EPA Publishes Final Rule for Small MS4 General Discharge Permits

HIGHLIGHTS:

• The U.S. Environmental Protection Agency (EPA) has published a final rule that applies to general discharge permits for small Municipal Separate Storm Sewer Systems (MS4s), which include systems serving populations under 100,000 and systems at large hospitals, universities and military bases.
• Permitting authorities must regulate small MS4 discharges through comprehensive general permits, two-tiered general permits or a combination thereof.
• The final rule becomes effective on Jan. 9, 2017. Existing small MS4 discharge permits are not subject to the rule until they are due for renewal. The rule does not apply to soon-to-be-issued permits that are beyond their public comment period.

The U.S. Environmental Protection Agency (EPA) published the National Pollutant Discharge Elimination System (NPDES) Municipal Separate Storm Sewer System (MS4) General Permit Remand Rule in the Federal Register on Dec. 9, 2016. This final rule represents EPA's latest effort to promulgate rules for general NPDES permits for small MS4s after the agency's previous rule was partially remanded by the U.S. Court of Appeals for the Ninth Circuit.

EPA's rule requires NPDES permitting authorities (i.e., states with approved NPDES programs or EPA Regions) to choose from three methods when issuing general NPDES permits for small MS4s: 1) issue a comprehensive general permit that includes all terms and conditions; 2) issue a basic general permit that is supplemented with additional conditions specific to the individual MS4 applicant; or 3) use a combination of these two methods.

Background

Small MS4s include systems that serve populations of less than 100,000 as well as systems associated with large universities, hospitals, prisons and military bases. In 1999, EPA determined for the first time that discharges from small MS4s must be regulated by NPDES permits. Clean Water Act (CWA) Section 402(p)(3)(B) requires that MS4s subject to NPDES permits "reduce the discharge of pollutants to the maximum extent practicable." MS4 applicants seeking an NPDES permit can apply for an individual permit or a general permit. Under EPA's 1999 rule, MS4 applicants seeking a general NPDES permit had to submit a Notice of Intent (NOI) describing the best management practices (BMPs) that they would implement to reduce pollutant discharges to the "maximum extent practicable."

Environmental groups challenged EPA's 1999 small MS4 rule, arguing that the rule was flawed because the terms and conditions of general NPDES permits for MS4s were not subject to public comment or regulatory review. The Ninth Circuit agreed, finding that the NOIs submitted by MS4 applicants were the "functional equivalent" of applications for individual permits that the CWA requires to be subject to public notice, comment and the opportunity to request a hearing before final approval. The court also held that the permitting authority must review NOIs submitted by MS4 applicants because nothing prevented applicants from proposing BMPs for themselves that would not reduce pollutants to the maximum extent practicable. Accordingly, the court remanded to EPA the portions of its 1999 rule dealing with public participation and regulatory review of NOIs submitted by MS4 applicants.

Three Approaches for Issuing NPDES General Permits to Small MS4s

EPA's rule provides permitting authorities three approaches for issuing NPDES general permits to small MS4s. Each approach requires permits to clearly establish what is necessary for the MS4 to reduce pollutants "to the maximum extent practicable" while satisfying the CWA's public participation requirements.

Option 1: Traditional Approach Using Comprehensive General Permits

This approach requires NPDES permitting authorities to put all necessary terms and conditions into one comprehensive general NPDES permit. A MS4 applicant will submit a traditional NOI to provide the permitting authority basic information about its system, to establish its eligibility for a permit and to commit to comply with the terms of the general permit. The permitting authority can then issue a draft general permit that includes a full set of "clear, specific, and measureable" terms that fulfill the MS4 regulatory requirement "to reduce pollutant discharges from the MS4 to the maximum extent practicable." The permitting authority will include in the administrative record its rationale for the specific permit terms, which will be subject to public notice, comment and the opportunity to request a hearing. No additional requirements are added once the permitting authority issues the comprehensive general permit. EPA recognizes that it may be difficult for a permitting authority to create a single general permit that establishes terms and conditions suitable for all small MS4s. Therefore, EPA recommends that permitting authorities create subcategories of MS4s based on factors such as the systems' age, size and type, and create different comprehensive general permits for each subcategory.

Option 2: Procedural Approach Using Two-Step General Permits

Under this approach, a MS4 operator submits an NOI that contains detailed information about its system and the specific BMPs, milestones, schedules and terms that it believes will allow it to reduce pollutants "to the maximum extent practicable." The permitting authority will review the NOI and notify the public of its proposal to authorize the MS4 to discharge under a basic general permit, then provide an opportunity for the public to review, comment and request a hearing on the applicant's NOI as well as the specific terms and conditions that the permitting authority proposes to add to the final permit to achieve the required pollutant reductions. Once the public involvement period has ended, the permitting authority will issue a final decision authorizing the MS4 to discharge under the terms of the general permit and any terms and conditions that are specific to the individual MS4.

Option 3: Permitting Authority Choice Approach

The final approach that EPA authorized in its final rule is the ability for a permitting authority to use a combination of Options 1 and 2 in a way that best suits the circumstances. EPA expects that a permitting authority may elect to use different approaches for different subcategories of small MS4s. For example, a permitting authority may choose to use traditional comprehensive general NPDES permits for small MS4s that have established uniform stormwater management plans, but rely on Option 2 for MS4s that would benefit from more flexibility to address unique circumstances – such as non-traditional MS4s associated with large hospitals, public universities or military bases. Similarly, for MS4s that propose to discharge into receiving waters subject to total maximum daily loads (TMDLs), it may be easier to incorporate the watershed-specific TMDL requirements into the permit using the two-step approach.

Requirements for Permit Terms and Conditions

EPA's rule clarifies that permit terms and conditions should not contain non-mandatory language (e.g., "the permittee is encouraged to") or caveats (e.g., "if practicable, the permittee must"). Additionally, the terms and conditions of small MS4 permits must be re-evaluated each permit term to ensure that they continue to reduce pollutants "to the maximum extent practicable." EPA cautions permitting authorities not to reissue identical permits to small MS4s over multiple terms without evaluating whether the permit applicant can make additional progress toward meeting water quality goals.

Rule Implementation

EPA's rule becomes effective on Jan. 9, 2017. However, existing small MS4 permits do not have to be re-opened to comply with the new requirements. Rather, the new rule will apply to existing small MS4 permits when they are due for renewal. Additionally, the rule does not apply to soon-to-be-issued permits that are beyond their public comment period when the rule becomes effective. 
   

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.