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In the matter of the amendment of ARM 17.30.201 and 17.30.1341 pertaining to permit application, degradation authorization, and annual permit fees and general permits
1.  On December 23, 2010, the Board of Environmental Review published MAR Notice No. 17-309 regarding a notice of public hearing on the proposed amendment of the above-stated rules at page 2870, 2010 Montana Administrative Register, issue number 24.
2.  The board has amended ARM 17.30.1341 exactly as proposed and has amended ARM 17.30.201 as proposed, but with the following changes, stricken matter interlined, new matter underlined:
17.30.201  PERMIT APPLICATION, DEGRADATION AUTHORIZATION, AND ANNUAL PERMIT FEES  (1) through (1)(h) remain as proposed.
(2)  For purposes of this rule, the definitions contained in ARM Title 17, chapter 30, subchapter 10 and subchapter 13 are incorporated by reference.  The following definitions also apply in this rule:
(a) through (e) remain as proposed.
(f)  "multi-county," for pesticide permit fee purposes, means the general permit authorizing pesticide application within multiple contiguous counties, not to exceed 20, that are within the same Montana Department of Agriculture field office district as identified by the applicant;
(m)  "renewal permit" means a permit for an existing facility that has an effective discharge permit; and
(n)  "single county," for pesticide permit fee purposes, means the general permit authorizing pesticide application within one county or within multiple counties that are not within the same Montana Department of Agriculture field office district.; and
(o)  "threshold," for pesticide permit fee purposes, means the area of surface water that is impacted annually by pesticide treatment, as designated in the Pesticide General Permit for specific pattern uses.
(6)  The fee schedules for new or renewal applications for, or modifications of, a Montana pollutant discharge elimination system permit under ARM Title 17, chapter 30, subchapter 11 or 13, a Montana ground water pollution control system permit under ARM Title 17, chapter 30, subchapter 10, or any other authorization under 75-5-201, 75-5-301, or 75-5-401, MCA, or rules promulgated under these authorities, are set forth below as Schedules I.A, I.B, I.C, and I.D.  Fees must be paid in full at the time of submission of the application.  For new applications under Schedule I.A, the annual fee from Schedule III.A for the first year must also be paid at the time of application.  For new applications under Schedule I.B and I.C, the annual fee is included in the new permit amount and covers the annual fee for the calendar year in which the permit coverage becomes effective.
(a) and (b) remain as proposed.
(c)  The department may assess an administrative processing fee under Schedule I.D when a permittee makes substantial alterations or additions, requiring significant additional review, to a sediment control plan, waste management plan, nutrient management plan, pesticide discharge management plan, or storm water pollution prevention plan.
Schedule I.A remains as proposed.
Schedule I.B  Application Fee for Non-Storm Water General Permits
Single county - less than threshold
Multi-county - less than threshold
Single county - greater than threshold
Ground water remediation or dewatering
Ground water potable water treatment facilities
Other general permit, not listed above
(i) through (n) remain as proposed.
Schedule I.C remains as proposed.
(o) remains as proposed.
Schedule I.D remains as proposed.
(7) remains as proposed.
Schedule II remains as proposed.
(8) and (8)(a) remain as proposed.
Schedule III.A remains as proposed.
Schedule III.B  Annual Fee for Non-Storm Water General Permits
Concentrated animal feeding operation
Sand and gravel production
Domestic sewage treatment lagoon
Single county - less than threshold
Multi-county - less than threshold
Single county - greater than threshold
Multi-county - greater than threshold
Ground water remediation or dewatering
Potable water treatment facilities
Other general permit, not listed above
(b) through (d) remain as proposed.
Schedule III.C remains as proposed.
(e) through (11)(b) remain as proposed.
3.  The following comments were received and appear with the board's responses:
COMMENT NO. 1:  The fees for coverage under the pesticide general permit are too high.  Fees should be set at only what is necessary to cover administrative costs.  It is hard to judge the scope of this administrative work, since the permitting process is not yet fully defined.
RESPONSE:  The Department of Environmental Quality Water Protection Bureau (department) operates under a fee-based program.  The Montana Water Quality Act requires the board to adopt fee rules that are sufficient to recover the costs of issuing permits, licenses, and other authorizations, as well as the administrative costs of operating the program.  Section 75-5-516, MCA.  It is hard to exactly predict program costs at this time, since the permitting process and the regulated community have not been fully defined.  However, it will require department time and resources to ensure that applicants submit a complete Notice of Intent (NOI) and comply with the pesticide general permit requirements.
The department estimated the proposed fees for the pesticide general permit based on consideration of the following factors:  (a) comparison to general permits for construction dewatering and construction storm water; (b) comparison to other general permit fees, which are approximately 25% higher than the fee originally proposed for single-county pesticide applicators; (c) comparison to existing 308 authorization fees, which have historically been $400 annually; (d) the types of chemicals that could potentially be discharged to state waters and the potential impacts of these chemicals on the environment, with a higher fee needed for higher potential impacts; (e) an assumption that the program will require 1.5 full time equivalent (FTE) staff to administer the program; and (f) an assumption that there will be approximately 100 permittees.
Based upon comments received, the proposed fees have been significantly reduced.  In addition to reducing the multi-county and single-county fees, the revised rules will create a new category for smaller sources that discharge less than the pesticide permitting threshold designated in the general permit.  The new category will have nominal application and annual fees.  If it becomes apparent in the future that the program is not self-sufficient, the department may request a fee increase based on the shortfall at that time.
COMMENT NO. 2:  The definitions of multi-county and single-county permits are not clear enough, and may be confusing to applicators conducting business in more than one county.
RESPONSE:  Based upon comments received, the definition of "multi-county" has been changed.  Rather than restricting operations to one of the five agriculture field office districts, the "multi-county" definition is changed to include up to 20 contiguous counties.  The limit of 20 out of the 56 counties will allow each applicant to cover up to about one third of the state in any one authorization.  This will ensure that the department has a manageable administrative burden, while allowing flexibility for owner/operators whose work crosses county boundaries.  The definition of "single county" also has been changed, to eliminate the reference to multiple counties that are not in the same agriculture field office district.
Each owner/operator must determine the best permitting strategy for its own business.  If pesticide application activities statewide could impact state waters, the owner/operator will need to determine if the activities will be located within one county or multiple counties.  Based on that determination, the owner/operator would indicate the type of permit requested and submit the appropriate fee.
COMMENT NO. 3:  There should be an exemption for local government, since fees will cut into the limited dollars available to control mosquitoes and aquatic noxious weeds at the local level.
RESPONSE:  There is no difference in the cost to the department for permitting and compliance efforts, or in the environmental impacts of pesticide activity, between local government pesticide application and that of state, federal, or private activity.  Based on the statutory requirement that fees be sufficient to cover the costs of administering the program, it is not appropriate to create an exemption for local government.
A majority of local governments already have a budget set for mosquito and weed control, which should include permitting under the current 308 authorization process.  See 75-5-308, MCA.  308 authorizations have been required since 1993, and the current annual fee is $400, although that fee is reduced in this rulemaking to $250.  The new rules also introduce a streamlined NOI process, with nominal fees, for pesticide applications that are below the annual threshold, as defined under the pesticide general permit.  Most local governments affected by the pesticide general permit should see a reduction in permitting costs because they will be able to take advantage of the new below-threshold permit coverage with substantially lower fees.
COMMENT NO. 4:  The need for this permit may be temporary or become moot, because federal action may correct it, but we need to make sure this permit is not overly burdensome to applicators.
RESPONSE:  The requirement to create a pesticide discharge permitting program originated in January of 2009 with a decision by the federal Court of Appeals for the Sixth Circuit.  The court held that application of pesticides to water required a permit under the federal Clean Water Act.  As a consequence of the federal court decision, the department was required to develop a Montana pesticide general permit.  The Montana general permit was issued by the original court deadline, which was April 9, 2011.  The court subsequently extended the deadline for permit coverage to October 31, 2011.
Congress is considering legislation to exempt pesticide application from Clean Water Act permitting.  If that legislation is enacted, the department will not implement the Montana pesticide general permit.  No fees will be collected under the new fee rule, and the permit will effectively sit idle until the board can take action to repeal the related rules.  Pesticide applicators who would have been subject to the pesticide general permit would revert to the existing 308 authorization program, which allows temporary exemptions from water quality standards for the use of pesticides.
If there is no action by Congress to overturn the federal court decision, the department will implement the Montana pesticide general permit, and will require the submittal of an NOI and payment of fees by October 31, 2011.  Until that date, pesticide applications to waters of the state will be required to have authorization under the 308 program.  In an effort to reduce the burden to applicators, the department intends to provide education and outreach in conjunction with existing pesticide training courses, and will provide information and updates on the department webpage at http://deq.mt.gov/Permits.mcpx.
COMMENT NO. 5:  The fees for this permit should be absorbed by either EPA or the department.  The pesticide discharge permit requirement is an unfunded mandate, and it will add to costs and will impact the well-being of citizens and visitors to our communities.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Responses to Comment Nos. 1 and 4.
COMMENT NO. 6:  The board needs to determine if this is the correct permit fee.  It may be too high; it may be too low.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Response to Comment No. 1.
COMMENT NO. 7:  The proposed fees for the pesticide general permit will render our mosquito abatement program ineffective.  For 2010 our budget was $2,000 and the proposed permit fee of $900 does not kill a single mosquito.  With $1,100 left we cannot hire our contractor to do an effective job of mosquito control.  The public health will suffer as a result of the taxpayers' money being wasted on this non-productive fee.  There has been a system (FIFRA) in place for years that satisfies our needs.  The entire NPDES program must be eliminated before more damage is done to Montana's public health and the ability of ranchers and farmers to help create the food supply for America.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Responses to Comment Nos. 1, 2, and 3.
COMMENT NO. 8:  Valley County Commissioners oppose any change in regulations or fees.  Our mosquito control department feels that the present system is working well and that there is no need for change.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Responses to Comment Nos. 1, 2, and 3.
COMMENT NO. 9:  The proposed fees are not a great amount, but our county watches all expenditures, and, if we can continue without any increase in costs, that is our preference.  We are serious about the budget.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Responses to Comment Nos. 1, 2, and 3.
COMMENT NO. 10:  The proposed fees for mosquito control included in the new rules will place a great hardship on our little town.  Our entire mosquito control budget is $4,715 for this fiscal year.  Without mosquito control, the quality of life in our town will decline.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Responses to Comment Nos. 1, 2, and 3.
COMMENT NO. 11:  Our county is concerned that the fees for the pesticide general permit program are too high.  Broadwater County is a class 5 county and is very low in tax dollars.  Last fall Eurasian Watermilfoil, a noxious weed, was found throughout our waterways from the Jefferson River to Canyon Ferry Reservoir.  Many of the areas can be treated without the use of herbicides but, for some areas, herbicide treatment is the only feasible way to eradicate the plants.  Also, the Jefferson and Missouri River form the boundary between Broadwater and Gallatin and Jefferson Counties, depending on the location.  Since the weed is located on several different rivers and in several different counties, the fees would add up quite quickly making a cooperative effort very difficult.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Responses to Comment Nos. 1, 2, and 3.
COMMENT NO. 12:  These rules may act as a disincentive to commercial applicators, who are educated, trained, and experienced professionals.  Commercial applicators are in the best position to avoid environmental impacts from spraying, and they should be encouraged to stay in business.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Responses to Comment Nos. 1 and 2.
COMMENT NO. 13:  The proposed permit fees for mosquito control entities are far too high for small business contractors.  Our budgets are very tight and this added expense adds even more pressure.  Government is supposed to encourage small business, not discourage it.  Counterparts in other states say that their states' proposed fees are less than half of Montana's proposed fees.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Responses to Comment Nos.1 and 2.
COMMENT NO. 14:  A county weed control district is concerned about the cost of the permit and modifications.  As aquatic weed awareness rises, they will continue to find new infestations of existing and new weeds that may require the use of an herbicide not listed on the original permit.  There also will be new labeling for existing herbicides, as well as new herbicides.  With an authorization fee of $900, and about 30 modifications over the last five years, it would have cost the district an additional $15,900 as well as the $90,000 it has cost to treat aquatic weeds over the last five years.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Responses to Comment Nos.1, 2, and 3.  The need for a modification would depend on how the NOI was originally submitted.  The NOI does not require the applicant to identify the specific type of pesticide used, so changing the type of pesticide will not necessarily trigger a modification.  The NOI also allows a general statement of treatment location within a single county, e.g., "all water bodies"; so changing water bodies would not necessarily trigger a modification.
COMMENT NO. 15:  I operate a small business that does mosquito control for 12 mosquito districts.  Some of my districts have $4,500 or less in their budget for this, and I was told to share with you that I would not have their business if this particular fee structure was passed.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Response to Comment No. 1.  An applicator may decide that it is a good investment to obtain pesticide general permit coverage for all counties where the applicator might conduct pesticide applications.  In that case, any district that hires the applicator would be covered under the applicator's authorization, and the district would not be required to submit a separate NOI.  See Response to Comment No. 20.
COMMENT NO 16:  The members of a grain growers association view this proposed fee structure as a tax and as an excessive paperwork burden.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Response to Comment No. 1.
COMMENT NO. 17:  It is not fair that a farmer that farms in Hill County and Blaine County would only need a single-county permit, but a farmer that farms in Blaine and Phillips counties would be subject to a multi-county fee because the two counties were not in the same agriculture field office district.
RESPONSE:  Based upon comments received, the proposed fees have been reduced, and the multi-county permit has been restructured.  See Responses to Comment Nos. 1 and 2.
COMMENT NO. 18:  If there is a way to streamline this process and reduce costs, it would go a long way towards addressing the concerns of a wood products association.
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Responses to Comment Nos. 1 and 2.
COMMENT NO. 19:  Would a separate permit authorization be required for each pesticide that an applicator uses or would a single authorization cover all pesticides used?
RESPONSE:  The owner/operator applying for coverage under the permit is required to submit one NOI and fee for all pesticide applications to state waters for which they are responsible.  As long as the NOI specifies all of the relevant pesticide use patterns that would be undertaken, the authorization would cover those within the county or counties indicated in the NOI.  For example, if an owner/operator were responsible for both mosquito control and weed and algae control within one county, and the NOI indicated those applications, both could be permitted under a single authorization.
COMMENT NO. 20:  How will the fee be applied to aerial applicators:  individually on each farm, on each field, or can there be one single application fee just for business for a year?
RESPONSE:  All pesticide applications to state water need to have coverage under the pesticide general permit.  It will be up to the aerial applicators and their clients as to what the best permitting option may be.  One of the parties needs to be responsible for submitting a complete NOI package and fee prior to any pesticide application that may affect state waters.  The NOI can be as general or specific as the applicant determines.  For instance, a county may obtain permit coverage for all applications to all state waters in the county.  In that case, aerial applicators hired by the county could operate under the county's authorization.  Conversely, an aerial applicator may obtain permit coverage for all contiguous counties where the applicator conducts pesticide applications.  In that case, anyone hiring the applicator would be covered under the applicator's authorization and would not be required to submit a separate NOI.
The pesticide general permit authorization is on a five-year renewal cycle.  The initial fee submitted with the NOI includes both the application fee and the first year's annual fee.  Fees for each of the following four years are annual fees only.  An applicant can choose to terminate the authorization at any time if they no longer intend to spray to state waters, but they will be responsible for the annual fee for the year in which they terminate.
COMMENT NO. 21:  Has the state considered permit-by-rule or a statewide NOI process?  Forest ownerships often cross county and district boundaries and it seems punitive to have to pay these increased costs.
RESPONSE:  A statewide general pesticide application permit would be too difficult to administer and would not be consistent with the way other MPDES permits are administered.  To effectively track permit coverage and compliance, the department needs more specific information about pesticide application areas.  However, based on comments the proposed fees have been reduced and the definition of multi-county has been changed.  See Responses to Comment Nos. 1 and 2.
COMMENT NO. 22:  What is the time frame for the permit application and approval?  Monitoring for budworm populations starts in late May or early June.  Initial monitoring may determine that certain properties do not need to be sprayed, while other properties will be recommended for spraying based on budworm activity.
RESPONSE:  The rules authorizing the pesticide general permit and fees will be considered for final adoption by the board at their meeting on May 13, 2011.  If adopted, the rules will be effective by the end of May 2011.  The pesticide general permit itself was finalized by the April 9, 2011, deadline imposed by the federal court, although that deadline was subsequently extended to October 31, 2011.  Accordingly, the pesticide general permit allows until October 31, 2011, for submittal of NOI and fee packages.  This will allow the department time to provide outreach and education.  In the meantime, the existing 308 authorization process will continue.
The department will process NOI submittals within a very short time frame.  Coverage under the pesticide general permit is effective upon filing a complete NOI and fees, and the department will send out a letter confirming coverage within a week or ten days.
COMMENT NO. 23:  What is the turn-around time from filing an application to receipt of the permit authorization?  Our spray season begins in late April.  If the permit would not be available until May or June, can we get an exemption?
RESPONSE:  See Response to Comment No. 22.
COMMENT NO. 24:  Fees are required to be paid in full at the time of application.  Are they refundable if monitoring work determines that spraying is unnecessary?
RESPONSE:  If a particular spray project is deemed unnecessary, but the applicant may do additional spraying throughout the year, it would be in the applicant's best interest to maintain permit coverage.  However, if the applicant terminates permit coverage under this permit, there is no provision in the fee rules to allow a fee refund.
COMMENT NO. 25:  The department may assess an administrative processing fee when the permittee makes substantial alterations or additions, requiring significant review, to a pesticide discharge management plan.  What circumstances would warrant additional administrative processing fees?
RESPONSE:  In response to comments, the term "pesticide discharge management plan" was changed to "pesticide management plan," because an important purpose of the plan is to prevent discharges if possible.
According to ARM 17.30.201(6)(c), as amended, the department may assess an administrative processing fee under Schedule I.D when a permittee makes substantial alterations or additions, requiring significant additional review, to a pesticide management plan.  This will not routinely occur, since pesticide management plans must be maintained on-site but are not required to be submitted to the department except under special circumstances.  The administrative fee might apply if submittal of the pesticide management plan were required as part of a complaint investigation or during a compliance inspection, and the submitted plan was found to be deficient.  The department could assess the administrative fee if significant plan review were required in that situation.
COMMENT NO. 26:  Do pesticide management plans allow the flexibility to add new landowners on short notice?  This commonly occurs when neighbors learn that a forest treatment is planned.
RESPONSE:  Pesticide management plans can and should be continually updated by applicants to reflect changed conditions such as new application areas.  Since the department is not requiring submittal of the plans except as part of a compliance inspection, complaint investigation, or other similar circumstance, no fees are required for revisions, other than as described above in the Response to Comment No. 25.
COMMENT NO. 27:  Could this permit be combined with another permit, such as a storm water runoff permit?
RESPONSE:  Combining this permit with the storm water general permit would not be appropriate.  Based on federal requirements, discharge of pesticides to surface water through storm water runoff is considered a nonpoint source and is exempt from the discharge permit requirements.
COMMENT NO. 28:  Could the application form be reduced to a page or two, to reduce the workload for the department so that the fee structure could be reduced?
RESPONSE:  Based upon comments received, the proposed fees have been reduced.  See Response to Comment No. 1.  The NOI set out in the general permit will be as streamlined as possible.  The current draft is three pages plus a signature page.
COMMENT NO. 29:  If an application is submitted for an authorization under the suction dredge general permit, is the applicant required to pay a $500 administrative fee in addition to the $50 application fee?
RESPONSE:  The administrative processing fee in ARM 17.30.201(6)(c) does not apply to suction dredge permit applications.  An applicant for coverage under the suction dredge general permit would need to pay an initial fee, which is $50 for residents of Montana or $200 for non-residents.  These fees include both the application fee and the first year's annual fee.  After the first year, the annual fee is $25 for residents or $100 for non-residents.  These fees are set in statute at 75-5-516(12), MCA, and are not being changed in this rulemaking.
COMMENT NO. 30:  A Montana group of gold prospectors opposes the increase of fees for new applications for suction dredge permits.
RESPONSE:  The fees for suction dredge permits have not been changed in this rulemaking.  See Response to Comment No. 29.
COMMENT NO. 31:  Who would be required to get the pesticide discharge permit?
RESPONSE:  A detailed response to this question is outside the scope of this rulemaking, and will be addressed through the general permit process.  In order to ensure that the regulated community is aware of the pesticide general permit and associated fees, the department intends to provide education and outreach in conjunction with existing pesticide training courses, and will provide information and updates on the department webpage at http://deq.mt.gov/Permits.mcpx.
COMMENT NO. 32:  How is the 640-acre pesticide use pattern threshold in the pesticide general permit determined?  Is it determined by the distance and width of the surface water?  If the owner/operator chooses not to spray Bacillus thuringiensis over state water bodies, what is the appropriate buffer distance?
RESPONSE:  This question is outside the scope of this rulemaking and will be addressed through the general permit process.  See Response to Comment No. 31.
COMMENT NO. 33:  The requirements for a pesticide management plan appear rigid and burdensome.  Are there some examples of the plans for Bacillus thuringiensis applications?
RESPONSE:  This question is outside the scope of this rulemaking and will be addressed through the general permit process.  See Response to Comment No. 31.
Reviewed by:                                     BOARD OF ENVIRONMENTAL REVIEW
/s/ James M. Madden                         By:  /s/ Joseph W. Russell
JAMES M. MADDEN                                   JOSEPH W. RUSSELL, M.P.H.
Certified to the Secretary of State, May 16, 2011.
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