ 134 E. Construction Activity Conditional Exclusion Stakeholder Group ................................ 140 F. Construction activity conditional exclusion 2/18/04 meeting notes.............................. 141 G. List of MS4s designated by federal rule based on 2000 decennial census .................... 144 GG. Map of mandatory MS4s.............................................................................................. 148 H. List of MS4s population 10,000 or more designated by proposed rule......................... 149 HH. Map of MS4s population 10,000 or more ................................................................... 150 I. List of MS4s population 5,000 or more designated by proposed rule........................... 151 II. Maps of MS4s population 5,000 to 10,000 and impaired and special waters................ 153 J. Incidence of state and local taxes .................................................................................. 155 K. Comparison of estimated costs with average revenue ......................................................... L. Comparison of estimated costs with water and sewer charges ............................................

Stormwater Regulatory Program Rule – SONAR 1

STATE OF MINNESOTA POLLUTION CONTROL AGENCY

REGIONAL ENVIRONMENTAL MANAGEMENT DIVISION

In the Matter of Proposed STATEMENT OF NEED Amendments to Minnesota Rules AND REASONABLENESS Governing Stormwater Permits and Water Quality Permit Fees, and New Rules Governing the Stormwater Regulatory Program Minn. R. 7001.1020, 7001.1035, and 7001.1040 Minn. R. 7002.0220 and 7002.0250 Minn. R. ch. 7090 September 3, 2004

I. INTRODUCTION The Minnesota Pollution Control Agency (MPCA or Agency) is proposing to amend the existing rules governing stormwater permits, with minor revisions to Minn. R. ch. 7001, and to create a new chapter of state water rules for the Stormwater Regulatory Program, Minn. R. ch. 7090. The proposed rules contain permit requirements for regulating stormwater discharges from three main sources; municipal separate storm sewer systems (MS4s), construction activity, and industrial activity. The proposed rulemaking also includes making minor revisions to the existing rules governing the water quality permit fees, Minn. R. ch. 7002, by amending the definitions for stormwater permits to be consistent with the proposed rules, and to clarify the application fee requirement for a permit modification. The Minnesota Administrative Procedures Act requires a statement of need and reasonableness (SONAR) justifying and explaining the need for the proposed rule. This document fulfills that requirement. Alternative Format Upon request, this SONAR can be made available in an alternative format, such as large print, Braille, or audio tape. To make a request, contact Mary H. Lynn at the MPCA, Regional Environmental Management Division, 520 Lafayette Road, St. Paul, MN 55155-4194; phone (651) 297-2331; or e-mail [email protected]. TTY users may call the MPCA at (651) 282-5332 or (800) 657-3864. A. Background The primary objective of the Clean Water Act (CWA) is to restore and maintain the chemical, physical, and biological integrity of the Nation’s waters. To achieve this objective, the CWA established a variety of programs to control the discharge of pollutants to waterways. Section 402 of the CWA established the National Pollutant Discharge Elimination System (NPDES) permit program to specifically control the discharge of pollutants from point source dischargers to waters of the United States. The MPCA was authorized and delegated by the U.S. Environmental Protection Agency (EPA) to administer the NPDES program in June 1974 under 40 CFR 122.28. The EPA approved the MPCA’s NPDES general permit program on December 15, 1987. The program initially focused on industrial sources and municipal wastewater treatment plants. Congress amended the CWA in 1987 and directed EPA to develop

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and implement a two phased comprehensive national program for stormwater discharges under the NPDES program. The Phase I federal regulations, promulgated on November 16, 1990, required NPDES permits for two broad categories of stormwater discharges: 1) medium and large MS4s serving populations of 100,000 or more, and 2) eleven categories of industrial activity, including larger construction activities disturbing five or more acres of land (see National Pollutant Discharge Elimination System Permit Application Regulations for Storm Water Discharges, 55 Fed. Reg. 47990 (1990)). The Phase II federal regulations were promulgated on December 8, 1999 (see National Pollutant Discharge Elimination System-Regulations for Revision of the Water Pollution Control Program Addressing Storm Water Discharges, 64 Fed. Reg. 68722 (1999)). The Phase II rules expanded the scope of the existing NPDES permitting program to include discharges of stormwater from smaller MS4s in urbanized areas, from construction activities that disturb between one and five acres, and from smaller municipally owned industrial activities. The MPCA adopted rules regarding the NPDES Phase I federal regulations for administration and regulation of the stormwater program to meet federal program delegation agreement responsibilities. The MPCA promulgated rules to establish the Phase I stormwater program in 1994 and 1995. The MPCA is now proposing to adopt rules related to the Phase II federal regulations.

B. Stormwater Rulemaking Activities After evaluating the existing state stormwater rules, the Phase II federal regulations, issues related to the issuance of the general stormwater permits, and the administrative processes, the Agency made the decision to separate the stormwater rulemaking effort into three rulemaking activities. These proposed rules are the first of three planned stormwater rulemakings and will address the Phase II rule requirements. The stormwater rulemaking effort was separated into three rulemaking activities in order to help the Agency better manage controversial and complex issues during the rulemaking process. The three separate rulemaking activities are: 1. the rules needed to establish the permit requirements under the Phase II federal

regulations;

2. the rules needed to clarify state requirements and processes, specifically, how the requirements in the state water rules for non-degradation of outstanding resource value waters and all waters relate to the issuance of stormwater permits; and

3. the rules to needed to address the remaining Phase II program requirements, such as the

federal waiver provision for small MS4s, and potentially, rules to establish performance standards and criteria for managing stormwater discharges.

First Rulemaking

With the first rulemaking, the MPCA proposes to make minor revisions to Minn. R. ch. 7001 and 7002, and to create a new chapter of state water rules for the Stormwater Regulatory Program, Minn. R. ch. 7090. This first rulemaking will establish: 1) permit and minimum program requirements for MS4s, construction activity and industrial activity regulated under Phase II, 2) designation criteria and process for MS4s, 3) the conditional exclusion for certain feedlot and


agricultural construction activities from construction stormwater permit requirements, and 4) the conditional no exposure exclusion for industrial activities. A description of these parts of the proposed rule is provided below. The MPCA expects this first rulemaking to be controversial. Second Rulemaking

The second rulemaking is needed to clarify how the existing state rules governing non-degradation of outstanding resource value waters, Minn. R. 7050.0180, and non-degradation of all waters, Minn. R. 7050.0185, relate to the issuance of stormwater permits. Specifically, 2002 Legislative Session law, Minn. Stat. § 115.03, subd. 5b., requires the MPCA to adopt rules that “provide specific mechanisms or criteria to determine whether point source stormwater discharges comply with the non-degradation and mitigation requirements of agency water quality rules.” The MPCA’s non-degradation rules were developed pursuant to the federal CWA and were established based on the framework of the 1970’s implementation of the NPDES permit program for wastewater treatment plants and industrial dischargers. The two rules were written prior to MPCA authorization to use general permits and before the federal stormwater rules were promulgated. The Phase I and Phase II federal stormwater regulations do not address non-degradation requirements for the stormwater program. The MPCA staff is concerned that the kind of analyses anticipated in the non-degradation for outstanding resource value waters and for all waters are not reasonably feasible for the stormwater program. With the second rulemaking, the MPCA plans to amend Minn. R. ch. 7050 to better fit the Stormwater Regulatory Program. The MPCA expects the second rulemaking to be controversial. Third Rulemaking

The third rulemaking is to address the remaining Phase II federal program requirements which include establishing the waiver process for small MS4s. Additionally, as part of the rulemaking, the MPCA plans to amend Minn. R. ch. 7090 to incorporate performance standards and practices designed for the management of stormwater on a state-wide basis. The current development of the statewide stormwater manual, which will include these performance standards and criteria, and the appropriate best management practices (BMPs) to achieve them, is currently being guided by the Stormwater Steering Committee. The Stormwater Steering Committee consists of a broad representation of stakeholders including the MPCA and other state agencies, local units of government, builders/developers, business/industry, various associations, and environmental interests. The MPCA is hopeful that such a broad participation in the development and subsequent implementation of the statewide stormwater manual will provide for greater acceptance of the performance standards and criteria in rule. Description of the Proposed Rule

In developing an approach for the proposed rule, staff sought to integrate, where possible, the Phase II requirements with the Phase I requirements in order to facilitate a unified and “seamless” Stormwater Regulatory Program. Therefore, for ease of administration and clarity, the proposed rule addresses the requirements of both the Phase I and Phase II federal regulations by integrating these regulations into one state Stormwater Regulatory Program under Minn. R. ch. 7090. This approach facilitates program consistency, public access to information, and


program oversight. However, where necessary, references are made in this SONAR document to the specific requirements of the Phase I and Phase II regulations when needed for clarification. The proposed rules are divided into three major sections to address the permit requirements for each of the three stormwater program areas: 1) the MS4 program, 2) the construction program, and 3) the industrial program. The MS4 program is discussed in this SONAR under parts 7090.1000 to 7090.1040, the construction program is discussed under parts 7090.2000 to 7090.2080, and the industrial program is discussed under part 7090.3000 to 7090.3080. In general, this proposed rule will establish:

• the Phase II NPDES permit requirements; • the minimum program requirements; • the MS4 designation criteria and process; • the conditional exclusion for certain feedlot and agricultural construction activities; and • the conditional exclusion for no exposure of industrial activity

1. Phase II NPDES permit requirements These proposed rules apply to the MS4 and construction programs. The proposed rules will establish the requirement for regulated small MS4s and small construction activity to obtain permit coverage. Permit requirements for industrial activity are also established in these proposed rules however, no new categories of industrial activity were added under the Phase II regulations. For the MS4 program, the proposed rules establish the requirement for permit coverage for all federally regulated small MS4s and small MS4s designated by the Agency for permit coverage. The Phase I federal regulations required NPDES permit coverage for the cities of Minneapolis and St. Paul. Approximately 200 MS4s were designated in the Phase II federal regulations as requiring NPDES permit coverage; these include municipalities located within the boundaries of an urbanized area. Approximately 44 additional small MS4s will be designated for permit coverage under the proposed rule, as discussed below. For the construction program, the proposed rules establish the permit requirements for small construction activity which includes clearing, grading and excavating, that results in the land disturbance of equal to or greater than one acre and less than five acres. Construction activity also includes the disturbance of less than one acre of total land area that is part of a larger common plan of development or sale if the larger common plan will ultimately disturb equal to or greater than one acre. The proposed rule defines construction activity to include both small construction activity, and large construction activity which was regulated under the Phase I program. The MPCA estimates approximately 2,000 applications annually for permit coverage for small construction activity statewide, in addition to the approximate 900 applications received annually for large construction activity based on Phase I program data. Approximately 2,822 total permits were issued June 2003 to June 2004 for all construction activity, large and small. Approximately 55 subdivision registration forms were submitted for the same reporting period. Subdivision registrations account for permitted construction sites where there has been a change in owner or operator, for example when a developer subdivides residential property.


2. Minimum program requirements These proposed rules apply to the MS4, construction, and industrial programs. For the MS4 program the proposed rules establish the requirement for regulated small MS4s to develop a Stormwater Pollution Prevention Program (program) that specifically includes the six minimum control measures identified in the federal regulations. The program must be designed to reduce the discharge of pollutants from their municipal storm sewer system. For the construction program, the proposed rules establish the requirement for owners of construction activities covered under the construction stormwater permit to develop a Stormwater Pollution Prevention Plan designed to minimize pollutant runoff from the construction site. Owners and operators of construction activities that require permit coverage must comply with the stormwater management practices established in the proposed rule, including erosion prevention and sediment control BMPs. For the industrial program, the proposed rules establish the requirement for owners and operators of regulated industrial activities to develop a Stormwater Pollution Prevention Plan that is designed to eliminate or minimize stormwater contact with significant materials that may result in polluted stormwater discharges from the industrial site. The proposed rule also establishes Stormwater Pollution Prevention Program or Plan recordkeeping requirements applicable to the MS4, construction, and industrial programs.

3. MS4 designation criteria and process These proposed rules apply to the MS4 program. The MPCA must establish designation criteria and apply them to all small MS4s located outside of an urbanized area that serve a jurisdiction with a population of at least 10,000 and a population density of at least 1,000 people per square mile. The proposed rules establish criteria that will designate additional MS4s for permit coverage under this rulemaking, and criteria that can be applied to designate future MS4s under the designation and petition process identified in rule. Criteria to be considered in determining designation include; discharge to sensitive waters, high growth, and population density.

The proposed rule will designate approximately 88 partial MS4s. Partial MS4s are MS4s that are located partially within an urbanized area and by federal rule do not require permit coverage for the portion of the MS4 located outside of the urbanized area. Many of these MS4s that have a portion of their MS4 located outside of the urbanized area have already submitted a permit application and a Stormwater Pollution Prevention Program for their entire MS4. The proposed rule also designates approximately 44 additional small MS4s located outside of the urbanized area; these include municipalities with a current population of 10,000 and greater, and municipalities with a population of 5,000 and greater that discharge or have the potential to discharge to a special or impaired water. The proposed rule also defers the deadline for designated MS4s to apply for permit coverage within 18 months of designation or meeting designation criteria. This allows designated MS4s additional time to meet permit requirements because these MS4s were not identified in the Phase II federal rules as regulated MS4s. 4. Conditional exclusion for certain feedlot and agricultural construction activities


These proposed rules apply to the construction program. With these rules, the Agency is proposing a streamlined permitting procedure for two groups of regulated parties, feedlots and soil conservation projects, which would conditionally exclude them from the requirement to apply for a construction stormwater permit if specific eligibility criteria are met. Feedlot and conservation project construction activities would not be exempt from the Stormwater Regulatory Program but would need to comply with specific erosion prevention and sediment control BMPs established in the rules, or apply for permit coverage. The MPCA anticipates that this streamlined approach will make as much progress toward meeting the Phase II regulatory goals, as the traditional NPDES regulatory approach to permitting. These proposed rules would be considered good rulemaking under Minn. Stat. §14.002, performance based regulatory systems. 5. Conditional exclusion for no exposure of industrial activities. These proposed rule amendments apply to the industrial program. The proposed rule establishes the Phase II conditional exclusion for no exposure in state rules so that the MPCA can administer and implement the no exposure provision in Minnesota. Under the Phase I federal regulations the no exposure provision was only available to a limited category of industrial facilities; under the Phase II regulations the no exposure exclusion now applies to all regulated categories of industrial activity listed in the Phase I regulations, except construction activity. The conditional no exposure exclusion from permitting allows facilities that meet specific eligibility criteria to certify a condition of no exposure instead of obtaining an industrial stormwater permit. The no exposure exclusion is conditional and is not an outright exemption from the Stormwater Regulatory Program. A facility that has been issued a no exposure certification must maintain the condition of no exposure or obtain permit coverage. C. Request for Comment The MPCA initiated the formal Phase II stormwater rulemaking effort in July of 2002, with the publication of a Request for Comment on Possible Amendments to Rules Governing the Stormwater Permit Program. In the Request for Comment notice, three issues were identified that the MPCA was specifically interested in receiving comment on: 1) the criteria for designating small MS4s for permit coverage, 2) a plan to create a multi-step permit deadline, and 3) non-traditional MS4s, such as publicly owned systems at military bases, large hospital or prison complexes, under separate coverage. The MPCA specifically requested comment on these issues because the Phase II federal regulations require permitting authorities to establish criteria for designating small MS4s. Additionally, by establishing a stepped permit application deadline for the various categories of MS4s, the MPCA would be better able to maximize the effectiveness of limited program resources. The MPCA received approximately 20 comments, most addressing these issues, during the comment period. In the Request for Comment notice, interested parties were also advised that the MPCA did not expect to appoint an advisory committee to comment on the proposed rules. Because the MPCA was attempting to complete the first rulemaking by the March 10, 2003, federal deadline for Phase II implementation, the MPCA did not plan a rule development work group or public informational meetings due in part to the short time frame available for the rulemaking and limited resources. Therefore, the MPCA put more emphasis on soliciting comments during the Request for Comment notice period.


D. Public Participation and Stakeholder Involvement in the Permit Process Because the first rulemaking would establish the Phase II permit requirements, the issues regarding the development of these permits were the same, or similar to the issues that needed to be addressed in rulemaking. It is important to note that since these similar issues would be reviewed and commented on during the permit development process, the MPCA provided for stakeholder involvement specifically in the development of the Phase II MS4 and construction general permits which were being developed concurrently with the first rulemaking. Many comments and recommendations were received on the proposed draft permits at these stakeholder meetings. The MPCA considered the stakeholder input from these meetings in preparing the proposed rule. A brief discussion of the permit stakeholder and public participation process is provided here. MS4 Permit

Four meetings were held with external stakeholders on the development of the MS4 general permit where the MPCA staff sought input on several issues including the federal MS4 program requirement to include six minimum control measures in the Stormwater Pollution Prevention Program, and the potential designation of additional MS4s. These meetings were held on December 12, 2001, January 3, 2002, January 24, 2002, and February 5, 2002. Attendees included city and county officials, the League of Minnesota Cities (LMC), the Minnesota Center for Environmental Advocacy (MCEA), consultants, and attorneys. Three public informational meetings were held during the public comment period on the draft MS4 general permit. These meeting were held on March 26, 2002 in Rochester, March 27, 2002 in Shoreview, and March 28, 2002 in St. Cloud. The MPCA received approximately 27 written and verbal comments during the public notice comment period. Construction Permit

The MPCA held numerous meetings on the development of the construction general permit. At these meeting, MPCA staff sought input on a wide variety of issues including requirements in the Stormwater Pollution Prevention Plan, and the technical requirements under the permit regarding applicability and coverage for construction projects of varying sizes and proximity to outstanding resource value waters, wetlands, and sensitive waters of the state. Multiple meetings were held with the Minnesota Department of Transportation (MNDOT) including meetings on November 13, 2001, November 29, 2001, December 10, 2001, and January 8, 2002. In addition, following initial permit development, four meetings were held with a broader group of external stakeholders to review the draft construction general permit. These meetings were held on March 21, April 4, July 18, and August 21, 2002, at the MPCA office in St. Paul. These stakeholders included builders, developers, associations (trade, industry, and government), local units of government (City, County, Soil and Water Conservation Districts (SWCDs)), the Metropolitan Council, Minnesota Association of Watershed Districts, state agencies (MNDOT, Board of Water and Soil Resources (BWSR)), federal agencies (Federal Highway Administration, EPA), and consultants. Lastly, six public informational meetings were held during the public comment period on the draft construction general permit. Two meeting were held in Mankato on February 4, 2003, two in Maple Grove on February 10, 2003, and two in Brainerd on February 11, 2003. The MPCA received approximately 145 written and verbal comments during the public notice period.


E. Public Participation and Stakeholder Involvement in the Rule Process As discussed above, due to time constraints and limited resources, when the MPCA initiated the Phase II stormwater rulemaking effort in July 2002 with the publication of the Request for Comment notice, the Agency did not contemplate appointing an advisory committee to comment on the proposed rules. At that time, the MPCA expected to be working under an expedited rulemaking timeline in an effort to adopt rules to meet the March 2003 federal deadline for Phase II program compliance. However, several factors including controversial issues in permit development and competing program priorities within the stormwater program combined with limited staff resources, affected the Agency’s ability to meet the federal deadline. In addition, the Agency recognized that a broader, long term, more comprehensive planning effort was needed for the stormwater program. Therefore, the MPCA revised the timeline for the first rulemaking which subsequently provided time to establish a stakeholder process specifically to solicit input on the proposed rule. Stormwater Design Team The implementation of the Phase II federal stormwater regulations, as well as changes in Minnesota state law brought additional funding and responsibilities to the stormwater program in 2003. To meet these responsibilities and planning needs, the Stormwater Design Team was formed in the fall of 2003. The charge of the Stormwater Design Team was to design a long-term state stormwater effort to be based on effective partnerships with others outside the MPCA that would move toward full implementation of stormwater programs at the state and local level, as well as in the private sector. Members of the Stormwater Design Team included the Department of Natural Resources (DNR), BWSR, the Metropolitan Council, MNDOT, Watershed Districts, SWCDs, the Minnesota Chamber of Commerce, the LMC, MCEA, Minnesota Erosion Control Association (MECA), the University of Minnesota, the Builders Association of the Twin Cities (BATC), consultants, and the MPCA. See Appendix A for the complete list of Stormwater Design Team members. As part of this planning effort, the Stormwater Design Team was tasked with advising the MPCA on the proposed rule, with emphasis on specific issues that the MPCA expected to be controversial. These issues were: 1) MS4 designation criteria, and 2) the construction activity conditional exclusion. Meetings were held with the Stormwater Design Team on December 3, 2003, to discuss the MS4 designation criteria, and on December 18, 2003, to discuss the conditional exclusion. The Stormwater Design Team played an integral role in providing comment and feedback on the proposed rule as it was being drafted. See Appendix B for the Stormwater Design Team meeting notes on the rule discussions. Concurrent with the implementation of the Stormwater Design Team effort, the MPCA began preparing for meetings with external stakeholder groups to solicit comment an input on the MS4 designation criteria and conditional exclusion. A summary of the public participation and stakeholder involvement in the rule process for each of these issues follows. MS4 Stakeholder Group

In the July 2002 Request for Comment notice, the MPCA specifically requested comment on several criteria options that were being considered for designating additional MS4s for


NPDES/SDS stormwater permit coverage. These criteria options focused on current or projected growth population of 10,000 or more based on the latest decennial census. The MPCA received approximately five comment letters regarding these criteria with varying responses including: 1) seasonal population should be considered as designation criteria, 2) no designation without evidence of actual impairment of designated uses, 3) no additional communities designated at this time, 4) concern if criteria options are more restrictive or inconsistent with federal recommendations, 5) absence of criteria related to the protection of outstanding resource value waters and 303(d) listed waters, and 6) to meet federal requirements, the MPCA must develop criteria to evaluate whether stormwater discharge results in or has the potential to result in exceedances of water quality standards, including impairment of designated uses or other significant water quality impacts, and give balanced consideration to the six federally recommended designation criteria. In an effort to gather additional comment on the MS4 designation criteria options and the proposed rule, this issue was brought to the Stormwater Design Team for discussion. Additionally, to ensure that the interests of a broad range of potentially affected parties were represented, specifically municipalities, an MS4 stakeholder group was formed to advise the MPCA and provide comment and feedback on the proposed rule. The MS4 stakeholder group included the LMC and representatives from several cities, the Minnesota Association of Townships, the Association of Minnesota Counties, the Metropolitan Council, the Minnesota Chamber of Commerce, MCEA, MNDOT, small municipal associations, consultants, and the MPCA. See Appendix C for the complete list of MS4 stakeholder group members. Meetings were held with the MS4 stakeholder group on January 6 and February 4, 2004.

A broad range of designation criteria were suggested and discussed at these meetings. Some stakeholders desired broader criteria that would bring more of the state, or the entire state, into the program - creating a more comprehensive pollution abatement system. Some stakeholders desired criteria that would result in fewer designated parties due to the costs associated with compliance. However, all stakeholders recognized the need to regulate stormwater in rapidly growing areas, and to protect special waters. Accordingly, specific designation criteria were ultimately recommended by the stakeholders and are reflected in these proposed rules. The MS4 stakeholder group and the MPCA agreed on a phased approach to designation, with an initial focus on areas of greater population and protection of special water resources, with a process and additional criteria for designating additional MS4s in the future. See Appendix D for the MS4 stakeholder group meeting notes on the rule discussion. Construction Activity Conditional Exclusion Stakeholder Group

In an effort to streamline the permit process for animal feedlots that have obtained federal or state feedlot permits but are also subject to NPDES/SDS stormwater permit coverage, the MPCA sought input on conditionally excluding certain types of feedlot projects, and potentially other projects, from the requirement to apply for NPDES/SDS stormwater permit coverage. In addition to discussions with animal agricultural and conservation interests (Minnesota Department of Agriculture (MDA) and BWSR) during the early development of the Phase II stormwater program and the construction stormwater permit, a stakeholder group was formed to provide comment and input on the proposed rules. Again, to ensure that the interests of a broad range of potentially affected parties were represented, a conditional exclusion stakeholder group was formed to advise the MPCA and provide comment and feedback on the proposed rule. This stakeholder group included the MDA, United States Department of Agriculture (USDA), Natural


Resource Conservation Service (NRCS), Farm Service Agency (FSA), BWSR, SWCDs, Minnesota Farm Bureau Federation, Minnesota Farmers Union, the DNR, representation from the county feedlot officer’s, Minnesota’s Pork Producers Association, Milk Producers Association, Turkey Growers Association, and State Cattlemen’s Association, and the MPCA. See Appendix E for the complete list of conditional exclusion stakeholder group members. One meeting was held with the conditional exclusion stakeholder group on February 18, 2004. In addition to feedlot and conservation projects, several other types of projects were suggested for conditional exclusion and discussed at the meeting. See Appendix F for the conditional exclusion stakeholder group meeting notes on the rule discussion.

II. STATUTORY AUTHORITY The MPCA’s statutory authority to develop and adopt the proposed rules is set forth in Minn. Stat. ch. 115, and federal regulations. Specifically, Minn. Stat. § 115.03, subd. 5c, paragraph (b) provides the agency specific rulemaking authority for promulgating stormwater rules:

(b) Pursuant to this paragraph, the legislature authorizes the agency to adopt and enforce rules regulating point source stormwater discharges. No further legislative approval is required under any other legal or statutory provision whether enacted before or after May 29, 2003.

Additional authority is set forth in Minn. Stat. § 115.03, subd. 5 which grants the agency the authority to promulgate rules needed to administer NPDES permits. The authorizing statute provides:

Subd. 5. Agency authority; National Pollutant Discharge Elimination System. 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.

The MPCA is also the delegated Minnesota state agency to implement and administer the CWA NPDES program. Under that delegation, the Agency has duties, obligations, and authorities under Code of Federal Regulations (CFR), Title 40, Parts 122, 123, and 124.


Under the above-cited statutes, the MPCA has the necessary statutory authority to adopt the proposed rules.

III. NEED FOR THE RULES Minn. Stat. ch. 14 requires the MPCA to make an affirmative presentation of facts establishing the need for and reasonableness of the rule amendments as proposed. In general terms, this means that the MPCA must set forth the reasons for its proposal, and the reasons must not be arbitrary or capricious. However, to the extent that need and reasonableness are separate, need has come to mean that a problem exists which requires administrative attention, and reasonableness means that the solution proposed by the MPCA is appropriate. The need for minor revisions to Minn. R. chs. 7001 and 7002, and the proposed new chapter of state water rules for the Stormwater Regulatory Program, Minn. R. ch. 7090, are discussed below. A. Chapter 7001 Permits and Certifications The existing stormwater regulations are currently located in Minn. R. ch. 7001 which are the general agency rules governing permits and certifications. The need for minor revisions to Minn. R. ch. 7001 stems from the NPDES Phase II federal regulations and the Agency’s need to adopt these regulations into state rules. The MPCA adopted the NPDES Phase I federal regulations into state rules for administration and regulation of the stormwater program to meet federal program delegation agreement responsibilities. The MPCA promulgated rules to establish the Phase I stormwater program under Minn. R. ch. 7001. The MPCA is now adopting the Phase II regulations into state rules. With the new Phase II regulations and the expanded scope of the Stormwater Regulatory Program, minor revisions to Minn. R. chs. 7001 and 7002 are needed. With these proposed rules, a new chapter of state water rules, Minn. R. ch. 7090, is being created for the Stormwater Regulatory Program that will address both the Phase I and Phase II regulations under one rule chapter. For this reason, several definitions under Minn. R. 7001.1020, and permit requirements under Minn. R. 7001.1035 specific to the stormwater program, are not needed under chapter 7001 and will be repealed under these proposed rules. Minor revisions will be made to Minn. R. 7001.0040 and 7001.1040, relating to permit application deadlines, to reference these requirements as they relate to Minn. R. ch. 7090. B. Chapter 7002 Water Quality Permit Fees Minor revisions are also needed to the existing rules governing water quality permit fee rules, Minn. R. ch. 7002. Specifically, several definitions under Minn. R. 7002.0220 will be amended to be consistent with the proposed rules, and application fees under Minn. R. 7002.0250 will be amended to clarify the application fee requirement for a permit modification. The water quality permit application fee changes that occurred by statute during the 2002 and 2003 Legislative Sessions, increased the application fee from $85.00 to $240.00, and from $240.00 to $400.00 for some sources, respectively. These fee changes created confusion for Agency staff and regulated parties regarding the application fee for certain types of permit modifications. A minor revision is needed to the application fee under part 7002.0250 to clarify the types of changes that are not considered a permit modification, such as a name or address change, and therefore would not require an application fee.


C. Chapter 7090 Stormwater Regulatory Program After evaluating the existing Phase I stormwater rules under Minn. R. ch 7001, and the Phase II federal regulations, the Agency made the decision to create a new chapter of state water rules specifically for the Stormwater Regulatory Program, Minn. R. ch 7090. With the large increase in the number of parties to be regulated under the Phase II rules, the Agency determined that a new chapter was needed to accommodate a more comprehensive stormwater program that would incorporate the requirements of both the Phase I and Phase II regulations, and establish an administrative framework for the three stormwater program areas; MS4s, construction, and industrial. In addition, by creating a new chapter for the Stormwater Regulatory Program, the stormwater program rules are more easily located, as opposed to their placement in Minn. R. ch. 7001, which contains a broad scope of permit programs and requirements. The Phase I regulations addressed a large number of priority sources of stormwater pollution. The Phase II regulations are designed to further reduce adverse impacts to water quality and place controls on runoff that have the greatest likelihood of causing continued environmental degradation. The Phase II regulations expand the scope of the Phase I regulatory program by permitting unregulated smaller sources of stormwater discharges including small MS4s, small construction activity, and smaller municipally owned industrial facilities. The Phase II regulations are the next step in an effort to help preserve, protect, and improve water resources impacted by stormwater runoff. These proposed rules are needed for compliance with the federal NPDES permit program and state rules for NPDES/SDS permits, and to reduce environmental damage caused by stormwater runoff from MS4s, and construction and industrial activities.

Comply With Federal and State Regulations In 1987, the CWA was amended to require the phased implementation of a comprehensive national program for addressing stormwater discharges. The Phase I federal regulations, promulgated in 1990, were the first of two rulemakings to address stormwater discharges from a large number of priority sources including medium and large municipalities with populations of 100,000 or greater, and eleven categories of industrial activity including large construction activity that disturbed five acres or more of land. The Phase II federal regulations, promulgated in 1999, expanded the scope of the Phase I NPDES permit program to include discharges of stormwater from smaller municipalities in urbanized areas, construction activities that disturb between one and five acres, and smaller municipally owned industrial activities. With the promulgation of the Phase II federal rules, the MPCA is now adopting these regulations into state rules for administration and regulation of the stormwater program to meet federal program delegation agreement responsibilities. These rules are needed to comply with the federal NPDES permit program and state rules for NPDES/SDS permits. These regulations have been established by the EPA in 40 CFR Parts 122, 123, and 124, and by the MPCA in Minn. R. ch. 7001.


Reduce Environmental Damage Caused by Stormwater Runoff These proposed rules will establish a cost effective, flexible approach for reducing environmental harm by stormwater discharges from many point sources of stormwater that were not regulated under Phase I. The costs of implementing these proposed rules are discussed in Part V. of this SONAR, Consideration of Economic Factors. Polluted stormwater runoff causes adverse environmental impacts to the state’s water resources. Stormwater discharges are generated by runoff from land and impervious areas such as paved streets, parking lots, and building rooftops during rainfall and snow events. Polluted runoff may contain sediment, oil, greases, chemicals, nutrients, metals, litter, and pathogens in quantities that could adversely affect water quality. After a rain, stormwater runoff carries these pollutants into nearby streams, rivers, lakes, and wetlands. Individually and combined, these pollutants impair water quality, threatening designated beneficial uses and causing habitat alteration and destruction. The environmental harm caused by stormwater discharges from MS4s and construction activity has been well documented, as described in EPA’s Report to Congress on the Phase II Stormwater Regulations, October 1999 (EPA 833-R-99-001), and provided below.

• Urbanization alters the natural infiltration capability of the land and generates a host of

pollutants that are associated with the activities of dense populations, thus causing an increase in stormwater runoff volumes and pollutant loadings in stormwater discharged to receiving water bodies.

Urban development increases the amount of impervious surface in a watershed as undeveloped areas with natural infiltration characteristics, such as farm land and forests, are converted into buildings with rooftops, driveways, sidewalks, roads, and parking lots. These impervious surfaces have no ability to absorb stormwater. As stormwater and snow-melt washes over these impervious surfaces, the runoff picks up pollutants and gains speed and volume because of their inability to disperse and filter into the ground. The result is stormwater flows that are higher in pollutants, volume, and temperature than flows in areas with less impervious surface that have more natural vegetation and soil to filter the runoff.

• The National Urban Runoff Program (NURP) study (EPA 1983) indicated that discharges from MS4s draining runoff from residential, commercial, and light industrial areas carried more than ten times the annual loadings of total suspended solids than discharges from municipal sewage treatment plants that provide secondary treatment, and somewhat higher annual loadings of chemical oxygen demand, total lead, and total copper.

EPA conducted the NURP study to learn more about the nature of urban runoff from residential, commercial, and industrial areas. Though the NURP study is cited by the EPA in its’ Report to Congress, the NURP study is not the only study to describe current water quality impairments. More recent studies have not found significantly different pollutant concentrations in urban runoff when compared to the NURP study data (see 64 Fed. Reg. 68726 (1999)).


• The National Water Quality Inventory, (305(b)), 1996 Report to Congress shows that urban runoff/storm sewer discharges affect 13 percent of impaired rivers, 21 percent of impaired lakes, and 45 percent of impaired estuaries.

The National Water Quality Inventory, 1996, Report to Congress, (EPA 841-R-97-008) is required under the CWA section 305(b) and provides a national assessment of water quality based on biennial reports submitted by the States. In the report, States, Tribes, and Territories assess their individual water quality control programs by examining the attainment or nonattainment of the designated uses assigned to their rives, lakes, estuaries, wetlands, and ocean shores. A designated use is the legally applicable use specified in a water quality standard for a watershed, waterbody, or segment of a waterbody. The designated use is the desirable use that the water quality should support. Examples of designated uses include drinking water supply, primary contact recreation (i.e. swimming), and aquatic life support.

• Urban stormwater runoff, sanitary sewer overflows, and combined sewer overflows have been the largest causes of beach closings in the United States in the past three years.

A survey of coastal and Great Lakes communities found that more than 1,500 beach closings and advisories were attributable to stormwater runoff in 1998 based on EPA data supplemented with additional data (Natural Resources Defense Council. 1998. Testing the Waters Volume VIII: Has Your Vacation Beach Cleaned Up Its Act? New York, NY). Recreational bathers are at the highest risk for contracting illnesses such as gastroenteritis, typhoid, dysentery, hepatitis, skin rashes, and respiratory infections. Further studies document the connection between gastrointestinal illness in swimmers and water quality damaged by polluted stormwater discharges (see 64 Fed. Reg. 68727 (1999)).

• The NURP study found that pollutant levels from illicit discharges were high enough to significantly degrade receiving water quality and threaten aquatic, wildlife, and human health.

In addition to pollutants picked up by stormwater runoff before it enters a storm drain, studies have shown that discharges from a storm drain system often include wastes and wastewater from non-stormwater sources, referred to as illicit discharges. These discharges are illicit because MS4s are not designed to accept, process, or discharge these wastes. Sources of illicit discharges can include sanitary wastewater illegally connected to the storm drain system; effluent from septic tanks, car wash, laundry, and other industrial wastewaters, improper disposal of auto and household toxics, such as used motor oil and pesticides; and spills from roadways. The result of illicit discharges entering a system are untreated discharges that can contribute high levels of pollutants, including heavy metals, toxics, oil and grease, solvents, nutrients, viruses and bacteria into receiving waters.

• Siltation is the largest cause of impaired water quality in rivers and the third largest cause of impaired water quality in lakes, according to the 305(b) Report to Congress.

• Sediment yields from smaller construction sites are as high as or higher than the 20 to

150 tons/acre/year measured from larger sites.


Discharges from construction activity impact the biological, chemical, and physical integrity of receiving waters. Water quality becomes impaired, in part, because a number of pollutants are preferentially absorbed onto mineral or organic particles found in fine sediment. The interconnected process of erosion, sediment transport, and delivery is the primary pathway for introducing nutrients such as phosphorous, metals, and organic compounds into receiving waters and aquatic systems. Stormwater discharges from construction sites that occur when land area is disturbed, and before stabilization, can significantly impact designated uses. The siltation process can threaten these designated uses including; public water supply, recreation, and propagation of fish and wildlife. These proposed rules are needed to address polluted stormwater discharges from smaller MS4s and to address the erosion and transport of sediment in stormwater runoff from small construction activity. The implementation of the six minimum measures identified for MS4s in this proposed rule are expected to significantly reduce pollutants in urban stormwater compared to existing levels. Similarly, the implementation of BMPs for regulated construction activities in this proposed rule are also expected to result in significant reductions in polluted discharges and improve water quality. For the reasons stated above, and in order for the MPCA to comply with the Phase II federal requirements, there is a need for the MPCA to adopt rules to establish and administer a Stormwater Regulatory Program in Minnesota.

IV. STATEMENT OF REASONABLENESS Minn. Stat. ch. 14 requires the MPCA to make an affirmative presentation of the facts establishing the reasonableness of the proposed rules. “Reasonableness” is the opposite of arbitrariness or capriciousness. “Reasonableness” means there is a rational basis for the MPCA’s proposed action. The reasonableness of the proposed rules is explained in this part and divided into two sections: A) the reasonableness of the proposed rules as a whole and, B) the reasonableness of the individual proposed rule parts. A. Reasonableness of the Proposed Rules as a Whole The reasonableness portion of this SONAR provides the discussion and background on why and how the provisions of the proposed rules were established. The Reasonableness of the Proposed Rules as a Whole deals with the mandatory requirements established by the Administrative Procedures Act in completing the SONAR. Minn. Stat. §§ 14.131 and 14.23 set out nine factors for a regulatory analysis that must be included in the SONAR. Items (1) through (9) below quote these factors and then give the Agency’s response. 1. “A description of the classes of persons who probably will be affected by the

proposed rule, including classes that will bear the costs of the proposed rule and classes that will benefit from the proposed rule.”

Classes of persons most likely to be affected by this rule include: owners and operators of municipal separate storm sewer systems including counties, cities, townships, and other governmental entities; persons involved in the construction sector including building, development and general contracting, and heavy construction; feedlot owners and operators;


landowners participating in state and federal soil conservation programs; and owners and operators of industrial activities. This discussion is presented in more detail in Part V. of this SONAR, Consideration of Economic Factors.

2. “The probable costs to the agency and to any other agency of the implementation and enforcement of the proposed rule and any anticipated effect on state revenues.”

The probable costs of implementation and enforcement of the proposed rules are discussed in Part V. of this SONAR, Consideration of Economic Factors.

3. “A determination of whether there are less costly methods or less intrusive methods for achieving the purpose of the proposed rule.”

For the MS4 and industrial programs, MPCA staff and stakeholders found no methods of regulation that were less costly or intrusive that also would achieve the purpose of the proposed rules. Three methods are presented for the construction program. Construction Activity Conditional Exclusion A conditional exclusion to submitting a permit application and acquiring permit coverage is proposed under these rules. If the conditional exclusion proves to meet the intent of the stormwater regulations, additional reductions in cost and intrusion could be achieved in the future by including more categories of construction projects under the exclusion. These proposed rules conditionally exclude construction projects at feedlots that are already covered under a federal or state permit. Federal NPDES permits are required for concentrated animal feeding operations (CAFOs) and state construction short-form or interim permits are required for construction activity at non-CAFOs, with certain exceptions. These same projects are also regulated under the Phase II regulations for small construction activity. The proposed conditional exclusion would streamline the permitting process by relieving feedlot owners of the requirement of obtaining two construction permits. The Agency is also proposing to conditionally exclude smaller construction projects that fall under the regulation of the USDA, NRCS, and BWSR. The NRCS and BWSR manage grant programs that regulate conservation practice projects. These agencies establish construction standards and specifications and have legal agreements with the project owners, typically landowners. These same projects are also regulated under the Phase II regulations for small construction activity. The MDA, NRCS, and BWSR worked together with MPCA staff to establish a process to minimize the administrative burden on project owners. These efforts resulted in the conditional exclusion in the proposed rules. Under this exclusion, the project owner or operator is not required to apply for an NPDES/SDS construction stormwater permit if specific eligibility criteria are met. The proposed rule establishes these criteria, and construction activity minimum requirements, including BMPs for erosion prevention and sediment control. These stormwater pollution prevention and management requirements have also been incorporated into a fact sheet for feedlot construction sites, and a construction site specification sheet for the NRCS and BWSR construction grant forms. These projects remain part of the Stormwater Regulatory Program.


The conditional exclusion approach addresses both cost and intrusive issues. The exclusion approach is less intrusive for the feedlot owner because it prevents double permitting and double fees for feedlot facilities by not requiring separate permits for stormwater control and feedlot construction activities. It is also less intrusive for conservation practice project owners because they are not required to complete a permit application in addition to the funding application initially completed for NRCS or BWSR. Completing one application instead of two is less costly for the project owner. Not having to process the application and relying on county feedlot officers, NRCS or BWSR to maintain information on the project is less costly for the MPCA. If the conditional exclusion approach is determined to be successful for the projects regulated by the feedlot, NRCS and BWSR programs, then staff will look at other programs administered by state agencies, such as the DNR Protected Waters Program, to find additional opportunities to reduce administrative requirements while continuing to achieve the intended environmental protection goals. Partnering With Local Government Building Permit Programs

MPCA staff started to evaluate the existing systems of issuing building permits at the local government level. Many municipal governments already issue building permits for projects within their jurisdiction. Staff then worked to develop a plan to utilize this existing administrative structure and tie the NPDES/SDS permit to the municipal building permit, thus eliminating a separate administrative process at the state level – separate application, fee collection and tracking. The initial goals for considering this approach were for reducing the administrative burden on the regulated parties. However, establishing one administrative process instead of two would result in a net cost-saving solution. There would potentially be a slight cost increase at the local government level to modify the permit documents and permit issuance processes to incorporate the stormwater and data collection requirements and make the connections with the state stormwater program. However, a net cost savings would be realized once the program was established. Staff did not pursue this approach for several reasons. The strongest limitation came from the MPCA’s federal delegation requirements. Through an agreement with EPA, MPCA is delegated with the authority to administer the NPDES program and issue these federal permits. As part of that agreement, the MPCA cannot further delegate the responsibility for issuing permits to local governments. Since the plan to utilize the local building permit included distributing the NPDES/SDS stormwater permits at the local level, initial discussion with EPA staff indicated MPCA would be in violation of the delegation agreement. In addition, building permits are not issued at the local government level statewide. Therefore, the MPCA would still need to establish and maintain an administrative system for issuing permits in locations without a municipal building permit system. Even in areas with building permit systems, the success of establishing a state-local permit administration system would depend on the willingness of the local governments with building permit systems to volunteer to participate because there is no statutory mandate to partner for this purpose. However, MPCA staff still believes this plan has merit, mostly as a method to simplify the permit issuance process for construction activities, and hopes to revisit this idea in the future.


In the interim, the MPCA has looked to other ways in which it can partner with local governments to facilitate the implementation of the stormwater program. One such example is the construction program inspector pilot project. Under this project, the Agency contracts with non-agency sources, such as counties, to perform construction site inspections. The contract employees are required to document the inspections and provide the information back to the MPCA. The transfer of information is done in electronic form. The first contract for construction site inspections was with Dakota County, and inspections began in March 2004. The goals of the pilot project include developing: 1) a plan for providing information about new construction permit applications to local governments, and accepting construction inspection data in return, 2) a long-term plan for sharing electronic data with contract inspectors for the construction stormwater program, and 3) a long-term plan for sharing electronic data in a standardized manner that will allow all inspection programs to participate, if so desired.

Submitting Permit Applications On-line

MPCA staff evaluated using the MPCA web page and Internet to allow persons required to obtain an NPDES/SDS construction stormwater permit to fill out and submit the application electronically. Staff concluded that this method of application would be less intrusive for the person completing the application because the form would be available any time of the day for those persons with personal computers in their homes or offices. They would not have to make contact with the MPCA or wait for an application form to be sent to them. This method was also determined to be less costly if the electronic data submitted via the Internet could also be entered into the MPCA central data management system through an automated process. Currently, information from the permit application and about the construction project is being manually keyed into the database by stormwater program staff. Under the Phase I program, one staff person processed approximately 900 permit applications a year for large construction activity. At this rate it is difficult to process the applications in a timely manner during seasonal periods of high construction activity. At the time the Phase II construction program was being developed, the number of submitted construction permit applications was anticipated to increase by 5,000 annually. This increase would require 5.5 more staff persons to be hired to enter data. (Approximately 2,822 total permits were issued June 2003 to June 2004 for all construction activity, large and small.) The program could save the cost of these staff persons if the MPCA could develop a process for electronic permit application to be automatically entered into the central database. The expectation of being inundated by permit application information is a potential problem for administering the Phase II program. The MPCA currently does not have the funding to hire additional staff persons solely for purposes of entering permit information and the ability to automatically enter permit application data submitted electronically into the Agency’s central database has not yet been developed. The goal of the MPCA staff is to create an on-line application system and a method to capture the electronic application data. The MPCA is currently working on this effort and expects to have an on-line application system available for the construction stormwater permit in fall of 2004. In the interim, to make the application process somewhat easier to access, the application forms are available on the MPCA web page.


4. “A description of any alternative methods for achieving the purpose of the proposed rule that were seriously considered by the agency and the reasons why they were rejected in favor of the proposed rule.”

MPCA staff considered following the Phase II federal regulations at their strictest interpretation by requiring all regulated parties to apply for and obtain an NPDES/SDS permit. This approach was rejected in favor of opportunities to minimize the administrative burden on regulated parties and to focus limited Agency resources to achieve the largest potential for environmental gains. The proposed rules establish a conditional exclusion for some regulated parties that have stormwater concerns with a lesser potential for causing environmental harm. The parties covered under the conditional exclusion remain part of the Stormwater Regulatory Program and, therefore, must fulfill some level of regulatory requirements, can be required to apply for a permit, and are subject to enforcement actions if compliance problems occur. However, they are not required to apply for a permit. Conditional exclusions are proposed for feedlots covered under a state or NPDES/SDS feedlot construction permit, and small construction activity for conservation practice projects regulated by the USDA, NRCS or BWSR. The feedlot and conservation practice project exclusions are designed to prevent duplicating administrative requirements. MPCA staff also considered allowing permit waivers. Waivers are allowed under 40 CFR 122.32 for small MS4s and under 40 CFR 122.26(b)(15)(i)(A) for small construction activity. The decision was made not to consider waivers as part of this rulemaking because of the amount of staff resources that would be needed to determine if an MS4 would meet the waiver requirements. Staff concluded that it would be unlikely that an MS4 would desire to do all the evaluation required under the federal rule to make the presentation of proof needed to show it qualified for the waiver. In addition, based on MPCA staff’s analysis, it was determined that the construction activity waiver which is based on rainfall erosivity, is not suited to Minnesota conditions, in part due to climate and soil conditions. Therefore, staff concluded that from the state perspective, requiring permits would be a more efficient use of limited staff resources than creating a separate labor-intensive process for processing waivers.

5. “The probable costs of complying with the proposed rule, including the portion of the total costs that will be borne by identifiable categories of affected parties, such as separate classes of governmental units, business, or individuals.”

The probable costs of complying with the proposed rules are discussed in Part V. of this SONAR, Consideration of Economic Factors.

6. “The probable costs or consequences of not adopting the proposed rule, including those costs or consequences borne by identifiable categories of affected parties, such as separate classes of government units, businesses, or individuals.”

The probable costs or consequences of not adopting the proposed rules are discussed in Part V. of this SONAR, Consideration of Economic Factors.


7. “An assessment of any differences between the proposed rule and existing federal regulations and a specific analysis of the need for and reasonableness of each difference.”

The proposed rule has been developed based on the Phase II federal regulations governing stormwater discharges and is intended to meet or exceed the federal regulations. The proposed rule is consistent with many of the permit coverage and permit requirements established in the Phase II regulations for MS4s, construction activity, and industrial activity. The proposed rule also contains provisions that are different than the federal regulations. Several provisions in the proposed rules for the construction program differ in that they are either more restrictive to provide for better protection of the States’ water resources or they propose a flexibility in the permitting process that is intended to reduce the administrative burden on regulated parties yet meet the goals of the Stormwater Regulatory Program.

This section is divided into two parts; the first part provides a description of where the proposed rule is consistent with the federal regulations, the second part provides a description of the general differences between the proposed rule and the federal regulations, and the rationale for this difference. Proposed Rule Consistent With Federal Regulations Provisions in the proposed rules that are consistent with the federal regulations are discussed here. Permit required and permit deadline The proposed rules that establish the requirement to have permit coverage and the deadlines for permit coverage are consistent with federal regulations. The proposed rules at Minn. R. 7090.1010, 7090.2010, and 7090.3010 establish that an NPDES/SDS stormwater permit is required for regulated MS4s, construction activity, and industrial activity, respectively, and the application deadlines for permit coverage. With these proposed rules, the MPCA is adopting the federal regulations at 40 CFR 122.26(a)(1) and (9) which specify the NPDES permit requirement for stormwater discharges from these sources.

Minimum permit requirements for MS4s

The proposed rules at Minn. R. 7090.1040 establish the minimum permit requirements for MS4s. The Phase II federal rule specifies that a regulated small MS4 must develop and implement a stormwater pollution prevention program (SWPPP) to minimize the discharge of pollutants from their municipal storm sewer system to protect water quality. The federal rule at 40 CFR 122.34(a) additionally requires that the SWPPP include the following six minimum control measures; 1) public education and outreach on stormwater impacts, 2) public participation/involvement, 3) illicit discharge detection and elimination, 4) construction site stormwater runoff control, 5) post-construction stormwater management in new development/redevelopment, and 6) pollution prevention/good housekeeping for municipal operators. MS4s will need to develop and implement appropriate BMPs to be performed to satisfy each of the required six minimum control measures. With these proposed rules, the MPCA is adopting these federal requirements for regulated MS4s.


Minimum permit requirements for construction activity The proposed rules at Minn. R. 7090.2040 establish the minimum permit requirements for construction activity. Owners and operators of construction activity covered under an NPDES/SDS permit must develop and implement a stormwater pollution prevention plan (SWPPP) designed to minimize pollutant runoff from the construction site. The federal rule, at 40 CFR 122.26(c)(ii), requires operators of construction activity covered under an NPDES/SDS permit to provide a description of the proposed measures to control pollutants in stormwater discharges during construction and after construction operations have been completed. These proposed measures must include stormwater pollution prevention and management requirements. The proposed rule requires the owner of a construction site to develop a SWPPP which includes the minimum requirements for erosion prevention and sediment control BMPs for the site. The SWPPP must be developed prior to application for permit coverage. These proposed rules are consistent with the federal requirements for construction activity. Other permit requirements for construction activity – subdivision registration

The federal rule at 40 CFR 122.28(b)(v) provides that a notice of intent (NOI) is not required for a general NPDES stormwater permit for activities regulated under 40 CFR 122.26(b)(15) if the permitting authority finds that the use of a NOI would be inappropriate (NOI is the federal term used for a permit application). This rule gives the NPDES permitting authority the discretion to decide whether or not to require the submittal of a permit application for construction activity of less than five acres. These proposed rules are consistent with the federal regulations as well as the requirements for operators of construction sites under EPA’s NPDES General Permit for Discharges From Large and Small Construction Activities, Part 3, subpart 3.2.C, which became effective July 1, 2003. EPA’s general permit requires that persons with operational control over a portion of a larger construction site are responsible for compliance with the applicable terms and conditions of the permit for their portion of the site, and must either implement the common SWPPP or develop and implement their own SWPPP.

The proposed rules at Minn. R. at 7090.2060 establish these same requirements for implementing the SWPPP and they establish the process for identifying and tracking how the site operator will meet these requirements. Under the proposed rule, persons that acquire ownership of a portion of property covered under a construction stormwater permit are required to either obtain permit coverage and develop a SWPPP or submit a subdivision registration form to the MPCA identifying whether they will be implementing the original SWPPP for the construction site or developing and implementing their own SWPPP. The submittal of a subdivision registration form ensures permit coverage for the new property owner without requiring submittal of a permit application and application fee. Additionally, it also allows the Agency to track permit coverage at construction sites with multiple or numerous operators for administrative and inspection or enforcement purposes, which is consistent with EPA’s recommended use of NOIs (see 64 Fed. Reg. 68777 (1999)). These proposed rules are consistent with the federal requirements. Minimum permit requirements for industrial activity The proposed rules at Minn. R 7090.3040 establish the minimum permit requirements for industrial activity. Owners and operators of industrial activity covered under an NPDES/SDS permit must develop and implement a stormwater pollution prevention plan (SWPPP) designed


to eliminate or minimize contact of stormwater with significant materials that may result in polluted runoff. The federal rule, at 40 CFR 122.26(c)(i), requires operators of industrial activity covered under an NPDES/SDS permit to provide a description of the proposed measures to control pollutants in stormwater discharges leaving the facility. These measures must address the specific conditions at the industrial facility. The proposed rule establishes the requirement for these preventative measures including an inventory of exposed significant materials and BMPs to eliminate or reduce pollution of stormwater runoff from the facility. The SWPPP must be developed prior to application for permit coverage. These proposed rules are consistent with the federal requirements for industrial activity. MS4 Designation criteria The proposed rules at Minn. R. 7090.1010 establish designation criteria that are consistent with federal regulations. The proposed rules also establish the administrative process for designation. The federal rule, at 40 CFR 123.35(b), requires states to develop a process and criteria to designate small MS4s for NPDES stormwater permit coverage, other than those MS4s that have been designated under the Phase II regulations. States must apply the criteria, at a minimum, to any small MS4 located outside of an urbanized area with a population of 10,000, and a population density of 1,000 people per square mile. The federal rule also requires states to designate any small MS4 that contributes substantially to the pollutant loadings of a physically interconnected MS4 that is regulated by the NPDES/SDS stormwater program. Though EPA guidance recommends consideration of the following six designation criteria; 1) discharge to sensitive waters, 2) high population density, 3) high growth or growth potential, 4) contiguity to an urbanized area, 5) significant contributor of pollutants to waters of the United States; and 6) ineffective protection of water quality concerns by other programs, the Phase II regulations allow states the flexibility to apply these criteria or develop their own criteria. The proposed rule establishes designation criteria based on EPA recommended criteria, and several additional criteria based on feedback the Agency received from the MS4 stakeholder meeting participants. The MPCA has applied the designation criteria as required and has identified approximately 44 MS4s that will be designated for permit coverage under this rulemaking. Any future designations will be based on the criteria established in these rules. Conditional exclusion for no exposure

The proposed rules at Minn. R. 7090.3060 for no exposure are consistent with the federal regulations for the conditional exclusion for no exposure of industrial activities and materials to stormwater, see 40 CFR 122.26(g). Like the federal regulations, the proposed rule to establish the no exposure exclusion from permitting will apply to all 11 categories of industrial activity identified in the Phase I regulations, except construction, category (x). The proposed rule will allow facilities that meet the eligibility criteria for no exposure, as specified in 40 CFR 122.26(g)(4), to receive a certification of no exposure instead of obtaining NPDES stormwater permit coverage. General Differences Between the Proposed Rule and the Federal Regulations Several provisions in the proposed rules for the MS4 program and the construction program differ from the federal regulations and are discussed here. Designation of MS4s located partially within an urbanized area


The federal regulations, at 40 CFR 122.32(a)(1), state that if a small MS4 is not located entirely within an urbanized area, only the portion that is within the urbanized area is regulated. The proposed rule at Minn. R. 7090.1010, subpart 1, item B, subitem (1) requires that a city or township that is located partially within an urbanized area must apply for permit coverage for the entire municipal boundary. The proposed rule to regulate these partial MS4s could be interpreted as exceeding federal regulations because the federal rule does not require permit coverage for that portion of a federally designated small MS4 that is located outside of the urbanized area. However, it is reasonable that if the MS4 needs to adopt a stormwater pollution prevention program that addresses the minimum requirements for part of their jurisdiction, it makes sense from a planning and implementation perspective to apply these requirements to the entire jurisdiction. Additionally, construction activity that occurs on the fringe of the urbanized area needs the additional environmental protection afforded by the construction/post construction minimum measures required under the MS4 permit, and under jurisdictional wide stormwater pollution control ordinances versus partial area ordinances. Emergency construction

The federal rules at 40 CFR 122.26(c)(1)(ii) and 122.26(e)(1) and (8) establish the application requirements and deadlines for NPDES/SDS permit coverage for stormwater discharges associated with construction activity. Under the federal rule, permit coverage is required for regulated construction activity before the start of construction. The MPCA is proposing rules that will allow for flexibility in meeting the permit application requirements when construction activities must begin immediately to minimize the impacts of an emergency situation. The proposed rules at Minn. R. 7090.2010, subpart 4, extend the deadline for when a permit application must be submitted for construction activities required to minimize the impacts of an emergency situation if certain notification requirements are met, and the BMPs identified in the proposed rule are complied with.

The MPCA does not intend that this rule provision will be applicable to the individual sewage treatment system program, which is regulated under Minn. R. ch. 7080. The purpose of this rule provision is to address emergency situations resulting from natural disasters that present an imminent threat to public health and safety, and is not intended to be used for addressing a threat to public health or safety that is a result of a failing or noncompliant individual sewage treatment system. These proposed rules are needed for several reasons. During the public comment period for the draft NPDES/SDS general construction stormwater permit, the MPCA received requests from several parties, including Flint Hills Resources, Minnegasco, Excel Energy, Great River Energy, and Minnesota Power, to address emergency situations where an owner/operator of a proposed construction activity cannot meet the seven day notification requirements. These requests included allowing for an exemption from permit coverage or the issuance of one permit annually for all emergency construction.

Gas and electric distribution companies are required to supply uninterrupted service to their customers however; emergency situations arise where immediate response is required to restore service. Situations may also arise where local governments must act quickly to protect the public, natural, and manmade resources, as was the case of the Red River flood of 1997 where immediate construction activity was required to construct dikes and dams to control flood


waters. These situations generally are the result of natural disasters, rain or snow storms, or failures of systems unrelated to utility operations. Regardless of the cause, immediate action is necessary to restore service and/or protect human health and the environment. Such action may require immediate construction of an emergency access, diversionary or replacement structures, or other types of activities. These activities would not be able to meet the federal requirements and the proposed rule under parts 7090.2010 and 7090.2040, for permit application and stormwater pollution prevention plan preparation requirements prior to the start of the emergency construction activities. Additionally, based on the MPCA’s experience implementing the Phase I construction program, it is difficult to define all of the potential situations where true emergencies and the related response actions may require permit coverage. Given that situation, historically the MPCA would exercise enforcement discretion in those emergency situations where the permit application process, permit issuance, and permit compliance would inhibit timely and adequate responses to emergency actions. Therefore, utility companies and local governments could proceed with emergency actions without first obtaining NPDES/SDS construction stormwater permit coverage and the Commissioner could then decide whether enforcement discretion should be exercised after a review of the total circumstances surrounding the alleged emergency situation. These proposed rules allow for a process where the emergency responder provides notice to the MPCA when emergency construction activities commence so that those construction activities which require permit coverage can be implemented with MPCA approval prior to obtaining permit coverage. This process under the proposed rule lessens the likelihood that the Agency would then need to exercise enforcement action later. Though it is difficult to predict the exact frequency of these types of emergency situations, the MPCA expects a somewhat limited use of this rule provision, particularly for weather related emergency situations. Due to Minnesota’s climate and seasonal changes, natural disasters and severe weather do not typically occur frequently or year round, and in the case of floods, are somewhat predictable. However, this proposed rule is reasonable because such emergency situations can compromise public health and safety and can occur with little or no advance warning. In these cases it may not be feasible or practical, or in the interest of protecting the public and the environment, to delay construction activity to mitigate the immediate impacts of such disasters in order to meet the federal requirements for permit application. Construction activity conditional exclusion The federal rules, at 40 CFR 122.26(a)(1) and 9(i)(B), establish the NPDES permit requirements for stormwater discharges associated with construction activity. Under the federal rule, permit coverage is required for regulated construction activity before the start of construction. The federal rule, at 40 CFR 122.28(b)(2)(v), also provides the permitting authority the discretion to authorize a construction general permit for sites less than five acres without submitting an NOI (i.e. permit application). The proposed rules at Minn. R. 7090.2020, conditionally exclude certain feedlot and agricultural construction activities from the requirement to apply for construction stormwater permit coverage if specific requirements are met.


These proposed rules are needed for several reasons. In addition to discussions with MDA, NRCS, and BWSR during the early planning and development stages of the Phase II stormwater program, the Agency also received comments from several parties during the public comment period for the draft NPDES/SDS general construction stormwater permit, regarding the impact of the Phase II regulations on agricultural and conservation projects. Specifically, concerns were raised regarding the requirement for livestock producers (feedlots) to get multiple MPCA permits for pollution abatement projects (i.e. a feedlot interim permit and a construction stormwater permit), and for landowners who voluntarily install conservation practices to apply for a permit and pay a permit fee. Faced with double permitting of construction activities and a permit requirement that would act as a disincentive for these landowners, an abbreviated stormwater process was needed for certain types of construction activities. Additionally, due to the potentially large number of these feedlot and agricultural construction activities and the Agency resources that would be required to permit each of these activities, the MPCA determined that there was a need to more efficiently regulate these sources. These proposed rules are needed to maximize the effectiveness of the construction stormwater program and minimize the regulatory process given existing and projected limited staffing resources. These rules allow the MPCA to do so by providing a more streamlined permitting process and flexibility in meeting the stormwater program requirements. Because the feedlot and agricultural construction activities identified for this conditional exclusion are already regulated under state and federal feedlot permits or regulated by the USDA, NRCS or BWSR under construction grants, the MPCA is not requiring a separate permit for stormwater control when the requirements of the conditional exclusion are met. However, this conditional exclusion is not a requirement; an owner or operator of these construction activities may submit an application for NPDES/SDS construction stormwater permit coverage, should they desire to do so. This approach is reasonable because it prevents a duplication of administrative requirements, reduces the administrative burden on regulated parties, and facilitates project oversight at the local level by county feedlot officers, the jurisdictional MS4, and grant contractors. Concerns may be raised regarding this approach because it does not include the issuance of an NPDES/SDS construction stormwater permit to every party that is required to have such a permit under federal requirements, and because a permit application is not being submitted for these construction activities, the requirement to develop a SWPPP does not apply. However, owners and operators conducting construction activities that are operating under the conditional exclusion are not exempt from the Stormwater Regulatory Program. The proposed rule requires owners and operators of these construction activities to comply with the BMPs established in the rule, including erosion prevention and sediment controls. Should they fail to do so, they must submit a permit application. This is reasonable because the requirement to comply with the BMPs established in these rules meets the same purpose as the BMPs in the NPDES/SDS construction stormwater permit, which is to protect water quality. Additionally, should the Agency become aware of a conditionally excluded project where problems exist that cannot be addressed through the BMPs established in these rules, the Agency has the authority under part 7090.2010, subpart 1 to require permit coverage. These proposed rules are based, in part, on the key streamlining and innovation principles outlined in the October 30, 2002 “Joint Report on Streamlining – Recommendations for Action”, a State-EPA joint partnership effort to streamline and re-engineer core water program processes. This streamlined permitting approach provides the Agency the needed flexibility in managing


the construction stormwater and feedlot permit programs, by reducing the permitting workload and allowing the Agency to focus its’ efforts on those areas of the program which will provide the most environmental benefit. The reasonableness of these proposed rules for the construction activity conditional exclusion is discussed in more detail in Part IV. B. of this SONAR, Reasonableness of the Individual Proposed Rule Parts. Additional discussion of the need for these proposed rules is provided here. Feedlot construction activity The MPCA's feedlot program regulates and controls pollution created by animal-production facilities under Minn. R. ch. 7020. The size of the facility, number of animals, pollution potential and type of construction all play a part in the degree to which a facility is regulated. Depending on the situation, different types of permits are issued to differing facilities. The table below indicates the approximate number of feedlot permits issued annually, including individual and general NPDES permits, interim permits, and construction short-form permits (55 counties are delegated to issue the state construction short-form and interim permits).

Year MPCA

Construction Short-Form

MPCA Interim

MPCA NPDES (individual & general, mostly general)

County Construction Short-Form

County Interim

2000 2 4 NA NA NA 2001 14 22 232 301* NA 2002 18 23 241 255 93 2003 13 26 67 79 36 2004 8 11 45 NA NA Total 55 86 585 635 129 * Type of permit, construction short-form or interim, was not distinguished this report year. Under the Phase II federal regulations, many of these feedlots would be required to apply for NPDES/SDS construction stormwater permit coverage in addition to permit coverage required under the feedlot program rules. Because Minnesota already has a system for regulating construction at feedlots, the Phase II requirements would result in double permitting of feedlots.

The conditional exclusion allows feedlot construction activities, other than large CAFOs covered under an individual or general NPDES/SDS permit, to be conducted without applying for construction stormwater permit coverage if specific requirements are met. The proposed rules establish the requirements for the conditional exclusion including permit coverage under the feedlot program rules and the requirement to comply with the required BMPs. These proposed rules will streamline the permitting process by relieving feedlot owners of the requirement of obtaining two permits for construction activity, a feedlot permit and a construction stormwater permit, and from paying additional permit fees. The feedlot permits issued under Minn. R. 7020.0405 will need to be modified to incorporate stormwater requirements for construction activity as it relates to the construction permit requirements for animal feedlots. The current NPDES/SDS general permit for CAFOs includes stormwater control requirements for Phase I construction and requires the applicability of those conditions to Phase II construction, upon implementation of the Phase II stormwater


requirements. The MPCA plans, prior to the 2006 expiration of the NPDES/SDS general permit for CAFOs, to modify the general permit to specifically address the Phase II construction stormwater requirements. The work effort to modify this permit is currently in progress. Individual NPDES permits currently issued for CAFOs include the Phase II construction stormwater requirements with permit conditions for erosion prevention and sediment control and inspection and maintenance requirements. The interim and construction short-form permits are currently issued with the MPCA fact sheet “Stormwater Control Requirements at Feedlot Construction Sites.” This fact sheet contains the stormwater BMPs for feedlots that are established in these proposed rules.

The MPCA also anticipates that any future amendments to the feedlot program rules will need to include the requirement that feedlot permittees comply with the applicable requirements of the Stormwater Regulatory Program rules. Such amendments to Minn. R. ch. 7020 should specifically identify the stormwater rule requirements that apply to feedlots. Agricultural construction activity Certain types of construction activity that occur on agricultural land (i.e. tillage activities), are federally exempted from obtaining NPDES stormwater permit coverage. The EPA has determined that stormwater discharges from clearing, grading and excavation, for the purpose of growing crops are not covered by the NPDES program; discharges from these activities are considered to be non point source “agricultural stormwater discharges” and therefore are excluded from the requirements of the NPDES permitting program, see 40 CFR 122.3(e). However, there are certain types of soil conservation construction projects conducted by governmental entities that do not specifically fall under the federal exemption. These proposed rules establish criteria that identify and conditionally exclude some of these construction activities, specifically conservation practice projects completed under the USDA, NRCS, and BWSR funding programs. A conservation practice is the installation of a BMP or an alteration to the existing condition that reduces the amount of erosion from wind or water, controls the movement of sediment or nutrients, and/or enhances the habitat of plants and animals. Conservation practices are described in the USDA, NRCS Field Office Technical Guide which is available on the internet at http://www.nrcs.usda.gov/technical/efotg/. As indicated in the table below, the USDA, NRSC, and BWSR work with private landowners on hundreds of erosion control projects annually though construction grants administered by state and federal conservation programs. These state and federal projects are not all typically reported in number of projects, but rather by number of contracts (which may include several projects under one contract) or number of practice acres.

http://www.nrcs.usda.gov/technical/efotg/


Program Estimated # of Contracts,

Practice Acres, or Projects USDA NRCS Environmental Quality Incentives Program (EQIP)*

294 contracts in 2002 1,071 contracts in 2003

Conservation Reserve Program (CRP) - Conservation Reserve Enhancement Program (CREP) Contracts** (Acres reported are for wetland restoration projects (practice code CP23)).

205.1 acres in 19991,763.5 acres in 20003,107.5 acres in 2001

11,104.4 acres in 200219,897.4 acres in 20031,185.7 acres in 2004

BWSR State Cost Share Program*** 200 – 250 projects per yearReinvest in Minnesota (RIM) Reserve Wetland Restoration***

50 – 75 projects per year

* Estimates were obtained from NRCS, 2002 EQIP Application and Contract Practices, and

2003 EQIP Practices. EQIP reports are available on the internet at http://www.mn.nrcs.usda.gov/programs/eqip/eqip2004.html.

** Estimates were obtained from USDA, Farm Service Agency, Conservation Reserve Program

– Monthly Contract Report, Project Summary – Practice Summary for Active CREP Contracts by Program Year. No grassed waterway projects – practice code CP8 or terrace projects – practice code CP15 (additional CRP practice projects likely to meet the definition of construction activity) were identified in the report. CRP reports are available on the internet at http://www.fsa.usda.gov/dafp/cepd/crp_reports.htm.

***Estimates were obtained from BWSR and are based on Local Government Annual Reporting

System (LARS) data from 1998 – 2002. These conservation practice projects are the heart of soil conservation practices, reducing or eliminating many tons of soil erosion. Many of these projects such as waterway construction, sediment basin construction and terraces, which are designed to NRCS standards to prevent soil erosion, would be subject to the NPDES Phase II permit requirements and would require permit coverage. Cooperators on these projects are typically private landowners who are voluntarily trying to control erosion, protect water quality, or enhance wildlife habitat on their property. To charge these landowners a permit fee of $400 or more to voluntarily install conservation practices would be a detriment to conservation application in Minnesota. Doing so would place an undo burden on landowners and may limit future soil conservation projects. Landowners that must first obtain a permit and pay fees may be less inclined to go ahead with the project. The conditional exclusion allows conservation practice projects of less than five acres to be conducted under the existing NRCS and BWSR processes without NPDES/SDS permit coverage if specific requirements are met. The proposed rules establish the requirements for the conditional exclusion including; participation in a governmental program that includes financial assistance, the requirement to follow USDA, NRCS construction standards and specifications, and compliance with the required BMPs. These proposed rules would streamline the permitting process by relieving landowners of the requirement of applying for permit coverage and paying permit fees.

http://www.mn.nrcs.usda.gov/programs/eqip/eqip2004.html

http://www.fsa.usda.gov/dafp/cepd/crp_reports.htm


8. “Describe how the agency, in developing the proposed rules, considered and implemented the legislative policy supporting performance-based regulatory systems set forth in Minn. Stat. § 14.002, which requires state agencies, whenever feasible, to develop rules and regulatory programs that emphasize superior achievement in meeting the agency’s regulatory objectives and maximum flexibility for the regulated party and the agency in meeting those goals.”

While developing chapter 7090, the MPCA considered and implemented performance based standards which emphasize superior achievement in meeting the Agency’s regulatory objectives and allowed regulated parties and the Agency the appropriate flexibility in meeting those goals. These proposed rules reflect the intent of this statute and represent an effort to promulgate less intrusive and less costly means to achieve the purposes of the Phase II federal regulations. The NPDES Phase I and Phase II federal regulations were developed based on a performance based regulatory approach that provides broad requirements and flexibility in meeting those regulatory requirements by allowing for site-specific measures for achieving compliance. The fundamental approach for addressing stormwater discharges under the Phase I and Phase II regulations is the use of site-specific stormwater pollution prevention plans and programs and BMPs. These plans/programs and practices are designed and implemented to reduce the amount of polluted stormwater runoff entering water bodies. Through the requirement to develop site-specific stormwater management programs, owners and operators of MS4s, construction and industrial activities are in the best position to determine the appropriate combination of stormwater management practices for their own circumstances. The flexible nature of the Stormwater Regulatory Program encourages innovation on the part of owners and operators and allows them to design their stormwater management programs to their own unique circumstances. Because the Phase I and II federal regulations are performance based, and these proposed rules establish the regulatory requirements of the Phase II federal regulations, these rules are also, by default, performance based and provide the same flexibility in meeting regulatory requirements as the federal rules. MPCA staff tried to take a common sense approach in developing the Phase II stormwater program and these rules with the understanding that Agency resources are limited and the number of regulated entities is large. Additionally, the Agency looked for ways to streamline the permitting process and avoid double permitting of regulated parties were possible, yet focus on those regulated areas of the greatest environmental concern. Staff concluded that an administrative program designed to process a permit application and issue a permit for each party required to be regulated under Phase II would not be successful. Therefore, these proposed rules include several rule provisions that provide additional flexibility in the permitting process that is intended to reduce the administrative burden on some regulated parties and the Agency. With these proposed rules, the Agency’s goal is to allow more flexibility to regulated parties while still meeting regulatory objectives, protecting water quality, and making more efficient use of Agency resources.

The following proposed rules reflect the intent of this statute and represent an effort to promulgate less intrusive and less costly means to achieve the purposes of the Phase II federal regulations.


• In part 7090.2010, subpart 4, owners and operators conducting emergency construction activity are granted flexibility for when a permit application must be submitted. The proposed rule allows for a permit application for emergency construction to be submitted within seven days of the emergency construction start date, rather than before the start of construction activity, if notification requirements are met and specific BMPs are complied with.

• In part 7090.2020, owners and operators conducting construction activity for certain feedlot and conservation practice projects are granted flexibility in meeting permit application requirements. The proposed rule allows for these construction activities to be conducted without applying for permit coverage and paying the permit application fee when specific conditions are met and BMPs are complied with.

• In part 7090.2060, owners and operators that acquire a portion of property covered under an existing construction stormwater permit are allowed flexibility to determine under what administrative process they can continue permit coverage. The proposed rule provides the new owner or operator the option to obtain their own permit coverage or be covered under the original permit by submitting the subdivision registration form. There is no subdivision registration fee.

9. “Describe the agency’s effort to provide additional notification to persons or classes

of persons who may be affected by the proposed rule.” The Agency’s efforts to provide additional notification to persons or classes of persons who may be affected by the proposed rule are discussed in Part VI. of this SONAR, Additional Notice. B. Reasonableness of the Individual Proposed Rule Parts This section addresses the reasonableness of specific parts of the proposed rules. 1. Chapter 7001 Permits and Certifications With the new Phase II regulations and the expanded scope of the Stormwater Regulatory Program, minor revisions to Minn. R. ch. 7001 are needed. With these proposed rules, a new chapter of state water rules, Minn. R. ch. 7090, is being created for the Stormwater Regulatory Program that will address both the Phase I and Phase II regulations under one rule chapter. For this reason, several definitions under Minn. R. 7001.1020 and the permit requirements under Minn. R. 7001.1035 specific to the stormwater program are not needed under chapter 7001 and will be repealed under these proposed rules. Minn. R. 7001.0040 and 7001.1040, relating to permit application deadlines, will be amended to reference these requirements as they relate to chapter 7090. 7001.0040 Application Deadlines This part identifies the permit application deadlines for permits issued under Minn. R. ch. 7001. Subpart 1. Subpart 1 states that except as otherwise required by parts 7001.0530 and 7001.1040, a permit application for a new facility or activity may be submitted at any time, and recommends that the application be submitted at least 180 days before the start of facility construction or the activity. The Agency proposes to amend this provision to include a reference to Minn. R. ch.


7090 because the requirements of this subpart also relate to the Stormwater Regulatory Program under chapter 7090. This is reasonable because this provision is applicable to the MS4, construction, and industrial programs under parts 7090.1000, 7090.2000, and 7090.3000, respectively. 7001.1020 Definitions The following definitions were established under Minn. R. ch. 7001, which administers the Phase I federal stormwater regulations. Subpart 16a. General construction stormwater permit. The Agency proposes to repeal this definition from Minn. R. ch. 7001. Though the term “general construction stormwater permit” is used in the stormwater program and under Minn. R. ch. 7002, it is not used in these proposed rules. Minn. R. ch. 7001 uses the term “general construction stormwater permit” to identify a specific type of permit, an NPDES general permit, for stormwater discharges from construction regulated under Phase I, large construction activity. Stormwater discharges from all regulated construction activities are covered under either an NPDES/SDS general permit or an individual permit. The Phase II federal stormwater regulations expanded the scope of construction activity regulated under the NPDES stormwater permit program to include small construction activity. Rather than defining Phase I and Phase II construction separately, these proposed rules define all regulated construction activity using one term, “construction activity.” Because the Agency issues one general permit for all regulated construction activity, except where an individual permit is required, it is reasonable to use one definition that will incorporate both large and small construction regulated under the NPDES/SDS construction stormwater permit program.

Subpart 16b. General industrial stormwater permit. The Agency proposes to repeal this definition from Minn. R. ch. 7001. Again, though the term “general industrial stormwater permit” is used in the stormwater program and under Minn. R. ch. 7002, it is not used in these proposed rules. Minn. R. ch. 7001 uses the term “general industrial stormwater permit” to identify a specific type of permit for regulating stormwater discharges associated with industrial activity and references 40 CFR 122.26(b)(14)(i-ix, xi). Stormwater discharges from all regulated industrial activities are covered under either an NPDES/SDS general permit or an individual permit. There are 11 categories of regulated industrial activity under Phase I including construction activity, category (x). No new categories of industrial activity have been added under the Phase II regulations. Because the Agency issues one general permit for all regulated industrial activity, except construction activity and where an individual permit is required, it is reasonable to define all regulated industrial activity using the term “industrial activity.”

Subpart 16c. Individual stormwater permit. The Agency proposes to repeal this definition from Minn. R. ch. 7001. The term “individual stormwater permit” is used in the stormwater program and under Minn. R. ch. 7002, however, it is not used in these proposed rules. Minn. R. ch. 7001 uses the term “individual stormwater permit” to identify a specific type of permit for regulating stormwater discharges from industrial activity, large construction activity, and large or medium MS4s regulated under Phase I. Stormwater discharges from all sources regulated under Phase I and Phase II are covered under either an NPDES/SDS general permit or an individual permit, therefore it is not necessary to include a definition in these proposed rules that identifies the types of facilities or activities that are regulated in accordance with federal and state requirements under an individual, or general permit.


Subpart 16d. Large municipal storm sewer system. The Agency proposes to repeal this definition from Minn. R. ch. 7001. The term “large municipal storm sewer system” is used in the Phase I and Phase II federal regulations however; it is not used in these proposed rules. Minn. R. ch. 7001 uses the term “large municipal storm sewer system” to define those MS4s with a population of 250,000 or more regulated under Phase I. The Phase II federal stormwater regulations have expanded the scope of MS4s regulated under the NPDES stormwater permit program to include small MS4s. Rather than defining Phase I and Phase II MS4s separately based on population size, the Agency identifies MS4s in these proposed rules as either being mandated by federal rule or designated by the state for permit coverage, and in doing so requires permits appropriate to meet federal and state requirements. Subpart 17a. Medium municipal storm sewer system. The Agency is proposes to repeal this definition from Minn. R. ch. 7001. The term “medium municipal storm sewer system” is used in the Phase I and Phase II federal regulations however; it is not used in these proposed rules. Minn. R. ch. 7001 uses the term “medium municipal storm sewer system” to define those MS4s with a population of 100,000 or more but less than 250,000 regulated under Phase I. Again, rather than defining Phase I and Phase II MS4s separately based on population size, the Agency identifies MS4s in these proposed rules as either being mandated by federal rule or designated by the state for permit coverage. Individual or general permits will be issued in accordance with the federal and state requirements. Subpart 28a. Stormwater. The Agency proposes to repeal this definition from Minn. R. ch. 7001, because this definition which is specific to the stormwater program is no longer needed under this chapter. The term stormwater is defined in the proposed rules because the term is applicable to the Stormwater Regulatory Program under chapter 7090.

7001.1035 Stormwater Permits This part identifies the circumstances when an NPDES permit for stormwater discharge is required. Item A. Item A identifies the federal regulation that defines industrial and construction activity requiring NPDES stormwater permit coverage under the Phase I program. The Agency proposes to repeal this provision from Minn. R. ch. 7001. The Phase II federal stormwater regulations have expanded the scope of construction and industrial activities regulated under the NPDES stormwater permit program. Therefore it is necessary to establish permit requirements that incorporate both Phase I and Phase II regulations. These proposed rules, for clarity, identify the permit requirements separately for each stormwater program area; MS4, construction, and industrial. The Phase I requirements for MS4s, construction activity, and industrial activity are now established in these proposed rules under parts 7090.1010, 7090.2010 and 7090.3010, respectively. Item B. Item B states that the Commissioner determines that a stormwater discharge may cause or contribute to a violation of an applicable state or federal water quality rule or regulation. The Agency proposes to repeal this provision from Minn. R. ch. 7001, and move this provision to chapter 7090. This is reasonable because this provision is applicable to the Stormwater Regulatory Program under chapter 7090. Item C. Item C states the requirement for an NPDES stormwater permit if a water quality


management plan recommends pollution control requirements be applied to the discharge. The Agency proposes to repeal this provision from Minn. R. ch. 7001, and move this provision to chapter 7090. This is reasonable because this provision is applicable to the Stormwater Regulatory Program under chapter 7090. Item D. Item D states the requirement for an NPDES stormwater permit for large or medium MS4s. The Agency proposes to repeal this provision from Minn. R. ch. 7001. The Phase II federal stormwater regulations have expanded the scope of MS4s regulated under the NPDES stormwater permit program. Therefore it is necessary to establish permit requirements that incorporate both Phase I and Phase II regulations. As stated above, these proposed rules, for clarity, identify the permit requirements separately for each stormwater program area; MS4, construction, and industrial. The Phase I requirements for MS4s are now established in these proposed rules under part 7090.1010. 7001.1040 Application Deadline for New Permits This part identifies the permit application deadlines for new permits issued under Minn. R. ch. 7001.

Item B. Item B establishes when an application must be submitted for activities that require a general construction stormwater permit under Minn. R. ch. 7001. The Agency proposes to amend this provision to replace the reference to Minn. R. ch. 7001 with a reference to Minn. R. ch. 7090 because the requirements of this subpart relate to the Stormwater Regulatory Program under chapter 7090. This is reasonable because this provision is applicable to the construction program under part 7090.2000. 2. Chapter 7002 Water Quality Permit Fees Minor revisions are needed to the existing rules governing water quality permit fee rules, Minn. R. ch. 7002. Specifically, several definitions under Minn. R. 7002.0220 will be amended to be consistent with the proposed rules, and application fees under Minn. R. 7002.0250 will be amended to clarify the application fee requirement for a permit modification. 7002.0220 Definitions Subpart 3a. This subpart states that general construction stormwater permit means a permit that is defined in Minn. R. 7001.1020, subpart 16a. It is necessary to amend this rule provision because the definition of general construction stormwater permit in Minn. R. ch. 7001 is being repealed under these proposed rules. Therefore, the Agency proposes to amend this provision to define general construction stormwater permit to mean an NPDES general permit for stormwater discharges associated with construction activity as defined in part 7090.0080, subpart 4. This is reasonable because this definition is applicable to the Stormwater Regulatory Program under chapter 7090. Subpart 3b. This subpart states that general industrial stormwater permit means a permit that is defined in Minn. R. 7001.1020, subpart 16b. It is necessary to amend this rule provision because the definition of general industrial stormwater permit in Minn. R. ch. 7001 is being repealed under these proposed rules. Therefore, the Agency proposes to amend this provision to define industrial stormwater permit to mean an NPDES general permit for stormwater discharges


associated with industrial activity as defined in part 7090.0080, subpart 6. This is reasonable because this definition is applicable to the Stormwater Regulatory Program under chapter 7090. Subpart 3c. This subpart states that individual stormwater permit means a permit that is defined in part 7001.1020, subpart 16c. It is necessary to amend this rule provision because the definition of individual stormwater permit in Minn. R. ch. 7001 is being repealed under these proposed rules. Further, the definition under chapter 7001 applies only to sources regulated under the Phase I federal rules; medium and large MS4s, and large construction activity, and industrial activity. The Agency proposes to amend this provision to define individual stormwater permit to mean an NPDES permit for stormwater discharges associated with a specific site and type of activity as defined in 40 CFR 122.26(b)(4), (7), and (14)-(16). This is reasonable because this amendment applies to all sources regulated under the Phase I and Phase II federal rules, including small, medium and large MS4s, small and large construction activity, and industrial activity. 7002.0250 Application Fee This rule establishes, in part, that a person who applies for a permit to construct, install, modify, or operate a facility, or applies for a permit modification as described in part 7001.0190, must submit the application with the appropriate application fee. The Agency proposes to amend Minn. R. 7002.0250 to exclude changes in name, address or ownership on a water quality permit from the requirement to submit an application fee. This amendment is needed to standardize the Agency’s water permit fee program with the Agency’s other permit fee programs - only water quality permits must pay a fee for these transactions. The proposed rule amendment will not jeopardize collection of the Agency’s projected revenue total because these fees were not included in the projection, which is based on new and re-issuance permit applications and issued permit numbers. Water quality permit application fee changes occurred by statute during the 2002 Legislative Session (increasing from $85 to $240) and the 2003 Legislative Session (some fees were reduced to zero, other fees increased from $240 to $400). These fee changes subsequently created some inconsistencies in the submittal of the application and fee for these types of permit changes. This is due in part because the Agency issues numerous types of permits under its air, waste and water programs and some permittees have more than one type of permit. Additionally, water quality permittees often requested these types of permit modifications with their annual report submittals instead of through permit application process, resulting in permit data entry delays. The proposed amendment is reasonable because it will allow for more consistency within the Agency permit fee structure. The Agency expects that this amendment will prevent confusion and delays in updating water quality permit data.


3. Chapter 7090 Stormwater Regulatory Program 7090.0010 Scope

This proposed rule part establishes that the provisions of Minn. R. ch. 7090 establish the Stormwater Regulatory Program which is required under the NPDES Phase I and Phase II federal regulations, the sources of stormwater discharges that are regulated under the program, and the purpose of the program. This part is necessary and reasonable because it provides a general summary of the subject matter included in Minn. R. ch. 7090. It is reasonable to state that the purpose of this chapter is to abate water pollution associated with stormwater discharges from the sources identified in this rule part because doing so identifies the intent of these proposed rules. 7090.0020 Permit Process This part establishes the permit process for the Stormwater Regulatory Program, and that the process requirements for stormwater permits are the same as for NPDES/SDS permits under Minn. R. ch. 7001. Stormwater discharges from MS4s, construction activity, and industrial activity are regulated under the NPDES/SDS stormwater permit program. Because stormwater permits are NPDES permits, this part is reasonable because it maintains and uses the processes and requirements for NPDES permits that are already established under Minn. R. ch. 7001. There is no need to establish new rules for NPDES processing requirements since these requirements already exist and are applicable to stormwater permits. 7090.0030 Permit Requirements This part establishes the permit requirements for the Stormwater Regulatory Program. Federal rules require NPDES stormwater permits for certain sources and activities associated with stormwater discharges. Subpart 1, items A though D of this part identifies the sources and circumstances that require a NPDES/SDS stormwater permit. This subpart is reasonable because it identifies for the reader that permit requirements exist for specific regulated sources. Item A establishes that a permit is required for municipal separate storm sewer systems under part 7090.1010. This item is reasonable because it identifies MS4s as a regulated source of stormwater discharges and it identifies the rule part where the permit requirements for MS4s are found. Item B establishes that a permit is required for construction activity under part 7090.2010. This item is reasonable because it identifies construction activity as a regulated source of stormwater discharges and it identifies the rule part where the permit requirements for construction activity are found. Item C establishes that a permit is required for industrial activity under part 7090.3010. This item is reasonable because it identifies industrial activity as a regulated source of stormwater discharges and it identifies the rule part where the permit requirements for industrial activity are found. Item D establishes that a permit is required if an adopted Section 208 CWA water quality management plan recommends that pollution control requirements be applied to the discharge.


This requirement is included under this rule part because this plan pertains to statewide water management issues rather than the individual permit programs; MS4, construction, and industrial, established by the Stormwater Regulatory Program. A water quality management plan adopted pursuant to section 208 of the CWA is a non point source plan which can recommend that pollution control requirements be applied to the discharge of pollutants in addition to the traditional point sources. Though the Agency does not typically have a need to implement this part, it is standard language in Agency rules and could be implemented if a 208 plan makes such a recommendation. Therefore it is reasonable to include this provision in these rules. Subpart 2 states that if a person who discharges stormwater into waters of the state is required by statute or rule to obtain both a NPDES and SDS permit, the issuance of a NPDES permit under this chapter satisfies the requirement to obtain both permits. The intent of this rule is to clarify that for these types of discharges that require a permit, the term National Pollutant Discharge Elimination System permit under this chapter means both National Pollutant Discharge Elimination System (NPDES) permit under federal authority and/or a State Disposal System (SDS) permit under state authority. This is a simplification of the rule language for a frequently repeated text. It is not intended to change the requirements for permits in any way. This rule is reasonable because it embodies current Agency practice and because it makes permitting simpler for regulated parties who are technically under the obligation to obtain two permits for the same activity. This rule provision is consistent with Minn. R. 7001.1010. 7090.0040 Permit Fees This part identifies that application and annual fees for stormwater permits are established under parts 7002.0210 to 7002.0310. This part is reasonable because it identifies the existing requirement that these fees already established under Minn. R. ch. 7002 will be charged for NPDES/SDS stormwater permits. MS4s, construction activity, and industrial activity are regulated under the NPDES/SDS stormwater permit program. The MPCA is currently charging fees for individual NPDES stormwater permits, and for general NPDES/SDS stormwater permits that regulate construction activity and industrial activity. Under 2002 Minnesota Session Laws, chapter 115, section 115.03, Sec. 157, MS4s are exempt from these application and annual fees. 7090.0060 Incorporation by Reference This proposed rule part establishes the incorporation by reference used in parts 7090.2000 to 7090.2060. Minn. Stat. § 14.07, subp.4, requires that references to documents be incorporated into a rule, and the availability of the document identified for the reader. This part identifies for the reader that a specific document is used within the above-stated parts and where the document is available. A general discussion of the need for and reasonableness of this proposed rule part is provided below. A more detailed discussion of the reasonableness of the incorporation by reference is discussed in this SONAR under the specific rule part where it is used. The rule parts where the incorporation by reference is used in the proposed rule or discussed in the part of the SONAR are:

• Compliance requirements for unpermitted construction activity, part 7090.2010, subpart 3

• Emergency construction, part 7090.2010, subpart 4


The document incorporated by reference in this proposed rule is the MPCA’s General Permit Authorization to Discharge Stormwater Associated With Construction Activity Under the National Pollutant Discharge Elimination System/State Disposal System Permit (NPDES/SDS) Program (construction stormwater permit). The purpose of this incorporation by reference is to establish specific permit requirements in rule for erosion prevention and sediment control, and additional BMPs for the protection of special waters. To do so, three specific parts of the construction stormwater permit are incorporated; the stormwater discharge design requirements, construction activity requirements, and the requirements of Appendix A. This proposed rule is needed for several reasons. First, the rule serves as a regulatory tool for those construction activities that do not obtain NPDES/SDS construction stormwater permit coverage. The implementation of the BMPs in the construction stormwater permit is necessary to minimize the impacts of construction activities on receiving waters. Currently, MPCA Compliance and Enforcement Program staff can only site these construction activities for failure to obtain permit coverage, rather than for the failure to implement erosion prevention and sediment control BMPs in the permit, due to the applicability of these permit conditions without permit coverage. Therefore, staff determined that a stronger regulatory tool, in the form of required BMPs for these unpermitted construction activities, would help the MPCA’s Compliance and Enforcement Program build better enforcement cases and more adequately address noncompliance conditions on construction sites. The intent of this incorporation by reference is not to pre-empt those activities that do not require permit coverage (i.e. construction activity less than one acre and not part of a common plan of development), yet have stormwater discharges that can cause environmental damage. Therefore, under part 7090.2010, subparts 3 and 4, unpermitted sites are held accountable for the applicable requirements of the permit whether or not a permit application has been submitted, with reference to the specific permit requirements in this rule part. With the requirement to comply with the stormwater management requirements of the construction permit incorporated in rule, the Agency has a stronger enforcement tool for these unpermitted sites. It is reasonable to incorporate by reference these specific requirements because they contain stormwater management practice and specific BMPs that are used to prevent or mitigate polluted stormwater runoff from leaving construction sites. This rule provision addresses the noncompliance and the potential for environmental harm due to the failure to implement required BMPs for these sites. Second, the construction stormwater permit and required BMPs are incorporated by reference to lessen the complexity of the proposed rule. During the rule development process, staff considered several different approaches to including the permit and required BMPs in these rules. One approach staff considered was a rule that contained, verbatim, all the stormwater discharge design requirements, construction activity requirements, and Appendix A of the construction stormwater permit. The stormwater management control requirements contained in the construction stormwater permit are numerous and technically detailed. The downside to "matching" the rule with the permit is that rule requirements could become obsolete when the permit is reissued. Because federal regulations require that general permits be reissued every five years (see 40 CFR 122.46), some permit requirements such as BMPs are likely to change with permit reissuance, due in part to new and changing BMP technology, and potentially, to new performance standards and criteria that are to be developed as part of the statewide stormwater manual work effort. Additionally, though the administrative process for permit


reissuance, which includes statutory requirements for public notice and comment on the draft permit, is similar to the administrative process for rulemaking, it is not as rigorous in terms of administrative requirements and generally occurs on a shorter timeline. Therefore, it is reasonable to incorporate by reference the BMP requirements contained in a permit that is reissued on a regular basis, rather than promulgating these BMP requirements in rules. Another approach staff considered was including only some of the erosion prevention and sediment controls in rule that would apply to unpermitted sites. The difficulty with a “scaled down” version of the BMP requirements is that it could set a false standard, as some of the requirements would be more generalized, and some would not be included at all. Further, including only a subset of the erosion prevention and sediment controls may also present an opportunity for negative future effects, specifically a claim could be made that the conditions in the permit are “baseless” because a lesser standard exists in rule. 7090.0080 Definitions This proposed rule sets forth fourteen definitions of words or phrases used within the rules. These definitions are discussed below. Subpart 1. Scope. This subpart establishes the meaning for terms ascribed to them in Minn. Stat. §§ 115.07 and 116.06, and Minn. R. 7090.0020 when used in this chapter. When a term is defined in both statute and in this chapter, the definition given in statute is the authoritative meaning for the purposes of this part. Subpart 2. Best management practices. The term “best management practices” or “BMPs” means the types of practices used to prevent or reduce the pollution of waters of the state. This definition is consistent with the meaning given it in Minn. R. 7001.1020, rules governing NPDES/SDS permits. The term “best management practices” is used in the MS4, construction, and industrial stormwater programs, and is used in these proposed rules under parts 7090.2000 to 7090.2060 for describing the type of practices required for erosion prevention and sediment control at construction sites. Though pollutant specific best management practices are required for erosion prevention and sediment control, the definition given here is more broadly applied in that it identifies the purpose of best management practices, and it identifies what those practices are. Because the regulatory basis of stormwater permits is the implementation and maintenance of effective best management practices to prevent or reduce stormwater pollution, it is reasonable to define what best management practices are. Subpart 3. Common plan of development or sale. “Common plan of development or sale” is defined as a contiguous area where multiple separate and distinct construction activities may be occurring at different times and on different schedules under one development plan. This term is used in the federal definitions of large and small construction activity, as well as in the definition of construction activity in these rules. It is necessary to define what constitutes a common plan of development because smaller construction sites with land disturbances of less than one acre may need permit coverage if they are considered to be part of a larger common plan of development or sale that is one acre or greater. Cumulatively, stormwater runoff from these smaller construction sites could have a significant adverse water quality impact, potentially more so than these sites would individually. Examples of these sites would be lots in a residential subdivision or an industrial park. Permit coverage is not required for single construction sites under one acre that are not part of a larger common plan of development or sale, however, the


Agency may require these sites to obtain permit coverage if stormwater discharges from the site are determined to be a violation discharge. This definition establishes that the requirement to obtain permit coverage cannot be circumvented by dividing a project site or adjusting the size of the construction site or activity. Subpart. 4. Construction activity. The Phase I regulations required NPDES permit coverage for stormwater discharges associated with large construction activity disturbing five or more acres of land. The Phase II regulations for stormwater discharges associated with small construction activity require NPDES/SDS permit coverage for construction activity that results in land disturbance of equal to or greater than one acre and less than five acres. With the implementation of the Phase II regulations, and in order to provide more clarity to regulated parties, the Agency determined it would no longer make the distinction between Phase I and Phase II construction activity. Therefore, this proposed rule incorporates both the Phase I and Phase II definitions of construction activity under one definition of construction activity. It is reasonable to define construction activity to include both large and small construction activity because these proposed rules for the Stormwater Regulatory Program govern both the Phase I and Phase II stormwater programs and doing so is more inclusive for purposes of regulation. It is also reasonable because the Agency issues one general construction stormwater permit that covers both large and small construction activity. This proposed rule is consistent with the federal definitions for large and small construction activity, as defined in 40 CFR, 122.26(b)(14)(x) and (15)(i). Construction activity is regulated under the construction program, parts 7090.2000 to 7090.2060. The 1987 amendments to the CWA required EPA to control stormwater discharges. EPA, in developing the NPDES/SDS stormwater permit program identified systems and activities that are associated with polluted stormwater discharges, including construction activity. This rule clarifies that in Minnesota it is the type of activity that triggers the need for NPDES/SDS stormwater permit coverage, not the discharge associated with the activity that requires a permit. The activity itself results in, or has the potential to result in stormwater discharges with known impacts to surface or ground waters (see 64 Fed Reg. 68728 (1999)). .Specifically, it is the activity that leads to pollution of the waters of the state, so if a person is conducting this type of activity, it needs to be controlled.

Construction activity means construction activities that include clearing, grading, and excavating that result in land disturbance of equal to or greater than one acre. The phrase “equal or greater than one acre” incorporates both large and small construction activity under one definition, as discussed above. Construction and construction related activities refer to the actual earth disturbing construction activities and those activities supporting the construction project such as construction materials or equipment storage or maintenance (e.g., fill piles, borrow area, concrete truck washout, and fueling), measures used to control the quality of stormwater associated with the construction activity, or other industrial stormwater directly related to the construction process (e.g. concrete or asphalt batch plants). Construction activity also includes the disturbance of less than one acre of total land area, if that activity is part of a larger common plan of development or sale if the larger common plan will ultimately disturb equal to or greater than one acre. This means that stormwater discharges from construction sites that are less than one acre are not automatically required to obtain permit coverage, but are required to do so if they are part of a larger common plan of development that will disturb one or more acres.


This definition establishes that routine maintenance that is performed to maintain the original line and grade, hydraulic capacity, or original purpose of the facility is not by definition construction activity if it involves a land disturbance of less than five acres. For construction sites less than five acres, the federal regulations do not consider construction activity to include routine maintenance, as described above, on the original facility. The earth disturbing activity has to be part of a project to build, demolish, or replace a structure (e.g., building, road, pad, pipeline, transmission line, etc.) to trigger the need for permit coverage. Earth disturbance that is a normal part of the long-term use or maintenance of the property is not covered by the construction general permit. For example, re-grading a dirt road or cleaning out a roadside drainage ditch to maintain its “as built” or original state is road maintenance and not construction. Restoring the well pad of an existing oil or gas well is operation of a well and not construction. Re-grading and re-graveling a gravel parking lot or equipment pad is site maintenance and not construction. Repaving is routine maintenance unless underlying and/or surrounding soil is cleared, graded, or excavated as part of the repaving operation. Where clearing, grading, or excavating (i.e., down to bare soils) takes place, permit coverage is required if more than one acre is disturbed. Reworking planters that are part of the landscaping at a building is landscape maintenance and not construction. Applying daily cover at a landfill is part of the operation of a landfill and not construction. Describing what the term routine maintenance means clarifies that these types of activities are not considered construction activity that would require permit coverage. Lastly, stormwater discharges from any clearing, grading, and excavation for the purpose of growing crops are not are not covered by the NPDES program; discharges from these activities are considered to be “agricultural stormwater discharges” and therefore are excluded from the requirements of the NPDES permitting program (U.S. EPA, Washington D.C., February 5, 1998, memorandum to Water Division Directors, Regions 1-10). In accordance with 40 CFR 122.3(e), pollutants from non-point source agricultural and silvicultural activities, including stormwater runoff from orchards, cultivated crops, pastures, range lands, and forest lands, do not require NPDES permits. This exclusion does not apply to discharges of stormwater associated with construction activity at, or construction of, livestock feeding facilities involving animal feeding operations, concentrated animal feeding operations, and feedlots. Under the NPDES stormwater regulations, all activities associated with the construction of livestock feeding facilities, including clearing, grading, and excavation are subject to NPDES permit coverage. Because stormwater discharges associated with the construction of livestock feeding facilities is different both in content and nature from stormwater discharges associated with the operation of such facilities, the former are not “agricultural” and are not entitled to the exclusion for agricultural stormwater discharges. Subpart 5. Decennial census. The proposed rule defines “decennial census” as the census of population and housing taken in each year ending in zero. This definition is consistent with the definition for decennial census contained in the April 1999, U.S. Census Bureau, Decennial Management Division Glossary. The EPA, in its’ Phase II rulemaking, made a determination which governmental entities are regulated if they operate a small municipal separate storm sewer system located fully or partially within an urbanized area boundary, as determined by the U.S. Bureau of the Census. At the time the Phase II federal rules were promulgated in December 1999, this list of governmental entities was based on the 1990 Census however; the list was subject to change based on the next decennial census, the year 2000 Census. Once the 2000 Census data became available, the Agency updated the statewide list of governmental


entities that operate regulated small MS4s to include those entities identified in the decennial census. It is reasonable to define this term because the proposed rules contain permit requirements for regulated small MS4s of a certain size based on the latest decennial census, which under this rulemaking is the 2000 Census. Subpart 6. Industrial activity. The Phase I regulations required NPDES permit coverage for stormwater discharges associated with eleven categories of industrial activity. No new categories of industrial activity have been added under the Phase II regulations. The proposed rule defines “industrial activity” to mean the eleven categories of industrial activity, as defined in 40 CFR, 122.26(b)(14)(i)-(xi), which are directly related to manufacturing, processing or raw materials storage areas at an industrial plant. Because permit coverage is required for stormwater discharges associated with these eleven categories of industrial activity, it is reasonable to define this term to identify the types of industrial activities that are regulated. The eleven categories are: (i) facilities subject to stormwater effluent limitation guidelines, new source performance standards, or toxic pollutant effluent standards under 40 CFR Subchapter N, (ii) “heavy” industrial facilities classified by the following Standard Industrial Classification (SIC) codes: 24, 26, 28, 29, 311, 32, 33, 3441, and 373, (iii) mineral industry facilities classified by SIC codes 10, 12, 13, and 14, (iv) hazardous waste treatment, storage, or disposal facilities, (v) landfills, land application sites, and open dumps that receive or have received industrial waste, (vi) facilities involved in the recycling of material, including metal scrap yards, battery reclaimers, salvage yards, and automobile junkyards, including but limited to those classified as SIC codes 5015 and 5093, (vii) steam electric power generating facilities, (viii) transportation facilities classified by SIC codes 40, 41, 42 (except 4221-25), 43, 44, 45, and 5171 which have vehicle maintenance shops, equipment cleaning operations, or airport deicing operations, (ix) sewage treatment works, (x) construction activity including clearing, grading, and excavation disturbing five or more acres of land, or less than five acres of land if it is part of a larger common plan of development or sale of five acres or greater, and (xi) “light” industrial facilities classified by SIC codes 20, 21, 22, 23, 2434, 25, 265, 267, 27, 283, 285, 30, 31, 323, 34, 35, 36, 37, 38, 39, 4221, 4222, and 4225. Although the federal definition of industrial activity includes large construction activity, category (x), it is not necessary to regulate large construction activity under the industrial program because the Agency administers a separate stormwater permit which regulates all construction activity, large and small. Therefore, these eleven categories of industrial activity, except category (x), are regulated under the industrial program, parts 7090.3000 to 7090.3080, and construction activity is regulated under the construction program, parts 7090.2000 to 7090.2060. Subpart 7. Municipality. The proposed rule defines “municipality” as a county, city, town or other governmental subdivision of the state responsible for the prevention, control, and abatement of water pollution. This definition applies to municipalities in the state of Minnesota and is consistent with the meaning given it in Minn. R. 7001.1020, rules governing NPDES permits. It is necessary and reasonable to define municipality to identify the types of governmental entities which may own or operate systems or activities subject to regulation under the Stormwater Regulatory Program. Subpart 8. Municipal separate storm sewer system or MS4. This definition is based on the federal definition of municipal separate storm sewer system or MS4. It is necessary to define this term to clarify what a municipal separate storm sewer system or MS4 is and to identify what


types of conveyances or systems of conveyances are regulated under the MS4 program. This definition is reasonable because it is consistent with the federal definition for municipal separate storm sewer as contained in 40 CFR 122.26(b)(8).

The Agency notes that part of the definition of MS4 is also taken from the federal definition of small municipal separate storm sewer systems under 40 CFR 122.26(16)(iii), specifically; a small MS4 does not include separate storm sewers in very discrete areas, such as individual buildings. This part of the definition is needed because these proposed rules do not include a definition for small MS4s. As discussed previously, these proposed rules do not make a distinction between Phase I and Phase II sources and therefore do not include separate definitions for the types of MS4s regulated under each Phase; small, medium and large MS4s. This rule is reasonable because it provides important clarification on which systems are not to be included in the definition of MS4s.

Individual buildings may have a municipal separate storm sewer, but they do not have a “system” of conveyances. The six minimum control measures for small MS4s were written to apply to storm sewer “systems” providing stormwater drainage service to human populations and not to individual buildings. In cases such as for state and federal buildings where a complex may consist of several buildings, the EPA recommends that the Agency use its’ best judgment as to the nature of the complex and its stormwater conveyance system, and whether such a complex could be treated as a single building and not require a permit. Subpart 9. No Exposure. “No exposure” means that all industrial materials (including waste materials, such as particulate matter from roof stacks or vents) or activities are protected by a storm resistant shelter to prevent exposure to rain, snow, snowmelt, and/or runoff. This proposed rule is consistent with the federal definition for no exposure, as defined in 40 CFR, 122.26(g). It is necessary to define no exposure because under the Phase II regulations, all categories of industrial activity, except construction activity, may apply for a no exposure certification if the facility has no exposure of industrial materials or activities to stormwater. The no exposure certification is a conditional exclusion from the requirement to obtain industrial stormwater permit coverage. A facility operator applying for the conditional no exposure exclusion from permitting must certify that the facility meets the definition of no exposure. In order for an owner or operator of an industrial facility to make a determination if they can certify no exposure, the owner or operator needs to know what no exposure means. This definition is reasonable because it establishes what constitutes a condition of no exposure. Facilities that conduct industrial activities outdoors can move these activities into buildings or under cover because if industrial materials or activities are not exposed to stormwater, then the potential for contamination of rainfall and stormwater runoff from the facility can be prevented and a condition of no exposure can be achieved.

Subparts 10 and 11. Operator and Owner. These proposed rules provide a separate definition of operator and owner for each of the three stormwater programs; MS4, construction, and industrial. This is needed because these terms have somewhat different meanings in each of the three programs. It is reasonable to define operator and owner separately because doing so provides clarity for regulated parties to ensure that operators and owners are properly identified and acknowledge their responsibilities under these rules. In general terms, operator or owner means the operator or owner of any facility or activity subject to regulation under the NPDES program.


Item A. An MS4 operator is the person with primary operational control and legal responsibility for the municipal separate storm sewer system. An MS4 owner is the person that owns the system. Operators (and owners) of regulated MS4s are required to obtain NPDES/SDS stormwater permit coverage, and develop and implement a stormwater pollution prevention program that incorporates BMPs applicable to their MS4 to control polluted stormwater runoff. Identifying the operator and owner of an MS4 is necessary to ensure effective implementation of the permit requirements and stormwater pollution prevention program for the MS4.

Item B. An operator of a construction activity is the person designated by the owner who has day to day operational control and/or the ability to modify plans and specifications related to the SWPPP for that activity. An owner is the person or party possessing the title of the land on which the construction activities will occur, or the lease holder or contracting government agency responsible for the construction activity. Operators and owners of construction activities are required to obtain NPDES/SDS stormwater permit coverage and develop and implement a stormwater pollution prevention plan for the construction site. Operators typically consist of the owner or developer of a project, the party with control of project specifications, and the general contractor, the party with day to day operational control of the activities at the construction site which are necessary to ensure compliance with the permit. Control over project specifications is necessary to ensure that a project design includes appropriate erosion prevention and sediment control measures and post construction stormwater management measures. Day to day operational control is necessary to ensure effective implementation of permit requirements at a construction site. Item C. An operator of an industrial activity is the person responsible for the overall operation of an industrial facility. An owner is the person who owns an industrial facility or part of an industrial facility. Operators and owners of industrial activities are required to obtain NPDES/SDS stormwater permit coverage or certify a condition of no exposure for their industrial facility. Where permit coverage is required, the operator is required to develop and implement a stormwater pollution prevention plan that incorporates specific BMP applicable to their industrial facility. Where a certification of no exposure has been issued to the facility the operator is responsible for maintaining a condition of no exposure, and for obtaining permit coverage when the conditions of the no exposure exclusion can no longer be met. Identifying the operator and owner of an industrial activity is necessary to ensure effective implementation of the permit requirements and stormwater pollution prevention plan for the industrial facility.

Subpart 12. Stormwater. "Stormwater" or “storm water” means stormwater runoff, snow melt runoff, and surface runoff and drainage. Stormwater discharges are generated by runoff from land and impervious areas during rainfall and snow events and contain pollutants such as sediment, oil, grease, chemicals, nutrients, metals, litter and pathogens. When untreated polluted stormwater runoff is discharged over land or through storm sewer systems directly into local water bodies or infiltrated into the groundwater, it can adversely affect water quality. It is necessary to define this term because most stormwater discharges are considered point sources of pollution and require NPDES permit coverage. This definition is reasonable because it establishes that the runoff and drainage from a precipitation event is the discharge that is regulated under the NPDES/SDS stormwater permit program.


Subpart 13. Surface waters. The proposed rule defines “surface waters” to mean all streams, lakes, ponds, marshes, wetlands, reservoirs, springs, rivers, drainage systems, waterways, watercourses, and irrigation systems whether natural or artificial, public or private. This term was developed for use in the construction stormwater permit, and subsequently, is used in the proposed rules for construction activity under part 7090.2000. It is necessary to define this term to identify the types of waters that specific requirements for construction activity apply to.

In the construction stormwater permit, when referring to specific permit requirements, the term surface waters is used in place of the term waters of the state. However, it is important to note that the term, waters of the state, is still used in several parts of the permit to document the MPCA’s legal authority to protect these waters from stormwater discharges. The term surface waters was added to the construction stormwater permit because during the draft permit public notice period, the Agency received comments that the term, waters of the state, was too broadly defined for specific permit requirements and as a result, the permit conditions may be applicable to any accumulation of water, such as mud puddles. To address those concerns, the MPCA worked with stakeholders to change the terminology to surface water to focus and clarify requirements in certain provisions of the permit.

Specifically, the definition of surface waters is consistent with the definition of waters of the state, except for the exclusion of the phrase “all other bodies or accumulations of water, surface or underground”, i.e. groundwater. Groundwater is not included in the definition of surface waters because the term surface waters, as used in these proposed rules and in the construction stormwater permit, is used only where the specific permit requirements address surface water discharge. Provisions in the permit that address groundwater discharge, such as requirements for infiltration/filtration systems, do not use the term surface waters but refer to underground waters or ground water. MPCA operates its NPDES and SDS permitting programs jointly, incorporating the provisions of both state and applicable federal water pollution control requirements into a combined permitting program. It is appropriate to make this distinction because the construction stormwater permit is a combined NPDES/SDS permit; the NPDES permit program addresses surface water discharge, while the SDS permit program addresses disposal system construction and operation which may involve subsurface discharge. Therefore, the term surface waters is not applicable, nor is it used in association with all construction activity requirements, it is used only in the context of specifying NPDES requirements. This definition is reasonable because it provides clarity by making the distinction between the waters associated with the NPDES requirements and the SDS requirements. Subpart 14. Urbanized area. “Urbanized area” or “UA” means an area consisting of one or more places and the adjacent urban fringe, containing at least 50,000 people and an overall population density of at least 1,000 people per square mile of land. This definition is intended to be the same as the U.S. Bureau of the Census general definition of an urbanized area and be consistent with the definition of an urbanized area in the EPA guidance document Stormwater Phase II Compliance Assistance Guide, March 2000. The term “urbanized area” is mainly used in these stormwater regulations under parts 7090.1000 to 7090.1040 for determining an MS4s area of permit coverage under the MS4 stormwater permit program. It is necessary to define urbanized area in order to determine if a MS4 is regulated under the Stormwater Regulatory Program.


Urbanized areas are the largest and most dense areas of population. The U.S. Bureau of the Census determines urbanized areas by applying a detailed set of published UA criteria to the latest decennial census data (see Urbanized Areas for the 1990 Census – Final Criteria, 55 Fed. Reg. 42592 (1990)). Urbanized area calculations then delineate the boundaries around these dense areas of population and identify areas of concentrated development. It is these areas of dense population and concentrated development that are the focus of the federal stormwater regulations to address stormwater discharges from municipal separate storm sewer systems. Under the federal regulations, owners and/or operators of MS4s located in an urbanized area are required to obtain NPDES/SDS permit coverage because their stormwater discharges are considered point sources of pollution. The federal rule also requires the Agency to designate certain MS4s located outside of an urbanized area for permit coverage based on specific criteria. The main criteria used in determining if an MS4 is required to obtain permit coverage under the federal rules are the location of the MS4 with respect to an urbanized area, and the population of the MS4. This definition is reasonable because it specifically identifies the type of land area, and the population threshold and density that constitute an urbanized area; the criteria used in determining if an MS4is regulated under the federal stormwater rules. Subpart 15. Waters of the State. “Waters of the State” as defined under Minn. Stat. § 115.01 means all streams, lakes, ponds, marshes, watercourses, waterways, wells, springs, reservoirs, aquifers, irrigation systems, drainage systems and all other bodies or accumulations of water, surface or underground, natural or artificial, public or private, which are contained within, flow through, or border upon the state or any portion thereof. It is reasonable to define this term by reference in order to identify the types of waters that these rules are being proposed to be protective of. 7090.1000 Municipal Separate Storm Sewer System (MS4) Program

The stormwater program for MS4s is designed to reduce the amount of pollution that enters surface and ground water from municipal separate storm sewer systems in the form of stormwater runoff. Stormwater discharges associated with MS4s are regulated through the use of NPDES/SDS permits. Parts 7090.1000 to 7090.1040 establish the requirements for permit coverage under the MS4 program. These rules are reasonable because they clarify the administrative process that will be followed by the regulated community and they contain the minimum requirements for obtaining permit coverage. 7090.1010 MS4 Permit Requirements This part establishes the permit requirements for the MS4 permit program. This part is needed because the permit requirements are different for each stormwater program area. This part specifically addresses the MS4 program. This rule part establishes the permit requirements, and designation criteria and process for designating MS4s for permit coverage, in addition to those that are federally designated. Subpart 1 establishes that a NPDES/SDS stormwater permit is required within the specified time period for the MS4s identified in items A to C of this subpart, and that an owner or operator of these MS4s must submit a complete permit application for permit coverage. This subpart is reasonable because it identifies under what circumstances a stormwater permit is required for


MS4s and within what time periods. NPDES/SDS permits require an application to trigger coverage. This information exchange assures communication between the Agency and the regulated community. This communication is critical in ensuring that the regulated community is aware of the requirements and the Agency is aware of the potential for adverse impacts to water quality from identifiable locations. Therefore, it is reasonable to require a complete permit application because the Agency cannot make sound decisions as to whether the MS4 will meet applicable statutes and rules unless full and complete information is received. Subpart 1 also establishes that once an MS4 is required to obtain a permit, the requirement remains in effect until the requirement is removed pursuant to the petition process established in subpart 4, item B. Under the NPDES stormwater program, MS4s are either automatically or potentially designated for permit coverage. Medium and large MS4s were automatically designated for permit coverage under the Phase I federal rule. Small MS4s located in urbanized areas were automatically designated for permit coverage under the Phase II federal rule as regulated small MS4s; some small MS4s located outside of the urbanized area may be designated by the Agency and become regulated small MS4s. The federal rule “freezes” the definition of medium and large MS4s at those that qualify based on the 1990 census (see 64 Fed. Reg. 68749 (1999)). The federal regulations also state that a small MS4 that is automatically designated into the NPDES stormwater program under an urbanized area calculation for any given census year will remain regulated regardless of the results of subsequent urbanized area calculations. In effect, the federal regulation also “freezes” the status of a regulated small MS4. Further, additional designations based on subsequent census years will be governed by the Census Bureau definition of urbanized area in effect for that year. This means a small MS4 may not be regulated now, but could be automatically designated in the future. The federal regulations do not identify a finite point in time when designations are complete. The designation of additional MS4s will be on-going in part because some criteria are based on decennial census data where population changes are identified every ten years, or a criterion is based on other federal program requirements, such as the CWA Section 303(d) Impaired Waters List, which is updated every two years. To be consistent with the federal requirement for regulated small MS4s, the Agency considers that designated small MS4s (both federal and state designated) shall also remain regulated regardless of subsequent population calculations, or other changes relevant to the criteria on which the designation was based; until the requirement is removed as identified in this subpart. Item A establishes the permit requirement for MS4s located in an urbanized area in whole or in part. These MS4s include the Phase I medium and large MS4s, and the Phase II small MS4s. This rule is consistent with the permit requirements for MS4s established in the federal regulations as identified in this item. EPA recognized that the Phase I rules had created "doughnut holes" in urban areas where permit coverage was not required. These were places within a large city that were not owned or operated by the city. Therefore, in its’ Phase II rules, EPA attempted to more broadly address stormwater impacts across an entire urbanized area and automatically designated MS4s located within the boundaries of an urbanized area for permit coverage. Appendix G contains a list of the MS4s designated by the Phase II federal rule based on the 2000 decennial census; this list identifies MS4s that are located wholly and partially


within an urbanized area. Appendix GG contains a map of these mandatory MS4s in the urbanized areas. Item A also establishes that the permit requirements of this subpart also apply to “nontraditional” MS4s which are publicly owned entities such as a military base, hospital, prison or correctional facility, college or university with a potential resident capacity, bed count occupancy, or average daily user population of 1,000 or more. With this proposed rule, the MPCA intentionally limits the nontraditional MS4s that are required to obtain a permit under this rulemaking. However, it is important to note that nontraditional MS4s that are not required to obtain a permit under this rule can be required to do so either through designation by the Commissioner or the petition process as discussed in item C of this subpart and subpart 4.

Under the Phase II regulations, the Agency was looking at potentially having to permit all publicly owned entities that operate an MS4 in an urbanized area including; elementary schools, middle schools and high schools, main and branch post offices, military recruitment centers, and numerous other types of public entities. Although the Agency recognizes that some of these types of facilities are fairly intricate complexes with multiple buildings and parking lots, due in part to level of environmental risk associated with these types of entities, and limited Agency resources, the Agency determined it was necessary to limit the nontraditional MS4s that would be required to obtain a permit. A limit of 1,000 allows for ease of regulated parties in understanding permit requirements and a more simplified administrative process for the Agency. Potential resident capacity, bed count occupancy, and average daily user population, all relate to human activity, which is linked to impervious surface, urbanization, and impacts on water quality, and therefore are criteria for determining if a nontraditional MS4 requires a permit. In limiting the scope of this rule provision to 1,000, the Agency combined its’ best judgment with the population limits established in the federal waiver provision for small MS4s of less than 1,000 (40 CFR 122.32(d)). The EPA established these thresholds based on the small likelihood of adverse water quality impacts at these population and density levels. Item B establishes that MS4s that meet the criteria in subitems 1 to 3 must obtain a permit within 18 months of meeting the criteria. This means that MS4s that currently meet the criteria identified in this rule are designated for permit coverage under this rulemaking and must obtain a permit within 18 months of when this rule becomes final. MS4s that meet these criteria at a future date beyond when this rule becomes final must obtain a permit within 18 months of that date. Because a stormwater permit is required for regulated MS4s, it is reasonable to require these MS4s to obtain a permit within a reasonable amount of time of when they become regulated. Due to the complexity of the SWPPP requirements for MS4s and the necessity for these newly regulated governmental entities to plan for and secure funding for the development and implementation of a SWPPP, the Agency believes eighteen months is a reasonable amount of time to develop a SWPPP and obtain a permit. Subitem 1 establishes that the entire jurisdiction of a city or township that is partially regulated in accordance with 40 CFR 122.26(a)(9)(i)(A), must obtain a permit. The federal regulations, at 40 CFR 122.32(a)(1), state that if a small MS4 is not located entirely within an urbanized area, only the portion that is within the urbanized area is regulated. These proposed rules require that those MS4s, specifically cities or townships that are located wholly or partially within an urbanized area must obtain permit coverage for their entire jurisdiction. Specifically, by this rule, the Agency is proposing to designate the non-urbanized area portion of a city or township


jurisdiction as a regulated MS4. This rule provision establishes the requirement for permit coverage for that portion of a city or township that is located outside of an urbanized area, and in doing so, the Agency has considered the MS4s’ contiguity to an urbanized area in its’ plan to include the non-urbanized area portion of these jurisdictions as regulated MS4s. This proposed rule is needed for several reasons. First, small regulated MS4s located partially within an urbanized area are generally located near the edges of developed areas where high growth is expected. Since these MS4s are likely to experience higher growth rates, it makes for good planning to include the whole MS4 in the development of the SWPPP. Second, the interconnectedness of a MS4 does not readily lend itself to being divided and regulated as several separate systems. For example, because of the interconnectedness of the system, tracking illicit discharges and spills would be better accomplished if the whole system is mapped and covered under a SWPPP. This proposed rule is reasonable because if a SWPPP is to be developed for a portion of the MS4, it makes sense to develop the SWPPP for the whole MS4. It is more equitable to apply the requirements of the SWPPP to the whole system, particularly where ordinances must be enforced; the MS4 general permit requires MS4s to implement an ordinance or other regulatory mechanism to require erosion prevention and sediment controls, including sanctions to ensure compliance. The proposed rule is also reasonable because administratively, it should be easier to regulate a MS4 as one whole system, as opposed to several systems, each requiring a separate set of criteria. Approximately 88 small MS4s that are partially located in an urbanized area will be affected by this rule (see Appendix G). Counties are not included under this proposed rule because of their large geographic area. The Agency does not intend for these MS4s to be drawn into the regulations where they only touch the boundary of a regulated MS4. Subitem 2 establishes that an MS4 owned or operated by a municipality with a population of at least 10,000 or more based on the most recent decennial census or approved municipal boundary adjustment, must obtain a permit. The Phase II federal regulations require the Agency to develop designation criteria and apply them, at a minimum, to all small MS4s located outside of an urbanized area with a population of at least 10,000 and a population density of at least 1,000 people per square mile. This proposed rule designates those MS4s located outside the urbanized area with a population of 10,000, regardless of population density. Appendix H contains a list of the MS4s population 10,000 or more designated by these proposed rules. Appendix HH contains a map of these MS4s.

The Agency is applying only the 10,000 population criteria, based on decennial census data, in part because population data is the most readily available information and it is established as defining criteria in the federal regulations. The Agency is also applying a population threshold based on municipal boundary adjustment to account for those situations where annexation of municipalities has occurred and the resulting municipal population reaches 10,000. A recent example of this occurred in Washington County where Forest Lake city (2000 Census Bureau population 6,798) annexed Forest Lake township (2000 Census Bureau population 7,642), for a combined population of 14,440. Under this proposed rule, a municipality must obtain a permit application once the annexation is complete and the combined population totals 10,000 or more. Applying only the 10,000 population criteria is reasonable because it is more inclusive than just addressing the pockets of high density areas; therefore allowing municipalities to plan for a more unified stormwater program and providing the Agency with a more unified stormwater


regulatory approach. For ease of administration, the Agency in evaluating these non-urbanized MS4s made the generalization that if an MS4 has a population of at least 10,000 it meets the designation criteria. With limited resources this approach avoids the labor intensive process of evaluating all population centers through the state. Additionally, this is a reasonable approach because applying the 1000 people per square mile criteria would be less likely to capture the fringe construction activity. Construction activity that occurs on the fringe of the urbanized area needs the additional environmental protection afforded by the construction/post construction minimum measures required under the MS4 permit, and under jurisdictional wide stormwater pollution control ordinances versus partial area ordinances. Subitem 3 establishes that an MS4 owned or operated by a municipality with a population of at least 5,000 based on the most recent decennial census or approved municipal boundary adjustment, and meets the criteria in (a) to (c), must obtain a permit. Criteria in (a) to (c) identify that the MS4 discharges or has the potential to discharge stormwater into an outstanding resource value water, trout lake or trout stream, or to a water listed as impaired under Section 303(d) of the CWA, except waters solely listed for mercury (Hg) or polychlorinated biphenyls (PCBs). Appendix I contains a list of the MS4s population 5,000 or more designated by these proposed rules. Appendix II contains maps of these MS4s and impaired and special waters. This designation process for communities over 5,000 has been included in this rule because these communities can have potential to contribute to or cause impacts that can ecologically degrade significant waters. Regulating communities that have the potential to discharge to these waters is the minimum protection measure that is reasonable to impose under this program. Stormwater contributes a variety of pollutants that may need to be investigated on high quality or impaired waters. Mercury and PCBs have been exempted from the designation process because the source for these pollutants is usually atmospheric deposition, which is not a directly controllable source. In addition, the number of additional MS4s brought into the program using this criterion could place an undue regulatory burden on the MPCA without commensurate environmental gain. Item C requires that MS4s designated by the Commissioner must submit a complete application for permit coverage. Designated MS4s are subject to the MS4 permit requirements of this part, which include the requirement to submit a complete permit application. As discussed in subpart 1 of this part, requiring a complete application is reasonable because the Agency cannot make sound decisions as to whether the MS4 will meet applicable statutes and rules unless full and complete information is received. Item C also requires that a permit application be submitted within a specific timeframe of designation. Due to the complexity of the SWPPP requirements for MS4s and the necessity for these newly regulated governmental entities to plan for and secure funding for the development and implementation of a SWPPP, the Agency believes eighteen months is a reasonable amount of time. Subpart 2. Designation criteria. This subpart establishes that designation means a determination by the Commissioner that an MS4 is subject to the permit requirements of this part and sets forth the criteria on which a designation may be based. Under the Phase II federal program, small MS4s are either automatically or potentially designated for permit coverage. Small MS4s located within the boundaries of an urbanized area are automatically designated for permit coverage. Small MS4s located outside of an urbanized area that serves a jurisdiction with a certain size population must be evaluated for designation into the program. These small MS4s may be designated for permit coverage based on specific


designation criteria. In accordance with 40 CFR 123.35(b), the NPDES permitting authority, must develop a process and criteria for designating small MS4s that are not located in an urbanized area. Therefore, the burden for creating the designation criteria and expanding the number of entities regulated under the MS4 permit program falls to the Agency. This proposed rule is the administrative tool for establishing the designation criteria. The process for designation is established in subpart 3 of this rule part. The Phase II federal regulations provide recommended criteria for designating MS4s which include high population density, high growth or growth potential, contiguity to an urbanized area, discharge to sensitive waters, and significant contributor of pollutants to waters of the United States. Although specific criteria are recommended for consideration in designating MS4s, the federal regulations provide flexibility in how states weigh these criteria in order to best account for local as well as watershed conditions, and to allow for case by case analysis in designating MS4s.

The MPCA is proposing designation criteria that are consistent with federal criteria as well as several additional criteria that the Agency believes are needed to take into consideration geographically specific conditions, such as seasonal population and proximity to high quality waters. The Agency is proposing these designation criteria for the following reasons:

• These criteria are consistent with the federal recommended criteria • These criteria are reflective of the designation criteria recommended by the MS4

Stakeholder Group. • Multiple criteria allow for flexibility and account for varying local conditions. • Many factors can influence whether an MS4 will have an impact on water quality,

therefore multiple criteria are needed on which to base a designation.

Subpart 2, items A and B establish the criteria on which the Commissioner may designate an MS4. An MS4 may be designated based on more than one criterion; however, all criteria do not have to be met in order for an MS4 to be designated. Item A establishes that the Commissioner may designate an MS4 that contributes substantially to the pollutant loadings of a physically interconnected MS4 that is regulated by the NPDES/SDS stormwater program. The federal regulations define the term “physically interconnected” to mean that one MS4 (including roads with drainage systems and municipal streets) is connected to a second MS4 in such a way that it allows for direct discharges into the second system. This rule addresses the concerns of local governments that they should not have to bear total responsibility for a stormwater program when stormwater discharges from another municipality are also contributing pollutants or adversely affecting water quality. For example, an operator of a regulated MS4 located adjacent to and downstream from an unregulated MS4 may believe that the unregulated MS4 is contributing pollutants to its’ MS4. This rule provides the Commissioner the discretion to determine if the unregulated MS4 is contributing stormwater discharges to another MS4 and if the unregulated MS4 is contributing substantially in a manner that requires regulation. The inclusion of the term “substantially” provides the Agency some flexibility in making a determination that an unregulated MS4 is subject to regulation. This designation criterion is consistent with EPA recommended criteria and will help to provide some consistency among municipalities and facilitate watershed planning in the implementation of the


NPDES stormwater program. The Agency expects that small MS4s located either just outside the boundary of an urbanized area or the boundary of a designated MS4, are most likely to meet this designation criterion. These small MS4s will need to be aware of and determine if they discharge pollutants into a regulated MS4. If an MS4 contributes substantially to the pollutant loadings of a physically interconnected MS4, it is reasonable to regulate both parties under certain circumstances. For example, often there will be situations where a solution such as a pond or other BMP will be required to treat a pollutant in the downstream MS4. While the physically interconnected upstream MS4 could treat their stormwater separately, this often will not be the most practical solution with a mixed waste load of stormwater. Regulation of both parties, the upstream and down stream contributors, makes an equitable solution more likely, if agreement cannot be reached outside the regulatory arena. Item B establishes that the Commissioner may designate an MS4 if it is determined to be a significant contributor of pollutants to waters of the state or have an adverse impact on water quality. This criterion is one of the basic tenets of designation and is meant to capture all significantly contributing sources in an effort to have both a comprehensive and equitable coverage, as provided for in 40 CFR 122.26(a)(5). This criterion also aids in developing a watershed approach. Subitems 1 to 8 describe the factors that the Commissioner may consider in making such a determination. Subitem 1 establishes high growth or growth potential as a factor. Urban runoff and storm sewer discharges are a major source of water quality contamination, particularly for waters near cities, and subsequently near more people in higher populated areas. Areas of high growth or growth potential are more likely to have adverse impacts on watersheds and their receiving waters. By designating rapidly growing communities with high growth or growth potential, these communities can better plan for growth areas instead of needing to retrofit their plans after damage from high growth has occurred. Applying this factor as designation criteria could minimize future restoration or retrofitting costs. This designation criterion is consistent with EPA recommended criteria. Subitem 2 establishes high population density as a factor. Urban development alters the natural infiltration capability of the land and generates pollutants that are associated with the activities of dense populations, causing an increase in stormwater runoff volumes and pollutant loadings in stormwater discharged to receiving water bodies. Population density is related to level of human activity, which has been shown to be directly linked to levels of impervious land surfaces. It is important to note that in proposing these criteria, the Agency is not intending to encourage lower density development and urban sprawl, but rather good land use planning and development decisions that are protective of our water resources and water quality. This designation criterion is consistent with EPA recommended criteria.


Subitem 3 establishes high seasonal population as a factor. High seasonal population increases are a result of more people vacationing and/or living in areas of the state outside of the urbanized area, particularly during the warm weather months. Similar to high growth and high population density, the greater the increase in seasonal population, the greater the level of human activity, and the more likely the potential exists for adverse impacts on water quality. As seasonal populations increase, communities continue to develop to provide goods and services to accommodate them. And, as more lake area and lakeshore property is developed and/or redeveloped outside of the urbanized areas, the greater the likelihood of adverse impacts on these water bodies. Fertilizer entering lakes, runoff containing sediment, wave erosion, turbulence from watercraft, and lack of shaded water, all potentially degrade lake clarity and damage water quality. Subitem 4 establishes impervious land cover as a factor. Urban development increases the amount of impervious surface in a watershed. Impervious land cover such as parking lots, driveways, sidewalks, and roads are impermeable to rainfall, creating large amounts of runoff. Curb and gutter systems with catch basins or inlets collect stormwater and direct it through pipes to a downstream stormwater facility or to receiving waters. Stormwater runoff is often then directly discharged into nearby water bodies without adequate water quality treatment. These effects of urbanization on water quality result in increased stream temperature, increased pollutants, and increased risk of beach closure. An increase in pollutants can adversely affect aquatic organisms and can result in beach closures, safety concerns and/or activity limitations for people.

Studies show that as stormwater and snow melt runoff wash over impervious areas, pollutants are picked up by the runoff while gaining speed and volume because of their inability to disperse and filter into the ground. This results in stormwater flows that are higher in volume, pollutants, and temperature than the flows of less impervious areas which have more vegetation and soil to filter the runoff (U.S. EPA, 1997 Urbanization and Streams: Studies of Hydrologic Impacts EPA 841-R-97-009). Further, a strong correlation exists between the level of impervious area and the quality of the nearby receiving waters. Studies indicate that stream degradation occurs at 10 to 20 percent impervious cover, and as low as 5 to 10 percent (T.R. Schueler, 1994 “The Importance of Imperviousness” Watershed Protection Techniques). As percentage of impervious increases, stream quality decreases. Subitem 5 establishes contiguity to an urbanized area as a factor. The areas located closely outside of an urbanized area are more likely to experience future growth and as a result, may also have significant impacts on a regulated MS4 that is within an urbanized area. This criterion would capture those rapidly developing areas on the fringe of an urbanized area. Construction activity that occurs on the fringe of the urbanized area needs the additional environmental protection afforded by the construction/post construction minimum measures that are required under the MS4 stormwater permit. This designation criterion would allow for an extension of the coverage provided by the regulation of an urbanized area where necessary. This proposed rule also captures this concept under subpart 1, item B of this rule part, which designates those MS4s that are located partially outside of the urbanized area. This designation criterion is consistent with EPA recommended criteria.


Subitem 6 establishes the ineffective protection of water quality by other programs as a factor. This criterion requires the Agency to consider whether the stormwater runoff problems of a potentially designated MS4 are being effectively addressed under other water programs or regulations. For example, an MS4 may be operating under another program that addresses nonpoint sources of water pollution, such as through the Clean Water Partnership (CWP) and Clean Water Act Section 319 programs. The Agency could determine that the program adequately addresses impacts to water quality from stormwater discharges from the MS4 and therefore, the MS4 would not need to be designated for permit coverage. Subitem 7 establishes an approved or established total maximum daily load (TMDL) that requires reduction of a pollutant associated with stormwater beyond what can be achieved with an existing program. It is reasonable to require permits for MS4s discharging to waters with an approved or established total maximum daily load when implementation requires reduction of a pollutant associated with stormwater beyond what can be achieved with existing programs. Where a regulated MS4 may have restrictions placed for a pollutant load reduction, but other unregulated MS4s contribute significantly to a TMDL impairment, regulation of all contributors may be an equitable solution. Subitem 8 establishes proximity to a high quality water such as an outstanding resource value water or trout water as designation criteria. The Commissioner has broad latitude to take actions to protect water quality under a variety of circumstances. This rule does not extend existing authority but makes clear that this authority under the stormwater program is intended to apply to protection of the existing values of high quality waters, not just to be applied to degraded waters. Subpart 3 establishes the process for designating MS4s. This process is being established in rule in order to provide for public understanding and participation in the designation process and is consistent with 40 CFR 123.35(b) which requires the Agency to develop a process to designate MS4s. Items A to E set forth the administrative requirements for designation. Item A sets forth the requirement to issue a public notice identifying MS4s that meet the designation criteria and the Commissioners preliminary determination. Public notice requirements are required to be included in the Agency’s NPDES permit programs by 40 CFR 123.25(a)(28). Because the MS4 program and designation requirements are part of the federal NPDES permit program, these rules are consistent with state and federal regulations in that these same public notice requirements are being applied to the designation process. This type of public notice has been used in other Agency permit programs (see Minn. R. ch 7001).

It is reasonable to require issuance of a public notice because it puts the MS4 subject to the draft designation and the public on notice of the specific criteria that triggered the draft designation and subsequent requirement to obtain permit coverage once designated. It is reasonable for the Commissioner to make a preliminary determination on the designation because this preliminary determination serves as a focal point in soliciting comments from the MS4 subject to the draft designation and the public. The preliminary determination also serves as the Commissioners recommendation to the Agency.


Item B, subitems 1 to 6, set forth the minimum requirements that must be included in the public notice. The reasonableness of the individual subitems is discussed below.

Subitem 1 requires contact information for the main Agency office, and applicable regional office, and a statement that additional information may be obtained at these offices. The purpose of the administrative process is to include the public as a stakeholder in the designation process. Requiring this information in the public notice ensures the public is included and that information is made publicly available. Subitem 2 requires the name and address of the MS4, facility or activity that is the subject of the draft designation. It is reasonable to require this information because it identifies for the public, the MS4 that is the subject of the draft designation. Subitem 3 requires a concise description of the facility or activity that is the subject of the draft designation. It is reasonable to require this information because it aids the public in understanding why the MS4 is subject to designation. Subitem 4 requires the public notice to include the criteria under which the MS4 is proposed for designation and the basis for designation. The purpose of identifying the criteria and basis for designation is to explain the basis for the draft designation and the Commissioners preliminary determination. This is reasonable because it aids the subject MS4 and the public to understand the Commissioners recommendation. It is reasonable to require this information since it is necessary for the MS4 and the public to know why the MS4 is subject to designation. Subitem 5 requires the public notice to state that during the public comment period a person may submit comments to the Agency on the draft designation and or on the preliminary determination. The notice must also state when the comment period begins and ends, and that the comment period is 30 days unless a different public comment period is established by another Agency rule. It is reasonable to issue public notice of draft designations and the preliminary determinations which solicit public comments because it gives persons outside the Agency an opportunity to raise legitimate issues which the Agency should consider in making the designation. Additionally, comments will help the Agency to understand what the public desires and why. It is reasonable to identify the dates when a comment period begins and ends because the comment period is established for a set period of time and the public needs to know when that time period is in order to submit comments. Subitem 6 requires a description of the procedures for reaching a final decision on the designation, the procedures for requesting a public information meeting or a contested case hearing; and any other procedures for public participation. It is reasonable to require that the Agency identify how it will make its final decision on a designation because it informs the public of the process for doing so. Additionally, the public needs to know how they can participate in the public process. Identifying the procedures for requesting a public informational meeting or contested case hearing is reasonable because it aids the public by informing them of the procedures they must follow to request such a meeting or hearing. Item C sets forth the requirement to distribute the public notice in accordance with Minn. R. 7001.0100, subpart 5. Minn. R. 7001.0100, subpart 5 lists the ways that the Commissioner must make the public notice available to members of the public. These or similar types of requirements for distribution of a public notice have been followed in the past in issuing some


NPDES/SDS permits. It is reasonable to distribute the public notice in the manner specified in this item because the requirements in chapter 7001 are designed to reach a wide range of interested persons. Item D requires a person to request a contested case hearing or public information meeting on the designation determination in accordance with Agency rules; and if a hearing is held, requires the Commissioner to comply with Agency procedural rules. The first part of this item makes it clear that a request for a contested case hearing or public information meeting on a designation determination is to be made in the same manner as for permits under Minn. R. 7001.0130. Including this rule reference aids the public in determining the procedures that will be followed with respect to contested case hearings and public information meetings. The second part of this item references the Agency rules which the Commissioner must follow if a contested case hearing is held. This is reasonable because it informs the public as to where the proper procedures are set forth. Item E establishes that the Commissioner may make a final determination on the designation by finding that the MS4 meets the designation criteria established in these rules. In accordance with 40 CFR 123.35(b)(3), the Commissioner has the authority to designate any small MS4 that meets the criteria established by the Agency. This item clearly identifies that a determination can be made to designate an MS4 if it meets the designation criteria. The criteria established in these rules are to be used as a basis for designating MS4s for permit coverage, therefore it is reasonable that the Commissioner can designate an MS4 if it is determined that the MS4 meets these criteria. Subpart 4 establishes the petition process for MS4s. This process is being established in rule in order to provide for public understanding and participation in the petition process and is consistent with 40 CFR 122.26(f) which allows for a petition to the Commissioner to require a permit. Items A and B set forth the administrative requirements for two types of petitions; a petition to designate an MS4, and a petition to reevaluate the designation of an MS4.

Item A establishes the process to petition the Commissioner for the designation of an MS4. Public involvement is an important part of the NPDES stormwater program and managing stormwater runoff at the local level. This proposed rule encourages public participation through a process in which the public can petition the Commissioner for the designation of an MS4 in order to protect water quality. For example, an operator of a regulated MS4 can use the petition process to request that the Commissioner designate a nonregulated MS4 that is contributing to the regulated MS4.

This item requires the Commissioner to evaluate the written petition, make a determination if designation is appropriate, and if so follow the administrative process for designation established in part 7090.1010, subpart 3. It is reasonable to require a written petition in order to provide information that will help the Agency to understand the reason for the petition. It is also reasonable that the same administrative process should be followed for the petition of a designation as the Commissioner’s designation under part 7090.1010, subparts 2 and 3 because both processes encourage public participation, and the intended outcome of these processes is the same – the designation of an MS4 for permit coverage. Item B establishes that any person can petition the Commissioner for the reevaluation of a designated MS4 for the determination that the MS4 does not meet the criteria in subparts 1 and


2. This rule provision is needed to address those MS4s that were designated for permit coverage, but may no longer meet the criteria for designation in these proposed rules. Circumstances and factors relating to the criteria on which the designation was based may change, such as a decrease in population, and may make it necessary to reevaluate the designation of an MS4. However, an MS4 that may no longer meet the criteria on which its’ designation was based may meet other designation criteria. This item requires the Commissioner to evaluate the written petition and make a determination if the MS4 no longer meets the requirements for a permit. It is reasonable to require a written petition in order to provide information that will help the Agency to understand the reason for the petition, and to provide information necessary for the Commissioner to make an evaluation as to whether or not the MS4 meets permit requirements. 7090.1040 MS4 Minimum Requirements The common goal of stormwater management programs is to improve water quality by reducing the pollutants contained in stormwater discharges. Progress towards this goal can be achieved through the development and implementation of a stormwater pollution prevention program (SWPPP). This part establishes the minimum requirements for regulated MS4s, specifically the development of a SWPPP. Subpart 1 establishes the requirement for owners or operators of permitted MS4s to have a SWPPP to address environmental concerns related to stormwater discharge. Polluted stormwater runoff is often transported to municipal storm sewer systems and then discharged into local rivers and streams without treatment. The SWPPP is intended to improve local water bodies by reducing the quantity of pollutants that stormwater picks up and carries into storm sewer systems during storm events. The requirement to have a SWPPP is reasonable because the SWPPP identifies how an operator of a regulated MS4 will reduce pollutants in stormwater runoff to protect water quality. It is also reasonable because the development and implementation of a SWPPP is the primary requirement of an NPDES stormwater permit, and the SWPPP serves as a guide to assure compliance with the terms and conditions of the permit. Subpart 1 also establishes the requirement that the SWPPP address the six minimum control measures. The federal regulations at 40 CFR 122.34(b) requires the Agency to include these six minimum control measures in the NPDES stormwater permit for MS4s. As recommended by EPA, the Agency has issued a general permit to regulate stormwater discharges from regulated small MS4s that includes these six minimum control measures (see 64 Fed. Reg. 68737 (1999)). Though the federal requirement to address the six minimum control measures is specific to regulated small MS4s, the proposed rule does not make the distinction between small, medium, and large MS4s, as discussed in Part III. of this SONAR, Need for the Rules. These minimum control measures are similar to the individual permit requirements for medium and large MS4s that were regulated under the Phase I stormwater program. However, these minimum control measures are more general than the Phase I requirements and allow for maximum flexibility for operators of regulated small MS4s to optimize efforts to protect water quality. An owner or operator of a regulated small MS4 must develop and implement a SWPPP that 1) is designed to reduce the discharge of pollutants from their MS4 to the maximum extent practicable (MEP), 2) protects water quality, and 3) satisfies the appropriate water quality requirements of the Clean Water Act. MEP is the federal standard that establishes the level of pollutant reductions that operators of regulated MS4s must achieve. The MEP standard is the same standard applied to the Phase I program for medium and large MS4s. There is no regulatory


definition of MEP in order to allow the permitting authority and MS4s maximum flexibility in permitting. However, EPA’s guidance (see 64 Fed. Reg. 68754 (1999)) describes MEP as follows:

“The CWA [Clean Water Act § 402 (P)(3)(B)(iii)] requires that NPDES permits for discharges from MS4s ‘shall require controls to reduce the discharge of pollutants to the maximum extent practicable, including management practices, control techniques, and system, design and engineering methods’…Compliance with the conditions of the general permit and the series of steps associated with identification and implementation of the minimum control measures will satisfy the MEP standards.”

Compliance with the technical standard of MEP requires the successful implementation of appropriate BMPs. The Phase II federal regulations at 40 CFR 122.34(a) consider narrative effluent limitations that require the implementation of BMPs and the achievement of measurable goals as the most appropriate form of effluent limitations to achieve the protection of water quality; rather than requiring that stormwater discharges meet numeric effluent limitations. Because of unique and varying local conditions, such as the condition and use of receiving waters, hydrology and geology, and size of the storm sewer system, a location specific SWPPP tailored for each regulated MS4 is considered by EPA to be the most effective, flexible, and economically practical approach to achieve effective stormwater management. The Agency agrees with EPA’s approach and that BMPs are the most appropriate form of effluent limitation for regulated small MS4 stormwater discharges. Subpart 1, items A through F sets forth the six minimum measures that the SWPPP must address. The operator of a regulated MS4 must determine the appropriate BMPs and measurable goals for each of the six minimum control measures. The six minimum control measures are reasonable because they are described in general terms which allows MS4 operators the flexibility to develop their SWPPPs and select the appropriate BMPs for each minimum measure to address the factors that are specific to their storm sewer system. It is reasonable to require that the SWPPP address the six minimum control measures because implementation of the appropriate BMPs for each measure will help to reduce polluted stormwater runoff and protect water quality. Item A establishes public education and outreach as a minimum measure. To address this minimum measure, the operator of a regulated MS4 must implement a public education program to distribute education materials to the community, or conduct equivalent outreach activities about the impacts of stormwater discharges on local water bodies and the steps that can be taken to reduce stormwater pollution. Examples of educational materials include brochures or fact sheets, recreational guides, community events, educational programs for schools, storm drain stenciling, stormwater hotlines, and alternative information sources such as web sites, posters, and signs. The public education program should be developed using a variety of strategies that are appropriate to the local community as well as targeted to specific audiences. This minimum measure is reasonable for several reasons. First, a community that understands why a stormwater program is needed and important is more likely to support funding initiatives for the program. Second, an informed and knowledgeable community better ensures compliance with the program because the pubic is aware of the personal responsibilities expected of them, including individual actions they can take to protect or improve the quality of local water bodies.


Item B establishes public participation/involvement as a minimum measure. To address this minimum measure the stormwater pollution prevention program must comply with the applicable state and local public notice requirements. The operator of a regulated MS4 should include the public, with efforts made to engage all economic and ethnic groups, in developing, implementing, and reviewing the stormwater pollution prevention program for their community. This minimum measure is reasonable because public involvement is a key component in the success of an MS4s stormwater pollution prevention program. When the public has the opportunity to provide input and assistance in the development of the stormwater pollution prevention program the public is more likely to take an active role in the implementation of the program and less likely to raise legal challenges to the program. Public involvement can broaden public support for the stormwater pollution prevention program which can better ensure compliance with the program. Item C establishes illicit discharge detection and elimination as a minimum measure. To address this minimum measure the operator of a regulated MS4 must develop, implement, and enforce an illicit discharge detection and elimination program. Elements of the program include: 1) a storm sewer system map showing the location of ponds, streams, lakes and wetlands that are part of the system, structural pollution control devices that are part of the system, all pipes and conveyances in the system that are 24 inches in diameter, as a minimum, and outfalls including discharges from your system to other MS4s, or waters and wetlands that are not part of your system; 2) an ordinance or other regulatory mechanism that prohibits non-stormwater discharges into the MS4, with appropriate enforcement actions and procedures; 3) a plan to detect and address non-stormwater discharges, including illegal dumping, into the MS4; and 4) educating the public about the hazards associated with illegal discharges and improper disposal of waste. Operators of regulated small MS4s must also address additional categories of non-stormwater discharges or flows if the operator identifies them as significant contributors of pollutants to their MS4. Illicit discharges are considered “illicit” because MS4s are not designed to accept, process, or discharge non-stormwater wastes. Sources of illicit discharges include sanitary wastewater, effluent from septic tanks, car wash wastewaters, improper oil disposal, radiator flushing disposal, laundry wastewaters, spills from roadway accidents, and improper disposal of auto and household toxics. Illicit discharges enter storm sewer systems either through direct connections such as wastewater piping either mistakenly or deliberately connected to the storm drain, or indirect connections such as infiltration into the storm drain system from cracked sanitary systems, spills collected by drain outlets, or paint or used oil dumped directly into a drain. The result is untreated discharges that contribute high levels of pollutants including heavy metals, toxics, oil and grease, solvents, nutrients, viruses, and bacteria to receiving water bodies. Pollutant levels from these illicit discharges have been shown in EPA studies to be high enough to significantly degrade receiving water quality and threaten aquatic, wildlife, and human health (Investigation of Inappropriate Pollutant Entries Into Storm Drainage Systems – A User’s Guide 1993 EPA 600/R-92/238).


Therefore, in order to identify the source of an illicit discharge, it is necessary to determine where these inappropriate direct and indirect connections occur. This minimum measure is reasonable because identifying and eliminating sources of illicit discharges will result in reductions in the amount of polluted wastes and wastewaters entering local water bodies through illicit discharges. Further, by implementing a program that requires a public education component, the general pubic becomes informed of individual actions they can take to eliminate sources of illicit discharges. Item D establishes construction site runoff control as a minimum measure. To address this minimum measure the operator of a regulated MS4 must develop, implement, and enforce a program to reduce pollutants in stormwater to their MS4 from construction activities that result in a land disturbance of greater than or equal to one acre, and construction activity disturbing less than one acre if that construction activity is part of a larger common plan of development or sale that would disturb one acre or more. Elements of the program include: 1) an ordinance or other regulatory mechanism to require erosion prevention and sediment controls, as well as sanctions to ensure compliance; 2) requirements for construction site operators to implement appropriate erosion prevention and sediment control BMPs; 3) requirements for construction site operators to control wastes such as discarded building materials, concrete truck washout, chemicals, litter, and sanitary waste at the construction site that may cause adverse impacts to water quality; 4) procedures for site plan review which incorporate consideration of potential water quality impacts; 5) procedures for receipt and consideration of reports of non compliance or other information on construction related issues submitted by the public; and 6) procedures for site inspection and enforcement of control measures. Polluted stormwater runoff from construction sites often flows to MS4s and ultimately is discharged into local rivers and streams. Sediment is usually the main pollutant of concern, although other pollutants discharged from construction sites include phosphorous and nitrogen (in fertilizer), pesticides, and oil and grease. Sediment and these other pollutants from construction sites can cause physical, chemical, and biological harm to our state’s waters. For example, excess sediment can quickly fill rivers and lakes, requiring dredging and destroying aquatic habitats. Additionally, stormwater discharges from construction activities can also significantly impact the designated uses of a waterbody, including public water supply, recreation, and the propagation of fish and wildlife. Therefore, in order to control and prevent polluted stormwater runoff from leaving construction sites untreated, it is necessary to develop, implement, and enforce a construction site runoff control program to reduce these pollutants. The construction site runoff control program for regulated MS4s is needed to induce more localized site regulation and enforcement efforts, and to enable operators of regulated MS4s to more effectively control construction site discharges into their MS4s. Generally, properly implemented and enforced construction site ordinances will effectively reduce pollutants in stormwater runoff from construction activities. Construction site inspections give the MS4 an opportunity to provide additional guidance and education, issue warnings, or assess penalties. This minimum measure is reasonable because a construction site runoff control program for regulated MS4s provides for better oversight and regulation of construction activities at the local level. The opportunity for construction site oversight is generally greater at the local level because operators of regulated MS4s are more likely to be aware of construction activities that are planned or occurring in their communities than the NPDES permitting authority.


Item E establishes post-construction runoff control as a minimum measure. To address this minimum measure the operator of a regulated MS4 must develop, implement, and enforce a program to reduce pollutants in post construction runoff to their MS4 from the new development and redevelopment projects that result in the land disturbance of greater than or equal to one acre, and construction activity disturbing less than one acre if that construction activity is part of a larger common plan of development or sale that would disturb one acre or more. The program must ensure that controls are in place that would prevent or minimize water quality impacts. Elements of the program include: 1) developing and implementing strategies which include a combination of structural and/or non-structural BMPs appropriate for the MS4 community, 2) an ordinance or other regulatory mechanism to address post-construction runoff from new development and redevelopment projects, and 3) ensuring adequate long-term operation and maintenance of BMPs installed as a result of these requirements. There are generally two forms of substantial impacts of post-construction runoff. The first is caused by an increase in the type and quantity of pollutants in stormwater runoff. As runoff flows over areas altered by development, it picks up harmful sediment and chemicals such as oil and grease, pesticides, heavy metals, and nutrients such as nitrogen and phosphorus. These pollutants often become suspended in runoff and are carried to receiving waters such as lakes, ponds, and streams. Once deposited, these pollutants can enter the food chain through small aquatic life, eventually entering the tissues of fish and humans. The second kind of post-construction runoff impact occurs by increasing the quantity of water delivered to the waterbody during storms. Increased impervious surfaces interrupt the natural cycle of gradual percolation of water through vegetation and soil. Instead, water is collected from surfaces such as asphalt and concrete, and routed to drainage systems where large volumes of runoff quickly flow to the nearest receiving water. The effects of this process include streambank scouring and downstream flooding which often leads to a loss of aquatic life and damage to property. Post-construction stormwater management in areas undergoing new development or redevelopment is necessary because runoff from these areas has been shown to significantly effect receiving water bodies. According to EPA, many studies indicate that prior planning and design for the minimization of pollutants in post-construction stormwater discharges is the most cost-effective approach to stormwater quality management. Reducing pollutants in stormwater after the discharge enters a storm sewer system is often more expensive and less efficient than preventing or reducing pollutants at the source. Developing a post-construction stormwater management program to address discharges resulting from new development and redevelopment is essentially a pollution prevention measure. If water quality impacts are considered from the beginning stages of a project, new development and redevelopment provide more opportunities for water quality protection.

This minimum measure is reasonable because a post-construction stormwater management program for regulated MS4s provides for better oversight and regulation of post-construction activities at the local level. The effective implementation of a post-construction management program at the local level is more likely to ensure the long-term operation and maintenance of stormwater management controls at projects that are newly developed or redeveloped under the program. Additionally, similar to the construction site runoff control program, the opportunity for post-construction stormwater management is generally greater at the local level. Through the program, operators of regulated MS4s can work to ensure that runoff problems are addressed early on in the project development through the local planning process, and by incorporating site based local controls in the project development plans.


Item F establishes pollution prevention/good housekeeping as a minimum measure. To address this minimum measure the operator of a regulated MS4 must develop and implement an operation and maintenance program that includes a training component and has the ultimate goal of preventing or reducing pollutant runoff from municipal operations. The MS4 operator must: 1) operate and maintain their stormwater system in a manner so as to minimize the discharge of pollutants, 2) annually inspect all structural pollution control devices, 3) inspect, at minimum, 20 percent of the MS4 outfalls, sediment basins and ponds each year on a rotating basis, 4) based on the inspection, determine if repair, replacement, or maintenance measures are necessary for proper operation and to prevent environmental impacts, 5) summarize the results of outfall inspections in the annual report, and 6) keep records of the inspections and maintenance performed. This minimum measure is intended to ensure that municipal operations are performed in ways that will minimize contamination of stormwater discharges. This minimum measure requires the regulated MS4 to examine and subsequently alter their own actions to help ensure a reduction in the amount and type of pollution that 1) collects on streets, parking lots, open spaces, and storage and vehicle maintenance areas and is discharged to local waterways, and 2) results from actions such as environmentally damaging land development and flood management practices or poor maintenance of storm sewer systems. While the goal of this measure is to improve and/or protect the quality of receiving waters by altering the performance of MS4 operations, it can also result in cost savings for the MS4 since proper and timely maintenance of storm sewer systems can help avoid repair costs from damage caused by age and neglect. This minimum measure is reasonable because properly developed and implemented operation and maintenance programs reduce the risk of water quality problems. Subpart 2 requires owners and operators to keep a copy of the SWPPP and to make it available to the Agency for inspection. An integral part of the MS4 permit is the requirement to develop and implement a SWPPP. It is reasonable to require the owner or operator of an MS4 to keep a copy of the SWPPP because the SWPPP identifies how the requirements of the MS4 permit will be met. It is also reasonable to make the SWPPP available to the Agency for inspection so the Agency can obtain any additional information that would be needed to process a permit application or determine compliance with an existing permit and these rules. 7090.2000 Construction Program The stormwater program for construction activity is designed to reduce the amount of sediment and pollution entering surface and ground water both during and after construction activities. Stormwater discharges associated with construction activity are regulated through the use of NPDES/SDS permits. Parts 7090.2000 to 7090.2080 establish the requirements for permit coverage under the construction stormwater permit program. These rules are reasonable because they clarify the administrative process that will be followed by the regulated community and they contain the minimum requirements for obtaining permit coverage. 7090.2010 Construction Activity Permit Requirements This part establishes the permit requirements for the construction stormwater permit program.


This part is needed because the permit requirements are different for each stormwater program area. This part specifically addresses the construction program and applies broadly, not just to owners and operators of construction activity that require permit coverage but also to certain construction activities that are conditionally excluded from the permit application requirements. Subpart 1 establishes when an NPDES/SDS construction stormwater permit is required. This rule is reasonable because it identifies under what circumstances a construction stormwater permit is required. Item A establishes that a permit is required if a person is conducting construction activity, except those construction activities that are conditionally excluded. Certain activities are associated with polluted stormwater discharges, including construction activity. However, as previously discussed in part 7090.0080, it is the type of activity that triggers the need for NPDES/SDS stormwater permit coverage, not the discharge associated with the activity that requires a permit. The activity itself results in, or has the potential to result in stormwater discharges with known impacts to surface or ground waters (see 64 Fed. Reg. 68728 (1999)). Specifically, it is the activity that leads to pollution of the waters of the state, so if a person is conducting this type of activity, it needs to be controlled. Therefore, it is reasonable that a NPDES/SDS permit is required for construction activity. Item A also establishes that a permit is not required for certain construction activities. Part 7090.2020 identifies those construction activities that do not require permit coverage, specifically certain feedlots and conservation practice projects. The reasonableness of not requiring a permit for these activities is discussed under that part.

Item B establishes that an NPDES/SDS construction stormwater permit is required if the Commissioner determines that a discharge from a land disturbing activity not addressed in item A may cause or contribute to a violation of an applicable state or federal water quality rule or regulation. Determining whether a discharge will cause or contribute to an exceedance of water quality standards is done a on a case by case basis. In making this determination the Commissioner will consider the size of the discharge, the quantity and nature of the discharge, and the location of the discharge to waters of the state. Construction activities that might not require coverage under item A, such as construction activities that disturb less than one acre that are not part of a common plan, may have deleterious effects on receiving waters due to site specific conditions including but not limited to steep slopes, soil types, erodibility downstream of the discharge point, location of the discharge point in the receiving water (e.g. a proposed outfall pipe which discharges directly into a spawning area), and sensitivity of the receiving water. The federal regulations, at 40 CFR 122.26 (b)(15)(ii), provide that construction activities below one acre may be designated for regulation where necessary to protect water quality. Specifically, stormwater discharges associated with small construction activity means the discharge of stormwater from “Any other construction activity designated by the Director, or in States with approved NPDES programs either the Director or the EPA Regional Administrator, based on the potential for contribution to a violation of a water quality standard or for significant contribution of pollutants to waters of the United States.” This designation under CWA, section 402(p)(6),


gives States the flexibility to designate additional sources below one acre that are likely to cause water quality impairment. In other words, the one acre threshold under the Phase II federal regulations for construction activity is not an absolute threshold like the five acre threshold that applied under the Phase I federal regulations. Additionally, the MPCA is authorized to administer the SDS permit program under Minn. Stat. chapter 115. The MPCA also has the powers and duties to administer and enforce all laws relating to pollution of any waters of the state. The Commissioner has the authority to make such a determination under Minn. Stat. ch 115 and Minn. R. ch. 7001 to require NPDES/SDS permit coverage for additional sources not regulated under the NPDES federal regulations. Subpart 2 establishes when a permit application or subdivision registration must be submitted and the method of submittal. Item A requires an owner or operator to submit a complete permit application provided by the Agency before conducting construction activity or to meet the subdivision registration requirements. Prior to application or registration submittal, the applicant must either complete a stormwater pollution prevention plan or agree to follow an existing SWPPP. The SWPPP is the main requirement of the construction stormwater permit and it identifies how the person(s) conducting construction activity will prevent erosion and control sediment and discharges of other pollutants from their site. Therefore it is reasonable to require the submittal of an application or registration before conducting construction activity. It is also reasonable to require the submittal of a complete application because the Agency cannot make sound decisions as to whether the proposed activity will meet applicable statutes and rules unless full and complete information is received. Item B states that a permit application or subdivision registration may be submitted electronically if approved by the Commissioner and that the Commissioner will establish the effective date of permit coverage under such a submittal. Permit applications and subdivision registrations are currently submitted to the Agency in paper form either by mail or facsimile. Under the current construction stormwater permit which is effective until August 1, 2008, permit coverage becomes effective in seven, 30, or 90 days after the postmarked date of the completed application. For ease of administration and to expedite the application process, the MPCA plans to implement an electronic system that would provide for the submittal of on-line permit applications. An electronic submittal, which would have appropriate checks and balances to ensure a complete and accurate application submittal, will allow for a quicker application approval process for regulated parties, and subsequently, quicker permit coverage and construction start dates. For this reasons, it is reasonable for the proposed rule to allow for the electronic submittal of permit applications and for the Commissioner to determine the effective date of permit coverage under such submittals. Subpart 3 establishes the requirement for owners and operators of construction activities required to have a construction stormwater permit that fail to submit a permit application to comply with the specific requirements of the permit that are incorporated by reference in this rule. Owners of construction activities that require permit coverage are required to develop and jointly with operators implement a SWPPP that includes BMPs, which are in general, measures to prevent or mitigate pollution from any type of activity. BMPs for managing stormwater runoff are needed


to minimize the impact of construction activities on receiving waters. This rule provision is necessary to address the noncompliance and the potential environmental harm and failure to implement a SWPPP for those sites that fail to submit a permit application and obtain permit coverage. For many unpermitted sites, MPCA compliance and enforcement staff have worked to address the issue of how to assess violations on these sites with respect to erosion prevention and sediment control BMPs in the permit; and the applicability of these permit conditions without permit coverage. The MPCA typically has not assessed a penalty for such violations. In addition, the MPCA typically does not assign an economic benefit amount for non-implemented BMPs due in part to the site not having a permit, and the difficulty in determining site conditions with enough specificity to develop these amounts. Therefore, it is necessary to hold these unpermitted sites accountable for the applicable requirements of the permit, whether or not a permit application has been submitted. The purpose of the construction stormwater permit is to protect the waters of the state. The construction stormwater permit requires the development and implementation of a site-specific SWPPP that includes non-structural and structural BMPs that will be implemented at the construction site to manage stormwater runoff. Non-structural BMPs, which focus on changing behavior and management, are “baseline” BMPs that are applicable to a wide variety of construction activities. Examples of non-structural BMPs are phasing land disturbing activities at a construction site so that only the minimum amount of soil necessary is disturbed at any one time, a preventative maintenance program, visual inspections, and an employee training program. Structural BMPs are measures that control or manage stormwater runoff and drainage, are site-specific, and tailored to specific sources of pollutants at a construction site. Preventing erosion can significantly reduce the amount of sedimentation and other pollutants transported by runoff from construction sites. Examples of structural BMPs for erosion prevention and sediment control include vegetative buffer strips or horizontal slope grading to minimize erosion, silt fences or other effective sediment controls, stormwater detention basins, and interim and permanent stabilization practices as well as preserving existing vegetation. The proposed rule, at part 7090.0060, incorporates by reference these non-structural and structural BMP requirements contained in the construction stormwater permit and Appendix A to that permit. The incorporation by reference specifically includes only those stormwater management practices that are necessary for the protection of the environment and water quality. The implementation of these BMPs, specifically those for erosion prevention and sediment control, are necessary for protecting water quality. Therefore, it is reasonable to require owners and operators of construction activities to comply with these specific requirements because they contain stormwater management practices and specific BMPs that are used to prevent or mitigate polluted stormwater runoff from leaving construction sites. Subpart 4. Emergency construction. Subpart 4, item A states that construction activities required to minimize the impacts of an emergency situation including floods, tornados, and severe storms presenting imminent threat to human health, public drinking water, or the environment may begin before submittal of a permit application if certain requirements are met. The proposed rule is needed to establish the requirements for emergency construction activity that would otherwise require construction stormwater permit coverage prior to conducting the construction activity. Emergency situations often arise where immediate action is required to restore utility related services such as gas or electricity, or other essential public services such as


public transportation systems such as airports and roadways. These emergency situations may be the result of natural disasters or failures of systems unrelated to the utility operation. Regardless of the cause, immediate response is necessary to restore service and/or protect human health and the environment. These situations may require immediate construction of emergency access, diversionary or replacement structures, or other types of activities. Construction activities under such scenarios could not likely meet the seven day notice requirements of the construction stormwater permit or the preparation of a stormwater pollution prevention plan prior to submittal of a permit application and before conducting the emergency construction activities. Therefore it is reasonable to establish a rule provision that allows for emergency construction activity to be temporarily waived from meeting the permit notification and application requirements if specific requirements are met. Subitem 1 requires the owner to notify the Commissioner when construction activity begins. This rule allows for a process where the emergency responder provides notice to the MPCA when emergency construction activities commence so that those construction activities which require permit coverage can be implemented prior to obtaining permit coverage with MPCA approval. This rule provision is needed so the MPCA knows that the purpose of the construction activity is for an emergency situation and that the construction is occurring temporarily without permit coverage. This is reasonable because this process lessens the likelihood that the Agency would need to exercise enforcement action later for failure to apply for and obtain permit coverage before the start of the emergency construction. Subitem 2 requires the owner and operator of the emergency construction activity to comply with the specific requirements of the construction stormwater permit that are incorporated by reference in this rule. As discussed in subpart 3 of this rule part, the incorporation by reference specifically includes only those stormwater management practices that are necessary for the protection of the environment and water quality. This rule provision is necessary to ensure the implementation of stormwater management practices without having applied for permit coverage for the emergency construction activity. It is reasonable to require owners and operators to comply with these specific requirements because they contain stormwater management practices and specific BMPs that are used to prevent or mitigate polluted stormwater runoff from leaving the construction site. Item B states that the notification must be completed by letter, telephone or facsimile. Since the owner or operator conducting the emergency construction activity is temporarily waived from meeting the requirement to submit a permit application, which is the regulatory mechanism for notification of construction activity, an alternative method of notification is needed. It is reasonable to identify the methods in which emergency construction notification can be made so that owners conducting emergency construction are aware of the notification requirement and how the requirement can be complied with. Subitems 1 to 5 contain the information required for emergency construction notification. The information required in these subitems is the minimum information upon which a reasonable notification can be based. The minimum contents of the emergency construction notification required under this item are consistent with and required in the application for construction stormwater permit coverage.


Subitem 1 requires that the notification include the owner’s name, and the name of the construction company if different than the owner. Since businesses can have complex ownership arrangements, the owner(s) are not always reflective of a company name and all owners and operators are ultimately responsible for construction activity compliance, it is reasonable to require this information in the notification. Subitem 2 requires that the notification include the address or description of the location where the construction activity is occurring. Since the emergency construction is likely being conducted to ensure public health and safety, it is reasonable to require this information so that if necessary, local residents and the general public can be made aware of where the emergency construction activity is occurring and act accordingly. Subitem 3 requires that the notification include a list of cities, counties, and townships where the construction activity is occurring. Emergency construction may require coordination with the local units of government to ensure that local requirements and regulations are met. It is reasonable to require this information so that the appropriate local units of government are aware of the project and can provide project oversight and assistance if necessary. Subitem 4 requires that the notification include the approximate acres to be disturbed by the construction activity. Construction activity is defined in part by the quantity of land disturbed. It is reasonable to require this information so the Agency can make a determination that the construction activity requires permit coverage, and if the number of acres to be disturbed triggers the requirement for a review of the stormwater pollution prevention plan for the project. Subitem 5 requires that the notification include a brief description of the emergency situation. Item A of this subpart identifies that an emergency situation includes but is not limited to floods, tornados, and severe storms presenting imminent threat to human health, public drinking water or the environment. It is reasonable to require this information so that the Agency can make a determination that the construction activity being conducted prior to obtaining permit coverage is to minimize the impacts of an emergency situation. Item C requires that a permit application be submitted to the Commissioner within seven days of the emergency event start date. Due to the need to minimize and mitigate the impacts of an emergency situation as expeditiously as possible to ensure public health and safety, or environmental protection, it may not be feasible for persons proposing to conduct construction activity for emergency purposes to meet the seven day notification requirement, prepare a stormwater pollution prevention plan, and submit a permit application prior to construction. However, because construction stormwater permit coverage is required for construction activity, it is reasonable to require that an application for permit coverage be submitted within a reasonable time period of when the emergency related construction activity begins. The Agency believes seven days is a reasonable amount of time. 7090.2020 Construction Activity Conditional Exclusion Subpart 1 establishes that owners and operators of construction activities that meet the requirements in subparts 2 and 3 are conditionally excluded from the requirement to submit a permit application. This conditional exclusion keeps regulated parties under the Phase II program but allows them to avoid submitting a permit application if they meet certain requirements. Because this conditional exclusion does not apply to all construction activity, it is


necessary and reasonable to identify what types of projects are eligible for this exclusion. The types of projects, and requirements specific to them, are identified in subparts 2 and 3.

Owners and operators that meet the requirements of subpart 2 and 3 have the option to either apply for a construction stormwater permit or meet the stormwater management requirements established in part 7090.2030. This option is provided for several reasons. The conditional exclusion is not a requirement, therefore it is necessary to clarify owners and operators of conditionally excluded projects have the option to obtain a permit. Further, because some projects (e.g. feedlots) have the potential to generate significant public interest or may be challenged legally, an owner or operator may want to obtain a construction stormwater permit. NPDES permit coverage provides the regulated community the additional legal protection of the “permit shield” under the CWA section 402(k). Additionally, construction activity may be planned for a site with unique geographic conditions that requires BMPs that are more site-specific, and not included in the stormwater management requirements for conditionally excluded projects. Subpart 1 also establishes that if an owner or operator conducting construction activity under this conditional exclusion fails to comply with the requirements of part 7090.2030, they must submit a permit application. Owners and operators conducting construction activity under this conditional exclusion did not apply for a permit and therefore were not required to develop and implement a SWPPP, which are permit requirements. As discussed previously, SWPPPs are developed to include specific BMPs that are used to prevent or mitigate polluted stormwater runoff from leaving the construction site. Therefore, without a SWPPP, it is reasonable to require these non-permitted sites to comply with the stormwater management practices established in these rules. Subpart 2. Feedlots. This rule establishes that construction activities at feedlots for the purposes of building a new or expanded animal feedlot, manure storage area, or animal holding facility or performing related maintenance are eligible for the conditional exclusion, if an owner or operator obtains a state feedlot permit or fulfills the preconstruction notification requirements, as identified in items A to D. It is reasonable to require that the construction activity is for the purposes identified in this rule because these are typical of the types of activities that would require a feedlot permit or preconstruction notification, a condition of this exclusion.

A federal or state feedlot permit is required for construction activity at feedlot facilities. Construction activity at large CAFOs, facilities with 1,000 or more animal units, are covered under an individual or general NPDES permit and are not eligible for this conditional exclusion. Individual NPDES permits for large CAFOs include stormwater management requirements and practices specific to the individual facility. The general NPDES permit for large CAFOs is currently being modified to address among other items, the Phase II requirements for construction activity.

State feedlot permits (SDS, interim, and construction short-form permits) as identified in items A to C, are required for construction activity at non-CAFO facilities; facilities with 300 to 999 animal units. Because these permits have not been modified to address the Phase II requirements, the MPCA currently issues these permits with the fact sheet “Stormwater control requirements at feedlot construction sites” which includes stormwater pollution prevention and management requirements for construction activities. If construction disturbs one or more acres at a non-CAFO facility, the feedlot owner and operator must follow the applicable BMPs


described in the fact sheet, irregardless of whether or not a state feedlot permit is needed. The BMPs for erosion prevention and sediment control in the fact sheet are consistent with the BMPs established in part 7090.2030 that owners and operators conducting construction activities pursuant to this conditional exclusion must include in their activities. Preconstruction notification, as identified in item D, is required for owners and operators of facilities which are constructing or expanding and do not otherwise need a feedlot permit. This requirement applies to facilities of any size; however it will generally only be applicable to feedlots under 300 animal units, since all feedlots over 300 animal units which are constructing will need a permit. It is reasonable to require an owner or operator to meet the preconstruction notification requirements, if applicable, to be eligible for this exclusion for several reasons. This requirement serves as notice to the MPCA and the local government that construction activity will be conducted at the feedlot facility. At the time of notification, the MPCA and local zoning authority will then be able to make sure they send the needed information, including the above referenced fact sheet, to the feedlot owner about BMP requirements. It there was no notification, the regulatory authorities might not know about the construction activity and therefore not be able to communicate the required stormwater management activities. As discussed previously in this SONAR (see Reasonableness of the Proposed Rules as a Whole, Regulatory Analysis #7), one of the purposes of this conditional exclusion is to avoid double permitting and not require two permits for the same type of activity. It is reasonable to require an owner or operator to obtain a state feedlot permit or meet notification requirements, if applicable, to be eligible for this exclusion because if a construction activity is to be excluded from construction stormwater permit coverage, then the activity must be covered under a feedlot permit or notification of construction to ensure that construction stormwater BMPs are followed. Subpart 2 also requires that feedlot construction activities that are not subject to the permit requirements under Minn. R. 7020.0405, subpart 1, or the notification requirements under Minn. R. 7020.2000, subpart 5, must comply with the BMPs required for conditional exclusion projects or apply for a permit. With these proposed rules, the Agency is not requiring separate permits for stormwater control and feedlot construction activities.

This rule is needed to address construction activity at feedlots that do not need a feedlot permit, and to ensure the implementation of stormwater management practices at these non-permitted sites. These are feedlots that are: 1) less than 300 animal units and are not correcting a pollution hazard therefore no interim permit needed, and 2) not constructing a liquid manure storage area and therefore no notification requirements must be met, however; the construction activity is equal to or greater than one acre and a construction stormwater permit is required. An example of this type of activity would be the construction of a barn or other building, where the number of animal units is not increased thus triggering the need for a feedlot permit. Though the MPCA does not frequently see the type of construction activity that would not require a feedlot permit, this rule provision will address such cases. The number of these projects is expected to be minimal. It is reasonable to require owners and operators of these non-permitted facilities to comply with these specific requirements because they contain stormwater management practices and specific BMPs that are used to prevent or mitigate polluted stormwater runoff from leaving the construction site.


Subpart 3. Conservation practice projects. This rule establishes that construction activities that disturb one to less than five acres for the purposes of a conservation practice project such as a grassed waterway, terrace or diversion, or water and sediment control basin, are eligible for the conditional exclusion if the owner or operator meets the requirements identified in items A and B. (Management practice projects are not considered for this exclusion because they do not move earth.) It is reasonable to require that the construction activity is for the purpose identified in this rule because these are typical types of projects that reduce or prevent erosion and control sediment runoff and are considered a conservation practice. Often times these projects occur on soil that is already disturbed and the end result of the project is a stabilized area that will not erode. Under these proposed rules, the construction activity must be for a conservation practice project, a condition of this exclusion. Subpart 3 specifically limits construction activity for the purpose of a conservation practice to projects of less than five acres. This is in part due to the time period for construction of these projects; smaller projects are likely to be shorter in duration and therefore require fewer BMPs or less maintenance of BMPs that are used on the project. For example, NRCS projects are typically two weeks or less and, because contractors working on these conservation practice projects are not making a large sum of money, they try to wrap them up quickly. A final payment on these projects usually is not made until the project is complete and the area is re-vegetated. Additionally, limiting these projects to less than five acres is consistent with federal guidance that gives the MPCA the discretion to authorize a construction general permit for sites less than five acres without submitting a permit application (see 40 CFR 122.28(b)(2)(v)). Though a permit is not required for these projects as a condition of this exclusion (unlike the feedlot construction activities), this proposed rule sets forth requirements that meet the regulatory intent of the Phase II requirements and allows these conservation practice construction activities to remain within the MPCA regulatory authority without issuing a construction stormwater permit.

Item A requires participation in a state or federal conservation program that includes financial assistance. NRCS projects are done under federal cost share grant programs and BWSR projects are done under the state equivalent grant program. These programs include the Environmental Quality Incentives Program (EQIP), Conservation Reserve Enhancement Program (CREP), and State Cost Share Program. EQIP is a voluntary conservation program from the USDA, NRCS. EQIP provides technical assistance, cost share payments, and incentive payments to assist crop, livestock, and other agricultural producers with environmental and conservation improvements to their operations. It supports production agriculture and environmental quality as compatible goals. Through EQIP, landusers may receive financial and technical help with structural and management conservation practices on agricultural land. EQIP is administered by the NRCS.

CREP is a joint, state-federal voluntary land retirement program that helps agricultural producers to protect environmentally sensitive land, and to improve water quality, decrease erosion, and restore wildlife habitat related to agricultural use in specific geographic areas. CREP supports increased conservation practices such as filter strips and forested buffers. These conservation practices help protect streams, lakes, and rivers from sedimentation and agricultural runoff.


CREP uses financial incentives to encourage farmers and ranchers to enroll in contracts of 10 to 15 years in duration to remove lands from agricultural production. CREP is administered by the USDA, FSA; NRCS provides technical support. The State Cost Share Program, administered by BWSR, provides funds to SWCDs for the implementation of conservation practices that protect and improve water quality by controlling soil erosion and reducing sedimentation. Through the State Cost Share Program, landowners can request financial and technical assistance from their local SWCD for the implementation of BSWR-approved conservation practices. Grant and project contracts are made with the landowner who in-turn hires a contractor to conduct the construction activities. BWSR is also authorized to grant funds for the Reinvest in Minnesota Reserve Wetland Restoration program. Projects under this program also include erosion control. These projects are conducted per NRCS and BWSR conservation practice specifications and follow the same requirements and procedures. NRCS and BWSR use these financial assistance grants, contracts, and project specification documents for conservation practice projects. Construction activities for the purposes of these conservation practices are regulated by NRCS and BWSR under these grants and contracts. These contracts provide a mechanism to ensure project oversight and BMPs for erosion prevention and sediment control are implemented. For example, contractors do not receive their NRCS payment until the construction area has been re-vegetated, which is often done by the landowner, and must be verified by the NRCS district conservationist. Conservation practice projects are aimed at resource protection. Because these erosion prevention and conservation practices are done on a voluntary basis, the process and requirements need to remain simple so that landowners are not discouraged from doing these projects. Using the existing financial assistance process under these state and federal programs addresses the concern that landowners, if required to get stormwater permit coverage for smaller construction activities, might be discouraged from conducting land conservation projects. Therefore, this proposed rule is reasonable because it prevents a duplication of administrative requirements and reduces the administrative burden on regulated parties. Item B requires the use of design standards, construction and material specifications, and comparable construction inspection requirements maintained by the USDA, NRCS, and BSWR. Conservation practice projects conducted under state and federal conservation programs must use the applicable construction standards and specifications, as required by the financial assistance grant or contract under which the project is being conducted. Because these state and federal agencies are providing a service to the landowner through these grant and incentive programs, it is reasonable to require the use of standards and specs for erosion prevention and sediment control that have been approved by them. Further, these standards and specifications are maintained by these agencies which have technically qualified staff to review and update these requirements as needed. These standards and specifications for conservation practice projects can be found in the USDA, NRCS Field Office Technical Guide which is available on the internet at http://www.nrcs.usda.gov/technical/efotg/, and in the BWSR State of Minnesota Cost Share Manual also available on the internet at http://www.bwsr.state.mn.us/cs/costsharemanual.pdf. Additionally, during the development of the Phase II program, the MPCA worked with NRCS and BWSR staff to develop erosion prevention and sediment control requirements for

http://www.nrcs.usda.gov/technical/efotg/

http://www.bwsr.state.mn.us/cs/costsharemanual.pdf


stormwater management within the NRCS grant and project specification documents. Currently, this stormwater requirement sheet is included in the site requirements – erosion and sediment control job sheet, which is part of the project. This document is included with the site requirements job sheet instead of the grant contract because the requirements are field documents and therefore in the hands of the persons doing the construction activities. The following statement appears as an introduction to the requirements:

“Conservation projects with more than one acre of non-cropland soil disturbance are operating under an exclusion from National Pollution Discharge Elimination System (NPDES) permitting requirements for construction site stormwater discharges. The following provisions must be implemented to provide construction site erosion prevention and sediment control for these projects to avoid the need for an NPDES permit. For all smaller conservation practice construction projects, these provisions should be implemented to the extent practical and feasible.”

The BMPs for erosion prevention and sediment control in the site requirement job sheet are consistent with the BMPs established in part 7090.2030 that owners and operators conducting construction activities pursuant to this conditional exclusion must include in their activities. Item B also provides for the use of other design standards and specifications approved by state and federal conservation programs. This is necessary because both EQIP and State Cost Share Program have a procedure to consider a variation from existing practice standards (i.e. a variance procedure), and because the State Cost Share Program allows the use of design standards certified by a registered professional engineer in addition to NRCS practice standards in the Field Office Technical Guide. The corresponding State Cost Share Program policy is found in the BWSR State of Minnesota Cost Share Manual, Part V Technical Information. Approval by the state or federal program under which the project is being conducted is reasonable because this process ensures that the project will not be conducted using other non-approved standards and specifications which may not be applicable to the types of projects under this conditional exclusion or as protective of the environment. Part 7090.2030 Best Management Practices (BMPs) Required for Conditional Exclusion Projects Subpart 1 establishes the requirement that owners and operators responsible for construction activities that meet the requirements for a conditional exclusion must include the BMPs set forth in this rule part. These BMPs are categorized into five groups and are described in subparts 2 to 6. Because application for a construction stormwater permit, and subsequently the development and implementation of a SWPPP which contains site specific BMPs, is not required for these conditionally excluded projects, BMPs for these projects are established in these proposed rules. If these activities were conducted under a construction stormwater permit, the owner/operator would be required to implement the BMPs in the permit therefore; the requirement to include BMPs for these construction activities is a reasonable requirement. Subpart 2. Minimize size of disturbed area. Where permanent vegetation must be disturbed, the area of disturbance must be limited to the minimum required for the project. Carefully planned preservation of existing vegetation minimizes the potential of removing or injuring existing trees, vines, shrubs, and grasses that protect soil from erosion. The best way to prevent erosion is to not disturb the land. In order to reduce the impacts of construction activity, projects should be designed, wherever possible, to avoid disturbing land in sensitive areas of the site (e.g.,


natural watercourses, steep slopes). Mature vegetation has extensive root systems that help to hold the soil in place, thus reducing erosion. In addition, vegetation helps keep soil from drying rapidly and becoming susceptible to erosion. Retaining permanent vegetation by limiting the disturbed areas on a construction site can greatly reduce the amount of sediment that is picked up in stormwater runoff. By keeping the sediment out of the runoff, other BMPs such as silt fence can work more effectively and will require less maintenance. Subpart 3. Sediment control. This item requires that buffers and/or sediment control BMPs be installed down gradient of land disturbing activities on conditionally excluded projects. Sediment control is any practice that traps soil particles after they have been detached and moved by rain, flowing water, or wind. Sediment control BMPs are usually passive systems that rely on filtering or settling the particles out of the water or wind that is transporting them. Sediment control BMPs include those practices that intercept and slow or detain the flow of stormwater to allow sediment to settle and be trapped. These practices can consist of installing linear sediment barriers (such as silt fence, sandbag barriers, and straw bale barriers), providing fiber rolls, gravel bag berms, or check dams to break up slope length or flow, or constructing a sediment trap or sediment basin. For short term (five days or less) conservation practice projects where the land was already disturbed and not stabilized prior to the start of construction, the Agency proposes that sediment control practices not be required. The short time that the site will be under construction and the beneficial nature of these projects (taking a disturbed area and stabilizing it); make these projects a benefit to the environment. The Agency does not want to discourage these conservation practices by adding costs to the project with potentially little benefit. Subpart 4. Soil stockpiles. This item requires that soil stockpiles must be placed in a location where they will not be subject to erosion from channelized flow. If stockpiles are placed within 300 feet upslope of a surface water or tile inlet for more than three days, or when precipitation and runoff are imminent, a buffer or sediment controls must be used. Due to the steep slopes found on most stockpiles they are often the most highly erodible location in the project area. Requiring buffers and/or sediment control BMPs down gradient of the stockpile, as described in subpart 3, will reduce the chance of sediment from the stockpile being discharged from the site. Stockpiles in place for less than three days have a reduced chance of sediment discharge into a surface water because on average precipitation events occur in Minnesota approximately once every three days. Subpart 5. Temporary stabilization. This item requires seeding and temporary stabilization for exposed soil areas on the project site that are no longer actively being worked. Seeding alone is not considered temporary stabilization. Temporary stabilization is an erosion prevention BMP that protects the soil surface and prevents soil particles from being detached by rainfall, flowing water, or wind. All inactive soil disturbed areas on the project site, and most active areas prior to the onset of rain, should be protected from erosion. Soil disturbed areas may include relatively flat areas as well as slopes. Typically, steep slopes and large exposed areas require the most robust erosion prevention practices; flatter slopes and smaller areas still require protection, but less costly materials or practices may be appropriate for these areas.


To be effective, erosion prevention BMPs for slopes at disturbed areas must be protected from concentrated flows. Some erosion prevention BMPs can be used effectively to temporarily prevent erosion by concentrated flows. These BMPs, used alone or in combination, prevent erosion by diverting, conveying and discharging concentrated flows in a manner that prevents soil detachment and transport. For slopes 3:1 or steeper, the Agency proposes that mulch or erosion control blanket be installed on the slope within seven days after final grading. For example, straw mulch installation usually consists of placing a uniform layer of straw and incorporating it into the soil with a studded roller or anchoring it with a tackifier stabilizing emulsion. Straw mulch protects the soil surface from the impact of rain drops, preventing soil particles from becoming dislodged. Erosion control blankets are mattings of natural materials and are used to cover the soil surface to reduce erosion from rainfall impact, hold soil in place, and absorb and hold moisture near the soil surface. For slopes between 3:1 and 10:1 and slopes flatter than 10:1 the Agency proposes effective temporary stabilization be installed within 14 days and 21 days respectively, after final grading. For these flatter slopes due to the short term, small budget, and conservation nature of these projects the Agency will accept any of the following temporary stabilization methods if they prove effective on the site: 1) compact the soil surface of concentrated flow areas to reduce soil erodibility, 2) grade along the contour and use surface roughening techniques such as horizontal slope tracking with tracked equipment, 3) apply mulch or erosion control blanket, and 4) install check dams such as fiber rolls, sand or gravel filled berms and/or geotextile erosion barriers across concentrated flow areas such as waterways. While some of the temporary stabilization methods for flatter slopes may not be traditional methods employed on the majority of construction sites (compaction), the Agency recognizes the voluntary and beneficial nature of these projects which usually results in the stabilization of an eroding area and will allow these practices if they prove effective on the site. Subpart 6. Final stabilization. The Agency proposes that final stabilization BMPs which will achieve 70 percent vegetative cover on disturbed soil areas be required when the project has been completed. Final stabilization is usually accomplished through permanent seeding with a mulch or blanket over the seed to establish perennial vegetation on a disturbed area. Final stabilization has been achieved when the disturbed areas on the site have a vegetative cover density of 70 percent and all other portions of the site are covered by permanent erosion control materials such as rip rap or impervious surface. It is intended to stabilize disturbed areas in a manner compatible with the intended use and adjacent stakeholders. Once it is established, permanent vegetative cover is very effective in controlling soil erosion. Until the area is stabilized mulch should be used to provide protection (see subpart 5 above). Vegetation protects the soil from erosion by raindrop impact and overland flow. Vegetation also maintains the infiltration capacity of soil, thereby reducing the volume of runoff that will occur. Once established, permanent seeding which results in a good vegetative cover can reduce soil erosion rates by 99 percent (see the MPCA guidance manual Protecting Water Quality in Urban Areas, Chapter 6, Erosion Prevention and Sediment Control). The manual is available on the internet at http://www.pca.state.mn.us/water/pubs/sw-bmpmanual.html.

http://www.pca.state.mn.us/water/pubs/sw-bmpmanual.html


Final stabilization practices should begin to be installed according to slopes and timeframes laid out in subpart 5. On slopes 3:1 or steeper final stabilization work must begin within seven days of last working in an area, within 14 days if the slope is between 10:1 and 3:1, and within 21 days if the slope is flatter than 10:1. If construction is completed after the fall seeding cutoff date dormant seeding and/or any of the temporary stabilization practices listed in subpart 5 that are effective and appropriate for site conditions must be used. In this case steps must be taken as soon as possible the following spring to ensure final stabilization is achieved on the disturbed soil areas of the site. 7090.2040 Construction Activity Minimum Requirements The common goal of stormwater management programs is to improve water quality by reducing the pollutants contained in stormwater discharges. Progress towards this goal can be achieved through the development and implementation of a stormwater pollution prevention plan (SWPPP). This part establishes the minimum requirements for submitting an application for an NPDES/SDS construction stormwater permit, specifically the development of a SWPPP, and the recordkeeping requirements for these plans. Subpart 1 requires owners of constructions activities that require a permit to complete a SWPPP before submitting a permit application and before conducting construction activity. The permit application is submitted jointly with the operator. The SWPPP identifies how owners and operators conducting construction activities will reduce pollutants in stormwater runoff to protect water quality. The SWPPP must incorporate specific BMPs applicable to the construction site.

This rule is not a new requirement for the construction program. The Phase I construction program required applicants to complete a SWPPP that included specific requirements before applying for permit coverage. This requirement remains the same under the Phase II construction program. Because the development and implementation of a SWPPP is the primary requirement of a construction stormwater permit, and the SWPPP serves as a guide to assure compliance with the terms and conditions of the permit, it is reasonable for owners and operators of regulated construction activities to complete and adhere to a SWPPP as required. Subpart 2 establishes recordkeeping requirements for SWPPPs. A copy of the SWPPP must be kept on site and made available to the Agency for inspection. The SWPPP can be kept in either the field office or on-site vehicle. This is necessary because the SWPPP contains site-specific plans and BMPs that are designed and must be implemented to reduce the amount of polluted stormwater runoff entering water bodies. The SWPPP should be readily available to the site operator for reference because the operator is typically the person who has overall responsibility for implementing the SWPPP. Because the operator has day to day operational control of the site, and/or the ability to make changes to the plans and specifications related to the SWPPP, the operator should be knowledgeable about site-specific conditions and the practices in the SWPPP to address stormwater runoff. Therefore, it is more likely that the components of the SWPPP will be implemented if it is available at the construction site. For these reasons the requirement to retain a copy of the SWPPP on site is reasonable, and doing so is not overly burdensome to the site operator.


Additionally, in an effort to streamline the permit application process and require from applicants only what is needed and will be reviewed by the Agency, except in certain cases, applicants for a construction stormwater permit are not required to submit their completed SWPPPs with their application. Exceptions to the non-submittal of a SWPPP with a permit application are those projects that disturb 50 acres or more that have a discharge point on the project site that is within 2000 feet of, and flows to, a special water listed in Appendix A of the construction stormwater permit, as incorporated by reference in these proposed rules, or waters listed as impaired under section 303(d) of the CWA. However, applicants that are not required to submit a SWPPP are required to certify that they have completed their SWPPP before submitting their application. Requiring that the SWPPP be made available to the Agency for inspection within a specific timeframe is reasonable because the Agency does not maintain a copy of the SWPPP, unless it has specifically requested one. The Agency believes 72 hours is a reasonable amount of time. 7090.2060 Subdivision owner registration Residential or commercial construction projects often change ownership before construction of homes or businesses on the site begins or is completed. For example, an original developer may subdivide and sell a portion of their property on a construction site to various homebuilders or to future tenants of a business, commercial or retail development. This part establishes the regulatory requirements for those construction sites where the owner or operator changes due to the sale of a portion of the property. These subdivision requirements address the change of coverage when a portion of the permitted property is sold. Where the owner or operator of an entire project changes after a permit application has been submitted, the construction stormwater permit requires the new owner or operator to submit an application for permit transfer/modification within seven days of assuming control of the site or commencing work on-site, or the legal transfer, sale of closing on the property. Under these proposed rules, a new owner or operator that acquires ownership of a portion of property that is covered under an existing construction stormwater permit has two options for how they choose to comply with the requirements for permit coverage; either obtain permit coverage or submit a subdivision registration. Item A sets forth the option of obtaining permit coverage and developing a SWPPP. For any number of reasons, a new owner or operator may not want to be covered under another party’s permit. Under this option, they can obtain their own permit coverage. This option is consistent with the permit requirements for construction activity under part 7090.2010, subpart 2. Item B sets forth the option of submitting a subdivision registration form provided by the Agency within seven days of assuming operational control of the site. The submittal of a subdivision registration form ensures permit coverage for the new owner or operator without requiring submittal of a permit application and application fee. Additionally, it also allows the Agency to track permit coverage at construction sites with multiple or numerous owners or operators for administrative and inspection or enforcement purposes. The requirement to submit the subdivision registration on a standard form ensures consistency and provides for ease of processing by Agency staff. The requirement to submit the form within seven days is consistent with the time period in the construction stormwater permit for the submittal of an application for permit transfer/modification.


Additionally, under item B, subitems 1 and 2; for the portion of the site that their construction activities will impact, the new owner or operator must either implement the original SWPPP for the site or develop and implement their own SWPPP in accordance with the permit for the site. The subdivided portions of a permitted construction site all may not be alike due in part to differences in the construction plans for the site, and site topography, location, and proximity to receiving waters. Specific BMPS, not identified in the original SWPPP for the site, may be needed to address such differences. This option allows flexibility for the new owner or operator to either implement the original SWPPP for the site if they determine it adequately addresses their site specific conditions, or develop and implement their own SWPPP. This option meets the regulatory intent of the construction stormwater permit which is to protect water quality through the required implementation of the SWPPP for the site. Item C establishes the requirement for the new owner or operator to comply with the applicable requirements of the permit and the SWPPP. This proposed rule provides Agency Compliance and Enforcement Program staff a regulatory tool that can specifically be used to cite noncompliance when a new owner or operator acquires ownership of a portion of property covered under an existing construction stormwater permit and fails to obtain permit coverage or submit a subdivision registration form. As discussed previously under part 7090.2040, the permit and SWPPP contain site-specific plans and BMPs that must be implemented to reduce the amount of polluted stormwater runoff entering water bodies. Complying with the permit and the SWPPP is necessary for the protection of receiving waters and water quality. Therefore the permit and SWPPP for the site must be complied with regardless of whether or not the new owner or operator has met the requirements of either item A or B. Item D requires the new owner or operator to ensure that their activities do not render another party’s erosion prevention and sediment control BMPs ineffective. Subdivided properties are often adjacent to each other and share common property boundaries. Whether an owner or operator is working under their own permit and SWPPP or the original SWPPP for the site, when working on a portion of a larger construction site, operators must be aware of their actions and their potential for impact on adjacent properties. For example, if a site is being graded, and construction is already occurring on the adjacent site with silt fences installed, the operator needs to take precautions to ensure that the grading does not cause the adjacent silt fencing to become nonfunctional. BMPs that are damaged or nonfunctional do not meet their intended purpose which is to minimize or reduce polluted stormwater runoff and protect water quality therefore; it is reasonable to require that owners and operators conducting construction activities do not render them ineffective. 7090.3000 Industrial Program The stormwater program for industrial activity is designed to reduce the amount of pollution that enters surface and ground water from industrial facilities in the form of stormwater runoff. Stormwater discharges associated with industrial activity are regulated through the use of NPDES/SDS permits.

Parts 7090.3000 to 7090.3080 establish the requirements for permit coverage under the industrial stormwater permit program. These rules are reasonable because they clarify the administrative process that will be followed by the regulated community and they contain the minimum requirements for obtaining permit coverage.


7090.3010 Industrial Activity Permit Requirements This part establishes the permit requirements for the industrial stormwater permit program. This part is needed because the permit requirements are different for each stormwater program area. This part specifically addresses the industrial program. Subpart 1 establishes when an NPDES/SDS industrial stormwater permit is required. Activities that take place at industrial facilities, such as material handling and storage, are often exposed to stormwater. The runoff from these activities discharges industrial pollutants into nearby storm sewer systems and water bodies adversely impacting water quality. NPDES/SDS industrial stormwater permits are required for industrial activity to reduce the amount of polluted stormwater runoff that enters water bodies from industrial facilities. This rule is reasonable because it identifies under what circumstances an industrial stormwater permit is required. Item A establishes that a permit is required for industrial activity. The eleven categories of industrial activities that are regulated through NPDES/SDS permits are identified in the definition of industrial activity under proposed rule part 7090.0080, subpart 6. As discussed in this SONAR under this part, although the federal definition of industrial activity includes large construction activity, it is not regulated under the industrial stormwater permit because the Agency administers a separate stormwater permit for construction activity. It is reasonable to require a permit for industrial activity because doing so is consistent with the permit requirements for industrial activities established in 40 CFR 122.26(a)(1)(ii). Item B. The reasonableness of this item is described in part 7090.2010, subpart 1, item B. Subpart 2 establishes the time period under which an application for the construction of a new facility or new activity for which a NPDES/SDS permit is required must be submitted. This subpart requires submittal at least 180 days before the planned date of commencement of construction. This time period is intended to allow enough time for the Agency and owner/operator to address all issues so the permitting process does not result in a delay of the commencement of construction. It is reasonable to attempt to minimize any construction delays caused by the permitting process. This requirement is reasonable because the Agency needs adequate time to review and process the permit application. This rule provision was previously established under chapter 7001.1040 and has been moved to this part because it is applicable to the permit application requirements for industrial activity. One change has been made to this rule. The term “complete” was added to the language in this subpart, and the term “written” was deleted when referring to the permit application. This change is needed to provide consistency with the permit application requirements for the MS4 and construction stormwater programs. It is reasonable to require a complete application because the Agency cannot make sound decisions as to whether the proposed facility or activity will meet applicable statutes and rules unless full and complete information is received. Additionally, it is not necessary to use the term “written” because of the likelihood of submitting applications electronically in the future.


7090.3040 Industrial Activity Minimum Requirements The common goal of stormwater management programs is to improve water quality by reducing the pollutants contained in stormwater discharges. Progress towards this goal can be achieved through the development and implementation of a stormwater pollution prevention plan (SWPPP). This part establishes the minimum requirements for submitting an application for an NPDES/SDS industrial stormwater permit, specifically the development of a SWPPP, and the recordkeeping requirements for these plans. Subpart 1 requires owners and operators of industrial activities that require a permit to complete a SWPPP before submitting a permit application. The SWPPP identifies how owners and operators will eliminate or minimize stormwater contact with significant materials that may result in polluted stormwater discharges from the industrial facility. The SWPPP must incorporate specific BMPs applicable to the site.

This rule is not a new requirement for the industrial program. The Phase I industrial program required applicants to complete a SWPPP that included specific requirements before applying for permit coverage. This requirement remains the same under the Phase II industrial program. Because the development and implementation of a SWPPP is the primary requirement of an industrial stormwater permit, and the SWPPP serves as a guide to assure compliance with the terms and conditions of the permit, it is reasonable for owner and operators of regulated industrial activities to complete and adhere to a SWPPP as required. Subpart 2 establishes recordkeeping requirements for SWPPPs. A copy of the SWPPP must be kept on site and made available to the Agency for inspection. This is necessary because the SWPPP contains site-specific plans and BMPs that must be implemented to reduce the amount of polluted stormwater runoff leaving the facility. The SWPPP must be readily available for reference to the person with overall responsibility for implementing the SWPPP, typically the facility operator, who should be knowledgeable about site-specific conditions and the practices in the SWPPP to address stormwater runoff. Retaining a copy of the SWPPP at the facility will also give employees better accessibility to the SWPPP, and therefore it is more likely that the components of the SWPPP will be implemented if it is available at the facility. For these reasons the requirement to retain a copy of the SWPPP at the facility is reasonable, and doing so is not overly burdensome to the site operator.

Additionally, as discussed under the recordkeeping requirements for construction activity, in an effort to streamline the permit application process and require from applicants only what is needed and will be reviewed by the Agency, applicants for permit coverage are not required to submit their completed SWPPPs with their application. However, applicants are required to certify that they have completed their SWPPP before submitting their application. Requiring that the SWPPP be made available to the Agency for inspection within a specific timeframe is reasonable because the Agency does not maintain a copy of the SWPPP, unless it has specifically requested one. The Agency believes 72 hours is a reasonable amount of time.

7090.3060 Conditional Exclusion for No Exposure

The conditional no exposure exclusion from permitting provides regulated parties some regulatory flexibility and an incentive for stormwater pollution prevention. For example, a facility that conducts industrial activities outdoors may move the activities under cover or into a


building to prevent contamination of rainfall and stormwater runoff to meet eligibility criteria for certifying no exposure. Additionally, facilities that can certify no exposure are relieved of the requirement to obtain permit coverage and pay annual permit fees. There is no application fee or annual fee for the no exposure certification. This part establishes the eligibility requirements for industrial facilities requesting a no exposure certification, and the process the Agency must adhere to for administering the no exposure provision. These requirements are set forth in subparts 1 to 5. Subpart 1 establishes that discharges composed entirely of stormwater are not discharges associated with industrial activity if there is a condition of no exposure and the facility meets the requirements of this part. No exposure means that all industrial materials or activities are protected by a storm resistant shelter to prevent exposure to rain, snow, snowmelt or runoff. This proposed rule identifies the types of stormwater discharges that are not associated with industrial activity, and therefore would not require an industrial stormwater permit under part 7090.3010, subpart 1. This proposed rule and the requirements of this part are consistent with the federal regulations for no exposure in 40 CFR 12.26(g). Subpart 2. Applicability. The conditional exclusion for no exposure applies to those activities that are regulated under the industrial stormwater permit program. This proposed rule makes the important clarification that there are two methods by which owners and operators of industrial activities that require a permit under part 7090.3010, subpart 1, can meet regulatory requirements; either obtain a permit or certify no exposure.

With this proposed rule, the requirement for permit coverage is no longer mandatory, as it was for most categories of industrial activities under the Phase I regulations, if a facility can certify a condition of no exposure. Under Phase II, all eleven categories of industrial activities that were regulated under the Phase I regulations are eligible for the no exposure certification, except construction activity. Because these categories of industrial activity, except as noted, may not have any industrial sources of stormwater contamination or such sources can be sheltered from stormwater, it is reasonable that they are eligible for the no exposure certification. It is reasonable to not require stormwater permit coverage if there is no exposure of industrial materials and activities to runoff because if there is no exposure, a facility’s discharges are likely to be composed entirely of stormwater. If a source has no exposure of industrial activities or materials to stormwater, it should not be held to the same requirements as those sources with exposure. Subpart 3 establishes the application requirements for the conditional exclusion for no exposure. The first part of this proposed rule requires that operators certifying a condition of no exposure must submit to the Commissioner an application for no exposure certification on an Agency form. An application submittal on a standardized form provided by the Agency allows for a less onerous regulatory process and administration of the process in a consistent and efficient manner. The Commissioner is the appropriate person to which an owner or operator may apply for the no exposure certification because the Commissioner represents the responsible governmental unit (i.e. the Agency) with the authority to issue a certification of no exposure.

The second part of this proposed rule requires that an application for the no exposure certification must be submitted once every five years. This rule provision establishes a schedule for applying for the no exposure certification. Like the NPDES/SDS general industrial


stormwater permit which is issued for a five year term, the no exposure certification term is five years. Once a facility certifies a condition of no exposure, and assuming that the facility maintains its’ no exposure status, they need only apply for the no exposure certification once every five years, the same schedule as applying for industrial stormwater permit coverage. It is reasonable to limit the term of the no exposure certification in order for the Agency to assure that, at a minimum, a condition of no exposure is certified at least once every five years as required by 40 CFR 122.26(g)(1)(iii).

Subpart 4 establishes the conditions under which a certification of no exposure will be issued to facilities. This subpart identifies the administrative process that the Agency will use to determine if a certification of no exposure will be issued to a facility. Items A and B state the requirements for the process. Item A requires that a complete and signed application be submitted to the Commissioner. A facility operator must complete an application in order to determine if the facility can meet the requirements for a certification of no exposure. A completed application provides information that will aid the Agency in determining if the facility qualifies for the no exposure certification and it can provide proof to the Agency for certification purposes that a condition of no exposure exists. This requirement is reasonable because it allows the Agency to administer and implement the no exposure provision in a fair and consistent manner, and it provides the Agency with a means to hold the facility accountable for a certification of no exposure. Item B requires the Commissioner verify that there is no contact of stormwater with industrial activities using the methods contained in subitems 1 to 3. These methods are needed and reasonable because they will aid the Commissioner in verifying a condition of no exposure.

Subitem 1 establishes review of the application as a method for verification that there is no contact of stormwater with industrial activities. A review of the application is reasonable because the application requires specific information that will assist the Agency in determining if a certification of no exposure will be issued to the facility. In accordance with 40 CFR 122.26(g)(4)(iii), the application must include a checklist of industrial materials or activities that the applicant must confirm are not, or will not be, exposed to precipitation or stormwater runoff, currently or in the foreseeable future. The Agency must review the application and checklist to determine if the applicant is eligible for the no exposure exclusion. Subitem 2 establishes inspection of the facility as a method for verification that there is no contact of stormwater with industrial activities. An inspection of the facility is reasonable because it is an appropriate test for verifying no exposure at a facility and the Agency has the technical ability to conduct such an inspection. Subitem 3 establishes that the Commissioner may use means other than those identified in subitems 1 and 2 to verify there is no contact of stormwater with industrial activities. This proposed rule is needed so that the Agency has the flexibility to consider any additional information that may assist the Agency in verifying a condition of no exposure and issuing a certification of no exposure. For example, the Agency may need to call the facility and discuss the information provided in the application, or if applicable, the facility’s permit file, if the Agency has doubts about the facility’s no exposure claim. Since the intent of item B is to provide sufficient information for the Commissioner to verify that there is no contact of


stormwater with industrial activities, it is reasonable to allow for other means that are reasonably reliable and needed to make that verification. Subpart 5, items A to E establish the limitations of the conditional no exposure exclusion and identify specific circumstances that may affect an industrial facilities’ eligibility for the no exposure exclusion. These proposed rules are needed and reasonable because they will assist a facility in determining if they are eligible for the no exposure exclusion. These rule provisions are consistent with 40 CFR 122.26(g). Item A establishes that construction activities that require a permit under part 7090.2010, subpart 1, are not eligible for the conditional no exposure exclusion. This rule is needed to identify what types of activities are not eligible for the no exposure exclusion. The nature of construction activity itself excludes it from a condition of no exposure. Construction activity occurs outdoors where sediment, the main pollutant of concern, is exposed to rainfall and snowmelt. Generally, sediment cannot be entirely sheltered from stormwater, which is a requirement for the no exposure exclusion. Therefore, it is reasonable that construction activity is not eligible for the conditional exclusion for no exposure.

Item B establishes that the no exposure exclusion is available on a facility wide basis only. This means that an operator must be able to certify a condition of no exposure at the entire facility site in order to be eligible for the no exposure exclusion. This is reasonable because if a condition of no exposure exists at only part of the regulated facility, the remaining parts of the facility would require coverage under an NPDES/SDS industrial stormwater permit. Therefore, the facility would not be relieved of the requirement to obtain permit coverage and pay permit fees. In addition, the area of the facility that was no exposure would be covered under the permit, because the permit is issued for the entire facility and on a facility wide basis, not for a specific activity. Item C establishes that the no exposure exclusion is conditional and if the conditions for the no exposure exclusion no longer apply to the facility, the facility must comply with the permit requirements under part 7090.3010. This means that once a facility has certified no exposure, the facility must maintain its’ no exposure status or obtain permit coverage. Failure to maintain a condition of no exposure or obtain coverage under an NPDES/SDS industrial stormwater permit can lead to the unauthorized discharge of pollutants to waters of the state, which can result in penalties under the CWA. Therefore, if a facility operator anticipates a change in circumstance where the conditions for the no exposure exclusion would no longer apply, the operator should apply for and obtain permit coverage before the change in circumstance. A facility may apply, or reapply, for the no exposure exclusion anytime during the term of permit coverage. This rule provision is reasonable because a certificate of no exposure is only valid as long as the conditions of no exposure, as identified in the application and in this rule part, are met. The intent of the no exposure provision is to promote a condition of permanent no exposure. However, the EPA recognizes, and the Agency concurs, that there are circumstances where the permanent no exposure of industrial activities or materials is not possible. Under such conditions, materials and activities can be sheltered with temporary covers (e.g. tarps) between periods of permanent enclosure or until permanent closure can be achieved. Additionally, because the application for no exposure does not specify every situation, the Agency will address this issue as necessary and on a case-by-case basis.


Item D establishes that a certification of no exposure is nontransferable. Because the operator is the person responsible for the facility claiming the no exposure exclusion, this means that if a new operator takes over the facility, the new operator must complete and submit a new application for no exposure certification. The purpose of the application for no exposure certification is: 1) to aid the facility operator in determining whether a condition of no exposure exists at the facility or site, and 2) to provide the necessary written certification that allows the facility to be relieved of permit obligations, provided that the facility meets the definition of no exposure and the requirements of this rule. Therefore, it is reasonable to require the new operator to submit a new application because doing so aids the operator in understanding the conditions and requirements that must be met for a claim of no exposure. Item E establishes that the Commissioner has the authority to deny the no exposure certification and require permit coverage under part 7090.3010. Under part 7090.3010, a permit is required if the Commissioner determines that a discharge may cause or contribute to a violation of an applicable state or federal water quality rule or regulation. This proposed rule is reasonable because there may be circumstances where a facility can meet the conditions of the no exposure exclusion, however, stormwater discharges from the facility may cause adverse impacts on receiving waters. As stated previously, the no exposure exclusion from permitting provides regulated parties an incentive for stormwater pollution prevention. For example, a facility that conducts industrial activities outdoors may move the activities under cover or into a building to prevent contamination of rainfall and stormwater runoff to meet eligibility criteria for certifying no exposure. However, in some cases, an industrial facility may make major changes at a site to achieve no exposure, such as constructing a new building or cover to eliminate exposure or constructing structures to prevent stormwater contact with industrial materials and activities. These types of major changes can increase the impervious area of the site, such as when a building with a smooth roof is placed in a formerly vegetated area. Subsequently, increased impervious area can lead to an increase in the volume and velocity of stormwater runoff, which in turn can result in a higher concentration of pollutants in the discharge, since fewer pollutants are naturally filtered out. For this reason, increased impervious area is addressed in one of the questions on the application for the no exposure certification. The application requires that the facility indicate if they have paved or roofed over a formerly exposed, pervious area in order to qualify for the no exposure exclusion, and identify, in acres, approximately how much impervious area was created to achieve no exposure. This question does not have an effect on a facility’s eligibility for the no exposure exclusion. However, this question provides additional information that will aid the Commissioner in determining if this type of major change would cause stormwater discharges from the facility to have an adverse impact on receiving water, and if permit coverage may be needed to address the concern.


7090.3080 No Exposure Certification The first requirement of this part requires that the application for no exposure certification must include a certification statement. The certification statement requires applicants to certify the truth and accuracy of the information in the application for no exposure, based on their inquiry of the person or persons who manage the facility, or those persons directly responsible for gathering the information in the application. It is reasonable to include this requirement to enable the Agency to retain its authority to administer the NPDES permit program and the conditional exclusion for no exposure. It is also reasonable to include this requirement for applicants for the no exposure certification because it will encourage applicants to inquire into the truth and accuracy of the information they intend to submit. The second requirement of this part requires that the person who signs the application must certify a condition of no exposure as required by federal regulations. The application for the no exposure certification requires that an authorized person must sign the no exposure certification statement, certifying to a condition of no exposure. The authorized signature may be the principal executive officer, vice president, or more typically, the person responsible for the overall facility operations, the facility operator. It is reasonable to require an applicant to make the certification because the authorized signature of the person certifying no exposure authenticates the certification process and allows the Agency to verify the condition of no exposure at the facility if necessary.

V. CONSIDERATION OF ECONOMIC FACTORS A. Summary These proposed stormwater rules are not expected to have a noticeable impact on general economic activity in Minnesota. Within a few sectors that are affected directly by the rules, economic impacts are expected to be greater in relative terms but not to the extent that significant losses result. As costs and benefits are distributed throughout the regional economy, they are expected to have a slightly regressive effect. Households in the lower 20 percent of the income scale will incur relatively higher costs. However, distributed costs will be relatively slight, which means the regressive effects are likely to be minimal. B. Findings Construction Sector Nearly all affected construction firms are small businesses. They are distributed throughout the state in a pattern that roughly compares to population distribution. Most construction firms are located in the Twin Cities’ metropolitan region. Residential construction firms will incur the largest portion of costs associated with the proposed rules. Road construction firms will also incur cost. MNDOT informally estimates that the proposed rules will increase costs by 1.0 to 1.5 percent. Total annual costs incurred by the construction sector range from $12 million to $15 million. (Informal estimates by MPCA staff indicate this range may be a bit wider – from $10 million to $20 million.) This is 0.1 percent of total output for the construction sector and 0.01 percent of general economic output for the state. Cost estimates for Minnesota are based on a national


estimate made by EPA. Costs are not expected to have a significant negative impact on the construction sector generally or on the residential housing market. Municipal Separate Storm Sewer Systems (MS4s) About 200 Municipal Separate Storm Sewer Systems will be affected by the proposed rules. Most of them are located in or near Minnesota’s population centers. Annual cost estimates for MS4s cover a broad range – from $10 per household to $50 per household. This implies total cost estimates of $10 million to $50 million. Estimated costs are expected to have varying impacts among affected cities: PERCENTAGE OF CITIES IMPACTED AT SPECIFIED LEVELS Cost estimate Proportion of 2002 revenue

Low ($10/household)

High ($50/household)

More than 3% --- 27%

1% to 3% 20% 68% Less than 1% 80% 5%

Affordability becomes an issue when costs are discussed. A criterion that EPA uses in another water-related program proved useful in this case. EPA’s criterion evaluates the affordability of costs for drinking water systems. It assumes that system operators cover costs by including them in user charges. Nearly all affected cities pass the affordability test if it covers all households. On the other hand, if the test is limited to households in the lowest 20 percent of the income scale, about a third of affected cities do not pass the test. This finding indicates that the proposed rules will probably have a slightly regressive impact. Households in lower income categories will incur relatively higher costs if user charge increases are evenly distributed. Comparing estimated costs to household income indicates that, despite regressivity, the proposed rules are unlikely to have significant negative impacts. PERCENTAGE OF HOUSEHOLD INCOME Cost estimate Household income category

Low ($10/household)

High ($50/household)

All households 0.01% 0.1%

Lowest 20% 0.03% 0.1%


Other Affected Groups Proposed stormwater rules will affect groups other than construction firms and MS4s. Other affected groups include:

• Animal feedlots. • Conservation-oriented projects on farm properties which are subsidized by the Natural

Resources Conservation Service, the Board of Water and Soil Resources, and other federal and state government entities.

• Facilities owned by municipalities which qualify as “industrial” structures. The MPCA could not find readily available base data or cost estimates for facilities in these groups. We expect that, just as with construction firms and MS4s, cost impacts will be relatively light for other affected groups. Costs Incurred by State Agencies Program administration at the MPCA is estimated to require the equivalent of about 25 full-time staff members, at current staffing levels. This staff complement is expected to cost $1.9 million per year. Another $1.6 million will be incurred to contract for needed services. As noted above, MNDOT estimates the proposed rules will add 1.0 to 1.5 percent to road construction costs. Consequences or Costs of Not Adopting the Proposed Rules If the proposed rules are not adopted: a) pollutant loading to surface waters will increase because fewer BMPs will be installed, b) surface water quality will decline, and c) a series of program-related effects may make administration harder. Usually, environmental costs comprise the benefit estimates associated with regulatory changes. Benefits are the estimates of costs not incurred because regulations promote environmental improvements. Benefits associated with the proposed rules are expected improvements in:

• Recreational opportunities. • Flood control. • Aesthetic values. • Values increased for people who, although they do not use water resources, derive

pleasure from knowing that water quality has improved. C. Qualifications Generally, information in this section of the SONAR relies on estimates that should be read with appropriate caution. Bear in mind also that estimates are needed because the MPCA does not have (and is likely never to have) detailed and complete information on the financial operations of groups and individuals affected by proposed rules. EPA sources contribute significantly to the estimates used here. EPA develops a Regulatory Impact Analysis (RIA) for all significant rule proposals. Congress set the limit of significance at $100 million. Any proposed federal rule that will cost over $100 million per year must have an

RIA. These analyses routinely include benefit-cost studies*, economic impact analyses and cost-effectiveness evaluations. Since EPA completed an RIA for its proposed stormwater rules, the MPCA used this analysis for its first cost estimate. Benefits estimated in the RIA also provide a starting point for discussion of the costs of not adopting the proposed rules. However, data limits, uncertainties and ambiguities are scattered throughout EPA’s RIA. When possible, we have noted cases in which a limiting factor causes an over- or underestimate. Comparable evaluations cannot be made in all cases. Some limits make findings so ambiguous an evaluator cannot tell how an adjustment would affect the estimate.

This summary is kept intentionally brief. Reviewers who want to know more about the assumptions and methods that support estimates will find general descriptions in the next section – LEGAL REQUIREMENTS AND ESTIMATION METHODS.


* The terms “benefit-cost” and “cost-benefit” are different labels for the same thing. Use of one term or another indicates nothing more than the college at which the writer (or editor) studied economics.

1. LEGAL REQUIREMENTS AND ESTIMATION METHODS Three sections of Minnesota law require economic analyses of MPCA rules. Minn. Stat. § 14.131 and §14.002 apply to rules made by all state agencies:

By the date of the section 14.14, subdivision 1a, notice, the agency must prepare, review, and make available for public review a statement of the need for and reasonableness of the rule. The statement of need and reasonableness must be prepared under rules adopted by the chief administrative law judge and must include the following to the extent the agency, through reasonable effort, can ascertain this information: (1) a description of the classes of persons who probably will be affected by the proposed rule, including classes that will bear the costs of the proposed rule and classes that will benefit from the proposed rule; (2) the probable costs to the agency and to any other agency of the implementation and enforcement of the proposed rule and any anticipated effect on state revenues; (3) a determination of whether there are less costly methods or less intrusive methods for achieving the purpose of the proposed rule; (4) a description of any alternative methods for achieving the purpose of the proposed rule that were seriously considered by the agency and the reasons why they were rejected in favor of the proposed rule; (5) the probable costs of complying with the proposed rule, including the portion of the total costs that will be borne by identifiable categories of affected parties, such as separate classes of governmental units, businesses, or individuals;

(6) the probable costs or consequences of not adopting the proposed rule, including those costs or consequences borne by identifiable categories of affected parties, such as separate classes of government units, businesses, or individuals; and (7) an assessment of any differences between the proposed rule and existing federal regulations and a specific analysis of the need for and reasonableness of each difference. The statement must describe how the agency, in developing the rules, considered and implemented the legislative policy supporting performance-based regulatory systems set forth in section 14.002. The statement must also describe the agency's efforts to provide additional notification under section 14.14, subdivision 1a, to persons or classes of persons who may be affected by the proposed rule or must explain why these efforts were not made.

§14.131 Statement of need and reasonableness.

The legislature recognizes the important and sensitive role for administrative rules in implementing policies and programs created by the legislature. However, the legislature finds that some regulatory rules and programs have become overly prescriptive and inflexible, thereby increasing costs to the state, local governments, and the regulated community and decreasing the effectiveness of the regulatory program. Therefore, whenever feasible, state agencies must develop rules and regulatory programs that emphasize superior achievement in meeting the agency's regulatory objectives and maximum flexibility for the regulated party and the agency in meeting those goals.

§14.002 State regulatory policy.


Two other laws apply only to the MPCA:

Subdivision 1. In addition to the other powers prescribed by law, the agency shall have the powers and duties prescribed in this section. In exercising all such powers the agency shall give due consideration to the establishment, maintenance, operation and expansion of business, commerce, trade, industry, traffic and other economic factors and other material matters affecting the feasibility and practicability of any proposed action, including, but not limited to, the burden on a municipality of any tax which may result there from and shall take or provide for such action as may be reasonable, feasible and practical under the circumstances.

§115.43 Powers. Subdivision 6. Pollution control agency; exercise of powers. In exercising all its powers the pollution control agency shall give due consideration to the establishment, maintenance, operation and expansion of business, commerce, trade, industry, traffic, and other economic factors and other material matters affecting the feasibility and practicability of any proposed action, including, but not limited to, the burden on a municipality of any tax which may result there from, and shall take or provide for such action as may be reasonable, feasible, and practical under the circumstances.

§116.07 Powers and duties. Some of these required analyses are interrelated. It will help this presentation if the analyses are taken out of statutory sequence and addressed in an order that flows from one point to the next. Because regulated firms often want most to know what proposed rules will cost, this section will first address the issues related to individual firms and then proceed to cover large-scale effects. A. Description of Proposed Rules' Expected Costs (§ 14.131, subd. 5) We begin with a discussion of the factors that impose cost. Separate parts of the proposed rules will be examined to see what sorts of costs they will impose on which stakeholders. Our analysis will take a broad view of the word "cost." We cannot estimate all costs in numerical terms. Time and resource limits confine our numerical estimates to readily available data. We do not have the funds, people or time needed to conduct the surveys that would add precision to local estimates. In the past, this resource constraint imposed severe limits on impact analyses. Fortunately, internet sources now supply data and information that can substitute in part for local surveys. The substitution can never be complete, of course. But a reasonable effort to understand and describe aggregate economic effects can minimize the influence(s) of local exceptions. It is clear in the statutes that apply to the MPCA that our evaluations should go beyond simply estimating the expenses regulated groups will incur when they comply with the proposed rules. But it is not clear how much further the analysis should go in its cost estimates. We propose to use a cost classification system that covers the subject broadly, yet keeps it within manageable limits. Categories of Estimated Cost Government administration of environmental statutes and regulations

rule and program development • • •

monitoring enforcement



• •

• • •

•

• •

Private sector compliance expenditures capital operating (includes maintenance and waste disposal)

Negative costs (i.e., benefits)

natural resource inputs (improvements in community health and general productivity) worker health innovation stimulation (technological change that lowers compliance costs and increases competitiveness)

General economic effects (changes that occur outside of the directly affected sectors)

product substitution (shifting consumer demand to goods and services whose production pollutes less – distribution of employment and income shifts) employment trade

“Cost,” in this general system, relates to the value and use of resources. An action imposes cost if it requires the use of resources – such as capital, labor, skills, time, and natural systems. If resources are used for one activity (e.g., building a plant) and they cannot be used for other activities, then the individual or organization that owns the resources incurs a cost. Direct and easily accountable costs dominate the government administration and compliance expenditure categories, which usually makes these elements; cost estimates fairly reliable. As we move to consideration of general economic impacts, it becomes harder to relate cost or portions of cost to specific activities, such as compliance with environmental regulations. Linking cost to resource use brings environmental values into consideration. Installing, operating and maintaining pollution control equipment: a) imposes costs on some firms or individuals, and b) reduces the public costs of pollution. Engineers and accountants work hard to understand direct costs. They have a personal interest in cost accounting and cost estimation because accuracy in this area can be an important criterion in their performance reviews. Estimators of indirect cost often rely on less direct methods, such as surveys or model-based analysis. This practice can make indirect cost estimates incompatible with direct cost estimates. Indirect cost estimates usually rely on existing information. Limited budgets and schedules usually keep the MPCA from conducting surveys that cover specific rules. When indirect cost information proves too hard to find, qualitative analyses will describe potential impacts. Without the precision of numbers, our evaluations of indirect cost will often use comparable conditions to describe expected impacts. For example, an expectation of increased costs that lead to price changes for specific goods or services can be compared with overall spending patterns. The comparison will help us judge whether price changes in one sector are likely to have significant effects on, say, overall employment or output. Comparative analysis is an essential part of economic evaluations. Deciding whether economic changes are significant or not, requires understanding of both general economic and sector-specific contexts.

Permits, rules and costs

Stormwater permits and stormwater rules have developed on an unusual

schedule. Permits preceded rules. General permits for construction activities and Municipal Separate Storm Sewer Systems took effect in 2003. This action was taken in order to meet federal rules. Groups affected by the proposed rules have already begun to incur compliance costs. A very strict reading of these circumstances might conclude that the rules will impose no new costs because the permits have already done so.

Our estimates will not assume that the rules impose no cost. Instead, our estimates assume that permits and rules are integral when it comes to cost, even though they do not take effect at the same time. Administrative rules and the permits issued to make them effective look like a single force to the groups affected by them. A reasonable cost estimate should respect the point of view of those who incur cost.

B. Scope, Distributive Impacts and Benefits of Proposed Rules (§ 14.131, subd. 1 and 6) Aggregate estimates require an understanding of how many business firms, local governments and individuals will either incur costs or realize benefits because of the proposed rules. The scope of the cost analysis will be defined by:

• the number of firms, governments and individuals that will have to comply with proposed rules;

• their relative size; • their location; • the implementation schedule for proposed rules; and • the number, size and location of firms and other organizations that will benefit when the

proposed rules take effect. Most of the information needed for cost analysis is available from conventional sources. Benefit analysis is more problematic. A new feature of the Administrative Procedures Act (APA) requires agencies to describe “the probable costs or consequences of not adopting the proposed rule …” Generally, economic studies refer to “probable costs or consequences” as benefits. Note that the MPCA is not required to estimate the monetary value of benefits. However, we will describe benefits with enough specificity to identify who will be made better off by the proposed rules. Benefits associated with environmental rules generally come from improvements in environmental conditions. Environmental benefits can cover a broad range of effects, from reductions in local human health impacts to improvements in global conditions. Different rules



will cause different benefits, and some may be quite wide-ranging. However, our analysis for MPCA rules will be confined to benefits realized within Minnesota. The usual sequence for developing a benefit estimate follows a more or less regular pattern:

• Locate pollutant releases and classify them by type (e.g., phosphorus, sediment). • Estimate the extent of pollutant releases. This estimate should cover both time and space.

It is often helpful if the estimate can be subdivided into different regions and time periods.

• Describe the potential damage caused by pollutants. • Estimate the relative risks for people and other “communities,” such as wildlife or

forests. Findings at this stage may report, for example, that people experience an increased risk of incurring a named health effect. Risk is often reported in terms of a number of cases per 100,000 people in the affected community.

• Estimate the monetary value of likely damages. This step usually requires extensive survey research.

In 1998, a 13-member panel assembled by the MPCA spent $98,000 and took five months to find that it would take another $4 million and four years to build a “Cost-Benefit Analysis” model. This model was to estimate benefits and costs for water quality standards applied in specific watersheds. The panel did not estimate the time and cost involved in actually using the model. It seems unlikely that the MPCA will ever have the resources needed to develop comprehensive benefit analyses. It is more likely that the MPCA will rely, as in this SONAR, on EPA and other sources. Benefit evaluations will then focus on differences between national (or other) studies to see what they can tell us about likely benefits in Minnesota. Compiling cost estimates and benefit descriptions encourages comparisons. There is a natural tendency to ask whether benefits exceed costs. In rule making cases a formal benefit-cost analysis will not be possible because, although the MPCA will estimate costs to a reasonable extent, monetary benefits generally will not be estimated. The two sets of values will not be presented in commensurate terms. However, some useful and informal comparisons can be made if we can avoid the temptation to treat the analyses as accounting reports. Some of the useful findings we can expect from a non-quantitative comparison of benefits and costs are:

• estimates of the minimum level of expected costs - these estimates can be compared with the costs of other public programs to get an idea of their relative value

• broad indications of the scope and magnitude of expected benefits • an indication of how much a group of environmental benefits will cost - which will help

reviewers to consider whether the benefits identified are worth the estimated cost. C. Administrative Costs (§ 14.131, subd. 2) Administrative costs are sometimes considered direct and sometimes indirect. Legislative preference calls for separate consideration of administrative cost. The MPCA and MNDOT will incur new costs – MPCA as an administrator and MNDOT as a regulated organization. If reasonable information is available, total cost estimates will also take into account the less direct but potentially significant costs that all parties incur to develop and negotiate proposed rules.


D. Aggregate Economic Impacts (§ 115.43 and § 116.07) After direct and administrative costs are estimated, we move on to look at costs incurred outside of the sectors directly affected by the proposed rules. In this section, we will first describe in some detail how the MPCA generally approaches economic impact analysis. Then, in the last two paragraphs, we describe specifically the methods used for the proposed stormwater rules. Regulated firms have a few ways to cover the costs imposed by rules. They can:

• increase selling prices and pass costs along to consumers, • cut costs in other parts of their operations, • borrow to pay for new equipment, • make productivity-enhancing changes that lower production costs, • accept less profit at the end of the year, or • devise a combination of the other five methods that causes the least disruption of

business. Whatever course a business firm chooses to cover the costs of a rule change, it affects other firms and interest groups. Consumers may face higher prices. Some suppliers may find orders decreasing. Workers may get fewer hours of work or lower pay increases. In extreme cases, some workers may lose their jobs. Owners and shareholders may earn lower returns on their investments. For every negative development, a potential offset occurs for business sectors that supply alternative products and services.

We do not have direct ways to trace all of the interrelated connections between regulated firms and the rest of the economy. Instead, we rely on economic models and survey-based data to estimate the general economic effects of proposed rules. It is a three-step process. First, economic models calculate “control forecasts” that provide baseline values. Next, variables within the models are changed to simulate the effects of proposed rules, and the models’ estimates are recalculated under changed conditions. This step yields a “simulation forecast.” Finally, we calculate differences between control forecasts and simulation forecasts. These differences define the economic impacts of the simulated changes. The graph below shows how the process works for an estimate of employment impacts:

Jobs


Control forecast (baseline) Simulation forecast

program start Time The difference between the simulation forecast and the control forecast estimates the impact of the proposed change on statewide employment. When the simulated effect is above the control forecast value, higher employment is expected. Lower employment is expected when the simulation drops below the control forecast. Comparing simulation and control forecast yields an estimate of net impacts. An Input/output (I/O) model known as IMPLAN is used to simulate economic impacts by solving a set of equations that describe the interrelated activities of the state’s economy. National data compiled by federal agencies comprise IMPLAN’s statistical foundation. I/O tables, developed by the U.S. Commerce Department’s Bureau of Economic Analysis, provide a foundation structure for the model’s description of Minnesota’s economy. The I/O tables describe how economic sectors relate to each other as buyers and sellers. The relationships described focus on “backward linkages.” They show what business sectors demand from their input suppliers. Consideration of “forward linkages” will compare demand for the output of individual sectors to total demand from households, business firms and government. Bear in mind also that I/O tables do not forecast future values. They are static models that show what would happen in other sectors if output or employment in a business sector was different and nothing else changed. I/O results have to be combined with other analyses to evaluate future developments in a comprehensive way. An economy, like a natural system, consists of identifiable groups that interact in complex and dynamic ways. Business firms and nonprofit organizations produce goods and services (supply) to meet the consumption needs (demand) of people and their organizations. Governments tax firms and individuals to pay for public goods and services. A firm’s output can satisfy either final demand (e.g., groceries) or intermediate demand (e.g., paper stock), in which case the product is used to make new goods or provide new services. Each economic sector in the I/O tables relates to every other sector in a way that is based on the resources it demands from other sectors. Likewise, each sector supplies some part of its final output to other sectors and/or to final demand. The strength of these relationships varies, depending on the specific conditions of each sector. Consider an example:

Hypothetical Input/Output Table

Agr. Mfg. Svcs. Final demand Gross output Agriculture 60 60 20 60 200 Manufacturing 40 25 90 80 235 Services 10 70 55 105 240 Value Added 90 80 75 245 Gross output 200 235 240

Rows in the I/O table show the outputs from one sector that provide intermediate inputs (e.g., raw materials used to manufacture goods) for itself and other sectors along with output of final goods and services. The service sector in this table provides 10 units to agriculture, 70 units to manufacturing, 55 units to itself and 105 units to final demand. This adds up to 240 units, which is called gross output. Columns show each sector’s demand for goods and services, and the “value added” produced in each sector. The service sector buys 20 units of agricultural output, 90 units of manufacturing output and 55 units of its own output. Value added is the measure of the extra value that economic activity within a sector adds to the inputs it buys. Notice that the value added is equal to gross output less the sum of inputs demanded. In the example, value added for the service sector is 240 - (20+90+55) = 75. The example simplifies a more complex process. IMPLAN’s basic tables have over 500 economic sectors. The value of the I/O tables for this analysis is that changes made in one sector have effects in all other sectors. This feature means that the IMPLAN model provides a comprehensive way to take indirect effects into account. The model also takes into account the relative strengths of intersectoral impacts, which depend on the extent to which some sectors rely on other sectors for productive inputs or economic demand. Thus, changes induced in one sector will have only slight effects on another sector that either demands little of the changed sector’s output or supplies few of the changed sector’s inputs. Conversely, a heavily dependent sector will be strongly affected by induced changes. A Social Accounting Matrix extends IMPLAN’s I/O foundation to include the “institutions” (e.g., households, government) that demand final goods and services from business firms. Results from modeled simulations are defined in terms of a set of standard economic variables. Usually, readers are interested in employment and output changes. Other measures of economic impact are also available (e.g., value added), but they will be provided only if they are called for later on. In order to extend the analysis beyond IMPLAN's static results, other sources will be used to adapt the I/O findings to economic forecasts. Finally, we will evaluate the likelihood that proposed rules will influence economic growth. Although critics often maintain that environmental regulations slow economic growth, proponents sometimes assert that regulations may improve growth prospects under the right conditions. Sorting out a rule's implications for growth will be the last part of the economic impact analysis.



E. About EPA’s Regulatory Impact Analysis (RIA) EPA develops RIAs of all significant rule proposals. Congress set the limit of significance at $100 million. Any proposed rule that will cost over $100 million per year must have an RIA. These analyses routinely include benefit-cost studies, economic impact analyses and cost-effectiveness evaluations. Since EPA completed an RIA for its proposed stormwater rules, the MPCA used this analysis for its first cost estimate. Benefits estimated in the RIA also provide a starting point for discussion of the costs of not adopting the proposed rules. Although EPA’s estimates can give us a useful start, they cannot remain our only source of information. EPA’s estimates are dated and limited. National cost estimates, for example, have limitations that make local applications more indicative than predictive:

a) A number of EPA’s estimates rest on the findings of surveys that have significant limits. For example, the estimate of cost incurred by 5,040 municipal separate storm sewer systems (known as MS4s) derives from a survey of 1,600 municipalities. Only 121 municipal officials answered the survey. Of that number, only 56 returned usable responses. Comparable surveys yielded comparable results for other elements of EPA’s cost estimates. Low survey response rates do not invalidate results. But they do widen confidence intervals, sometimes to the point that findings become ambiguous. This affects the accuracy of EPA’s cost estimates.

b) Census data from 1980 to 1994 informed EPA’s estimate of the growth rate for construction activity. This is a national estimate, and it is very low because the time period covered includes two recessions. More recent data and popular news reports show much higher growth rates for construction in Minnesota. A Minnesota estimate based on EPA’s growth rate will probably be low. • Informal communications with the Builders’ Association of the Twin Cities (BATC)

reinforces doubts about EPA’s growth rate. Although BATC focuses on the numbers of buildings constructed, not on growth rates, they report a steady demand for housing which exceeds supply. This is a stronger sign of high growth than low growth.

c) EPA’s cost estimates do not cover all affected sectors. Some of the exclusions make sense (e.g., feedlots, oil and gas firms) because legal measures set the affected sectors beyond the scope of the proposed rules. Other exclusions make less sense. They will be discussed in more detail in the next section. For now, it is enough to note that the exclusions imply that EPA underestimates total costs.

d) Administrative costs estimated in the RIA cover only the time needed to handle permit applications and waiver requests. Program administration will require more than paper handling. The MPCA has incurred and expects to incur in the future costs related to program development, inspection, monitoring and enforcement. This is another indication that EPA’s total cost estimate is low. In this case, however, the underestimate is not expected to be significant because administration is a relatively low part of total cost.

RIAs also include benefit estimates, which merit attention in this case because the 2003 Legislature required the MPCA to describe “the probable costs or consequences of not adopting the proposed rule …” This defines, in general terms, the object of environmental benefit analysis. The MPCA has had neither time nor resources to develop an original benefit estimate. Instead, we will describe EPA’s benefit estimate and discuss its applicability in Minnesota.


EPA used two methods to develop a range of estimated values for the environmental benefits of its proposed stormwater rules. In the first estimate, a large national model was written to simulate the environmental impact of the proposed rules. EPA refers to this as its “top down” approach to benefit estimation. The second estimate derives from data and information found in water quality reports that state agencies compile. This is EPA’s “bottom up” approach. Both methods yielded estimates of water quality changes expected from the proposed rules. Both used findings from a national study to estimate the economic value of water quality changes. As with the cost estimates, there are limits to the usefulness of EPA’s benefit estimates:

a) The national model simulates water quality changes in less than 20 per cent of the country’s rivers and streams. Impacts are excluded for other rivers and streams and for lakes and estuaries. This means the national model probably underestimates total benefits.

b) Benefit estimates are limited to impacts that result from construction and MS4 controls. As with the cost estimates, these exclusions indicate that benefits are underestimated.

c) Although the RIA maintains that the national model went through a “groundtruthing” process, there is no description of the process or its findings. “Groundtruthing” compares a model’s findings with real world results to see how well the model fits with actual experience. This sort of analysis has become popular as a way to test modeled findings. EPA’s national model is complex enough to merit a groundtruthing analysis. Without groundtruthing results, reviewers are left in doubt of the model’s accuracy. This makes the model’s findings somewhat ambiguous.

d) Another source of ambiguity is the national model’s statistical foundation. After the RIA describes a set of potential data sources and their shortcomings, it reports only that EPA used “various studies or data sources …” to estimate pollutant loadings to affected waters. (USEPA, 1999b, p. E-9)

e) Economic valuations, in both approaches, come from a 1993 national study. Basic data for this study derive from a 1983 contingent valuation survey. The phrase “contingent valuation” refers to the basic question posed to survey respondents. They are asked how much they would be willing to pay for a hypothetical good, such as cleaner air or water that is offered for sale in a hypothetical market. When the RIA was written, the survey data were nearly twenty years old. EPA adjusts basic survey findings twice in order to update them. First, the Consumer Price Index is used to adjust dollar values for monetary inflation. This is a generally accepted practice. Next, basic values get an “attitude” adjustment. This adjustment derives from a public opinion poll conducted annually by the University of Chicago. This poll found that, over the relevant time period, public attitudes about environmental matters have improved by 30 percent. The increase is used to support a 30 percent increase in the value of environmental benefits. This step is questionable because the basic terms of the valuation study and the opinion poll are not commensurate. In general, there is reason to be cautious in the use of findings that rest on 30-year-old survey data.

f) Estimates derived from EPA’s bottom up approach assume a direct, proportional relationship between the water area affected by proposed rules and the number of households affected. This assumption takes no account of variability in population density.

g) Basic data for the bottom up estimate derive from water quality reports written by state agencies. They are known as the 305(b) reports. Inter-state variability in 305(b)


reporting methods is widely recognized as a problem. If the 305(b) reports are incommensurate, the data foundation for the bottom up estimate is compromised.

h) In the bottom up analysis, willingness to pay estimates associated with construction sector regulations derive from a single North Carolina study that was conducted in 1993. It is questionable whether a single regional study provides an adequate base for a national estimate and whether it is reasonably useful in Minnesota.

When all is said and done, EPA estimates that total benefits range from $671 million to $1,096 million. The range of total costs extends from $848 million to $981 million. EPA concludes that “both approaches show that the benefits are likely to exceed costs.” (USEPA, 1999b, p. 6-37) It is unclear how this conclusion was reached. Although the evaluation introduces the notion of likelihood, there is nothing in the RIA that indicates how values within the estimated ranges are distributed. It seems reasonable to expect that, if the estimates are distributed in an unusual pattern, the RIA would have noted it and described the distribution. A more reasonable assumption is that the estimated are normally distributed. If this assumption is correct, the midpoints of both distributions are the likeliest future results. The midpoint of the benefit estimate is $883.5 million. The midpoint of the cost estimate is $914.5 million. This does not support the assertion that benefits are likely to exceed costs. Data limits, uncertainties and ambiguities are scattered throughout EPA’s RIA. When possible, we have noted cases in which a limiting factor causes an over- or underestimate. Comparable evaluations cannot be made in all cases. Some limits make EPA’s findings ambiguous, and we cannot tell how an adjustment would affect the estimate. Despite its shortcomings, the RIA serves as a good starting point and basis of comparison with other analyses. F. Summary In the end, we will have a composite view of the economic effects of proposed rules that meets the requirements of Minnesota statutes. This composite picture will analyze:

• the scope of proposed rules, • their costs, • their consequences and benefits (without estimating monetary values), and • their economic impacts

2. QUANTITATIVE ESTIMATES* Direct cost estimates begin with information about business firms or governments or consumers. Some environmental rules require firms to spend time and money on actions that reduce pollution. Cost estimates for rules of this sort take into account the time and expense required to design, install, operate, and maintain pollution control equipment. Other rules require firms to monitor environmental conditions and make regular reports. These sorts of rules may or may not

* Data timeliness can become an issue for economic impact estimates. Readers will find in this section that the data and information used are sometimes two or three years old. Without primary data collection resources of its own, the MPCA has to rely on other data collection agencies. Generally, the MPCA uses the most recent data and information that are available. However, it still takes time to collect, compile, reconcile and analyze data. There is some risk that important developments may have occurred between now and the time data were first available. SONAR readers should take this risk into account in their evaluations of MPCA impact analyses.


impose equipment expenses, but they still require someone to write and transmit reports and someone to receive and evaluate them. A direct cost estimate generally develops from a set of average cases that reasonably cover the scope of proposed rules. Typical distinguishing features for different cases are size, age, location, and industrial sector. Analysts build a set of representative cases that cover the full scope of proposed rules. Cost estimates for each case take into account the time and expense required to comply with proposed rules. A total cost estimate compiles estimates for each case and multiplies average costs by the number of firms in the class that the case represents. For example: Table 1. Elements of a total cost estimate.

Size class

Average cost estimate

Number of firms Total cost

A $ 50,000 200 $ 10,000,000 B $ 100,000 100 $ 10,000,000 C $ 250,000 25 $ 6,250,000

Total $ 26,250,000 Two sectors of Minnesota’s economy - construction and local government - will feel most of the direct effects of proposed stormwater rules. Construction firms and local governments will have to meet the conditions of new permits. They will have to take steps that minimize the effects of stormwater runoff. (State government agencies - mainly the MPCA - will incur new administrative costs. These are not expected to be a significant fraction of total state government spending.) After the rules' direct impacts occur, secondary effects will ripple throughout the economy as consumers and sellers deal with financial decisions made in directly affected sectors. For example, construction firms are expected to pass all new costs along to their customers. This will lead consumers to adjust their budgets and make changes in other business or household purchases. Our quantitative evaluation begins with descriptions of the sectors that will be most directly affected by the proposed rules. Our cost analysis will begin with EPA's RIA for the stormwater rules they promulgated in 1999.* A. Construction Sector County Business Patterns - a Census Bureau compilation of local data - reports that there were over 15,000 construction firms in Minnesota in 2000. These firms employed nearly 120,000 people. Their annual payroll expenses were $5.4 billion.

*Find EPA’s Regulatory Impact Analysis at http://cfpub.epa.gov/npdes/docs.cfm?view=allprog&program_id=6&sort=name

http://cfpub.epa.gov/npdes/docs.cfm?view=allprog&program_id=6&sort=name


Table 2. All construction firms

Regional totals

Employment**

Annual payroll($ thousands)

Number of establishments

North 20,942 $ 809,689 3,969 Metro 79,468 $ 3,851,939 7,924 South 18,750 $ 696,412 3,255 Statewide 119,160 $ 5,358,040 15,148

Regional share of state total

North 18% 15% 26% Metro 67% 72% 52% South 16% 13% 21% ** Total number of employees in mid-March of 2000. Two sub-sectors within the construction class call for closer attention because they will incur most of the proposed rules’ regulatory costs. County Business Patterns puts some firms in a "building, development and general contracting" class and other firms in a "heavy construction" class. Other construction sub-sectors consist of specialty firms that are unlikely to incur direct regulatory costs. Some of these sub-sectors (for example, erosion and sediment control firms) will see their business increase due to increased demand. Table 3. Building, development, & general contracting

Regional totals

Employment

Annual payroll

($ thousands)

Number of

establishments North 4,502 $ 132,713 1,140 Metro 20,691 $ 1,006,212 2,404 South 3,734 $ 128,919 873 Statewide 28,927 $ 1,267,844 4,381


North 16% 10% 25% Metro 72% 79% 55% South 13% 10% 20% Firms in the "Building, development and general contracting" class comprise about 30 percent of all Minnesota construction firms. They employ about 25 percent of all construction workers and account for about 25 percent of all construction payroll expenses. The Metro region has a bit more than half of the firms in this class.


Table 4. Heavy construction

Regional totals

Employment

Annual payroll

Number of establishments

($ thousands) North 2,880 $ 177,168 325 Metro 6,697 $ 429,304 322 South 2,215 $ 127,646 267 Statewide 11,792 $ 734,118 914


North 24% 24% 36% Metro 57% 58% 35% South 19% 17% 29% Firms in the "heavy construction" class comprise about six percent of all construction firms. They employ a bit less than ten percent of all construction workers and account for a bit less than 15 percent of all construction payroll expenditures. Heavy construction firms are more evenly distributed among the MPCA's regions, although the Metro concentration remains with respect to employment and payroll expenses. The rest of the construction sector consists of a miscellaneous group that is categorized as “specialty trade contractors.” These are firms that provide specific services (e.g., electrical installations, plumbing) for general contractors. Firms in this group are unlikely to need stormwater permits. County Business Patterns also has data on firm size. Size classes are defined in terms of employment. A quick look at a simple table shows that small firms predominate in the construction sector: Table 5. Number of construction firms, by employment size class Regional totals 1 to 10 10 to 50 50 + North 3,471 458 40 Metro 6,366 1,272 286 South 2,825 397 33 Statewide 12,662 2,127 359 Share of regional totals

North 87% 12% 1% Metro 80% 16% 4% South 87% 12% 1% Statewide 84% 14% 2% Note that small firms predominate in all three MPCA regions. Similar size distribution patterns occur in the two sub-sectors that will be directly affected by the proposed rules. (The relative size of the 10-to-50 class in heavy construction is a bit higher, but the difference does not look significant.)


Two patterns stand out. First, most of the proposed rules' direct impact will be focused in the Metro region. This is not to say that direct impacts will be confined to the Metro region. It seems likely that Metro region firms have some business contacts outside of the region. But it also seems likely that the Metro region will incur the major portion of the rules' impacts. Second, the proposed rules will impact a relatively large number of small firms. Small firms are the clear majority among all Minnesota firms. County Business Patterns shows that 84 percent of Minnesota firms have less than 50 employees. However, in the construction sector, the proportion of small firms is even higher. Another source has economic statistics for the whole state and its regions. This is the IMPLAN model that was described in the introduction. Information compiled by IMPLAN shows construction firms' relative position during 2000 within state and regional economies: Table 6. Construction sector’s share of economic activity. Region Output

($ billions) Value added ($ billions)

State totals: $ 335.8 $ 184.7 North 52.5 27.9 Metro 224.2 129.9 South 58.7 26.9

Construction firms Statewide: $ 18.4 $ 6.4

North 4.1 1.3 Metro 11.1 4.1 South 3.2 1.0

Construction share Statewide: 5% 3%

North 8% 5% Metro 5% 3% South 5% 4%

Output refers to the total value of goods and services produced within a region. Value added equals total output minus expenses for purchased goods and services. Value added in IMPLAN's methodology is roughly comparable to Gross State Product. Minnesota construction sectors’ contribution to the state economy compares roughly with national shares (Browne, 2000). Within Minnesota, construction's regional shares are also roughly comparable, with the MPCA's North region being slightly above average. MPCA data show that 5,100 construction permits are now open. These are permits issued under the first phase of stormwater regulations. The Metro region has the largest share of the open permits - 51 percent. North and South regional shares are 23 percent and 19 percent, respectively. EPA estimates costs ranging from $545 million to $679 million for the parts of the stormwater rules that apply to construction firms. (USEPA, 1999, p. 4-28) This estimate is made in terms of 1998 dollars. Inflating EPA's estimate to 2002 values raises the estimate to $601 million to

$749 million. Inflation adjustments were made by using the Consumer Price Indexes for 1998 and 2002.* EPA's cost estimates derive from: a) national data on building permits and construction starts and b) BMP cost estimates compiled by the Center for Watershed Protection and the Southwestern Wisconsin Regional Planning Commission. Minnesota's general economic profile closely resembles the national economy. The figures below show sector shares of Minnesota's gross state product (GSP) and gross domestic product (GDP) at the national level. Figure 1. GSP (state) and GDP (national) shares of industrial sectors

Minnesota

Trade18%

Mining1%

Manufacturing18%

FIRE18%

Services20%

Farm/Ag.2%

TCPU8%

Government10%

Construction5%

United States

Trade16%

Mining1%

Manufacturing16%

FIRE20%

Services22%

Farm/Ag.1%

Construction4%

TCPU8%

Government12%

Source: "Compare Minnesota," DTED, 2002-2003 State and national shares of the construction sector are about the same. Assume, for estimating purposes, that national and state construction sectors will incur roughly comparable costs. Note also that Minnesota's population and economic output have, for a number of years, been near two percent of national totals. If Minnesota's construction firms incur two percent of national costs, then a statewide estimate for the construction sector ranges from $12 million to $15 million. This is about 0.1 percent of total output and 0.2 percent of value added in Minnesota's construction sector. Estimated costs in relation to the state's total output or value added are less than 0.01 percent. Three sub-sectors will be affected by the proposed stormwater rules: heavy construction, industrial and commercial construction, and residential construction. Think of the last two groups as sub-categories of the class in County Business Patterns known as “Building, development, & general contracting.” Firms that develop roads are included in the heavy construction sub-sector. County Business Patterns reports 626 “highway, street, bridge, and tunnel” firms in Minnesota - about a third of the entire heavy construction group (CBP, 2000). IMPLAN’s 2000 estimate of output related to new highways and streets is just over $1 billion. Unfortunately, we do not have data that tell us what portion of the total estimate consists of projects in the 1-acre to 5-acre size range. This is the group that the proposed rules cover. Among projects of this size, MNDOT has estimated that


* EPA's cost estimates come from a number of different sources. Data on housing starts come from US Census Bureau sources. Data bases developed by the American Society of Civil Engineers and by the Center for Watershed Protection were used to estimate the performance of BMPs. Basic cost estimates for BMPs relied on methods reported in engineering reference works by RS Means: a) Building Construction Cost Data, 56th edition, 1998 and b) Site Work and Landscape Cost Data, 17th edition, 1998.


the proposed rules will increase costs by 1.0 to 1.5 percent. Without more information about the number and size of road projects subject to the new rules, we cannot go further with this cost estimate. We will revise and extend the cost estimate if better data or information become available. “Industrial and commercial building” is another construction sub-sector. IMPLAN reports that output from this group was $4.3 billion in 2000. Given the usual size of industrial and commercial building projects, the MPCA expects that nearly all of them are already covered by the Phase I stormwater rules. Phase II seems unlikely to affect many industrial or commercial building projects. Residential building is the largest construction sub-sector - $7.8 billion in 2000 output, according to IMPLAN. The proposed rules will impose new costs on new home construction. Consider how new costs will be covered by firms that build new homes. They can either raise the prices they ask for new homes or they can cover new costs by adjusting their own resources. They can, of course, use some combination of these two methods. However, for purposes of estimating impacts, assume their choice is an either-or proposition. This assumption limits the evaluation to its extremes. Either home builders incur all new costs or home buyers incur all new costs. These two conditions should cover the full range of possibilities. Conditions in between the two extremes are not likely to have impacts as great as either of the extreme cases. If home builders cover all new costs without raising prices, they have to cut other spending. This is a condition that IMPLAN can simulate because it calls for analysis of the sector’s “backward linkages.” Bear in mind the timeless feature of IMPLAN’s impact analyses. Impacts are estimated as though they occur in a very short period. In the real world: a) change takes time, b) people and firms adapt to change, and c) regulated firms and organizations often figure out ways to reduce regulatory costs. Recall the estimate, based on EPA’s RIA that the proposed rules will impose between $12 million and $15 million of new cost on residential construction firms in Minnesota. (It was not noted above, but EPA’s estimate was limited to consideration of impacts on residential construction. Road construction and industrial and commercial construction were excluded.) If the value of new housing construction is reduced by the full $12 - $15 million, IMPLAN indicates that the largest impacts will be confined to the “new residential construction” sector. Other impacts will be spread widely among other sectors. IMPLAN shows no job losses caused by the increased cost. It appears that the impact of $12 - $15 million in new cost is not enough to have a noticeable influence on a $7.8 billion economic sector. On the other hand, consider what might happen if home buyers incur all new costs imposed by the stormwater rules. In this highest-probable-cost-to-consumers scenario, new home prices have to increase by an amount that, in total, covers the $12 - $15 million in new cost. We can get an average cost estimate by dividing the number of new homes built into the estimated cost increase. In 2002, construction started on 26,800 single family homes (U.S. Census, 2002, table 921). Using this number as a base we can estimate the highest probable average cost at $560 per house ($15 million ÷ 26,800 = $560).


Comparing this $560 average cost with the value of new homes shows the relative impact of estimated new costs. Table 7 has a selection of housing sales price reports. The first two entries relate to new home sales. Other entries relate to either all houses or existing houses. These reports are included for comparative purposes. Table 7. Survey findings on housing prices. Metropolitan Council (MHFA) average new home sale price estimate, (Star Tribune, 3-29-02)

$ 245,000

Median sales price of new privately owned one-family houses in the Midwest region, 2000 (Statistical Abstract of U.S., table 940, 2001)

$ 169,700 Median price of home sales, (Star Tribune, 7-11-02) $ 188,900 Median sales price of new privately owned one-family houses in the Midwest region, 2000 (Statistical Abstract of U.S., table 940, 2001)

$ 169,700 Median sales price of existing homes in Minnesota, 1995 - 1996, (Minn. State Demographer's Office, August 1998

$ 87,500 Median sales price of existing homes in the Twin Cities Metro region, 1995 - 1996, (Minn. State Demographer's Office, August 1998

$ 102,900 Median sales price of existing homes in Minnesota, 1999 - 2000, (Minn. State Demographer's Office, August 2001

$ 124,500 Median sales price of existing homes in the Twin Cities Metro region, 1999 - 2000, simple average (Minn. State Demographer's Office, August 2001

$ 144,125 Median sales price of houses sold in the Midwest, 2001 (U.S. Department of Commerce, 2003)

$172,600

Average sales price of houses sold in the Midwest, 2001 (U.S. Department of Commerce, 2003)

$ 201,300

Value (weighted) for all owner-occupied housing units, Minnesota - 2000 Census (U.S. Department of Commerce, 2002)

$136,100 Prices in the Twin Cities metro region are at the high end of the range for new homes (Minnesota State Demographer’s Office, 1998 p. 3). The second entry, from the U.S. Census Bureau, can serve as the low end of the likely price range for new homes (U.S. Census, Statistical Abstract 2002, table 9-24). Our $560 average cost estimate is 0.2 to 0.3 percent of reported median prices for the region. If a home buyer had to cover the full average cost increase, it would add $4.50 to the monthly payment for a 30-year mortgage financed at a 7.5 percent annual rate. This does not seem high enough to discourage new home sales.

Further notes on road construction: 1) Small cities. Although EPA’s RIA did not take road construction costs into account, a follow-up analysis did. Congress required EPA to make new estimates of costs incurred by small municipalities. (USEPA, 1999a, p. II-7) Among the items covered in the new report, EPA estimated the costs added to small road construction projects. Analysis focused on cities with populations less than 50,000 in order to evaluate the new costs incurred by the group of municipalities considered most vulnerable. EPA used Census Bureau data to estimate the extent and frequency of new costs. Assuming that a) few municipalities would start projects in any given year and b) projects have a 20-year economic life, EPA estimated that new costs would average just over $1,600 per year for each municipality. When compared with average revenues, the average cost was less than one per cent per year. EPA also assumed that, if new costs would not impose an excessive burden on smaller municipalities, they would not prove too expensive for larger municipalities. 2) Large agencies. The MNDOT will also incur new costs. The first phase of stormwater regulations affected MNDOT’s operations. The second phase will add to the cost of smaller projects. (MNDOT, 2003) MNDOT’s informal estimate is that the proposed rules will add 1.0 to 1.5 percent to construction costs. MNDOT also estimates that the proposed rules will add about ten percent to design time. These are informal estimates that should be reviewed if there occurs a need for further evaluation. B. Municipal Separate Storm Sewer Systems (MS4s) A bit less than 200 municipalities will need to comply with the proposed rules. Appendix G contains a list of the affected counties, cities, townships and villages. They are located in or near Minnesota's largest cities. Affected cities in the Twin Cities Metro region have a combined population of a bit more than 2.5 million. Minneapolis and St. Paul are already covered by the first phase of stormwater regulations. Their combined population is about 700,000. After deducting the Minneapolis-St. Paul population, the net result is an affected population of 1.8 million in the Twin Cities Metropolitan area. Combined population in the other affected cities is a bit more than 600,000. So total population affected by the proposed rules will be roughly 2.6 million, about 52 percent of the state’s total population. EPA's RIA estimates that municipalities will incur costs, in 1998 dollars, ranging from $9.08 to $9.16 per household (USEPA, p. 4-7). Inflating EPA’s estimates to 2002 values yields estimates that range from $10.02 to $10.11 per household. With roughly 2.5 people per household in both the Metro and non-Metro regions, we estimate that affected MS4s have a total household population of about one million. This implies annual costs of about $10 million, if EPA's national estimate holds true in Minnesota. EPA bases its estimates on a mailed survey done by the National Association of Flood and Stormwater Regulatory Program Rule – SONAR 105


Stormwater Management Agencies (NAFSMA). 1,600 survey forms were mailed in 1998 to potential MS4 jurisdictions. NAFSMA got 121 returns, of which 56 had cost information (USEPA, 1999, 4-5). This rather low response rate encouraged MPCA to look for other MS4 cost estimates. Some independent reviews suggest EPA’s estimates are low. A General Accounting Office (GAO) review in 2001 found: “USEPA’s attempts to forecast costs have not encompassed the entire program or are out of date.” (GAO, p. 26) Estimates from other sources reinforce GAO’s findings. Annual costs per household in Los Angeles County are expected to fall within a $12.50 to $18 range (CRWQCB, p. 17). A national consultant estimated in 2000 a range of $7 to $20 per capita for annual costs, or $18 to $50 per household, assuming 2.5 persons per household. This estimate is “… a rule of thumb based on the author’s experience working in over 100 communities …” (Reese, p. 386). Local surveys indicate that costs in Minnesota will fall near the middle of the ranges for national estimates:

• A Metropolitan Council survey in 2000 found that local stormwater utilities have average annual rates of about $24 for residential customers (median = $19). This survey occurred in 1998 and 1999. It covered 140 communities in the Twin Cities Metropolitan Area. Forty-five of these communities reported that they have set up stormwater utility operations. Nearly all of the Metropolitan Council’s survey respondents are on our list of MS4s that will be affected by the proposed rules. (Metropolitan Council, 2000)

• A regional survey, done by a private engineering firm, reported 2001-2002 rates for MS4s in Minnesota and Iowa. This survey found annual stormwater charges of $31. The survey covered 920 communities in Minnesota and Iowa. It received 128 responses with respect to stormwater rates. (Howard R. Green Company, 2002)

• An informal survey of local communities found in 2004 that average residential rates are $38 (median = $36). This survey is part of continuing study by municipalities in the Twin Cities region. Municipal decision makers want to know the relative fiscal position of local systems. Local staffs use internet and phone contacts to compile information about stormwater charges. The study is currently led by the city of Cottage Grove. Eagan and Plymouth contributed to earlier versions of the study.

Along with their cost estimates, non-EPA reviewers note that regulatory flexibility in the proposed rules affects forecasts by widening their reasonable range. City officials have options when deciding how to comply with the rules. Cities experience such a wide variety of conditions and choices, analysts have to forecast in broad ranges in order to keep their estimates within reason. If, as non-EPA reviewers predict, Minnesota cities incur costs higher than EPA estimates, total costs could range from $12.5 million to $50 million. Estimated costs should be viewed from different angles to put them into perspective. Data and information from a variety of sources give us four different views of the relative cost of the proposed rules. First, consider estimated costs in relation to cities' total expenditures. The Minnesota State Auditor's Office compiles fiscal information from cities. It classifies cities in two groups, distinguished by population. Large cities (population at least 2,500) report annual fiscal results. Latest actual expenditure reports for this group come from 2001. Small cities (population under 2,500) report less often. Latest actual expenditure reports for this group come from 1999.

Cities' expenditures ($ millions)

All larger cities (2001) $ 3,181 All smaller cities (1999) $ 241 Total $ 3,422

If city expenditures are roughly proportional to population, the MS4 cities’ share of total expenditures is about $1.8 billion ($3.4 billion X 52%). The estimated cost range of the proposed rules varies from 0.7 percent to 2.8 percent of total expenditures. Consider from another perspective the relative costs incurred by individual cities. Records compiled by the State Auditor's Office have revenue estimates for 154 of the almost 200 cities whose MS4s are required to have permits. Assuming the highest value in EPA's cost estimate range, most MS4s (over 80 percent) costs will amount to less than one percent of estimated revenues. About 20 percent will incur costs that range from one to three percent of estimated revenues. Only one MS4 will incur costs that are greater than three percent of estimated revenues. The solid line in Figure 2 shows how costs are distributed relative to revenue, based on EPA’s cost estimate.

Figure 2: Estimated cost as a percentage of revenue in 154 cities

0%2%4%6%8%

10%12%

1 154

Per c

ent o

f est

imat

ed

reve

nue

for 2

002

EPA's estimate Reese's estimates

On the other hand, a different cost distribution results if we use the average of Reese’s cost estimates ($34 per household). The distribution pattern is the same, but the proportions are different. In this scenario, costs for 42 cities are three percent or more of 2002 revenue. Most cities’ costs fall within a range of one to three percent of 2002 revenue. The table in Appendix K shows the distribution of estimated costs in detail. Comparing the relative impacts of costs estimated by EPA and Reese, the difference appears significant enough to merit a closer look at the bases for the cost estimates. Quality varies for the three sets of estimates presented here. None of the estimates derives from formal, peer reviewed research papers. This does not mean the estimates have no value. Instead, the estimates’ quantitative support is not of the highest quality. You can find fault with any of them.

• EPA’s estimates derive from a national survey that was conducted by a trade association. Of the 1,600 questionnaires mailed, only 56 had usable cost estimates – a rather small sample (3.5 percent).

• The California Regional Water Quality Control Board’s (CRWQCB) estimates come from cities’ budget reports. Cities in Los Angeles County had no standards to guide them in making their reports. The CRWQCB noted that the reports “included questionable



estimates and creative accounting.” (CRWQCB, p. 7) Final estimates rely on a set of adjustments designed to offset reporting errors.

• Mr. Reese’s estimates rest on judgment that is based on his experience with over 100 communities. No further explanation for his estimates is given.

These cost estimates cover a significant range. Cost increases of 0.5 percent or less can be considered noticeable, but not significant. On the other hand, cost increases near or above three percent are significant and merit further attention. Recall the GAO’s finding that the proposed rules offer permittees many choices in deciding how to comply. Given a wide range of choice, it seems reasonable to expect that cities will favor cheaper options. City planners might, for example, consider ways to share program expenses with others. Consider also the bases for the three cost estimates. EPA’s estimates come from a national survey with a low response rate. CRWQCB’s estimates come from permittees’ self-reported results, which required adjustment. Mr. Reese’s estimates derive from professional experience with over 100 permittees. Each information source has strengths and weaknesses. None of them demonstrates a clear advantage over the others. Although surveys and professional observation do not show the likely distribution of average costs, the proposed rules’ flexibility suggests that costs will tend toward the lower end of the range. We expect that self-interest will lead city planners toward low-cost choices when they set compliance strategies. New costs for MS4s will probably be closer to EPA’s $10 per household estimate than to Mr. Reese’s high estimate of $52 per household. Another perspective on cost relates to a federal criterion that is based on estimates of households’ ability to pay for water service. EPA has an “affordability threshold” that it uses in deciding whether to allow variances under the Safe Drinking Water Act. The affordability criterion relates regulatory changes to household income. If a regulation causes an increase in water bills that makes the total bill exceed 2.5 percent of median household income, the affected water authority can apply for a variance. EPA relied on data from the national Consumer Expenditures Survey to develop the 2.5 percent limit. (USEPA, 1998) The National Rural Water Association (NRWA) has questioned the use of median household income as the basis for an affordability criterion (Rubin). They recommend instead that EPA use a lower income category, the first quintile, as an indicator of affordability in lower income households. EPA’s Science Advisory Board reviewed the affordability criterion and found that, although it is appropriate for its immediate purpose, the criterion has limits. (SAB, p. 4) The Science Advisory Board also recommended that EPA consider ways to take into account the effect that cost increases have on lower income households.


Although EPA’s affordability criterion is applied in a different context, we can use it here to relate household incomes to the estimated costs of proposed stormwater rules. It seems likely that most cities will cover new costs by changing sewer charges. This will not necessarily be the case in all cities, since the proposed rules do not specify how permittees must pay for new programs. We compared cost estimates with respect to sewer charges, water charges and the sum of water and sewer charges. The three evaluations cover the likeliest methods that municipalities will use to distribute new costs. Data compiled by the State Auditor’s Office show cities’ annual expenses for water services and sewer services. Tables 8 and 9 in Appendix L, derive from the financial reports of 154 cities that will be affected by the proposed rules. These tables also have median household income data from the 2000 Census. Along with basic data, the tables show how different cost estimates interact with different levels of affordability criteria. Table 8 assumes EPA’s $10 per household cost estimate. Table 9 uses the midpoint of Mr. Reese’s cost estimates, $34 per household. Both tables add estimated costs to different charge levels and compare them with a) 2.5 percent of median household income and b) 2.5 percent of median income in the first quintile. This last measure, income in the first quintile, comes from the NRWA suggestion to evaluate regulatory impacts on households in the lowest 20 percent of the income scale. Consider the results in terms of the number of cities for which the costs of water bills and sewer bills exceed EPA’s affordability standard. Table 10 summarizes results in Tables 8 and 9. Table 10. Costs relative to household incomes in 154 affected cities.

Number of cities in which costs exceed 2.5% of median household income.

Cost/ household

Water charges

Sewer charges Water & sewer charges

combined $10 0 0 2 $34 0 0 2

Number of cities in which costs exceed 2.5% of median income in the 1st quintile.

Cost/ household

Water charges

Sewer charges

Water & sewer charges combined

$10 31 26 77 $34 33 31 85

Some features to note in the summary:

• Estimated cost matters less than the income level chosen for the affordability criterion. • In about half of the affected cities, estimated costs exceed the NRWA criterion that

combines both water and sewer charges. Estimated costs exceed the NRWA criterion around twenty percent of the time if the criterion is based on either water or sewer charges.*

• Service charges for utilities tend to impose the highest relative cost on households in the lowest income groups. This issue will be covered in more detail in another section.

* Recall that the NRWA’s recommended procedure is to apply the 2.5 percent criterion to median income in the first quintile (i.e., the lowest 20 percent) of the household income distribution.


Finally, a Department of Revenue report provides another look at the relative size of estimated costs. (Revenue, 2003) The Department of Revenue annually studies how tax impacts are distributed among households in different income classes. Households are categorized in groups that comprise ten percent of income, or “deciles.” These groups can be combined into quintiles that correspond to the NRWA’s recommended affordability criterion. Since the tax incidence study covers the entire state, an adjustment is needed to bring statewide aggregate estimates down to a level that corresponds to the regions affected by the proposed rules. We noted earlier that cities with affected MS4s have a total population equal 52 percent of the statewide total. If we assume that households, income and local taxes are distributed in the same proportion, we can get another perspective on relative costs.* Table 11. Lower income households and MS4 costs ($ millions) Statewide MS4 region (52% of

total) Total First quintile Total First

quintile Households 2,322,380 464,476 1,208,000 242,000Household income $132,094 $4,116 $68,700 $2,100Percent of total 3.1% 3.1%Local, residential property taxes $2,452 $132 $1,300 $69Percent of income 5.4% 5.3%Total local taxes $3,701 $228 $1,920 $120Percent of income 6.2% 6.2% Total stormwater costs

High $50 $3.1Low $10 $0.6

High estimate, % share of:

Income 0.1% 0.1%Residential taxes 3.8% 4.5%Total local taxes 2.6% 2.6%

Low estimate, % share of:

Income 0.01% 0.03%Residential taxes 0.8% 0.9%Total local taxes 0.5% 0.5%

* The MPCA expects that the proportional income assumption underestimates the real case. Incomes in the Twin Cities metro region tend to be higher than incomes in the rest of the state.


It appears that the costs of the proposed rules’ MS4 section will have a slightly greater impact on households in the lowest 20 percent of the income scale. The reliability of our proportionality assumption will not affect this finding unless the income distribution among classes is significantly different between the affected region and the rest of the state. We do not now have any reason or means to adjust our estimates on the basis of differences regional income distributions. In summary, the estimated costs of proposed stormwater rules with respect to MS4s:

• are 0.7 percent to 2.8 percent of reported expenditures in 154 affected cities. • are, in most cases, less than three percent of 2002 reported revenues in 154 affected

cities. • fall below an “affordability” criterion that EPA uses in administration of drinking water

regulations. (Under an alternative criterion that gives greater weight to lower income households, estimated costs would exceed the criterion about 20 percent of the time.)

• will have a slightly regressive impact with respect to household income classes. We expect municipal governments to distribute MS4 costs through local user fees and local taxes. This method of cost distribution will reduce households’ disposable income and consumption. We cannot use our input/output model to test directly the impacts of reduced household consumption. Households and business sectors do not interact in IMPLAN’s system of equations. However, we can take a look at household consumption patterns and evaluate relative effects. IMPLAN reports that Minnesota households’ total demand for commodities was about $124 billion in 2000. If consumer demand is uniformly distributed, total demand in the areas affected by the proposed rules was about $54 billion. Recall that our cost estimate for MS4s was $10 million to $50 million. If new costs reduce household disposable income by the same amount, it will lower consumer demand by 0.02 percent to 0.1 percent. Demand reductions will probably not be uniform because consumers can choose how to economize when costs increase. However, it seems unlikely that impacts of less than 0.1 percent could have noticeable effects on the state’s economy.

As the proposed rules reachedlist of regulated MS4s. The teoriginally designated in EPA’smunicipalities if reasonable cr MPCA, in consultation with inseparate list for the late additioto the list were not included inspreadsheets support the basicenough to make adjustments rito one element may not be cordeveloped a separate analysis evaluation. It appears that inserting the latresults. Estimated costs for thbasic cost estimate is used. Onestimates, all but one of the neto three percent of 2002 revenbasic evaluation. In a similar way, the new groutest for drinking water systemspass the test regardless of the bhouseholds in the first quintile

• Roughly half pass if eieither EPA’s or Mr. Re

• Only four pass if both either EPA’s or Mr. Re

C. Other Affected Sectors Feedlots Although the proposed rules do operators will still have to adoptrules has applied since 1995 to ffive acres. Now, the rules will a Almost 30,000 feedlots are regisresponsibilities. Feedlots with cpermits. Notification requiremenand location with respect to surf

Stormwater Regulatory Program Rule

Late additions to the MS4 list

their final form, 44 designated municipalities were added to the rm “designated” refers to the set of MS4s that were not stormwater rules. States are given discretion to designate iteria are met.

terested groups, developed designation criteria for MS4s. A ns is included in Appendices H and I. The municipalities added the basic set of evaluations for MS4s. A set of interrelated evaluation. The spreadsheets are complex and extensive sky and difficult. There is a significant risk that changes made rectly transferred to other elements. Instead, the MPCA for the newly added MS4s and compared the results to its first

e additions into the basic MS4 evaluation would not change the is group are less than one percent of 2002 revenue, if EPA’s the other hand, if we use the midpoint of Mr. Reese’s

w group are expected to incur costs ranging from one percent ue. These ranges are comparable to the ranges found in the

p has comparable results with respect to EPA’s affordability . When the test is applied to the general population, nearly all asic estimate (EPA or Reese) used. When the test is limited to

of the income scale:

ther water or sewer charges are used for comparison (based on ese’s cost estimates).

water and sewer charges are used for comparison (based on ese’s cost estimates).

not require feedlots to have stormwater permits, feedlot , install and maintain BMPs. The first phase of the stormwater eedlot operators whose construction projects cover more than pply to projects in the one- to five-acre range.

tered with the MPCA. Different size classes have different apacity for over 1,000 “animal units” must have NPDES ts and permit coverage for smaller feedlots depend on their size

ace water.

– SONAR 112


From time to time, most feedlots will make changes that call for stormwater BMPs. Feedlot operators will have choices comparable to those of construction firms. The schedule and distribution of construction operations at feedlots will be irregular. Moreover, BMP choices will be idiosyncratic. Irregular scheduling and a broad range of compliance choices make it unreasonable to estimate costs by using average values. However, costs are expected to remain manageable. The MPCA expects feedlot operators to take stormwater BMPs into account as they make expansion plans. Likewise, operators are expected to act on plans they believe are affordable. Soil Conservation Programs Government programs at two levels subsidize local projects that align well with the goals of the proposed stormwater rules. The NRCS and BWSR offer grants that reduce the local costs of projects designed to reduce erosion and control sediment runoff. Proposed rules waive permit requirements for projects that meet NRCS or BWSR guidelines. Landowners who qualify for the waiver do not have to apply for permits before the begin construction for a conservation-oriented project. Conservation services have along history at both levels of government. NRCS traces its roots back to 1935. BWSR’s origins go back to 1937. Conservation programs have a considerable scope. With respect to activities potentially related to stormwater permits, NRCS reports that it assisted in 294 projects in 2002 and 1,071 projects in 2003. Estimated total values for the subsidized projects were $8 million and $9 million, respectively. Informal reports for the current year indicate further program expansion. It seems reasonable to expect that some of these projects would not be undertaken if landowners had to make a stormwater permit application and pay a $400 fee. However, there is no way reasonably to estimate how many projects would not occur if the proposed waiver is not offered. “Industrial” Activities of Municipalities A number of local governments own and operate facilities in which activities defined as “industrial” occur - facilities such as landfills, airports and maintenance sheds. These facilities will have to comply with the industrial requirements of the proposed rules. They can qualify for an exclusion if they are able to certify that their industrial materials are protected from contact with stormwater. This is the so-called “no-exposure” exclusion. Since adoption of last year’s general rule, a number of municipalities have registered with the MPCA. They have described the facilities that will meet conditions of the general permit. In all, over 130 municipalities and townships have registered nearly 200 facilities. We do not have enough information about the facilities to make a cost estimate. D. State Administration and its Effect on State Revenues MPCA administrative costs will relate to:

• review and approval of permit applications • review of required reports

o stormwater pollution prevention plans o monitoring reports

• enforcement activities


• education and technical assistance Managing these responsibilities will require the equivalent of 25 full-time employees (FTEs). Their time will be split among three program areas:

Municipal Construction Industrial Activity FTE Activity FTE Activity FTE

Support staff

0.8

Permit, annual report, and Outstanding Resource Value Waters review

2.8

Support staff and permit processing

3.2

Support staff, permit processing and annual report processing

1.6

Data compilation and management, shared with local units of government.

0.4

Data compilation and management

0.3

Data compilation and management

0.4

BMP effectiveness monitoring 0.4 BMP effectiveness monitoring and standards development

0.8

BMP effectiveness monitoring

0.1

Technical assistance and enforcement

3.2

Compliance and enforcement (complaints)

4.9

Compliance and enforcement (complaints)

0.6

Program assistance and approval for local units of government.

0.4 Enforcement plan review (includes engineer)

2.4 No exposure certification 0.8

Technical assistance 1

Environmental Assessment Worksheets and sewer extensions

1

8.0

13.6

3.5

Annual staff costs are estimated at $1.9 million. Contract spending for services is expected to be $1.6 million per year. This leads to a total cost estimate of $3.5 million. This cost is not expected to affect state revenues because permit fees now meet staff and other resource needs. A change in permit fee procedures is included in the proposed rules. The change would eliminate fees for relatively small changes in permits, such as changes in names or addresses. This change is not expected to have a significant effect on state revenues because the fees are relatively small and so is the number of minor modifications. Proposed stormwater rules will require changes in MNDOT procedures. Road construction projects will have to adopt BMPs. MNDOT estimates the new requirements will increase road construction cost by 1 to 1.5 percent. The effect of road construction cost increases on state revenues is unclear. MNDOT could manage cost increases as the MPCA plans to do – by redirecting current staff and other resources. On the other hand, MNDOT could request a new legislative appropriation to cover the new costs. No MNDOT representative has told the Agency how the Department plans to cover the increased cost.


No other state agency will be affected by the proposed rules. E. Distribution of Costs and Benefits Rules related to construction activities will mainly affect small business firms. About half of these firms are located in the Twin Cities metro region. If construction firms do not pass new costs on to their customers, they will have to cover new costs themselves. IMPLAN results show how construction firms’ resources were put to use in 2000. In the next table, estimates of proportional shares assume that the stormwater rules will impose $15 million in new costs. Table 12. Components of construction sector output ($ millions)

Sector

Inputs

Employee compensation

Proprietors’ Income

Other property income

Indirect business taxes

Residential Structures 5,960.45 1,221.800 297.005 253.446 59.434

Ind. & Comm'l. Bldgs. 2,529.09 1,258.380 333.154 128.683 35.631

Utility Structures 469.66 291.142 76.860 35.829 5.261

Highways and Streets 622.41 336.730 88.367 54.814 7.858

Farm Structures 334.92 166.227 37.345 23.569 2.410

Mineral Extraction Facilities 74.76 143.665 11.922 10.839 13.426

Government Facilities 2,143.67 1,155.950 311.799 175.912 25.830

Estimated cost = $15 million. Share of total in residential construction

0.3%

1.2%

5.1%

5.9%

25.2%

Residential construction firms can cover new costs by cutting expenses in all but the indirect business tax category. Economic resources in the residential construction sector amounted to $7.8 billion in 2000. With an estimated range of $12 million to $15 million, new costs amount to a relatively small proportion of purchased inputs, a noticeable percentage of employee compensation and a significant percentage of firms’ income. All other things being equal, it seems reasonable to expect that construction firms will economize where it is easiest. IMPLAN data show that: a) purchased inputs comprise three quarters of construction firms’ expenses, and b) purchases are spread over a wide range of input suppliers. It seems likely that economizing on purchased inputs will not cause significant impacts among construction firms’ suppliers. On the other hand, construction firms might look to their next easiest source – employee compensation – for savings that can offset new costs imposed by the proposed rules. Bureau of Labor Statistics (BLS) data from Minnesota show that construction sector wages are seventeen percent above the state average – and 43 percent above the state median.* The same data show that construction workers are relatively well paid. A bit less than twenty percent of construction workers earn wages less than the state average. Compensation losses, if they occur, seem unlikely to be distributed in a regressive pattern. Since EPA did not estimate costs for other construction sectors, we cannot extend the analysis to cover all sectors. However, it seems likely that the new-cost-to-resources relationship in other construction sectors will be comparable to the relationship in the residential construction sector.

* 2002 Occupational Employment Statistics Survey.

It also seems likely that construction firms will try to pass at least some, if not all, of the new costs on to their customers. An earlier estimate showed that the proposed rules are expected to add little to the cost of financing a new home. IMPLAN results show that new costs probably will not be evenly distributed among income classes. Figure 3 derives from IMPLAN data on the value of housing demanded by households of different income classes. It shows that middle and higher income households will probably incur most of the new cost if construction firms do not cover it all themselves. Figure 3

Income distribution of demand for housing

0.0%5.0%

10.0%15.0%20.0%25.0%

<$5k $5-$10k

$10-$20k

$20-$25k

$25-$30k

$30-$40k

$40-$50k

$50-$70k

$70k+

Household income category

Shar

e of

tota

l

Owner-occupied Dwellings Rented housing

Secondary impacts will occur as changes in new home prices influence rental rates and existing home prices. We expect these ripple effects to decline as they move further away from directly affected sectors. New costs imposed on MS4s will have a different distribution pattern. Local governments’ resources come from a mix of local taxes, local fees and grants from other governments. Whatever their direct source, local government resources derive from individual taxpayers. The Minnesota Department of Revenue’s tax incidence series shows the relative impact of taxes on households in different income classes. Appendix J contains a table that shows how state and local taxes were divided among income groups in 2000. Revenue’s findings are summarized in Figure 4.


Figure 4

Department of Revenue findings show that the progressive effects of the income tax are offset by other, regressive taxes. “Taken as a whole, the system of Minnesota taxes was marginally regressive (a Suits index of -0.030). State taxes were very slightly progressive (0.006), and local taxes were regressive (-0.138).” (Revenue, p. 11) The Suits index referred to yields positive values for progressive taxes and negative values for regressive taxes. Since the proposed stormwater rules require development of local programs, we expect the distribution of new costs to be slightly regressive. Regional economic costs will be somewhat offset by transfers to service firms. Specialized consultants perform compliance-related services (e.g., planning, design, and inspection) for both construction firms and MS4s. Although we believe the extent of this offset is widespread, we do not know its value because no one has collected data on consultants’ stormwater-related income. F. Probable Costs or Consequences of Not Adopting the Proposed Rule (§ 14.131, sub. 6) This part of the APA was passed during the 2003 legislative session. MPCA plans for stormwater rules and permits were well advanced before the new law took effect. In usual circumstances, the MPCA meets APA requirements by describing impacts in words and numbers. Narrative descriptions of proposed rules’ likely impacts are reinforced with quantitative estimates of the impacts’ strength, extent and distribution. In this case, quantitative analysis was not possible. Quantified estimates require time and money, both of which were in short supply during fiscal years 2003 and 2004. The MPCA does not have quantitative estimates of the probable costs or consequences of not adopting the proposed rule. In lieu of quantitative estimates, this section will discuss what is known about costs and consequences. The MPCA believes the discussion is detailed enough to help reviewers make reasonable evaluations. A quantitative analysis would no doubt improve reviewers’ evaluations, but it will have to wait until time and resources become available.



Consequences Three sorts of consequences are likely to occur if the proposed rules are not adopted.* First, pollutant loadings will increase. Stormwater regulations operate through the application of best management practices, usually known as BMPs. EPA’s rules describe the BMPs that state and local governments must adopt. EPA’s descriptions are specific enough to present a clear idea of what must be done. They are also general enough to permit local adaptations that minimize cost and improve efficiency. BMPs come in structural and non-structural forms. Silt fences are a type of structural BMP and education programs are classified as non-structural. EPA’s report to Congress on the first phase of its stormwater program presents five case studies of BMPs that reduce pollutant loadings. (USEPA, 2000, p, 3-17 ff.) Comparable results are expected in Minnesota. If the proposed rules are not adopted, it is likely that Minnesota’s lakes, rivers and streams will receive increased pollutant loadings as population growth and economic development proceed. Second, surface water quality will probably decline in Minnesota if the proposed rules are not adopted. Stormwater runoff carries a broad range of pollutants. These pollutant “loadings” have increased steadily with population growth and urban expansion. As stormwater-borne pollutants reach surface water, they cause a variety of environmental problems. The proposed rules are expected to reduce pollutant loadings and relieve some of the associated problems. EPA’s report to Congress presents four case studies of local BMPs that improved water quality. One case they cite occurred in Minneapolis, where a 1990s community education program is credited with causing a 60 percent reduction in Lake Harriet’s pesticide concentrations. Comparable results are expected on a wider scale if the proposed rules are adopted. If they are not adopted, surface water quality in Minnesota will continue to decline. The MPCA guidance manual Protecting Water Quality in Urban Areas, describes in more detail the composition of stormwater runoff and its impacts (see Chapter 1, Water Quantity and Quality). The manual is available on the internet at http://www.pca.state.mn.us/water/pubs/sw-bmpmanual.html. Finally, some consequences relate to administration of other federal and state programs:

• Failure to adopt the proposed rules would jeopardize the MPCA’s federal authorization to operate its NPDES program. Minnesota benefits from the MPCA’s current authorization because state officials tend to be more sensitive than federal officials to local conditions.

• Without the proposed rules, permit administration will lack the centralized and unifying guidelines that make programs run smoothly and efficiently.

• As TMDL limits develop, stormwater rules will improve the effectiveness of the programs that make TMDLs work, particularly in urban regions. Without the proposed rules, TMDL administration is likely to be more difficult for all concerned. TMDL implementation plans may not have the tools necessary to achieve their goals.

• Permit programs supported by rules are more open to public scrutiny. Without the proposed rules, interested groups and individuals would have to rely on public notices of permits for information and a chance to raise objections. Rule adoption proceedings tend to be more open and detailed.

* Consequences are described in the format used by USEPA in its 2000 report to Congress on the effects and effectiveness of the first phase of its stormwater rules. Find the full report at http://cfpub.epa.gov/npdes/docs.cfm?document_type_id=6&view=Program%20Status%20Reports&program_id=6&sort=name.

http://www.pca.state.mn.us/water/pubs/sw-bmpmanual.html

Costs “Probable costs … of not adopting the proposed rule” are usually referred to as benefits. When an environmental regulation takes effect, the changes it causes are expected to improve the quality of natural resources. Changes in environmental quality affect the value that a community places on its natural resources. Environmental benefits increase value and environmental costs decrease it. If an environmental regulation is expected to improve the quality of natural resources, the cost of not adopting the regulation is the value of the deferred quality improvement. A graph shows a possible development schedule for environmental benefits: Figure 5.

Resource

value

Time Rule adoption date

The grey box shows the cost of not adopting a rule if the rule is expected to produce its full effect on the day it is promulgated. As program administration begins, environmental costs decline and resource values rise. On the other hand, if an environmental regulation is expected to maintain resource quality by ending a declining trend, the cost of not adopting the regulation is the value of lost resource quality.


Another graph shows how the relationship changes in these conditions: Figure 6.

Resource


In both cases, the goal of the APA is to understand and perhaps estimate the values of the shaded areas. The costs estimated are of a sort often referred to as “opportunity costs.” They occur because a chance to maintain or increase value is missed. The discussion that follows will refer to environmental benefits, not the cost-of-not-adopting, in order to simplify the presentation. Environmental benefits associated with surface water quality generally relate to the ways people use water. Safe use for drinking, swimming, fishing and hunting define the local scope and effect of most water quality regulations. Improvements in water quality can be evaluated in economic terms. If water quality improves in a lake or a river so that more people can use it for swimming, environmental benefits can be estimated by surveying users to find out how their plans and activities change when water recreation conditions improve. The usual way to estimate benefits follows a more or less regular pattern:

• Identify pollutant releases and classify them by type (e.g., nutrients, sediments, etc.) • Estimate the extent of pollutant releases. This estimate should cover both time and space.

It is often helpful if the estimate can be subdivided into different regions and time periods.

• Describe the potential damage caused by pollutants. Examples of the damage pollutants may cause are: a) human health problems, b) lost recreational opportunities, c) loss of property value, and d) loss of wildlife habitat.

• Estimate the relative risks incurred by people and other “communities,” such as wildlife or forests. Findings at this stage may report, for example, that people experience an increased risk of incurring a specific health problem. Human health risks are often reported in terms of a number of cases per 100,000 people in the affected community.

Rule adoption dateTime

value Declining trend


• Estimate the monetary value of likely damages. This step usually requires survey research.

EPA’s RIA for the second phase of the stormwater program lists the specific environmental benefits expected to occur after proposed rules are adopted.

Potential Benefits of Water Quality Improvements

• Commercial fisheries, shell fisheries, and aquaculture; navigation

• Recreation (e.g., fishing, hunting, boating, swimming) • Subsistence fishing

In-Stream Use

• Human health risk reductions • Water-enhanced noncontact recreation (e.g., picnicking,

photography, jogging, biking, camping) • Nonconsumptive use (e.g., wildlife viewing, hiking near

water)

Near-Stream Use

• Flood control (reduced property loss and risk to health and safety)

• Industry/commercial (process and cooling waters) • Agriculture/irrigation

Diversionary Use

• Municipal drinking water (treatment cost savings, water storage dredging and construction savings, and human health risk reductions)

Aesthetic Use • Residing, working, traveling, and owning property near water, etc.

• Existence (satisfaction gained from knowing the resources exist and knowing others enjoy the resources; ecologic value, including reduced mortality and morbidity, improved reproductive success, increased diversity of aquatic and piscivorous wildlife, improved habitat for threatened and endangered species, and improved integrity of aquatic and aquatic-dependent ecosystems)

Passive Use

• Bequest (intergenerational equity)

Note: Previous analyses have included option value as a potential benefit of environmental improvement. For this analysis, EPA adopted Freeman’s (1993) conclusion that option value does not exist as a separate benefit category. Source: USEPA, 1998, p. 6-3.

EPA’s estimates have a national scope. Some of the expected national benefits either will not occur in Minnesota or are expected to be relatively small. However, several of the benefit categories in EPA’s list may also occur in Minnesota:


• Recreation

o Fishing – As water quality improves, the numbers and size of sport fish are expected to increase. EPA believes that reducing stormwater runoff may decrease the number of fish consumption advisories for local lakes.

o Hunting – Improved water quality is believed to improve living conditions for waterfowl, which should increase their populations.

o Boating – Improved water quality is expected to encourage boaters to make more use of recreation opportunities.

o Swimming – Improved water quality makes swimming more enjoyable. o “Non-contact” recreation – This involves activities for which users do not have

direct contact with water. Improved wildlife conditions and increased water clarity are expected to enhance non-contact recreation.

o “Nonconsumptive” use – This refers to viewing wildlife. With improved wildlife habitat, wildlife viewing conditions are also expected to improve.

• Flood control o Stormwater runoff controls reduce flood damage by providing room for water

storage, by diverting runoff and by reducing sedimentation. These improvements are expected to reduce risks incurred by the public and to reduce property damage caused by floods.

• Aesthetics o Improved water quality is expected also to improve general living conditions in

affected regions. • Passive use

o People are expected to find economic value in simply knowing that environmental conditions have improved. In some cases, this value relates to individual satisfaction. In other cases, people are expected to value the idea that they are passing on to their children and succeeding generations an environment that is worth more than it is now.

EPA’s discussion goes beyond descriptions of benefit categories. Their presentation includes quantitative estimates of benefit values. EPA’s estimation techniques are not directly useful in the Minnesota context, although their basic model merits consideration if Minnesota estimates are ever made. Developing a useful Minnesota estimate would require: a) updating and localizing EPA’s surveys, and b) adjusting EPA’s models to suit local conditions. However, it is worth knowing that EPA finds benefits and costs of the second phase are roughly comparable on the national level. Benefits will likely have a broader distribution than costs. Recall that costs will mainly be concentrated in the Twin Cities’ metro area and some other regional population centers. As construction firms and MS4s incur cost they are expected to pass cost on to customers who live in the same area. On the other hand, benefits will probably have a wider distribution. There will be local benefits for local users of water resources. However, water in rivers and streams moves from one region to another. Local water quality improvements in rivers and streams will yield benefits for downstream users. Non-local users will also enjoy benefits associated with water quality improvements in lakes. Tourists will benefit from improvements in recreational activities. More generally, “non-use” benefits are expected to have a very wide distribution.

This class of benefits derives from the satisfaction people get from knowing that natural resources are preserved or improved and can be either enjoyed later or “passed on” to future generations. Lawsuits are another type of cost that is likely to occur if the proposed rules are not adopted. Federal law allows citizens to sue state and local governments in order to compel appropriate administration of environmental laws and regulations. A suit that began in 1999 and concluded in 2002 involved the MPCA and city governments in Minneapolis and St. Paul. A coalition of environmental interest groups sponsored the suit, which sought to change administrative practices begun in the first phase of stormwater regulations. Legal costs incurred by the MPCA were a bit less than $90,000. MPCA staff costs were comparable. MPCA staff members estimate that environmental interest groups and city governments incurred significantly greater costs. With comparable regulations now being proposed and the same environmental interest groups concerned, it seems likely that they would consider legal action if the proposed rules are not adopted. G. References Beck Beck ,Roger J., et. al., "Using IMPLAN in Conducting Rural

Development Research: Some Random Thoughts and Technical Observations," 2000 National IMPLAN Users' Conference, October 2000.

Browne Browne, Lynn Elaine, "National and Regional Housing Patterns," New England Economic Review, July/August 2000.

CRWQCB California Regional Water Quality Control Board, “Review and Analysis of Budget Data Submitted by the Permittees for Fiscal Years 2000 – 2003, January 2003.

Edwards Edwards, Clark, "The Political Economy of Rural Development: Theoretical Perspectives," American Journal of Agricultural Economics, 58(1976), pp. 914-21.

GAO General Accounting Office, “Water Quality: Better Data and Evaluation of Urban Runoff Programs Needed to Assess Effectiveness,” GAO-01-679, June 2001.

Hahn Hahn, Robert W. and Cass R. Sunstein, “A New Executive Order for Improving Federal Regulation? Deeper and Wider Cost-Benefit Analysis,” Working Paper 02-4, American Enterprise Institute, March 2002.

Howard R. Green Howard R. Green Co., “Municipal Rate Survey: Water, Wastewater and Storm Water,” 2002.

Metro Council Metropolitan Council, “Stormwater Utility Use in the Twin Cities Metropolitan Area,” Publication no. 32-99-039, February, 2000.

Minnesota DTED Minnesota Department of Trade and Economic Development, “Compare Minnesota: Profiles of Minnesota’s Economy and Population, 2002-2003.

MNDOT Minnesota Department of Transportation, Memorandum to Michael Findorff from Richard Stehr, February 26, 2003.


NAFSMA National Association of Flood and Stormwater Management Agencies. 1999. Phase II Survey Raw Data Report. Washington, DC.

Reese Reese, Andrew J., P.E., “NPDES Phase II Cost Estimates,” Ogden Environmental and Energy Services, Inc., February 2000.

Rubin Rubin, Scott J., “Affordability of Water Service,” National Rural Water Association, 2001.

SAB Science Advisory Board, “Affordability Criteria for Small Drinking Water Systems,” Environmental Economics Advisory Committee EPA-SAB-EEAC-03-004, December 2002.

US Census Bureau US Census Bureau, Statistical Abstract of the United States, 2002. USEPA (1998) US Environmental Protection Agency, “National-Level Affordability

Criteria under the 1996 Amendments to the Safe Drinking Water Act – Final Draft Report, (August 19, 1998)

USEPA (1999a) US Environmental Protection Agency, “Report to Congress on the Final Phase II Storm Water Rule," October 1999, EPA833-R-99-001

USEPA (1999b) US Environmental Protection Agency, "Economic Analysis of the Final Phase II Storm Water Rule," October 1999

USEPA (2000a) US Environmental Protection Agency, “Report to Congress on the Phase I Storm Water Regulations,” February 2000, EPA833-R-00-001.

USEPA (2000b) US Environmental Protection Agency, “Guidelines for Preparing Economic Analyses,” September 2000, EPA240-R-00-003

Minnesota Planning Minnesota Planning, State Demographic Center, “Statewide housing prices rising after sharp drop,” August 1998, OSD 98-84.

Minnesota Revenue Minnesota Department of Revenue, “2003 Minnesota Tax Incidence Study,” March 2003.

VI. ADDITIONAL NOTICE

Minn. Stat. §§ 14.131 and 14.23, require that the SONAR contain a description of the MPCA’s efforts to provide additional notice to persons who may be affected by the proposed rules or explain why these efforts were not made. A. Public Participation The Agency has made several efforts to involve the public and stakeholders in the rule process. These efforts are summarized below. The formal rule process began in 2002. A notice of solicitation for public comment was published in July of 2002 with the Request for Comment on Possible Amendments to Rules Governing the Stormwater Permit Program. In the Request for Comment notice, interested parties were advised that the MPCA did not expect to appoint an advisory committee to comment on the proposed rules. Because the MPCA was attempting to complete the first rulemaking by the March 10, 2003, federal deadline for Phase II implementation, the MPCA did not plan a rule development work group or public informational meetings due in part to the short



time frame available for the rulemaking, and limited resources. Therefore, the Agency put more emphasis on soliciting comments during the Request for Comment notice period. The Agency received approximately 20 comments during the formal comment period. Agency staff has reviewed these comments and they are maintained on file. Stakeholder meetings were held during the development of the MS4 and construction general permits which were being developed concurrently with these proposed rules. Many of the issues regarding the development of these permits were the same, or similar to the issues that needed to be addressed in this rulemaking. Part I. D. of this SONAR, Public Participation and Stakeholder Involvement in the Permit Process, contains a more detailed discussion of this public participation effort. Meetings were also held during the development of the draft rule with three stakeholder groups; the Stormwater Design Team, the MS4 Stakeholder Group, and the Construction Activity Condition Exclusion Stakeholder Group, on several issues that the MPCA expected to be controversial during this rulemaking. These stakeholder groups played an important role in the development of these proposed rules providing comment and input on the rule as it was being drafted. Part I. E. of this SONAR, Public Participation and Stakeholder Involvement in the Rule Process, contains a more detailed discussion of this public participation effort. B. Additional Notice Plan This Additional Notice Plan will be reviewed by the Office of Administrative hearings for approval. The MPCA’s Additional Notice Plan includes giving notice required by statute. We will mail the rules and Notice of Intent to Adopt to everyone who has registered to be on the MPCA’s rulemaking mailing list under Minn. Stat. § 14.14, subd.1a. The MPCA will also give notice to the Legislature per Minn. Stat. § 14.116. In addition to the notice required by law the MPCA will send a copy of the Notice of Hearing to:

MS4 interests including:

• MS4 Stakeholder Group members (see Appendix C) • MS4s affected by these proposed rules (see Appendices G, H, and I) • MS4 Permit Stakeholder participants • MS4 permittees • Counties • Cities • Townships • Nontraditional MS4s (e.g. military base, hospital, prison, college or university)

Construction sector interests including: • Conditional Exclusion Stakeholder Group members (see Appendix E) • Construction Permit Stakeholder participants • Construction permittees • Builders • Developers


• Contractors

Industrial sector interests including: • Industrial permittees (i.e. private and public sector)

Stormwater Design Team members (see Appendix A) Stormwater Steering Committee members including:

• Association of General Contractors • Association of Minnesota Counties • Barr Engineering • Board of Soil and Water Resources • Builders Association of Minnesota • Builders Association of the Twin Cities • Carver County Soil and Water Conservation District • Clear Choice • Dakota County Soil and Water Conservation District • Friends of the Mississippi River • League of Minnesota Cities • Metropolitan Council • Minnesota Center for Environmental Advocacy • Minnesota Chamber of Commerce • Minnesota Erosion Control Association • Minnesota Farm Bureau Federation • Minnesota Farmers Union • Minnesota Land Improvement Contractors • Minnesota Public Works Association • Minnesota Association of Townships • Minnesota Department of Agriculture • Minnesota Department of Health • Minnesota Department of Natural Resources • Minnesota Department of Transportation • Minnesota Office of Environmental Assistance • Ramsey Washington Metropolitan Watershed District • University of Minnesota

Stormwater News Listserve Subscribers

• Approximately 730 interested persons have signed up for the MPCA’s Stormwater News electronic mail list to receive periodic e-mail updates about the MPCA’s stormwater permitting programs and related rulemaking activities.


VII. NOTIFICATION TO THE COMMISSIONER OF AGRICULTURE Minn. Stat. § 14.111 requires that before an agency adopts or repeals rules that affect farming operations, the agency must provide a copy of the proposed rule change to the Commissioner of Agriculture no later than 30 days prior to publication of the proposed rule in the State Register. A copy of the proposed rule will be sent to the Commissioner of Agriculture no later than 30 days prior to publication of the proposed rule.

VIII. COMMISSIONER OF FINANCE REVIEW OF CHARGES Minn. Stat. § 14.131 requires that the agency must consult with the Commissioner of Finance to help evaluate the fiscal impact and fiscal benefits of the proposed rule on units of local government. The MPCA will consult with the Commissioner of Finance on these proposed rules.

IX. NOTIFICATION TO THE COMMISSIONER OF TRANSPORTATION Minn. Stat. § 174.05 requires the Commissioner of the MPCA to inform the Commissioner of Transportation of all activities of the MPCA which relate to the adoption, revision or repeal of any standard or rule concerning transportation established pursuant to Minn. Stat. § 116.07. The Commissioner of Transportation will be notified of these proposed rules by the MPCA.

X. LIST OF WITNESSES AND APPENDICES A. Witnesses In support of the need for and reasonableness of the proposed rules, the MPCA anticipates having the witnesses listed below testify at the rulemaking hearings. Along with the names of the individuals who are available to testify are the principal topics on which they would testify. 1. Mary H. Lynn: The proposed rule in general, history of the stormwater program, rule

stakeholder participation and process, industrial activity no exposure exclusion. 2. Mike Findorff, P.E.: Construction permit program, conditional exclusion for feedlots and

conservation projects, stormwater management practices for construction activities, and consideration of economic factors.

3. Lou Flynn, P.E.: MS4 permit program, MS4 designation criteria and process, and

consideration of economic factors related to the MS4 program. 4. Ken Moon: Construction program and construction permit incorporation by reference. 5. Robert McCarron: Consideration of economic factors. 6. Don Jakes: Stormwater Program Plan, the Agency’s efforts in stakeholder participation in

the program plan and proposed rules.


7. Kevin Molloy: Rulemaking processes. 8. Brian Livingston: Proposed rule in general, the stormwater permitting program. B. Appendices A. Stormwater Design Team Members B. Stormwater Design Team 12/3/03 and 12/18/03 meeting notes on proposed rules C. MS4 Stakeholder Group D. MS4 stakeholder 1/6/04 and 2/4/04 meeting notes E. Construction Activity Conditional Exclusion Stakeholder Group F. Construction activity conditional exclusion 2/18/04 meeting notes G. List of MS4s designated by federal rule based on 2000 decennial census GG. Map of mandatory MS4s H. List of MS4s population 10,000 or more designated by proposed rule HH. Map of MS4s population 10,000 or more I. List of MS4s population 5,000 or more designated by proposed rule II. Maps of MS4s population 5,000 to 10,000 and impaired and special waters J. Incidence of state and local taxes K. Comparison of estimated costs with average revenue L. Comparison of estimated costs with water and sewer charges

XI. CONCLUSION Based on the foregoing, the proposed rules are both needed and reasonable. Dated: September 3, 2004 ____________________________________ Sheryl A. Corrigan Commissioner


Stormwater Design Team Members

Name Affiliation Phone Steve Klein Barr Engineering (952) 832-2600

John Jaschke Board of Water and Soil Resources (651) 297-3432

Remi Stone Builders Association of the Twin Cities (651) 697-7571

Frank Mendez

Builders Association of the Twin Cities, Clear Choice Water (952) 934-1200

Jay Riggs Dakota County SWCD (651) 480-7779

Keith Hanson Minnesota Chamber of Commerce (218) 722-5642

Erik A. Silvola Minnesota Chamber of Commerce (763) 241-2349

Craig Johnson League of MN Cities (651) 281-1259 Randy Neprash League of MN Cities (651) 604-4703 Jack Frost Met Council (651) 602-1078 Judy Sventek Met Council (651) 602-1156

Janette Brimmer MN Center for Environmental Advocacy (651) 223-5969

Steve Colvin DNR (651) 296-0786 Jason Moeckel DNR (507) 280-5063 Bob Miller MNDOT (218) 828-2479 Dwayne Stenlund MNDOT (651) 284-3787 Kevin Kosobud MNDOT (218) 828-2488

Jay Michaels MN Erosion Control Association (651) 261-4546

Jim Anderson University of Minnesota, Water Resource Center (612) 625-0279

Cliff Aichinger Ramsey Washington Metro Watershed District (651) 704-2089

Gary Pulford MPCA (651) 296-7340 Don Jakes MPCA (651) 296-7786 Dale Thompson MPCA (651) 296-5897 Gretchen Sabel MPCA (651) 296-7773 Reed Larson MPCA (218) 825-3054 Brian Livingston MPCA (651) 296-5426 John Ikeda MPCA (651) 297-5236 Joyce Cieluch MPCA (281) 846-7387 Kathy VanAsch MPCA (651) 296-3960 Mary H. Lynn MPCA (651) 297-2331 Mike Findorff MPCA (651) 296-6798 Milt Thomas MPCA (651) 296-5498


Appendix B Storm Water Design Team Meeting Notes for Rule Discussion - 12/3/03 The purpose of the afternoon discussion was to provide an overview of the draft storm water rules to date, and to request some input and feedback on the discretionary MS4 designation portion of the rule. Overview of Storm Water Rules:

• A significant portion of the rule was drafted prior to these Storm Water Design Team meetings, which in effect means that the current draft rule the group is receiving today is already somewhat outdated. We ask that you please keep this in mind as the draft rule is shared externally.

• The agency is currently in the process of planning and conducting a series of stakeholder meetings to receive input and feedback on several issues that we expect to be controversial during this rulemaking. These issues include construction activity and the installation of utility service lines, the construction activity conditional exclusion, and designation criteria for discretionary MS4s.

• Stakeholder meetings have been held on the utility rule; meetings on the other issues are being planned for December and January.

• The rulemaking team is working to coordinate the rulemaking stakeholder efforts with the planning efforts of the Storm Water Design Team and will be seeking input from the Design Team on specific issues (some members of the Design Team have already participated in the utility stakeholder meetings).

• We expect the draft rule is likely to change, possibly significantly, based in part on the Design Team efforts to date, and information learned from Mr. Schueler's (Center for Watershed Protection) recent visit.

• The proposed timeline for public noticing the rule is May 2004; however, the proposed schedule for this rulemaking was also prepared prior to the formation of the Storm Water Design Team. We are still working towards noticing the rule in May, but that could change as well.

Utility Installation:

• Stakeholder meetings were held on 10/21 and 11/18. • Participants include Minnesota Power, BACT, NRG, Xcel Energy, MnDOT, Utility Contractors

Association, QWest, Great River Energy, and consulting interests. • The stakeholder group wanted a rule provision that offered some flexibility and clearly identified

responsibilities and requirements. • The stakeholder group stressed that the key component to complying with the rule provision will

be education and guidance tailored to utilities. • Significant progress has been made in drafting rule language that all parties generally agree with.

Discretionary MS4s and Designation Criteria: A copy of the draft rule, the list of possible discretionary MS4s, and a list of partial mandatory MS4s was handed out to the group. 3 options for designating MS4s were presented for discussion –

1. No designation at this time (Schueler’s recommendation) 2. Designation based on population 10,000 and growth rate (this is the current list of 30 possible

discretionary MS4s) o Partial MS4s – designation of that portion of the MS4 located outside of UA (portion

located within a UA is a mandatory MS4) o Non-traditional MS4s such as universities, hospitals, prisons – designation of those non-

traditional MS4s with 1,000 population located in a discretionary MS4 3. Designation based on applying all federally recommended criteria


Comments: • What about special waters or sensitive waters? • What about seasonal MS4s (Alexandria) • What about upstream MS4s (Stillwater, Grant Township) • Designation needs to be a stepped process where MS4s are phased in over time. • Phase in – mandatory MS4s now, mandatory & some discretionary MS4s in 2008, statewide

MS4s in 2013 • MS4s need ordinances and BMPs in place to manage growth • Focus on growth rate, not population • Designate on watershed basis • Fairness issue for those non-growth or slow growth MS4s • Do not want to encourage development leap-frogging • Watershed based - MS4 planning • Need incentives for watershed based permit • What would criteria look like?

- Sensitive waters (define what this would include), ORVWs, 303d list? Number of additional MS4s brought in under this definition would be small?

- Percent growth rate - 1,000 new housing units by 2010 - population density - TMDL, sensitive waters - how many?

• Does it make sense to designate all partial MS4s, particularly those that are mainly rural or slow growing? Include (designate) all partial MS4s – handle requirements for agricultural land, low growth areas, etc. in MS4 permit. Except counties and MnDOT; address requirement for these partial MS4s in rule?

• Don’t bother with discretionary non-traditional MS4s at this time, focus on growth areas. • Designate based on TMDL allocation vs. focusing on watersheds with special waters and rapidly

growing areas • Not far enough along with TMDL process • Designations can occur over time • What can the MPCA realistically handle at this time (with respect to additional designations), in the

next _X_ years? How much can the MPCA do? • Map special waters based on watershed (DNR has GIS watershed mapping capabilities) • Should we first focus on special waters/watershed of the receiving water AND impervious rate of

_X_ (5%)? • All communities are in, in a watershed with _X_% impervious surface - Is this fair to undeveloped cities? • Imperviousness of watershed or MS4? What mapping capabilities exist? • Need to consider how basin planning ties in to designation on a watershed basis. Are there MS4s

in specific basins we should include, or voluntarily want to be included (Detroit Lakes)

Common themes we thought we heard: • Watershed based designation • Focus on MS4’s that meet a combination of criteria including high growth rate, a more narrowly

defined group of sensitive waters, and amount imperviousness • Designate partial MS4s, with certain exceptions address in permit


Storm Water Design Team Meeting Notes for Conditional Exclusion Rule Discussion - 12/18/03 The purpose of the afternoon discussion was to provide an overview of the conditional exclusion draft rule, and to request some input and feedback on the draft rule provision.

1. What types of conservation projects should be conditionally excluded? 2. Are there other specific construction activities, other than feedlot and conservation projects,

that should be considered under the conditional exclusion, and why? 3. What challenges exist that could make compliance with the draft rule difficult?

• Why exempt feedlots? Feedlots not exempted, are excluded from requirement to apply for permit coverage if specific requirements (i.e. covered under feedlot permit, must implement BMPs).

• Federal agricultural exemption for construction activity for the purpose of growing crops – interpreted to include grassed waterway construction.

• Feedlot exemption – should only pertain to those with permits. • What projects should be conditionally excluded?

o Prairie o Wetland banks o Habitat restoration o Streambank stabilization o Restoration

• DNR permit rule – SWCD obtains a general permit through DNR for specific projects (10 day

permit process). • Restoration projects – some are “problem” projects.

o Better project oversight needed. o Problems more likely with projects of longer duration. o Greater likelihood of project oversight by implementing agency than under MPCA permit.

• No permit fee for projects of a certain size or cost. • Generic SWPPP– reduced plan requirement for certain projects. • SWCD currently does plans for projects. • There are other agencies, besides NRCS and BWSR that are doing conservation practice projects

– SWCDs,… and others(?) that should be considered. • Adopt plans, with pre-approved standards, for specific types of projects. • Model plans could be in rule appendix.

• Permit all projects. • Haybales – out.


Appendix C

MS4 Stakeholder Group

Name Affiliation Phone Bill Douglass Bolton & Menk, Inc. (507) 625-4171 Brad Swanson City of North Mankato (507) 625-4141 Craig Johnson League of MN Cities (651) 281-1259 Dave Fricke MN Association of Townships (763) 497-2330

Keith Hanson Minnesota Chamber of Commerce (Minnesota Power) (218) 722-5642

Dave Weirens Association of MN Counties (651) 224-3344 Erik A. Silvola Great River Energy (763) 241-2349

Gene Ranieri Association of Metropolitan Municipalities (651) 215-4001

Judy Sventek Met Council (651) 602-1156 Jack Frost Met Council (651) 602-1078

Janette Brimmer MN Center for Environmental Advocacy (651) 223-5969

John Dooley MN Association of Townships (763) 497-2330 John Sampson MNDOT (651) 284-3784

Keith Nelson Coalition of Greater Minnesota Cities, City of Winona (507) 457-8274

Nancy Larson Association of Small Cities (320) 275-3130 Marion Haayer City of North Mankato (507) 625-4141 Nicklas Tiedeken MNDOT (651) 284-3789 Dennis Larson MNDOT (651) 775-3079

Cliff Aichinger Ramsey Washington Metro Watershed District (651) 704-2089

Randy Neprash Bonestroo & Associates, League of MN Cities (651) 604-4703

Remi Stone Builders Association of the Twin Cities (651) 697-7571

Sharon Sarappo Xcel Energy (621) 330-6743 Steve Bot City of St Michael (763) 497-2041 Steve Jahnke City of Albert Lea (507) 377-4325


Jay Michaels MN Erosion Control Association (651) 261-4546

Jay Riggs Dakota County SWCD (651) 480-7779

Tera Guetter Pelican River Watershed District (218) 846-0436

Frank Mendez Clear Choice Water (952) 934-1200 Mary H. Lynn MPCA (651) 297-2331 Bob McCarron MPCA (651) 296-7324 Lou Flynn MPCA (651) 296-6575 Gary Pulford MPCA (651) 296-7340 Don Jakes MPCA (651) 296-7786 Joyce Cieluch MPCA (281) 846-7387 Milt Thomas MPCA (651) 296-5498 Brian Livingston MPCA (651) 296-5426 Larry Gunderson MPCA (651) 297-3825 Dale Thompson MPCA (651) 296-5897


Appendix D Notes for MS4 Stakeholder Meeting 1/6/04 What Criteria?

• What is the minimum that EPA requires? EPA requires states to develop designation criteria and apply criteria to MS4s with population 10,000 and population density 1,000/square mile located outside the urbanized area. EPA provides recommended criteria.

• List of possible discretionary MS4s based on current or projected population of 10,000 or more.

Population growth = storm water impacts.

• Is growth rate used instead of 1000 people/square mile? Concerns if criteria different than EPA.

• Cities like Forest Lake, Hastings, Stillwater just outside of UA should be in, but Grant Township and others are a tougher call. Fairness - cities, townships under 10,000? Mankato wants off of list, common sense for smaller communities, just more red tape.

• Consider geography - Red River floods, or history of an area - look at what cities are already

doing for storm water, credit for existing programs. TMDLs

• How to help designated entities prepare for various programs and integrate efforts (TMDLs, storm water, etc.).

• Relationship to TMDLs, permitted vs. non-permitted facilities? If no permit and TMDL is

established, how do you determine TMDL allocation or do you need a permit to get allocated? TMDL allocations to permitted and non-permitted parties; can lean on permitted parties, but less funding?

• Do not permit now. Future TMDLs to handle impairments, do TMDL, then permit.

• Permit is better than TMDL. Resource protection and prevention is better and easier. People will

protect “nice” water and give up on degraded waters. Alternative is proactive MS4 program to prevent TMDL and impairment.

• Minnesota River bank erosion? Natural conditions are factored into TMDLs.

Technical Assistance

• Designate some MS4s now then phase in others. Consider what help is available; some MS4s have no technical expertise, amount of information too large and overwhelming. Regulate townships like counties, but still requires paperwork.

• Technical assistance is needed for smaller LGUs such as townships. Technical assistance is

available for townships, sources are out there. MECA does workshops. Smaller LGUs can coordinate with other communities to meet permit requirements.

• Regional differences exist in who does the technical assistance. LMC or MPCA guidance, what

parts could be tailored to townships? • Need list of resources for technical assistance for townships.

• 6 month vs. 18 month timeline for permit application?


Designation Process

• Criteria first, then designation, or at same time?

• Rule doesn’t name designated MS4s; is the intent to set the process and name MS4s later or not? Process is in rule, but MS4s are identified as process moves forward.

• Create exemption list where MS4s get credit for what they are currently doing and avoid permit

paperwork. Exemption/credit check list for activities currently implemented by MS4s not mandated for permit coverage. City staff of one, need to hire consultant = unfunded mandate.

• In the metro area, not a lot of new storm water programs were put in place due to the permit; local

governments applying existing programs towards permit requirements. Smaller MS4s can have smaller SWPPPs.

• Think long-term process, Phase III coming…

• Make the process as achievable, practical, do-able, affordable as possible.

• Process should focus on protecting resources. Designating MS4s over 10,000 isn’t appropriate.

• Phased process for designating additional MS4s. Difficulty in designating entire state; number of

regulated entities. Partially vs wholly within an urbanized area.

• It would help cities if major institutions are permitted. Rule Item D will facilitate communication between cities and the non-traditional MS4s in those cities.

• Grant township in, Stillwater out, Alexandria summer population of 40,000 in? Impaired Waters,

303 D List in next time?

• Map for MS4s population 10,000? 10,000+ are on list of possible discretionary MS4s.

• Take a watershed approach. Permit on watershed basis. Fairness issue - what about a permitted MS4 located downstream of another MS4 that is not permitted? Difficult because MS4 boundaries are not set on watershed boundaries.

• Has MCEA commented on draft rule? MCEA commented during Request for Comments on

Possible Rule Amendments; see Attachment 1 of the memo. Growth & Impervious Surface

• Can other tools such as satellite data of impervious surface be used here? Satellite data is available to determine percent of impervious surface.

• Impervious surface tool could work well for measuring growth and changes expected by cities.

Use statewide satellite data combined with city planning/zoning data for determination.

• What is the timeframe for availability of impervious data, what year is existing data?

• The amount of impervious surface is important because imperviousness increases runoff and BMPs have only limited effectiveness.

• % impervious = remediation, growth = prevention, both are important.

• Prioritize discretionary MS4s based on high growth, avoid retrofitting. What growth rate?

Communities are in if ___% growth rate. Look at census to determine cut point. • If we prioritize, focus on high growth rate areas, consider 3 factors: 1) where degradation begins,

2) percent impervious surface, and 3) growth.


• Apply impervious data on a minor watershed basis, then add high growth.

• Recommendation for 5% impervious - community is in if 5% of minor watershed is impervious

surface. 5% is being proactive; Schueler study indicates 10% impervious causes degradation (Brown’s Creek example).

• What geographic area? Start with DNR GIS layer of minor watersheds to determine which

watersheds have 5% plus impervious.

• What if a watershed covers multiple MS4s; how do you permit? Requires coordination. Voluntary or Phased Approach to Designation

• How to increase water quality with a permit? Recommend more technical support approach and guide into future; EPA iterative approach.

• Consider voluntary approach for MS4s in the short-term and provide technical assistance, training,

education. Consider MS4 permit re-issuance and TMDLs, impaired waters initiative.

• What are current permittees looking like? What is the MPCA’s capacity to handle additional MS4 permit applications? What can the MPCA handle in a reasonable way?

Funding

• Consolidate, coordinate programs, relative to requests for funding, high leverage efforts. How do water programs integrate so an appeal can be made to legislature to fund impaired waters? (Governors’ Clean Water Initiative, ISTS, TMDLs, Storm Water). Environmental lobby as team player, lobby legislature for funding.

• Need incentive – If user fees collected, and if funding goes to locals, locals need a plan. Funding

IF they have an approved plan or watershed plan, as part of process. What more does this group want to see from the MPCA?

• Summary of existing SWPPPs, what we are doing with them, what’s intended.

• Address the MPCAs capacity to handle an increased number of permittees.

• List of resources for technical assistance for townships.

• Maps of growth areas – transportation corridors.

• Data on growth for municipalities outside of metro area. Desired Outcomes – Derived Fair = consistent yet flexible, reasonable timeline, feasible Technical Assistance Coordinate/Integrate/Consolidate programs, requirements, $, etc.


Notes for MS4 Stakeholder Meeting 2/4/04 Status of Program to Date

• Brief discussion of the status of the current MS4 program and MPCAs capacity to handle additional permittees.

• New nondegradation requirements in revised permit will increase time needed for review of

application and SWPPPs.

• Estimated 20-40 additional permittees is MPCA capacity. Designation Criteria

Population Density 1000/sq mile

• Mistake on Hibbing land area? No

• Approximately 10 cities on list of 30 possible discretionary MS4s do not meet both population and density criteria.

• Density a limiting factor not additional.

• Data on just a subset like with in a UA, annex a lot of land and get out of requirement?

• EPA requirement to apply criteria to MS4s population 10,000 or 1,000 density? Both (see 40 CFR

123.35(b)(2))

Growth rate

• Difficult to select a growth rate that is applicable statewide and reasonable; mergers, acquisitions, and differences in rate over 10 years. Difficulty in trying to find a simple rule for complex issue, group agrees.

• Growth rate data available for counties, but not city.

• Can demographer do? What municipalities, at what scale, cost, and timeframe?

Impervious surface

• Satellite imagery available, from which data can be derived, could be extrapolated out to future.

• Concerns about timeframe for availability of data, 3 months to 1.5 years? U of M ready and if

state system for contracting easy then quick, or could take longer, 1.5 years is worst case and includes contract time. Use master contract? No, sole source for U of M, or need to do RFP.

• Wait on impervious data for rule on designation? Use several criteria, not just growth or

impervious surface.

Special Waters

• List of possible discretionary MS4s near impaired or special waters, all except Albert Lea. Why not Albert Lea? List based on type of impairment.

• Not considering those water bodies impaired before even getting to the city. Fairness issue for

upstream cities. MS4s have higher reduction levels due to being permitted. Petition process in future?


• Addresses fairness issue, should use list of cities near impaired …

• Discretion needs to happen during TMDL, when being done with load allocation. TMDL impaired water reaches, ORVWs are different.

• Special waters designation should not be criteria? No – a separate consideration, not a sub-list of

population.

Criteria Discussion • Add all lists together, get 69 and more than PCA can handle. • Capacity argument vs. who SHOULD be in is a concern. Can’t base program on budget, number

of permits. • Need to draw the line somewhere. What is EPA minimum? • Raise the bar until hit the point where staff can review. Protect resource then adjust FTE.

Legislative funding? Yes, includes monitoring, education, partnering.

• Don’t wait on the rule, write rule and when get data apply.

• Annexation trends in state? Yes, growing trend, growth areas. Large scale annexation of rural areas are for planning purposes. Need to get stormwater in those plans.

• Suggested criteria over 10,000, do not base on density, do not include projected? Can change

later if density requirement needed? Current rule draft. Option of later for impaired waters if we think we need to add a city in later after rule written? Cities or include counties? If 10,000 only designation criteria, what about ORVWs?

• Percent impervious surface not a good argument for criteria, arbitrary, how would it work?

• Blue book says X% impervious cover causes damage – see Schueler study.

• Schueler study applies % impervious on a watershed level. Watersheds have yet to be permitted.

Apply % over what land area?

• Cities, in excess of 5000, and impervious above ‘y’ then permitted. Need to be careful if annexation but never build for ‘y’ impervious. 10000 OR impervious? With annexation reach 10000, and small but dense, impervious captures, vacation towns caught too. Capture vacation areas with the ‘OR’ population/impervious. 10000 OR 1000 density OR impervious, no ands. No, 10000 are separate and automatic.

Suggested designation criteria written on board:

10K pop (automatic); 5K pop and 1000 pop density or % imperv.

A recommendation was made for drafting rule language based on these suggested criteria - MPCA will follow-up. Janette offered to draft language for ORVWs.

Partial MS4 Discussion

• Mandatory MS4s with portion of municipality located outside UA - MPCA has asked those cities to include entire MS4 in SWPPP.

• How to address requirements for certain partial MS4s that are primarily rural or slow growth? How

to capture growth areas but not rural areas?


• Link to zoning, if zoned agricultural, then don’t do anything, but if change in zoning then area is in.

• Link to land use and/or comprehensive plan.

• Handle requirements in permit not in rule? Yes, say what areas are in, not what’s out, so permitted area changes over time. Maybe better in permit vs rule.

And, lastly for the record – Because we captured the comment “Mankato wants out” in the meeting notes for the 1/6/04 stakeholder meeting, it’s only fair that we capture the comment “Mankato wants in!” stated at today’s meeting!


Appendix E Construction Activity Conditional Exclusion Stakeholder Group

Name Affiliation Phone Mark Dittrich Department of Agriculture (651) 296-1482 Paul Burns Department of Agriculture (651) 296-1488 Matt Drewitz Department of Agriculture (651) 296-3820 Tina Rosenstein Nicollet County (507) 931-6800 Wayne Edgerton DNR (651) 297-8341 Steve Colvin DNR (651) 296-0786 Jason Moeckel DNR (507) 280-5063 Jeff Johnson USDA / Farm Service Agency (320) 235-3540 Joe Martin MN Farm Bureau Federation (651) 905-2115 Thom Peterson MN Farmers Union (651) 639-1223

Dave Preisler MN Pork Producers Association (507) 345-8814

Bob Lefebvre MN Milk Producers Association (320) 203-8336

Steve Olson MN Turkey Growers Association (763) 682-2171

Steve Brake MN State Cattlemen Association (507) 472-8775

Keith Hanson Minnesota Chamber of Commerce (Minnesota Power) (218) 722-5642

Doug Thomas Board of Water and Soil Resources (651) 297-5617

Al Kean Board of Water and Soil Resources (651) 297-2907

John Brach USDA / Natural Resource Conservation Service (651) 602-7880


Sonia Jacobsen Board of Water and Soil Resources (651) 602-7879

Judy Sventek Met Council (651) 602-1156 Jack Frost Met Council (651) 602-1078

Leann Buck MN Association of SWCD’s (651) 690-9028 Sheila Vanney MN Association of SWCD’s (651) 690-9028 Jay Riggs Dakota County SWCD (651) 480-7779 Mary H. Lynn MPCA (651) 297-2331 Bob McCarron MPCA (651) 296-7324 Mike Findorff MPCA (651) 296-6798 Gary Pulford MPCA (651) 296-7340 Don Jakes MPCA (651) 296-7786 Joyce Cieluch MPCA (218) 846-7387 John Ikeda MPCA (651) 297-5236 Brian Livingston MPCA (651) 296-5426 Dale Thompson MPCA (651) 296-5897


Appendix F Notes for Construction Activity Conditional Exclusion Stakeholder Meeting 2/18/04 Overview:

• This issue was discussed with the Storm Water Design Team in December; the packet of information sent prior to this meeting includes their comments.

• Currently, two types of projects are being considered for exclusion from construction stormwater

permit application requirement: • Feedlots. • Conservation projects receiving financial assistance from NRCS or BWSR. PCA hasn’t

clearly identified what type of conservation projects so looking for comments and rationale.

• Interim policies have been in place since March 2003 when Phase II went into effect. Interim guidance includes: • Spec sheet for sediment and erosion control for NRCS/BWSR projects. • Fact sheet for construction activity at feedlots.

• A copy of the rule part that was referenced in Subpart 6.D. (7090.2070) was not included in the

draft rule that was sent out. Part 7090.2070 contains additional requirements for special waters; these requirements are based entirely on Appendix A of the general stormwater permit for construction activity.

Feedlots:

• For feedlots, is the incentive for complying with these rule requirements to reduce administrative paperwork and avoid double permitting and double fees? Yes. Large CAFOs are covered under NPDES and address stormwater requirements. Small feedlots covered under the construction short-form permit and interim permit are addressed in this draft rule. Are stormwater requirements also in these permits in addition to rule? PCA does not have a specific date to address these requirements in these permits, but are sending out an addendum sheet with the permit.

• Why don’t we not charge for the permit; facilities send in paperwork and are covered? PCA

required by statute to charge for construction permit application. Paperwork burden would remain even without fee.

• Are facilities meeting legal requirements with this? USDA will be requiring NOI until rule.

This will not protect facilities from lawsuit under the Clean Water Act. Facilities can abide by state law once the exclusion is in rule. State rule does not supersede federal rule, and therefore some may chose to get permit anyway.

• Are there post construction requirements for non-CAFO sites? – Feedlots are no discharge. The

BMP fact sheet for feedlots does not address post construction; it addresses BMPs during construction only. Post construction is a different issue with feedlots than with urban construction. Post construction requirements in permit are for urban construction and development. Can build requirements into waste management plans, especially 399?

• Is the TMDL language in the construction permit (pg. 4, 7) for turbidity only? Does this mean that

permits to build won’t be issued for the MN River Valley? The TMDL must be approved. Don’t know yet what will be in the TMDL implementation plan (follow permit or do extra BMPs?)

Conservation Projects:

• Main concern at NRCS - conservation projects are for erosion control purposes and having to pay for a permit would be a disincentive for landowners.


• Agricultural Exclusion - mixed messages from EPA, but fairly clear on grassed waterways and terraces too. Do we have written approval from EPA on these? PCA can decide which projects, with justification, and then present to EPA.

• NRCS standards and specs can be changed without notice to PCA, but don’t think this is an

issue. NRCS has a written policy on implementation of standard specs and BMPs; can include language that policy will not change or be revised without approval by PCA commissioner.

• NRCS is committed to work with PCA in order to give this exclusion. What assurances are

needed to make this work? Is project oversight the big issue? What is coordination process that will make everyone comfortable? Looking for group to develop.

What other projects should be considered under the exclusion? Projects funded by USDA, FSA that follow NRCS standards and specs.

• Currently only projects that are NRCS/BSWR financed are excluded. Concern expressed regarding fairness if other similar projects not funded by NRCS are not eligible for exclusion, such as projects funded through USDA, FSA where technical assistance is provided by NRCS.

• How to assure consistency? Who has oversight? Tie to funding and specs? Are NRCS,

technical assistance providers trained and/or certified? Need to make sure that there is NRCS oversight - 98% are technical service providers.

• Can PCA get a paragraph describing this?

Streambank stabilization and wetland mitigation projects.

• Streambank restoration projects are far fewer and would have to be a sizable project ($40-50,000), are already getting DNR permit. Do not duplicate permits (same as feedlot), DNR work in waters permit.

• Are there other standards and specs that could be used (DNR, MnDOT), but meet PCA

requirements?

• Can PCA get information describing this – i.e. types of DNR projects, standards and specs, project oversight?

Projects under MS4 - local jurisdiction.

• Permitting at local level, same thing applies; common development issues that push into permit. Other permitting agencies with same requirements, applicable if you’re getting another permit?

• Non-conservation practice projects – utilities. Utility conditional use permit, trigger one acre.

• Those projects where environmental review process occurs for project. EAW or EIS covered and

not need permit - the protection measures that are required through these environmental assessments push over one acre. Not all in the group agree that those protection measures will be enough or implemented. Language is vague, BMPs need to be specific. Not “don’t let dirt run down hill.”

Summary:

• In order to expand the types of projects to include under the conditional exclusion, a coordination process is needed that all will commit to. Standards and specs and oversight are 2 key issues. Need a mechanism to periodically review standards and specs, etc. Agree upon project oversight.

• Add state and federal funded projects (USDA, FSA, others?) that use NRCS standards and

specs, with NRCS oversight. PCA needs paragraph or so describing this and technical service


providers. BWSR agreed to get draft language to PCA; include USDA, FSA projects not funded by NRCS.

• Add DNR wetland restoration projects. DNR public waters permit projects – for DNR permit

coverage area only, not entire site. Provided that they are done under a standard set of specs and oversight beyond requirements in funding agreement. PCA needs supporting information for this.

• Look at post construction requirements for excluded projects and figure out what we need. May

need to have a separate discussion regarding these requirements.

• Proposal to look at other projects that are not conservation projects per se, such as utility projects - no agreement on this issue. Further this discussion.

• Recommended that projects with federal and state oversight – take care of in rule. Projects at

local permit level – address at storm water steering committee.

• Do we need definition of conservation practice project?

• Caution expressed that if we look to include too many types of projects under this exclusion, then third party (through public notice) will dismiss the entire idea. Don’t undo the work that’s been done on NRCS/BWSR projects; do not make exclusion so overly exclusive that we loose it all – ensure exclusion for conservation practice projects for erosion control.

• Not all are concerned that if too many types of projects are under the exclusion then could lose it

all – each type of project must stand on its own merits.

• Exempted vs. excluded? Projects are to be excluded from applying for permit coverage, not exempted from requirements. Open to other language/comments on draft language.

• No decision made at this time if this group will meet again. Not sure if we can notice by May, want

to keep this rulemaking effort moving forward.

• PCA needs additional information as discussed above. PCA will revise draft language and e-mail to group. May need to meet again, either separately by project types or all together.


Appendix G MS4s designated by federal rule based on 2000 Decennial Census

City / Township County 2000

Population Within 2000 Census Urbanized Area Andover Anoka 26,588 Partially Anoka Anoka 18,076 Wholly Apple Valley Dakota 45,527 Partially Arden Hills Ramsey 9,652 Wholly Birchwood Village Washington 968 Wholly Blaine (Multi-County) Anoka 44,942 Partially Blaine (Multi-County) Ramsey 0 Wholly Bloomington Hennepin 85,172 Wholly Brockway Township Stearns 2,551 Partially Brooklyn Center Hennepin 29,172 Wholly Brooklyn Park Hennepin 67,388 Wholly Burns Township Anoka 3,557 Partially Burnsville Dakota 60,220 Partially Carver Carver 1,266 Partially Cascade Township Olmsted 3,183 Partially Centerville Anoka 3,202 Partially Champlin Hennepin 22,193 Wholly Chanhassen Carver 20,321 Partially Chaska Carver 17,449 Partially Chaska Township Carver 154 Partially Circle Pines Anoka 4,663 Wholly Columbia Heights Anoka 18,520 Wholly Coon Rapids Anoka 61,607 Wholly Corcoran Hennepin 5,630 Partially Cottage Grove Washington 30,582 Partially Credit River Township Scott 3,895 Partially Crystal Hennepin 22,698 Wholly Dayton (Multi-County) Hennepin 4,686 Partially Dayton (Multi-County) Wright 13 Partially Deephaven Hennepin 3,853 Wholly Dellwood Washington 1,033 Partially Dilworth Clay 3,001 Partially Dresbach Township Winona 413 Partially Duluth St. Louis 86,918 Partially Duluth Township St. Louis 1,723 Partially Eagan Dakota 63,557 Wholly East Bethel Anoka 10,941 Partially East Grand Forks Polk 7,501 Partially Eden Prairie Hennepin 54,901 Wholly Edina Hennepin 47,425 Wholly Elk River Sherburne 16,447 Partially Empire Township Dakota 1,638 Partially Excelsior Hennepin 2,393 Wholly Falcon Heights Ramsey 5,572 Wholly Farmington Dakota 12,365 Partially Fort Snelling Unorganized Hennepin 442 Wholly Fridley Anoka 27,449 Wholly



Population Within 2000 Census Urbanized Area Gem Lake Ramsey 419 Wholly Golden Valley Hennepin 20,281 Wholly Grant Washington 4,026 Partially Greenwood Hennepin 729 Wholly Ham Lake Anoka 12,710 Partially Haven Township Sherburne 2,024 Partially Haverhill Township Olmsted 1,601 Partially Hermantown Township St. Louis 7,448 Partially Hilltop Anoka 766 Wholly Hopkins Hennepin 17,145 Wholly Hugo Washington 6,363 Partially Independence Hennepin 3,236 Partially Inver Grove Heights Dakota 29,751 Partially Jackson Township Scott 1,361 Partially La Crescent Houston 4,923 Partially La Crescent Township Houston 1,487 Partially Lake Elmo Washington 6,863 Partially Laketown Township Carver 2,331 Partially Lakeville Dakota 43,128 Partially Landfall Washington 700 Wholly Lauderdale Ramsey 2,364 Wholly Le Sauk Township Stearns 1,880 Partially Lexington Anoka 2,214 Wholly Lilydale Dakota 552 Wholly Lino Lakes Anoka 16,791 Partially Little Canada Ramsey 9,771 Wholly Long Lake Hennepin 1,842 Partially Loretto Hennepin 570 1990 Census UA Louisville Township Scott 1,359 Partially Mahtomedi Washington 7,563 Wholly Maple Grove Hennepin 50,365 Partially Maple Plain Hennepin 2,088 Partially Maplewood Ramsey 34,947 Wholly Marion Township Olmsted 6,159 Partially Medicine Lake Hennepin 368 Partially Medina Hennepin 4,005 Partially Mendota Dakota 197 Wholly Mendota Heights Dakota 11,434 Wholly Midway Township St. Louis 1,479 Partially Minden Township Benton 1,790 Partially Minneapolis (Phase I) Hennepin 382,618 Wholly Minnetonka Hennepin 51,301 Wholly Minnetonka Beach Hennepin 614 Wholly Minnetrista Hennepin 4,358 Partially Moorhead Clay 32,177 Partially Moorhead Township Clay 442 Partially Mound Hennepin 9,435 Partially Mounds View Ramsey 12,738 Wholly New Brighton Ramsey 22,206 Wholly New Hope Hennepin 20,873 Wholly Newport Washington 3,715 Wholly North Oaks Ramsey 3,883 Partially North St. Paul Ramsey 11,929 Wholly



Population Within 2000 Census Urbanized Area Oak Grove Anoka 6,903 Partially Oakdale Washington 26,653 Wholly Oakport Township Clay 1,689 Partially Orono Hennepin 7,538 Partially Osseo Hennepin 2,434 Wholly Pine Springs Washington 421 Wholly Plymouth Hennepin 65,894 Partially Prior Lake Scott 15,917 Partially Proctor St. Louis 2,852 Partially Ramsey Anoka 18,510 Partially Rice Lake Township St. Louis 4,139 Partially Richfield Hennepin 34,439 Wholly Robbinsdale Hennepin 14,123 Wholly Rochester Olmsted 85,806 Partially Rochester Township Olmsted 2,916 Partially Rosemount Dakota 14,619 Partially Roseville Ramsey 33,690 Wholly St. Anthony (Multi-County) Hennepin 5,664 Wholly St. Anthony (Multi-County) Ramsey 2,348 Wholly St. Bonifacius Hennepin 1,873 Partially St. Cloud (Multi-County) Benton 6,391 Wholly St. Cloud (Multi-County) Sherburne 5,982 Partially St. Cloud (Multi-County) Stearns 46,734 Partially St. Cloud Township Stearns 7,549 1990 Census UA St. Joseph Stearns 4,681 Partially St. Joseph Township Stearns 2,449 Partially St. Louis Park Hennepin 44,126 Wholly St. Paul (Phase I) Ramsey 287,151 Wholly St. Paul Park Washington 5,070 Wholly Sartell (Multi-County) Benton 2,011 Wholly Sartell (Multi-County) Stearns 7,630 Partially Sauk Rapids Benton 10,213 Partially Sauk Rapids Township Benton 723 Partially Savage Scott 21,115 Partially Shakopee Scott 20,568 Partially Shoreview Ramsey 25,924 Partially Shorewood Hennepin 7,400 Partially South St. Paul Dakota 20,167 Wholly Spring Lake Park (Multi-County) Anoka 6,667 Wholly Spring Lake Park (Multi-County) Ramsey 105 Wholly Spring Lake Township Scott 3,681 Partially Spring Park Hennepin 1,717 Partially Sunfish Lake Dakota 504 1990 Census UA Tonka Bay Hennepin 1,547 Wholly Vadnais Heights Ramsey 13,069 Wholly Victoria Carver 4,025 Partially Waite Park Stearns 6,568 Partially Watab Township Benton 2,920 Partially Wayzata Hennepin 4,113 Wholly West Lakeland Township Washington 3,547 Partially



Population Within 2000 Census Urbanized Area West St. Paul Dakota 19,405 Wholly White Bear Lake (Multi-County) Ramsey 23,974 Wholly White Bear Lake (Multi-County) Washington 351 Wholly White Bear Township Ramsey 11,293 Partially Willernie Washington 549 Wholly Woodbury Washington 46,463 Partially Woodland Hennepin 480 Wholly Total 2,868,043 County Urbanized Area(s) 2000 Population Anoka Twin Cities 298,084 Benton St. Cloud 34,226 Carver Twin Cities 70,205 Clay Fargo / Moorhead 51,229 Dakota Twin Cities 355,904 Hennepin Twin Cities 1,116,200 Houston LaCrosse / LaCrescent 19,718 Olmsted Rochester 124,277 Polk Grand Forks / East Grand Forks 31,369 Ramsey Ramsey 511,035 Scott Twin Cities 89,498 Sherburne St. Cloud / Twin Cities 64,417 St. Louis Duluth 200,528 Stearns St. Cloud 133,166 Washington Twin Cities 201,130 Wright St. Cloud / Twin Cities 89,986 Total 3,390,972

Appendix GG



Appendix H MS4s population 10,000 or more designated by proposed rule

City / Township County 2000 Population

Albert Lea Freeborn 18,356

Austin Mower 23,314

Bemidji Beltrami 11,917

Brainerd Crow Wing 13,178

Buffalo Wright 10,097

Cloquet Carlton 11,201

Faribault Rice 20,818

Fairmont Martin 10,889

Fergus Falls OtterTail 13,471

Forest Lake Washington 14,440

Hastings Dakota 18,201

Hibbing St. Louis 17,071

Hutchinson Wright 13,080

Mankato Blue Earth 32,427

Marshall Lyon 12,735

New Ulm Brown 13,594

North Mankato Blue Earth 11,798

Northfield Rice 17,147

Owatonna Steele 22,434

Red Wing Goodhue 16,116

Stillwater Washington 15,143

Willmar Kandiyohi 18,351

Winona Winona 27,069

Worthington Nobles 11,283

Total 394,130

Appendix HH



Appendix I MS4s population 5,000 or more designated by proposed rule (Municipalities are located within ½ mile of an outstanding resource value water or a river, lake or stream with a TMDL based on the 2004 List of Impaired Waters)

City / Township County 2000 Population Waterbody Name / Type

Alexandria Douglas 8,820 Lake Winona/Impaired Lake

Baxter Crow Wing 5,555 Little Buffalo Creek/Impaired Stream, Mississippi River/Mississippi River Segment

Big Lake Sherburne 6,063 Elk River/Impaired Stream

Big Lake Township Sherburne 6,785

Elk River & Mississippi River/Impaired Stream, Mississippi River/Scenic and Recreational River

Cambridge Isanti 5,520 Rum River/Scenic and Recreational River

Detroit Lakes Becker 7,348 Sucker Creek/Trout Stream, Unnamed trout streams/Trout Stream

Glencoe McLeod 5,453 Buffalo Creek/Impaired Stream

Grand Rapids Itasca 7,726 Mississippi River/Impaired Stream, Mississippi River/Mississippi River Segment

Litchfield Meeker 6,562 Jewitt’s Creek/Impaired Stream

Little Falls Morrison 7,719 Mississippi River/Mississippi River Segment

Marion Township Olmsted 6,159 Kinney Creek/Trout Stream

Montevideo Chippewa 5,346 Minnesota River & Chippewa River/Impaired Stream, Minnesota River/Scenic and Recreational River

Monticello Wright 7,868 Mississippi River/Impaired Stream & Scenic and Recreational River

North Branch Chisago 8,023 Sunrise River/Impaired Stream, Beaver Creek/Trout Stream, County Ditch #3/Trout Stream, Unnamed trout streams/Trout Stream

Otsego Township Wright 6,389 Mississippi River & Crow River South Fork/Impaired Stream, Mississippi River/Scenic and Recreational River

Redwood Falls Redwood 5,459 Redwood River & Minnesota River/Impaired Stream, Minnesota River/Scenic and Recreational River, Ramsey Creek/Trout


Stream

St. Michael Wright 9,099 Crow River South Fork & Unnamed Creek/Impaired Stream

St. Peter Nicollet 9,747

Minnesota River/Impaired Stream, Ottawa Bluff & WMA Fen/Section containing Fen, Paul’s Creek & Unnamed trout stream/Trout Stream

Waconia Carver 6,814 Burandt Lake/Impaired Lake

Waseca Waseca 8,493 Clear Lake/Impaired Lake

TOTAL 140,948

Appendix II


Appendix J Incidence of state and local taxes.


state of minnesota regional environmental …chapter 7001, governing stormwater permits, chapter...

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