OAH 4-2000-21002-1
Governor’s No. AR 423
STATE OF
OFFICE OF ADMINISTRATIVE HEARINGS
|
In the Matter of the Proposed Rules
of the State Department of Natural Resources Relating to Aquatic Plant Permit
Fees, |
REPORT OF THE
ADMINISTRATIVE LAW JUDGE |
Administrative Law Judge (ALJ) Bruce H. Johnson
conducted a series of hearings concerning rules proposed by the Minnesota
Department of Natural Resources (DNR or Department) regarding aquatic plant permit
fees. On February 23, 2010, hearings
were held at 2:00 p.m. and 7:00 p.m. at the
The hearing and this Report are part of a
rulemaking process governed by the Minnesota Administrative Procedure Act.[1] The legislature has designed the rulemaking
process to ensure that state agencies have met all the requirements that
The members of the DNR’s hearing panel at each
of the hearings were Steve Enger, Statewide Coordinator for the Aquatic Plant
Management Program, and David Wright, DNR Monitoring and Control Unit
Supervisor. Approximately four people
attended the hearings in
The Department and the Administrative Law Judge received written comments on the proposed rules prior to the hearing. At the hearing, the initial deadline for filing written comment was set at twenty calendar days (March 17, 2010), to allow interested persons and the DNR an opportunity to submit written comments. Following the initial comment period, the record remained open for an additional five business days (March 24, 2010), to allow interested persons and the Department the opportunity to file a written response to the comments received during the initial period. Numerous comments were received during the rulemaking process. To aid the public in participating in this matter, comments were posted on the Office of Administrative Hearings’ website as they were received. The hearing record closed for all purposes on March 24, 2010.
The Department must make this Report available for review by anyone who wishes to review it for at least five working days before the DNR takes any further action to adopt final rules or to modify or withdraw the proposed rules. If the DNR makes changes in the rules other than those recommended in this report, it must submit the rules, along with the complete hearing record, to the Chief Administrative Law Judge for a review of those changes before it may adopt the rules in final form.
After adopting the final version of the rules, the Department must submit them to the Revisor of Statutes for a review of their form. If the Revisor of Statutes approves the form of the rules, the Revisor will submit certified copies to the Administrative Law Judge, who will then review them and file them with the Secretary of State. When they are filed with the Secretary of State, the Administrative Law Judge will notify the Department, and the Department will notify those persons who requested to be informed of their filing.
Based upon all the testimony, exhibits, and written comments, the Administrative Law Judge makes the following:
1. The DNR administers the aquatic plant management (APM) program, which allows riparian owners to gain access to open water while protecting the aquatic habitat and water quality provided by aquatic plants. Minnesota Statutes, section 103G.615, gives the DNR authority to adopt rules regarding the APM program. The statute authorizes the DNR to establish a fee schedule for permits to control or harvest aquatic vegetation and to prescribe standards to issue and deny permits.[2]
2. In 2008, the Minnesota Legislature directed the DNR to establish rules for APM permit fees that recover the full cost of administering and enforcing the permit program.[3] To facilitate this directive, the Legislature removed the existing permit fees from statute. In response, the DNR tracked its APM permit program fees from 2006 through 2008 and found that the annual cost over this period was approximately $1 million. The Department also tracked permit revenues over this period, which averaged $300,000 per year.[4] Prior to 2005, aquatic plant permit fees were deposited in the state’s game and fish fund, and other revenues from that fund subsidized the cost of operating the DNR’s aquatic plant management program.[5] In 2005, the Legislature amended Minn. Stat. § 103G.615 by requiring permit fees to be deposited in the state’s water recreation account and directing that revenues from that account be appropriated to fund the cost of the APM program.[6] In 2008, the Legislature again amended Minn. Stat. § 103G.615, mandating the adoption of rules requiring aquatic plant permittees to bear the full cost of the program.[7] Accordingly, the Department now needs to generate an additional $700,000 in annual revenue to meet the Legislature’s most recent directive.
3. In response to this legislative directive, the DNR formed an advisory committee with representatives from three lake associations, two statewide organizations interested in lake management, four businesses that sell aquatic plant control services, and an APM specialist from the DNR’s Fisheries Division.[8] The advisory committee provided input on three different APM permit fee options. The first option closely resembled the current fee structure, but increased the permit fee to $110 and capped the fees at $2,200. The advisory committee felt that a fee of $110 was too high and that the cap was unfair when compared to the fee that individual permit holders would pay. The second option was a tiered system of permit fee caps based on the number of applicants on a single permit. According to the advisory committee, this system was too complex and would result in many errors. Furthermore, the committee opined that this system would encourage lake associations to add people to the applications simply to reach the next pricing break point. The third option incorporated an inspection fee within the permit fee. The DNR suggested the base permit fee could be $65, with a $150 inspection fee tacked on if the inspection was necessary (i.e. new permits or significant changes to existing permits). The advisory committee also thought this price point was too high.[9]
4. The advisory committee concluded that the key components of a successful permit fee structure are that: (1) everyone who receives a permit should pay some amount; (2) the permit fee structure should be simple; (3) there should be no fees for lake-wide invasive species management; (4) landowners should not pay more than $50-$60 to participate in the APM permit program; and (5) the DNR should find efficiencies in the program to reduce costs.[10]
5. The Department is proposing that lakeshore residents pay either a $90 or a $40 permit fee depending on the type of control requested, up from $35 and $20 respectively. The Department is also proposing to eliminate the maximum cap on fees associated with several different types of permits. The $90 fee would be charged for permit categories that require an initial inspection and DNR follow-up to ensure compliance. Permits in the $90 category include: aquatic plant control adjacent to lakeshore property; offshore control of aquatic plants; and lake-wide or bay-wide pesticide control of plankton algae or duckweed. Permits in the $40 category include swimmer’s itch control adjacent to lakeshore property and pesticide control of filamentous algae adjacent to lakeshore property. These permits generally do not require an inspection or follow-up monitoring.[11] For automated aquatic plant control on a site that does not exceed 2,500 square feet in an area adjacent to lakeshore property, the Department is proposing a three-year permit for $90.
6. The proposed rules contain two new permit fees: (1) a $100 permit fee for businesses that engage in the commercial mechanical control of aquatic vegetation or harvest aquatic plants for sale; and (2) a $300 inspection fee for each body of water listed on a permit application that requires an inspection.[12]
7. The DNR is also proposing to eliminate the fees for permits that authorize selective lake-wide invasive aquatic plant control (i.e. Eurasian water milfoil, curly-leaf pondweed, and flowering rush).
8. In addition, the proposed rules prohibit the control of lotus; specify that an inspection is required after an APM permit has lapsed for three years or more; allow the landowner signature requirement to be waived for control performed under an invasive APM permit when there are numerous property owners; allow an alternate form of landowner notification when the signature requirement is waived; extend the expiration date of permits from September 1 to December 31 of the year the permit is issued; clarify when permit fees can be refunded; specify who is responsible for reporting on the activities covered by an APM permit; specify that a commercial mechanical control permit is valid for one calendar year and expires on December 31 of the year it is issued; and specify that commercial mechanical permits may not be transferred.[13]
9.
On July
28, 2008, the DNR published in the State Register a Request for Comments
on possible amendments to rules governing aquatic plant permit fees. The notice indicated that the DNR had not yet
prepared a draft of the proposed rules and requested comments on proposed
criteria.[14]
10.
On July
6, 2009, the DNR published a second Request for Comments in the State
Register. The notice indicated that
the Department was considering adopting rules regarding aquatic plant permit
fees as well as aquatic plants and nuisances.[15]
11.
As
required by Minn. Stat. § 14.131, the DNR asked the Commissioner of Minnesota
Management and Budget to evaluate the fiscal impact and benefit of the proposed
rules on local units of government. Minnesota
Management and Budget provided comments in a memorandum dated November 20,
2009. Executive Budget Officer Michael
Salzwedel concluded that the proposed rules would have “minimal fiscal impact
on local units of government.”[16]
12.
On December
7, 2009, the DNR filed copies of the proposed Notice of Hearing, proposed
rules, and draft Statement of Need and Reasonableness (SONAR) with the Office
of Administrative Hearings. The filings
complied with Minn. R. 1400.2080, subp. 5.
On the same date, the DNR also filed a proposed additional notice plan
for its Notice of Hearing and requested that the plan be approved pursuant to
Minn. R. 1400.2060. By letter dated December
14, 2009, the Administrative Law Judge approved the additional notice plan.[17]
13.
On
December 28, 2009, the DNR distributed to more than 700 daily and weekly
newspapers and electronic media a statewide news release announcing the hearing
schedule and proposed rules. This same
day, the DNR also posted information regarding the proposed rules to its APM
webpage and sent an email to its advisory committee members. The DNR provided notice of the proposed rules
by electronic mail on December 30, 2009, to individuals who provided comments
via email.[18]
14.
On January
13, 2010, the DNR mailed the Notice of Hearing to all persons and associations
who had registered their names with the DNR for the purpose of receiving such
notice and pursuant to the Additional Notice Plan.[19] The
Notice contained the elements required by Minn. R. 1400.2080, subp. 2. The Notice identified the dates and locations
of the hearings in this matter. The
Notice also announced that the hearing would continue until all interested persons
had been heard, or additional hearing dates added, if needed.
15.
At the
hearing in
A.
the
DNR’s Request for Comments, as published in the State Register on July
28, 2008;[20]
B.
the
DNR’s second Request for Comments, as published in the State Register on
July 6, 2009;[21]
C.
the
proposed rules dated December 3, 2009, including the Revisor’s approval;[22]
D.
the
Department’s Statement of Need and Reasonableness (SONAR), dated November 18,
2009;[23]
E.
memorandum
from Minnesota Management and Budget regarding review under Minn. Stat. §
14.131, dated November 20, 2009;[24]
F.
a
letter dated December 14, 2009, noting that the Administrative Law Judge had
approved the DNR’s Notice of Hearing and Additional Notice Plan, and the DNR’s
request to OAH dated December 4, 2009;[25]
G.
the
Notice of Hearing as published in the State Register on December 28,
2009;[26]
H.
the
Notice of Hearing as mailed, dated December 14, 2009;[27]
I.
the
Certificate of Mailing the Notice of Hearing to the parties identified in the
Additional Notice Plan on January 13, 2010;[28]
J.
the
Certificate of Mailing the Notice of Hearing to the Rulemaking Mailing List on
January 13, 2010, and Certificate of Accuracy of the Mailing List as of
December 4, 2009;[29]
K.
the
DNR’s news release, dated December 28, 2009, announcing the proposed rules, and
information on the rules from the DNR’s web page;[30]
L.
the
certification that the DNR mailed a copy of the SONAR to the Legislative Reference
Library on January 13, 2010;[31]
M.
the
Certificate of Mailing the Notice of Hearing and the SONAR to various
Legislators on January 13, 2010, accompanied by a copy of the transmittal
letter;[32]
N.
a copy
of the opening statement of Steve Enger, Aquatic Plan Management Program
Coordinator;[33] and
O.
all
written comments and submissions on the proposed rules received by the
Department during the comment period.[34]
16. The Administrative Law Judge finds that the DNR has met all of the procedural requirements under applicable statutes and rules.
17. In its SONAR, the Department asserts that its specific statutory authority to adopt the fee provisions of these rules was granted by the Legislature in 2008 and is contained in Laws of Minnesota 2008, chapter 363, article 5, section 22, codified at Minn. Stat. § 103G.615, subd. 2.[35] Subdivision 2 provides:
(a) The commissioner shall establish a fee schedule for permits to control or harvest aquatic plants other than wild rice. The fees must be set by rule, and section 16A.1283 does not apply, but the rule must not take effect until 45 legislative days after it has been reported to the legislature. The fees shall be based upon the cost of receiving, processing, analyzing, and issuing the permit, and additional costs incurred after the application to inspect and monitor the activities authorized by the permit, and enforce aquatic plant management rules and permit requirements.
The remainder of the section allows the DNR to charge a fee for control of rooted aquatic vegetation along a shoreline, but prohibits the DNR from charging a fee for the control of purple loosestrife or lakewide Eurasian water milfoil. A fee may not be charged to a state or federal government agency applying for a permit to control aquatic plants, and the money received for the permits must be credited to the water recreation account.[36]
18. The DNR contends that it has general statutory authority to adopt the non-fee provisions of these rules contained in Minn. Stat. § 103G.615, subd. 3, regarding permit standards. Section 103G.615, subd. 3, provides:
Subd. 3.
Permit standards. The
commissioner shall, by rule, prescribe standards to issue and deny permits
under this section. The standards must ensure that aquatic plant control is
consistent with shoreland conservation ordinances, lake management plans and
programs, and wild and scenic river plans.
19. The ALJ concludes that the DNR has specific and general statutory authority to adopt the proposed rules.
20. Minn. Stat. §§ 14.131 and 14.23 require that an agency include in its SONAR a description of its efforts to provide additional notification to persons or classes of persons who may be affected by the proposed rule or explain why these efforts were not made. As discussed above, the Department submitted an additional notice plan to the Office of Administrative Hearings, which was reviewed and approved by the Administrative Law Judge by letter dated December 14, 2009. During the rulemaking proceeding, the DNR certified that it provided notice to those on the rulemaking mailing list maintained by the DNR and in accordance with its additional notice plan.[37]
21. As described below, the DNR made significant efforts to inform and involve interested and affected parties in this rulemaking:
A. the DNR published a Request for Comments in the State Register on July 28, 2008, and another one on July 6, 2009, after expanding the scope of the proposed rules;[38]
B. letters requesting comments were mailed to approximately 3,900 individuals who received an aquatic plant management permit in 2005-2008; individuals with commercial aquatic pest control licenses and commercial aquatic plant harvest permits; conservation districts; aquatic and plant-related professional societies; watershed districts; and conservation and environmental organizations;[39]
C. the DNR sent notice of the rule hearings to the 228 individuals and groups who responded to the Requests for Comments;[40]
D. the DNR announced this rulemaking process in December 2009 in a statewide news release that it distributed to all general news media in the state;[41] and
E. the proposed rules, the SONAR, and other information relating to the proposed rules have been available on the DNR’s website.[42]
22.
During
the periods after the Requests for Comments were published, the DNR received
comments from 228 groups and individuals.
Most of these comments were critical of the proposed fee increases.[43]
23.
The Department has disseminated the proposed
rules to affected parties. The Administrative Law Judge finds that the
DNR has satisfied the notice requirements.
V. Impact
on Farming Operations
24.
Minn.
Stat. § 14.111 imposes an additional requirement calling for notification to be
provided to the Commissioner of Agriculture when rules are proposed that affect
farming operations. In addition, where
proposed rules affect farming operations, Minn. Stat. § 14.14, subd. 1b,
requires that at least one public hearing be conducted in an agricultural area
of the state.
25.
The
proposed rules do not affect farming operations, and the ALJ concludes that the
Department was not required to notify the Commissioner of Agriculture.
26. Minn. Stat. § 14.131 requires an agency adopting rules to include in its SONAR:
(1)
a
description of the classes of persons who probably will be affected by the
proposed rule, including classes that will bear the costs of the proposed rule
and classes that will benefit from the proposed rule;
(2)
the
probable costs to the agency and to any other agency of the implementation and
enforcement of the proposed rule and any anticipated effect on state revenues;
(3)
a
determination of whether there are less costly methods or less intrusive
methods for achieving the purpose of the proposed rule;
(4)
a
description of any alternative methods for achieving the purpose of the
proposed rule that were seriously considered by the agency and the reasons why
they were rejected in favor of the proposed rule;
(5)
the
probable costs of complying with the proposed rule, including the portion of
the total costs that will be borne by identifiable categories of affected
parties, such as separate classes of governmental units, businesses, or
individuals;
(6)
the
probable costs or consequences of not adopting the proposed rule, including
those costs or consequences borne by identifiable categories of affected
parties, such as separate classes of government units, businesses, or
individuals; and
(7)
an
assessment of any differences between the proposed rule and existing federal
regulations and a specific analysis of the need for and reasonableness of each
difference.
27. With respect to the first factor, the DNR indicated in its SONAR that the proposed rules will primarily affect people who own shoreline properties that are affected by the growth of aquatic plants or other aquatic nuisance organisms, government units and private organizations that coordinate APM efforts, individuals and companies that control aquatic plants for hire or harvest aquatic plants for sale in retail or wholesale markets, and recreational users of public waters including boaters, anglers, and hunters.[44]
28. With regard to the second factor, the DNR stated that the costs are largely dependent on the number of permits requested and issued, as well as the intensity of enforcement efforts. The proposed rules do not require an increase in permitting or enforcement activity.[45]
29. The proposed rules will increase state revenues, as directed by the Legislature. Specifically, the proposed rules are designed to increase revenue by $700,000 per year to account for the difference between current permit revenue and program implementation costs. The DNR is aware that the increased permit costs in the proposed rules may result in a decrease in the number of permits issued.[46]
30. Regarding the third factor of whether there are less costly methods for achieving the purpose of the rule, the DNR noted that the proposed rules need to maintain the existing permitting and enforcement programs to provide adequate protection for aquatic plants. Less costly or less intrusive methods would not be sufficient to achieve the desired site-specific habitat management approach. Although the proposed rules increase permit fees to comply with the Legislature’s directive, the proposed rules are not more intrusive because they do not require permits for activities that are currently allowed without permits.[47]
31. Regarding the fourth factor, a description of alternative methods considered, the DNR contemplated both education and incentive-based approaches. While the DNR has made efforts in the past to educate shoreland owners about the need to limit shoreland disturbances and maintain shoreland, the DNR is aware that influencing attitude and behavior is difficult, particularly when owners of shoreline property will incur treatment costs. Although the DNR suggests that incentives could be an effective way to encourage shoreland owners to leave aquatic plant communities and habitats intact, it believes that there are insufficient financial incentives to offer them broadly. Ultimately, the possibility of financial incentives is constrained by the Legislature’s instructions.[48]
32. With regard to the fifth regulatory factor, the probable costs of complying with the proposed rule, the Department acknowledges that the proposed rules will increase permit costs for individual shoreland property owners, governmental units that own shoreland property and wish to control aquatic vegetation, and commercial businesses that mechanically control aquatic vegetation or harvest aquatic plants for sale.[49]
33. With respect to the sixth factor, the probable costs of not adopting the proposed rule, the DNR noted that the major consequence of not adopting the proposed rules is that permit fees would not be sufficient to recover the cost of administering and enforcing the APM program and the Department would not be in compliance with the 2008 legislative direction. Inadequate funding of the APM program will ultimately result in diminished protection and regulation of aquatic vegetation.[50]
34. Finally, with respect to the seventh factor, the DNR indicated that the proposed rules do not conflict with federal regulations.[51]
35. The Administrative Law Judge concludes that the DNR has fulfilled its obligation under Minn. Stat. § 14.131 to discuss costs and alternative assessments in the SONAR.
36. Minn. Stat. § 14.131 also requires that an agency include in its SONAR a description of how it “considered and implemented the legislative policy supporting performance-based regulatory systems set forth in section 14.002.” Section 14.002 states, in relevant part, that “whenever feasible, state agencies must develop rules and regulatory programs that emphasize superior achievement in meeting the agency’s regulatory objectives and maximum flexibility for the regulated party and the agency in meeting those goals.”
37. The DNR maintains that the rules as proposed are performance-based for several reasons. First, the proposed fee structure simplifies permit fees by placing them into four categories: (1) near-shore plant and nuisance control; (2) off-shore control of submersed aquatic plants; (3) lake-wide or bay-wide control of plankton algae and free-floating aquatic plants; and (4) APM activities for which no fee is charged. The DNR believes that this simplified structure will reduce confusion among applicants and thereby decrease DNR administrative costs.[52]
38. Second, the DNR asserts that not requiring re-inspection until an APM permit has lapsed for three or more years will reduce the number of required inspections. The DNR also believes that the increased permit fees will provide an incentive for some property owners to think more carefully about the amount of control of their shoreline that they wish to exercise.[53]
39. Finally, the proposed rules relax reporting requirements for permits that are valid for three years, permits that are valid for as long as a person owns their property, and permits that authorize a commercial service to perform the aquatic plant control.[54]
40. The Administrative Law Judge finds that the DNR has met the requirements set forth in Minn. Stat. § 14.131 for assessing the impact of the proposed rules, including consideration and implementation of the legislative policy supporting performance-based regulatory systems.
C. Consultation
with the Commissioner of Finance
41.
Under
42. As required, the Department consulted with the Commissioner of Finance, now known as Minnesota Management and Budget. On November 20, 2009, Executive Budget Officer Michael Salzwedel stated by letter that the proposed rules would have minimal fiscal impact on local units of government.[55]
43.
The ALJ finds that the Department has met the
requirements set forth in Minn. Stat. § 14.131 for consulting with the
Commissioner of Finance.
44.
Under
Minn. Stat. § 14.127, the DNR must “determine if the cost of complying with a
proposed rule in the first year after the rule takes effect will exceed $25,000
for: (1) any one business that has less
than 50 full-time employees; or (2) any one statutory or home rule charter city
that has less than ten full-time employees.”[56] The
Department must make this determination before the close of the hearing record,
and the Administrative Law Judge must review the determination and approve or
disapprove it.[57]
45. The DNR indicated in its SONAR that the proposed rules would not directly increase costs by more than $25,000 for small businesses in the first year after the rules take effect. The proposed rules implement an annual $100 fee for a commercial mechanical control permit (6280.0450, subp. 4.C). This proposed fee, like all of the proposed fees in this rulemaking, is the DNR’s method of complying with the Legislature’s directive to recover the cost of administering the APM program. The proposed rules also require an annual $100 fee for a commercial harvester permit (6280.0550, subp. 6). The final proposed rule affecting small businesses is the proposed fee of $300 per public water listed on an application that requires an inspection (6280.0550, subp. 6).[58] The DNR asserts that the proposed rules do not directly increase costs by more than $25,000 for small businesses but concedes that the proposed rules could reduce profits for businesses that control aquatic plants for hire. The increased permit fees could result in fewer APM permits, but the DNR has no way to estimate the potential lost profits for small businesses.[59]
46.
Kevin Kretsch of Lake Restoration, Inc., argues
that the DNR has not adequately addressed the impact to small businesses as
required by Minn. Stat.
§ 14.127. According to Mr. Kretsch, the proposed
increase in permit fees would directly cost
47.
In response, the DNR states that it has met its
burden under Minn. Stat.
§ 14.127 because there are no provisions in the proposed rules that small
businesses are required to implement. As
to Mr. Kretsch’s argument regarding the increase in fees from $66,000 to $170,000,
the DNR points out that these are fees paid to
48. The Administrative Law Judge finds that the DNR has made the determination required by Minn. Stat. § 14.127 and approves that determination. Though Mr. Kretsch disagrees with the ultimate determination, it cannot be said that the Department did not satisfy the statutory requirements.
E. Adoption
or Amendment of Local Ordinances under
49.
Effective August 1, 2009, the DNR must:
[D]etermine
if a local government will be required to adopt or amend an ordinance or other
regulation to comply with a proposed agency rule. An agency must make this determination before
the close of the hearing record . . . .
The administrative law judge must review and approve or disapprove the
agency’s determination.[62]
50.
The DNR
determined that no local governments would be required to adopt or amend an
ordinance to comply with the proposed rules because the rules do not require
local governments to accept any responsibility with regard to aquatic plant
management.[63] The
Administrative Law Judge approves that determination.
51.
Under
52.
The question of whether a rule has been shown to
be reasonable focuses on whether it has been shown to have a rational basis, or
whether it is arbitrary, based upon the rulemaking record.
53. Reasonable minds might be divided about the wisdom of a certain course of action. An agency is legally entitled to make choices between possible approaches so long as its choice is rational. It is not the role of the Administrative Law Judge to determine which policy alternative presents the “best” approach, since this would invade the policy-making discretion of the agency. The question is, rather, whether the choice made by the agency is one that a rational person could have made.[71]
54. In addition to need and reasonableness, the Administrative Law Judge must also assess whether the Department complied with the rule adoption procedure, whether the rule grants undue discretion, whether the Department has statutory authority to adopt the rule, whether the rule is unconstitutional or illegal, whether the rule constitutes an undue delegation of authority to another entity, or whether the proposed language is not a rule.[72]
VIII. Analysis of the Proposed Rules
55. This Report is limited to discussion of the portions of the proposed rules that received critical comment or otherwise need to be examined, and it will not discuss each comment or rule part. Persons or groups who do not find their particular comments referenced in this Report should know that each and every suggestion, including those made prior to the hearing, has been carefully read and considered. Moreover, because sections of the proposed rules were not opposed and were adequately supported by the SONAR, a detailed discussion of each section of the proposed rules is unnecessary.
56. The Administrative Law Judge finds that the DNR has demonstrated, by an affirmative presentation of facts, the need for and reasonableness of all rule provisions not specifically discussed in this Report. The Administrative Law Judge also finds that all provisions not specifically discussed are authorized by statute and there are no other problems that would prevent the adoption of the rules.
IX. Broad Issues Relating to the Proposed
Rules
Increase in Permit Cost
57.
Almost
without exception, the comments received regarding the proposed rules were
objections to the increased cost of APM permits. Lakeshore property owners from across the
state objected to the doubling and tripling of permit fees and the elimination
of the fee cap on certain permits. For
example, a cabin owner on
58.
The
Clear Lake Association in
59.
Many
lakeshore property owners on lakes with public access feel that they are being
asked to bear an unfair burden for the maintenance of a public resource that
also benefits other members of the public, such as boaters and fishermen.[75]
60.
Several
lakeshore property owners believed that the DNR is not making enough of an
effort to protect the health of
61.
In
response to these concerns about the increase in fees, the DNR points to other
parts of the proposed rules that provide less expensive alternatives. For example, no permit or fee is required to
clear limited submersed aquatic plants adjacent to privately owned shoreline
using mechanical methods (part 6280.0250, subpart 1). Lakeshore property owners can also obtain a
one-time channel permit (part 6280.0450, subpart 3, item B). Applicants receiving an annual permit for
their automated aquatic plant control devices can reduce their permit fee by
reducing the area of control and applying for a three-year permit for $90 (part
6280.0450, subpart 3, item A). The DNR
proposed these reduced-price and no-permit options as incentives for property
owners to disturb smaller areas of shoreline and enhance the protection of
near-shore habitat. The DNR, however,
believes that activities posing a higher risk to near-shore habitat, such as
the use of pesticides or larger scale control, require greater oversight in the
form of annual permits, monitoring, and inspections.[77]
62.
Furthermore,
the DNR has also proposed changes to the APM rules that will reduce the
administrative costs of the program.
These changes include: (1)
specifying that inspections are not required until three or more years after a
permit has lapsed; (2) clarifying that annual reports may come from either the
person who conducted the control activities or the person’s agent; (3) simplifying
the permit fee structure to reduce errors on the part of applicants; and (4)
grouping inspections to make efficient use of time and travel expense.[78]
Possible Consequences of the
2008 Legislation
63.
Members
of the DNR’s advisory committee, as well as members of the public, expressed
the belief that permit fees above the $50-$60 level will exceed the compliance
“tipping point” – that is, will either discourage shoreline owners from
performing any aquatic plant control or will encourage some owners to perform
surreptitious and unpermitted plant control.
There was concern that the result in both cases will be impairment,
rather than improvement, of the state’s waters.[79]
64.
The
Lake Minnetonka Association has noted that illegal control activity has
increased greatly since the DNR’s new shoreline treatment restrictions went
into effect last year. The Association
projects that the implementation of the proposed rules will only add to the
increase in unpermitted treatment activity.
The Association acknowledged that the DNR’s proposed rules are in
response to legislative direction and urged legislative leaders to reconsider
this directive in future legislation.[80]
65.
The
Prior Lake Spring Lake Watershed District Administrator also expressed concern
about the possibility of increased unpermitted control activities if the new
fees are adopted. He suggested that the
DNR require proof of an APM permit prior to the sale of any herbicide. He also supports a tax or user fee on
herbicides as a means of recouping APM program costs.[81]
66.
In
response, the DNR acknowledged that the permit fee increase may cause some
people to discontinue control of aquatic plants or cause others to perform
illegal control of aquatic plants. But
the DNR believes that the fee increase may also encourage shoreline owners to
engage in aquatic plant control that is allowed without a permit or apply for
multiple-year permits and treat smaller areas.
Ultimately, the DNR states that it is not possible to encourage
participation in the APM program by keeping permit fees low and also meet the
legislative direction to recover program costs from aquatic permit fee revenues.[82]
Suggestions by the Public
67.
Several
of the comments received suggested that the maintenance of state waters should
not be the primary responsibility of lakeshore property owners, who already
bear an increased property tax burden.[83] One
affected person worried that the elimination of the fee to obtain an invasive
aquatic plant management permit would result in an unfair burden on individual
lakeshore property owners who obtain permits to control native aquatic plants.[84] A number
of concerned individuals suggested that the shortfall of APM program money be
recouped by an increase in boat registration fees, fish house licenses, or
fines.[85]
68.
The
Clear Lake Association recommended that inspections be eliminated when chemical
treatments are performed by licensed and certified contractors.[86]
Similarly, the Little Elk Lake Improvement Association suggested that
the DNR transfer some of its oversight responsibility to licensed commercial
contractors.[87]
Another individual recommended that the DNR transfer some of its
chemical monitoring responsibilities to individual lake associations.[88]
69.
Regarding
transferring oversight responsibilities, the DNR responded that the purpose of
the oversight is not only to assess compliance with permit requirements, but
also to evaluate whether current permitting actions are adequately protecting
aquatic plant habitat. The DNR does not
believe that licensed commercial contractors or lake associations can, or
should, meet this dual responsibility.[89]
70.
Some of
the homeowners on
71.
Another
concerned individual understood the need to increase the fees generally, but
objected to the fact that the permit fee will be the same for renewal permits
as for new applications. He requested
that the DNR have a lower fee for a permit renewal where no inspection is
required and a higher fee for a new application.[91]
72.
The DNR
and its advisory committee considered the option of charging lower fees for
permit renewals. The committee
determined that a base fee of $65 for permit renewals would require an
inspection fee of $150 to meet the identified revenue requirement. Adding the inspection fee to the $65 permit
fee would make the cost of a new or modified permit $215. The DNR rejected this option in favor of a
flat fee of $90 to simplify the fee structure.[92]
73.
Several
lakeshore property owners felt that the DNR should review or cut its own
expenses for the APM program before it raises permit fees.[93] A
property owner on
74.
The
Department and the advisory committee did consider maintaining a fee cap in the
proposed rules. According to the
Department, group permits could be capped if there were clear economies of
scale. After a thorough analysis of the
fee structure, the Department did not find clear efficiencies that would
justify the deep discounts that these groups currently enjoy. The Department asserts that the flat rate for
aquatic plant control adjacent to private property is necessary because it
raises the amount of revenue required to cover the costs of the APM program. Each property owner requires approximately
the same amount of DNR permitting services regardless of how many properties
are covered by a single permit. If caps
were placed on permit fees based on the number of participating properties, the
fee for people applying for individual permits would have to be higher.[96]
75.
An
interested member of the Crow Wing Lake Association suggested that the DNR
offer reduced permit fees in exchange for increased shoreline restoration by
lakeshore property owners.[97]
76.
During
the course of this proceeding, members of the public offered a number of
thoughtful suggestions and ideas. Incorporation
of those suggestions into the proposed rules, however, will not alter the
fundamental economic reality. The
Legislature established the revenue requirement for the DNR’s aquatic plant
management program as the program’s actual cost, which the agency has
determined to be approximately $1 million.
The SONAR indicates that there were approximately 3,900 individual
permittees during the period 2005-2008.[98] In
2009, the DNR issued approximately 4,500 permits.[99] Even
if the DNR were to adopt many of the public’s meritorious suggestions, it would
not solve the underlying problem of spreading a $1 million revenue requirement
among that relatively small number of permittees.
X. Rule-by-Rule Analysis
Part 6280.0100, subpart 7f
77.
The
Department is proposing to define “invasive aquatic plant management permit” as
“an APM permit that allows the selective control of invasive aquatic plants,
authorizes control at a scale to cause a significant lakewide or baywide reduction
in the abundance of the invasive aquatic plant, and minimizes harm to nontarget
species.”
78.
The
Department has expanded efforts to control invasive aquatic species over the
past several years. Two characteristics
of most invasive aquatic plant control efforts are size and control method. The Department seeks to incorporate those
characteristics into the definition. A
definition of the term is important because the proposed rules waive or reduce
permit fees and signature requirements for this type of permit.[100]
79.
At
least two lakeshore property owners on
80.
The Department
responded that the definition of “invasive aquatic plant management permit”
focuses more on the level of control expected from the treatment activity than
on the area covered by the treatment.
For example, some lakes might have a single isolated area of infestation,
and treatment of that single area would constitute lakewide reduction of
invasive aquatic plants. Other lakes may
have widely distributed areas of infestation.
Treatment of one particular area of dense growth can still meet the
significant reduction standard on a lakewide or baywide scale.[102]
81.
The
Administrative Law Judge finds that the Department has put forth a definition
of “invasive aquatic plant management permit” that is needed and reasonable.
Part 6280.0450, subpart 1c
82.
Rule
part 6280.0450 currently requires the Commissioner to obtain signatures from
all landowners with shorelines adjacent to proposed treatment areas, with some
exceptions. The DNR proposes the
following new approval and notification requirements in subpart 1c:
A. Before
issuing an initial invasive aquatic plant management permit, the commissioner
shall require dated signatures of approval from all landowners whose shorelines
will be treated, except that the commissioner may waive the dated signature of
approval requirement when there are numerous property owners and obtaining
signatures creates an undue burden on the premises.
B. If
the signature requirement is waived, the commissioner shall require an
alternate form of landowner notification, including news releases or public
notices in a local newspaper, a public meeting, or a mailing to the most recent
permanent address of the affected landowners.
The notification must be done annually and must include: the proposed
date of treatment, the target species, the method of control or product being
used, and instructions on how the landowner may request that control not occur
adjacent to the landowner’s property.
83.
The DNR
believes that it is necessary and reasonable to get landowner approval before
aquatic plant control occurs adjacent to a landowner’s property. In most cases the treatment is requested by
the landowner to improve lake access.
But when invasive species management is the reason for the control, it
can be difficult to contact all of the lake shore property owners where the
control is needed. The DNR is proposing
this new signature waiver option when there are numerous property owners and
taking the time to obtain the signatures would create a burden on the premises
to be treated. The DNR argues that it is
reasonable and necessary to reduce this administrative burden in certain
instances.[103]
84.
Pat
Bundy, a lakeshore landowner, objects to the proposed signature waiver
language. He argues that he should not
be forced to accept treatment in the water bordering his property if he has not
requested it. According to Mr. Bundy,
the proposed rules put an undue burden on property owners to “opt out” of
treatment and “scour the newspapers every week” to see if the DNR will be
treating his waterfront.[104] In
addition, Mr. Bundy asserts that the DNR would violate the “wrong site” clause
in Minn. Stat. § 18B.07, if it were to treat the water on his shoreline without
his consent. This statute addresses
pesticide use, application, and equipment cleaning and prohibits the direct
application of a pesticide onto a property beyond the boundaries of the
targeted site without the permission of the landowner.[105]
85.
In
response, the DNR states that it is generally good public policy to conduct
invasive aquatic plant management activities in cooperation with lakeshore property
owners. Nevertheless, the state has
jurisdiction over public waters and needs to be able to authorize control over
invasive aquatic plants when it is in the public interest.[106] As
for the issue of whether the DNR may violate Minn. Stat. § 18B.07 by treating
without consent, the DNR asserts that as long as it applies the herbicides only
to the water for the purpose of controlling invasive aquatic plants, that it
would not violate Minn. Stat. § 18B.07.
86.
The
Administrative Law Judge finds that the DNR has shown a rational basis for the
proposed rule. The proposed rule
appropriately limits when the Commissioner can waive the signature requirement. The Commissioner’s discretion is not
unfettered. Further, if the requirement
is waived, the rule sets forth what the notice must contain and allows affected
landowners to request that the treatment not occur adjacent to their property. Rule part 6280.0450, subpart 1c, is needed
and reasonable.
Effective Dates
87.
The
2008 legislative directive, codified at Minn. Stat. § 103G.615, subd. 2, makes
clear that the fee amendments to the APM permit fee rules are not effective
until August 1 following the submission of the adopted rules to the Legislature
and the elapse of 45 legislative days.
This directive applies to proposed rule parts 6280.0450, subpart 4, and
6280.0550, subpart 6.
88.
The
remainder of the proposed rules was adopted under the DNR’s general authority
to make rules prescribing permit standards, found at Minn. Stat.
§ 103G.615, subd. 3. All of these proposed
amendments will become effective five business days after the Notice of
Adoption is published in the State
Register in accordance with Minn. Stat. § 14.18.
Based on the Findings of Fact, the Administrative Law Judge makes the following:
1. The Department of Natural Resources (DNR) gave proper notice in this matter.
2. The DNR has fulfilled the procedural requirements of Minn. Stat. § 14.14 and all other procedural requirements of law or rule.
3. The DNR has demonstrated its statutory authority to adopt the proposed rules, and has fulfilled all other substantive requirements of law or rule within the meaning of Minn. Stat. §§ 14.05, subd. 1; 14.15, subd. 3; and 14.50 (i) and (ii).
4. The DNR has demonstrated the need for and reasonableness of the proposed rules by an affirmative presentation of facts in the record within the meaning of Minn. Stat. §§ 14.14, subd. 4; and 14.50 (iii).
5. Any Findings that might properly be termed Conclusions and any Conclusions that might properly be termed Findings are adopted as such.
6. A Finding or Conclusion of need and reasonableness with regard to any particular rule subsection does not preclude and should not discourage the DNR from further modification of the proposed rules based on this Report and an examination of the public comments, provided that the rule finally adopted is based on facts appearing in this rule hearing record.
Based on the Conclusions, the Administrative Law Judge makes the following:
IT IS RECOMMENDED that
the proposed rules be adopted.
Dated: April _22_, 2010.
|
/s/ Bruce H. Johnson |
|
BRUCE H. JOHNSON |
|
Assistant Chief Administrative Law Judge |
Recorded: Transcribed by Kirby A. Kennedy & Associates (3 volumes)
[1]
[2] Exhibit (Ex.) 13 at 1.
[3] Laws of Minnesota 2008, chapter 363, article 5, section 22, codified at Minn. Stat. § 103G.615, subd. 2.
[4] Ex. 13 at 1.
[5]
[6] Laws of Minnesota 2005, 1st Special Session, chapter 1, article 2, section 123, codified at Minn. Stat. § 103G.615, subd. 2.
[7] Laws of Minnesota 2008, chapter 363, article 5, section 22, codified at Minn. Stat. § 103G.615, subd. 2 (2008).
[8] Ex. 13 at 1-2.
[9] Ex. 13 at 2.
[10] Ex. 13 at 2.
[11] Ex. 13 at 3.
[12] Ex. 13 at 3.
[13] Ex. 13, at 4.
[14] 33 SR 221 (July 28, 2008); DNR Ex. 1.
[15] 34 SR 29 (July 6, 2009); DNR Ex. 1a.
[16] Ex. 4.
[17] Ex. 5.
[18] Exs. 8 and 10.
[19] Exs. 8 and 9.
[20] Ex. 1.
[21] Ex. 1a.
[22] Ex. 2.
[23] Ex. 3.
[24] Ex. 4.
[25] Ex. 5.
[26] Ex. 6.
[27] Ex. 7.
[28] Ex. 8.
[29] Ex. 9.
[30] Ex. 10.
[31] Ex. 11.
[32] Ex. 12.
[33] Ex. 13.
[34] Ex. 14.
[35] The correct section number is 22, not 18, as stated in the SONAR.
[36]
[37] Exs. 8 and 10.
[38] SONAR at 2.
[39] SONAR at 2.
[40] SONAR at 2 and 13.
[41] Ex. 8.
[42] Ex. 8.
[43] SONAR at 2.
[44] SONAR at 7.
[45] SONAR at 7-8.
[46] SONAR at 8.
[47] SONAR at 9.
[48] SONAR at 10. See also, Findings 3 and 4.
[49] SONAR at 11.
[50] SONAR at 11.
[51] SONAR at 11-12.
[52] SONAR at 12.
[53] SONAR at 12.
[54] SONAR at 12.
[55] Ex. 4.
[56] Minn. Stat. § 14.127, subd. 1.
[57]
[58] SONAR at 14-15.
[59] SONAR at 15.
[60]
Ex. 17;
[61] DNR Response to Comments, dated March 17, 2010, at 22.
[62]
[63] SONAR at 14.
[64]
Minn. Stat. § 14.14, subd. 2;
[65] Mammenga v. DNR of Human Services, 442
N.W.2d 786 (
[66] Ex. 3.
[67] In re Hanson, 275 N.W.2d 790 (
[68] Greenhill v. Bailey, 519 F.2d 5, 19 (8th Cir. 1975).
[69] Mammenga, 442 N.W.2d at 789-90; Broen Mem’l Home v.
[70] Manufactured Hous. Inst. v. Pettersen, 347 N.W.2d at 244.
[71] Federal Sec. Adm’r v. Quaker Oats Co.,
318
[72]
[73] Naomi and Lanny Uber comment, dated January 28, 2010.
[74] Clear Lake Association, Inc. comment, dated January 26, 2010.
[75]
Gordo and Dorothy Agee comment, received February 26, 2010; Little Falls T. at
22, 30-31 (Bill Jordan and Lee Jordan);
[76] Edward Van Hal comment, dated January 19, 2010.
[77] Dept. Comment, dated March 17, 2010, at 5.
[78]
[79]
[80] Lake Minnetonka Association comment, dated January 15, 2010.
[81]
Michael Kinney comment, dated February 18, 2010;
[82] Dept. Comment, dated March 17, 2010, at 4.
[83] Rod and Elaine Collins comment, dated February 6, 2010; Nancy Golio comment, dated March 7, 2010.
[84] Kevin Kretsch comment, dated March 2, 2010.
[85]
Naomi and Lanny Uber comment, dated January 28, 2010; Elaine Swanson comment,
dated March 17, 2010;
[86] Clear Lake Association, Inc. comment, dated January 26, 2010.
[87]
Dean McDevitt comment, dated January 26, 2010;
[88]
Norman Bradow comment, dated February 24, 2010;
[89] Dept. Comment, dated March 17, 2010, at 16.
[90]
Bruce Maki comment, dated January 12, 2010; Tom and Juleann Crever comment,
dated January 21, 2010. An individual on
[91] Tom Schaffer comment, dated December 28, 2009.
[92] Dept. Comment, dated March 17, 2010, at 9.
[93]
Lance Ness comment, dated February 24, 2010;
[94] John Kalenberg comment, dated March 16, 2010.
[95] Janet Butler Smith comment, dated March 4, 2010.
[96] Dept. Comment, dated March 17, 2010, at 17.
[97] Rick Pederson comment, dated March 8, 2010; Little Falls T. at 64-66.
[98] SONAR at 2.
[99] Fergus Falls T. at 67.
[100] SONAR at 17.
[101] Diane Coderre comment, dated January 11, 2010; Bruce Maki comment, dated January 12, 2010; Tom and Juleann Crever comment, dated January 21, 2010.
[102] Dept. Comment, dated March 17, 2010, at 12-13.
[103] SONAR at 19.
[104] Pat Bundy comment, dated January 28, 2010.
[105]
[106] Dept. Comment, dated March 17, 2010, at 12-13.