Legislative Environment Chairs Introduce Pollutant Trading Bills

  Photo: MPCA

Photo: MPCA

Senate and House Environment Committee Chairs have introduced legislation to authorize the Minnesota Pollution Control Agency (MPCA), in collaboration with the Board of Water and Soil Resources (BWSR) to develop a watershed credit exchange program.

S.F. 2705 and H.F. 3120 outline a pollutant trading or banking program and make funding and MPCA fund management authority for such a program more explicit. Existing law authorizes MPCA to develop a trading program, and MPCA has overseen several point to point and point to non-point trades that have been reviewed on a case-by-case basis. The new bill could result in a streamlined program for generating, banking, and buying credits that is more widely used throughout the state.

While the bill does not include specific details about the "watershed credit exchange" program, one clear application is at public water treatment facilities located throughout greater Minnesota. Many communities are searching for funding for required public water treatment infrastructure improvements to enable them to meet water quality standards, especially for phosphorus.

  Photo: MPCA

Photo: MPCA

Some state funds are available through the Water Infrastructure Fund, but available funding does not enable all facilities to be funded through this mechanism.

A facility could purchase watershed credits to, at least temporarily, comply with water quality requirements for the facility. Watershed credits could be generated by non-point sources, for example, through best management practice (BMP) installation on farms resulting in quantifiable reductions of pollutants entering the water. A "credit bank" comprising multiple quantifiable reductions in water pollution would be available to enable public water treatment facilities to meet their water quality requirements at a cost lower than that of full-scale facility infrastructure updates.

Watershed districts could be key partners in the work of establishing and maintaining a bank of watershed credits for trading given their existing role in Best Management Practice development, water quality monitoring, and constituent engagement.

  Photo: BWSR

Photo: BWSR

Current Rulemaking

Municipal Water Fluoridation - Minnesota Department of Health

Groundwater Health Risk Limits - Minnesota Department of Health

NorthMet Permit - Department of Natural Resources

NorthMet CWA Section 401 Certification for USACE General Permits - Minnesota Pollution Control Agency

  • NorthMet 401 certification is now open, and the comment period runs through March 16, 2018.

Wild Rice & Sulfate - Minnesota Pollution Control Agency

  • In July 2017, MPCA proposed to change the rules related to the state's existing wild rice sulfate standard and wild rice waters.
  • Among other things, the rule proposed to change the current 10 mg/L rule to an equation-based water quality standard that accounts for a number of factors, including the amount of iron in a body of water. The rule also proposed to establish a new classification specific to wild rice waters (Class 4D), distinct from the current classification within the broader Class 4 Agricultural and Wildlife class.
  • On January 11, 2018, an Administrative Law Judge denied the MPCA's proposed rule changes.

Water Quality Standards and Tiered Aquatic Life Uses (TALU) - Minnesota Pollution Control Agency

  • MPCA's TALU framework amendments to state water quality standards, contained in Minnesota Rules Chs. 7050 and 7052, became effective on October 23, 2017.

3M Settles Lawsuit with MN Attorney General

The Minnesota Attorney General's Office and 3M agreed on a settlement amount of $850 million to settle a lawsuit filed in 2010 over industrial groundwater contamination. The Attorney General had sought at least $5 billion in damages from 3M for the company’s disposal of industrial chemicals -- including PFCs, which are bioaccumulative and harmful chemicals that can build up over decades and increase rates of cancer and birth defects -- in the Twin Cities Metro Area over the past 40 years. The $850 million will be provided to the state as a grant to fund clean drinking water and natural resource projects.

The settlement only covers damages to natural resources. The Attorney General's office stated that it has no jurisdiction to recover damages for personal injuries. 3M settled more than 3,500 personal injury suits last year, paying out more than $671 million.

Partnering for Water Quality and Flood Reduction Benefits

The Minnesota Department of Agriculture (MDA) announced a new collaboration among the MDA, Cedar River Watershed District, CFS Cooperative, Hormel Foods Corporation, Land O'Lakes SUSTAIN, the Environmental Initiative, and the Mower County Soil and Water Conservation District.

This public-private partnership, aimed at reducing flooding and improving water quality in the Cedar River watershed located in southeastern Minnesota, grew out of an agreement to enhance the state's water quality signed in 2016 by Governor Mark Dayton and Land O'Lakes.

  Photo: Minnesota Pollution Control Agency

Photo: Minnesota Pollution Control Agency

The partnership will engage CFS Cooperative, Land O'Lakes, and farmers located within the Cedar River Watershed to enable more precision agricultural practices and lead to farmers' participation in the voluntary Minnesota Agricultural Water Quality Certification Program, a 10-year guarantee of regulatory certainty in exchange for farmer-implemented conservation practices. Land O'Lakes and CFS help farmers become certified through direct education and technical assistance.

The Latest on Buffers

The MN Board of Water and Soil Resources (BWSR) released an updated final draft Model Watershed District Buffer Rule on January 18, 2018.

  Photo: MN Board of Water and Soil Resources

Photo: MN Board of Water and Soil Resources

In December 2017, BWSR reported that 97% of lands adjacent to public waters and 93% of all lands subject to the buffer law are in compliance with the law. The date by which lands adjacent to public ditches must be in compliance is November 1, 2018. No compliance date extensions are expected at present.

The first reporting deadline for the buffer implementation program was January 1, 2018 for water management authorities. BWSR will update compliance information after reviewing submitted reports.

Water management authorities must add "other watercourses" identified by Soil and Water Conservation Districts to their local water plans by July 1, 2018.

Supreme Court Rules on Judicial Review of WOTUS Rule

On January 22, the Supreme Court held that all lawsuits challenging the Clean Water Rule must be brought in U.S. District Courts. The decision resolves the procedural question about where challenges to the Clean Water Rule should be filed. The Clean Water Rule, published in 2015 by the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (USACE), clarifies water resource management in the United States under the Clean Water Act (1972).

The Supreme Court's ruling concludes efforts made under both the Obama and Trump administrations to obtain a ruling that would have permitted a challenge to the Clean Water Rule to be brought in the U.S. Circuit Courts of Appeal.

The Supreme Court considered the issue on appeal following an October 2015 decision by the U.S. 6th Circuit Court of Appeals to issue a nationwide stay of the Clean Water Rule, issued by the Obama administration and also known as the Waters of the United States rule, or WOTUS.

The Clean Water Act language at issue prescribes judicial review of rules within the Clean Water Act. The Act states that U.S. district courts will hear rule challenges except in the case of seven types of actions by the EPA designated for direct review by the court of appeals.

In a unanimous decision, the Supreme Court held that the WOTUS rule does not fall within the types of challenges that may be filed in the U.S. Circuit Courts of Appeal.

The result of this decision is that the 6th Circuit did not have jurisdiction to hear the WOTUS rule challenge or to issue the 2015 stay of the Clean Water Rule.

While the Supreme Court considered the WOTUS rule judicial review jurisdiction question, the Trump administration is taking steps to repeal and replace the WOTUS rule.

The EPA and the USACE have proposed to repeal the WOTUS rule (and to impose a moratorium by rule) that would prevent enforcement of the WOTUS rule until 2020. The federal government is taking these actions so that the WOTUS rule can not be applied as law even if the 6th Circuit's stay is lifted.

$8 million to aid buffer enforcement

On May 30, 2017, Governor Dayton signed a tax bill and an environment omnibus bill that will provide “Riparian Aid” to watershed districts and counties that elect jurisdiction to enforce the Buffer Law. $8 million has been appropriated for fiscal year 2018 (which starts July 1, 2017) and $10 million for 2019. 

To be eligible for Riparian Aid in the coming year, a watershed district or county must file with the Board of Water and Soil Resources, by 4:30 p.m. on June 28, 2017, a signed resolution accepting jurisdiction to enforce the Buffer Law and a point of contact. BWSR will estimate the funding available to a watershed district if the watershed district provides data on the total miles of public drainage ditches in the watershed by 4:30 p.m on June 14, 2017.

Further details are available here.

Stormwater - reuse projects earn exemption from state permit

Watershed districts have been partnering with golf courses, city parks, and school districts to construct stormwater harvest and reuse projects. The regulatory burden on these projects will be a little lighter, as the 2017 Legislature exempted stormwater reuse projects from the requirement to obtain a DNR water appropriations permit.  

Harvest and reuse projects reduce use of drinking water for simple irrigation, and more policy work to help support such efforts is yet to come. The Clean Water Fund Water Reuse project involves an interagency work group that is expected later this summer to recommend further measures to promote successful reuse projects.

For a look at stormwater reuse projects around Minnesota, view our gallery.

Legislature creates confusion on levy certification deadline

The 2017 Legislature added "special taxing districts" to the list of entities that must under the Truth in Taxation law submit their proposed tax levy to the county auditor by September 30 for the following year. Watershed districts are included in the definition of "special taxing districts," but already have a longstanding deadline to adopt a budget and certify a tax levy by September 15. We are advising our clients that the September 15 date is still the one to follow.