5 Colo. Code Regs. § 1002-61.21
In accordance with the requirements of C.R.S. 1973, 24-4-103(4) the Commission adopts this Statement of Basis and Purpose.
These regulations prescribe the requirements and procedures for implementation of the State Discharge Permit System and for continuation of the NPDES program delegated to the State in 1975 by the U.S. Environmental Protection Agency. These regulations are intended to comply with the State's agreement with EPA, applicable requirements of Federal law, and the Colorado Water Quality Control Act as amended by S.B. 10 (1981). These regulations are expected to improve and make more efficient an existing program.
The General Assembly significantly amended the Colorado Water Quality Control Act with the adoption of S.B. 10 (1981), and this is the primary reason for these amendments. The new law became effective on July 1, 1981. The changes primarily concern revised definitions, timeframes for action, a newly mandated fee structure, and implementation of S.B. 10. These regulations provide direction to the Water Quality Control Division and potential dischargers into state waters. The direction specifically relates to preparation and evaluation of applications for discharge permits or their renewal, modification, revocation or suspension. Major subjects covered by these regulations are as follows:
The Commission proposed a simple fee structure whereby the permit applicant would pay an hourly charge of $80.00 for each hour of direct technical time spent by the Division on the permit. That rate was also intended to cover administrative and clerical time for all hours worked whether or not directly billable to a specific permit.
At the October 6, 1981 Commission hearing on the proposed final permit regulations many witnesses expressed grave reservations about the hourly rate established, and questioned the Division's proposal in terms of the intent of S.B. 10 (1981). In effect, the first fee proposal was requiring permit applicants (whether new, renewals, or for amendments) applying in a particular fiscal year, to bear the cost of all permit activities in that year, whether such costs were directly attributable to them or not. It also became evident that permittees would have trouble budgeting for a fee when they didn't know how much it was going to cost. In addition there was much testimony stating that the hourly fee was excessive. The Commission is responsive to these and other concerns. However, the Commission feels that under the changes in the Water Quality Control Act and with current budget assumptions, it is fair and necessary to assess a reasonable level of permit fees for issuance and on-going administration which will supplement the amount of State, General and Federal funds available. The Commission has set interim fees that would not be a fixed cost for each permit but would charge each applicant for actual hours on that permit.
These regulations provide that the Commission will review recommendations of the Division annually on fees for both permit issuance and annual permit administration. The Division will analyze its total budget for each year, including State general funds, Federal funds, and estimated revenue from fees and enforcement fines. The Commission will review in accordance with these regulations the findings and updated information from year to year and authorize reasonable fees to be collected based upon budget needs from year to year.
The Commission feels strongly that what constitutes "substantial" change for a facility must be reviewed on a case by case basis and cannot be defined for all possible types of facilities or changes that may occur. Many witnesses felt that for renewal of a permit, the Division should merely refer to previously submitted information and quickly re-issue the same permit. In some cases this can be done but in many others past information submitted is inadequate. Renewal permits are not necessarily substantially less time-consuming to process than an application for a new facility.
The Division fully expects that as time records are compiled it will have better documentation as to efforts spent on renewals for different types of facilities and can more closely compare relative costs of new and renewal applications.
The parties to the Commission hearings held in preparation of these regulations are listed on the attached page.
PARTIES TO THE HEARINGS FOR THE REGULATIONS FOR THE STATE DISCHARGE PERMIT SYSTEM
FISCAL STATEMENT REGARDING AMENDMENTS TO THE REGULATIONS ENTITLED: "REGULATIONS FOR THE STATE DISCHARGE PERMIT SYSTEM"
GENERAL FISCAL IMPACT
Costs are incurred by an applicant for a discharge permit during pre-application facility evaluation. Such evaluation is needed to provide data required in a discharge permit application. The extent of the evaluation varies as a function of facility size and complexity. The information about facilities for which a permit is required is readily available to the management of an existing facility or may be contained in a prior permit. For a new facility much of the data would be contained in design and engineering documents needed by the applicant for reasons other than the filing of a permit application.
Permit applications contain both mandatory and optional information requirements. This reduces data demands to those which are essential. Applicants for permitting of major discharges are required to submit more data than are applicants for minor discharges.
Further, based on testimony, data requirements thought by parties to impose additional cost were minimized. All data required in these regulations is necessary and will be used in the Division's engineering evaluation of the discharge for which a permit is sought. Utilization of the public participation and adjudicatory hearing provisions of these regulations would expose permit applicants, the Division, and petitioners other than permit applicants, to hearing and case preparation expense. The amount is unpredictable.
The major costs of compliance with these regulations will be incurred by permittees in meeting discharge permit effluent limitations. However, these regulations specify only the procedures for imposing such requirements and not the requirements themselves. Therefore, the major costs of compliance must be determined on a case-by-case basis upon permit issuance. Consistent with these considerations little specific information was submitted to the Commission regarding the cost of compliance with these regulations except with respect to permit fees.
Procedures associated with variances and consideration of treatment of domestic wastewater beyond secondary provide opportunities for financial relief that were not available under previous permit regulations.
SPECIFIC FISCAL, IMPACT OF CERTAIN REGULATORY PROVISIONS
Based on the fiscal note to S.B. 10 (1981) and later estimates by the Division of the revenues to be derived from permit fees, the fiscal impact for fiscal year 1982 is approximately $372,000 from permit fees. This is a cost to permit applicants and permit holders and income to the water quality control fund from which appropriations are made for operation of the permit program. Approximately $128,000 was expected from enforcement fines in FY-82 and $128,000 in FY-83, but enforcement fines are not a provision of these regulations. It is essential that in the application of the fee portion of these regulations that sufficient cash funds are generated to cover the costs of permit processing and administration such that the various aspects of S.B. 10 and particularly the 180 day response time in the Act is satisfied. This makes the fees an issue of need to cover cost versus the appropriate level of the fee from the viewpoint of permit applicants. Testimony on this issue resulted in separation of the fee for annual administration of the permit from the fee for its preparation. Such separation facilitates budgeting by permit applicants and permit holders. Failure to raise sufficient cash funds through fees to cover permitting costs would impose a fiscal impact equal to the difference between fees obtained from permitting and the expenses incurred. This could result in a request to the General Assembly for supplemental funds or layoff of personnel. This later alternative would diminish the Division's responsiveness to program requirements. The payment of the fees indirectly impacts the rate payers as a cost and similarly impacts all taxpayers as a potential offset to general taxation. S.B. 10 (1981) limits the maximum fee for a new permit to $25,000, and to $5,000 for a renewal permit as defined in the Act for any and all permits required for an entire contagious plant site.
The specific fee schedule adopted is as follows:
There are currently approximately 1100 discharge permit holders in the State. Permitting activity will vary from approximately 250 to 300 actions per year.
PARTIES TO PROCEEDINGS
5 CCR 1002-61.21