Regulatory Flexibility Analysis for Small Businesses and Local Governments 6 NYCRR Part 601 and Subpart 621.4
1. 'Effect of Rule.' Prior to the 2011 amendments, Environmental Conservation Law (ECL) article 15, title 15, required permits solely for public water supplies with five or more service connections, regardless of the volume of water withdrawn. The statutory amendments (Chapter 401 of the 2011 Laws of New York) both expanded and limited this water withdrawal permit program.
The amendments expand the permit program to include withdrawals for purposes beyond public water supply, such as those for commercial, manufacturing, industrial, oil and gas development, and other purposes. The amendments generally limit the permit program to withdrawals that meet or exceed a threshold volume (of 100,000 gallons per day (gpd)). The effect is to regulate far more of the higher-volume withdrawals across the state while exempting from permitting requirements withdrawals associated with lower-volume public water supply systems. Nevertheless, under the regulations, withdrawals below the size threshold will still be required to comply with water pollution control laws (ECL article 17), Department of Health regulations, as applicable, and state environmental quality review (SEQR) requirements. The amendments to 6 NYCRR part 601 and subpart 621.4, and the consolidation of part 675 (Great Lakes water withdrawal registration) into part 601, implement this amended permitting program and the authorized exemptions thereto. The types of water withdrawal systems that are subject to the amended permit program are located in all areas of the state; so small businesses and local governments will be impacted by the regulations. As discussed below, the impacts are tempered by the 100,000 gpd threshold volume, exemptions, the availability of an 'initial permit,' and the staggered or delayed implementation schedule. While it is unknown how many local businesses and local governments may be affected by the amended law and rule, there are approximately 1,200 water withdrawals statewide that registered withdrawals in 2010 under ECL article 15 title 33. More than half of these are public water supplies that are already subject to the existing permitting requirements. This number is further reduced to approximately 500 as existing agricultural withdrawals that are properly reported are exempt from the permitting process.
2. 'Compliance Requirements.' The regulations do not distinguish between water withdrawal systems operated by small businesses and those operated by local governments. Existing agricultural withdrawals of any volume are exempt from the permit requirement altogether so long as the withdrawals were registered in accordance with ECL article 15 titles 16 and/or 33 as of February 15, 2012. Moreover, the registration requirement for agricultural withdrawals is subject to a more generous size threshold of an average of 100,000 gpd in any consecutive 30-day period. New agricultural withdrawals above the size threshold will require permits. The new part 601 implements other statutory exemptions to the water withdrawal permit requirement, such as those for fire suppression withdrawals and withdrawals approved by the Delaware River Basin Commission or Susquehanna River Basin Commission. Small businesses and local governments may benefit from these provisions. The exemptions are described in detail in the Regulatory Impact Statement (RIS) in this rule making.
Initial Permits. An "initial permit" includes all of the terms and conditions of a standard water withdrawal permit, but is a 'minor action' under the revision to subpart 621.4 that results in a slightly abbreviated permitting process. In the absence of a timely application for an initial permit, a standard water withdrawal permit must be applied for and approved under the full permit process. A water withdrawal system qualifies for an initial permit under the following circumstances: the withdrawal exists as of February 12, 2012; it is over the size threshold; it is properly reported to DEC by February 15, 2012 under existing law; it is not a public water supply; and the withdrawal is not otherwise exempt. (Existing public water supplies with water supply permits need do nothing different.) The slightly simpler administrative process for initial permits eases the compliance requirements for existing and previously-unregulated water withdrawals that are not exempt.
In addition, the application deadline for existing water withdrawals above the size threshold depends on the amount of water withdrawn. Under the provisions of part 601.7, initial permit applications are due according to a rolling series of deadlines, depending on the capacity of the system, such that the smallest withdrawals above the size threshold have the most time, five years, to apply. Specifically, applications for initial permits are not due until: February 15, 2017 for withdrawals equal to or greater than 0.1 but less than 0.5 million gallons per day (mgd); February 15, 2016 for withdrawals equal to or greater than 0.5 mgd but less than 2 mgd; February 15, 2015 for withdrawals equal to or greater than 2 mgd but less than 10 mgd; February 15, 2014 for withdrawals equal to or greater than 10 mgd but less than 100 mgd; and June 1, 2013 for withdrawals equal to or greater than 100 mgd. Such that small businesses and local governments that withdraw lesser amounts of water. These rolling deadlines would afford greater time delay benefits to the small businesses and local governments with the smaller water withdrawal systems above the size threshold.
These regulations become effective April 1, 2013, and the relevant 2013 permit application deadlines fall on June 1. Pursuant to section 202-b of SAPA, newly amended, we note here that a "cure period" for permit violations is not part of the water withdrawal regulations, as the enforcement of environmental permits is already subject to a broader enforcement policy and process.
3. 'Professional Services.' The regulations are the same for small businesses and local governments as they are for other regulated entities. Small business owners and local governments that own or operate water withdrawal systems are subject to the same requirements as other owners of water withdrawal systems, and would be required to retain the same level of professional services to comply with the regulations. The requirements are described in the "Costs" section of the RIS. A small business or local government who has a professional engineer with relevant experience on staff may use its engineer to produce any documents required by the regulations to be prepared by a professional engineer.
4. 'Compliance Costs.' Small business owners and local governments that operate water withdrawal systems are subject to the same requirements as others, and will likely incur similar costs as other withdrawal operators. The requirements are summarized in the "Costs" section in the RIS.
5. 'Economic and Technical Feasibility.' Small businesses and local governments who operate existing, currently-unregulated water withdrawal systems above the size threshold will need to meet the 'initial permit' requirements of the regulations. As noted above, the regulations provide a shorter and easier-to- comply-with administrative process for existing water withdrawal system through the 'initial permit' in the regulations. Applying for an 'initial permit' is quicker and less costly because it usually avoids the need for a permit hearing (as described in the RIS). The Department does retain discretion to require the hearing, but as the withdrawals of this nature already exist, a permit hearing is not expected to be common. To clarify, public notice and comment on the 'initial permit' application would occur, but a permit hearing on top of that would generally not be necessary.
It is important to understand that the economic burden related to the 'initial permit' process will be greater if the applicant did not report or register their withdrawals under ECL article 15 titles 16 or 33 by February 12, 2012, as is discussed in the RIS. The water withdrawal reporting requirements in ECL article 15 title 33 are statutory, already exist, and compliance is a pre-condition to eligibility to apply for an 'initial permit' with its more expedited process. The same is true for the Great Lakes Basin registrations requirements of ECL article 15 title 16. Potential 'initial permit' water withdrawal applicants are therefore urged to seek compliance advice or otherwise confirm their compliance with these statutory requirements. If such existing withdrawals at or above the size threshold were not reported or registered under titles 16 or 33, as applicable, by February 12, 2012, the small business owner or municipal entity is not eligible to apply for the quicker and less costly 'initial permit' and is instead required to apply for and obtain a standard water withdrawal permit under its more time consuming and more costly process. The costs associated with applying for an initial permit for existing water withdrawals should be less as most engineering, testing, environmental and alternative analyses costs would already have been incurred when the project was initially constructed, presumably through the SEQR and/or water pollution control permitting process (SPDES), as applicable. The economic savings (dollars and time) benefits of the 'initial permit' process are conditional benefits for withdrawals that already exist and that are at or above the size threshold and that are not otherwise exempt. Exemptions are spelled out in the RIS.
In addition to creating a more flexible permit application process for existing withdrawals above the size threshold, through the 'initial permit,' the regulations also afford flexibility and enhance the feasibility by providing additional time, up to five years depending on the capacity of the water withdrawal system, to submit the 'initial permit' application to the Department. The largest systems must apply first and the smallest systems (still at or above the size threshold), apply last.
While the administrative process of getting an 'initial permit' will be quicker and less costly, and will provide flexibility with respect to the time for the submittal of the application, the application will still need to address and complete all of the substantive requirements of a water withdrawal permit application, including an Engineer's Report, the costs of which are estimated in the RIS.
6. 'Minimizing Adverse Impacts.' Please see Items 2 through 5, above concerning the staggered or delayed implementation schedule for existing withdrawals that previously did not require a water withdrawal permit, as well as the other measures offered in the regulations to enable affected parties to more easily and effectively comply. In terms of additional measures taken to minimize potential adverse impacts of complying with the regulations, we note that water hydropower withdrawals that are federally regulated through a FERC (Federal Energy Regulating Commission) license are exempt from the water withdrawal permit requirement. To avoid potential duplication in the annual reporting obligation, and as is further discussed in the RIS, annual reports or registrations of water withdrawals that are submitted under ECL article 15 titles 16 or 33 are deemed sufficient under the regulations until those statutory provisions sunset on December 31, 2013. The flexibility, minimization of impacts, and avoidance of duplication that are in the regulations, as described in Items 2 through this Item 6, above, and in the RIS, are the direct result of outreach to the regulated community that occurred during the development of the legislation, was incorporated into the amended water withdrawal statute, and are now carried out in these regulations.
As stated above, under the amended statute and these regulations, new public water supply systems below the size threshold volume, regardless of the number of service connections, are no longer required to apply for water withdrawal permits. Existing public water supplies that are under the size threshold need do nothing different as a result of the amended legislation and these regulations. Similarly, existing agricultural withdrawals that were registered or reported to DEC under ECL article 15 titles 16 or 33 on or before February 15, 2012 are exempt altogether from the water withdrawal permit requirement under the amended law and these regulations (although such withdrawals must continue to be registered). And, the registration requirement for agricultural withdrawals is subject to a more generous size threshold.
For water withdrawal systems that are not exempt and that are above the size threshold as of February 15, 2012, the initial permit process is somewhat less costly and time consuming than the standard permit process. Initial permit applications for the smallest withdrawal systems above the size threshold are due last, providing time to comply up to five years.
7. 'Small Business and Local Government Participation.' The public outreach that occurred during the development of the statutory amendments was of significant and material assistance in drafting these regulations. DEC played a role in drafting the legislation underlying this rulemaking. In that process, DEC sought and received input from many stakeholders, including representatives of small businesses and local governments. The discussions were about how regulated entities would be subject to the law, and the discussions resulted in legislative changes to address concerns that are now also carried out in these regulations.
For example, in 2010, based on discussions with the New York Farm Bureau, DEC modified the statutory definition of threshold volume for agricultural withdrawals, and made other changes applicable to agricultural withdrawals to address concerns of New York's farmers. Those changes are codified in the rules primarily under §§ 601.2 (definitions), 601.9 (permit exemptions) and 601.17 (registration of water withdrawals for agricultural purposes). During the legislative process, DEC met with the Business Council and the New York State Chemical Alliance to address concerns of New York's businesses. In particular, these groups explained that it would be burdensome for such groups to apply for permits for withdrawals that have already existed without being regulated under ECL article 15 title 15 or its regulations in Part 601. To address this concern, the amended legislation includes provisions allowing existing systems to utilize the more efficient and less costly "initial permit" process. Again, that process is codified in the regulations.
The Department also met with the Independent Power Producers of New York, Inc. After consideration of the concerns raised, the Department committed to ensuring Department's water withdrawal regulations would not impose requirements duplicative of federal requirements and would require the Department to coordinate its review of water withdrawal permits with State Pollutant Discharge Elimination System (SPDES) permits, and any other applicable DEC permits which may already include conditions related to water withdrawals. These regulations, therefore, exempt withdrawals that are regulated by FERC from the regulations' permit requirements. In addition, these regulations expressly require that the Department review a water withdrawal permit application in coordination with the SPDES permit or other permit program.
In March through May 2011, DEC had several discussions with representatives of the New York State Association of Town Superintendents of Highways, Inc. to discuss potential permit requirements for water pumping equipment at mines owned and operated by towns. In April 2011, DEC met with Ski Areas of New York, Inc. and representatives of the state's ski areas to address concerns related to the impacts the proposed statutory amendments and implementing regulations might have on the water withdrawals from streams that are associated with New York's ski areas. DEC also discussed the proposed amendments with persons representing the interests of golf courses and installers of irrigation systems. DEC had individual discussions in 2010 and 2011 with several local governments about how the proposed amendments may impact them in relation to their existing public water supply systems. These, either individually or collectively, resulted in changes to the draft statutory amendments prior to their passage and thereby also to these regulations, which substantially mirror and carry out the statutory amendments. The regulatory provisions reflect a direct response to the public outreach and include, without limitation, the following: the definitions in § 601.2 ('environmentally sound and economically feasible,' establishment of the 'threshold volume' at a level as high as 100,000 gallons per day, with a more generous interpretation for farm withdrawals, and 'vessel' is defined such that it does not include tanker trucks); the annual reporting in § 601.5 (potential duplication with reporting under ECL article 15 titles 16 and 33 eliminated, the list of over seven exemptions from annual reporting), the 'initial permit' provisions in § 601.7, in their entirety; the provision of fifteen separate water withdrawal permit exemptions in § 601.9, which includes nine more than are in the amended statute, particularly the permit exemption for all withdrawals for agricultural purposes that were properly registered or reported by February 15, 2012; inclusion of "economically feasible" in the water conservation program that is required under the permit application provisions in § 601.10; and the allowance for the water conservation programs to be developed without the services of a professional engineer.
As an ancillary but relevant matter, DEC has undertaken outreach in an effort to ensure that all affected entities were made aware of the water withdrawal reporting requirements of ECL article 15, title 33 that became effective April 1, 2009. DEC posted information about the new reporting requirement on its webpage at http://www.dec.ny.gov/lands/55509.html. In 2009, DEC sent letters to thousands of persons potentially subject to the new reporting requirement as well as to organizations representing those persons, including the Association of Towns of the State of New York, public water suppliers, State Pollutant Discharge Elimination System permittees, and Concentrated Animal Feeding Operations. In 2010, DEC contacted the same list of persons via e-mail. In August 2011, DEC met with the New York Farm Bureau to discuss further outreach to alert farmers to the benefits to them of registering or reporting prior to February 15, 2012.