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New industrial stormwater permit brings additional regulations, expenses to San Diego businesses

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Until recently, many small businesses supporting the building industry, ranging from cabinetry, flooring, painting, solar and windows/glass companies to breweries, bakeries, print shops and transportation companies, were thought to be exempt from the costly and complex compliance requirements of California’s General Industrial Storm Water Permit (GIP). All that changed on April 1, when the State Water Resources Control Board adopted a new GIP. While the new GIP does not come into force until July 1, 2015, businesses should begin planning now on how they will address these new requirements.

The number of business regulated by the new GIP is enormous. In San Diego County alone, the number of regulated business is projected to rise from approximately 750 to as many as 14,000. (A complete list of regulated business categories can be found at: www.swrcb.ca.gov/water_issues/programs/stormwater/sic.shtml.)

The new GIP includes many new and costly requirements that are likely to affect small businesses. These include: discharge prohibitions, effluent limitations, receiving water limitations, total maximum daily loads, California Ocean Plan limitations, training qualifications and requirements, enhanced Storm Water Pollution Prevention Plans (SWPPPs), enhanced monitoring requirements, Exceedance Response Actions (ERAS), annual facility compliance audits and annual reports.

Small businesses are not the only entities that will incur significant cost increases as a result of the new GIP. A provision in the new General Municipal Storm Water Permit (MS4 Permit) adopted by the San Diego Regional Water Quality Control Board in May 2013, requires the county and the cities to inventory all of the GIP regulated businesses within their jurisdictions, physically inspect at least 20 percent of those businesses each year to ensure compliance with the new GIP and report noncompliant businesses to the Regional Water Quality Control Board for enforcement.

Assuming that there are 14,000 such businesses countywide and that it requires four hours per inspection, including travel and report preparation time, this amounts to an increase staffing demand of approximately 30 additional water cops, which will have to be paid for out of local general revenue funds.

Finally, the new GIP is enforceable by citizen suit. Anyone who believes that a small business has failed to comply with the stringent requirements of the new GIP can bring suit in federal court. Should the citizen prevail, the court can impose fines of up to $24,500 per day per violation, and require the defendant to pay the citizen’s legal fees.

Because this is a one-way fee shifting provision, it is possible that citizen suits will be brought for reasons other than just GIP violations, such as zoning and other land use disputes. Small businesses need to begin now to protect themselves against these exposures by taking action to understand their obligations and develop compliance strategies, including training, compliance groups and nonexposure certifications.

The Building Industry Association of San Diego County is offering training to those who would like more information about this critical compliance. The educational seminar will be take place on June 17 at the BIA San Diego office. Visit biasandiego.org and click on "events" for more information.

The new GIP provides an option for small businesses to form compliance groups. Compliance groups allow businesses engaged in similar industrial activities with similar stormwater issues to come together and reduce the cost of compliance through economies of scale and information sharing. Businesses considering this option should begin now working with their trade associations, as it will take time to form compliance groups that will function efficiently and meet the requirements of the new GIP.

Finally, businesses whose discharges are composed entirely of stormwater that has not been exposed to industrial activity may apply for a Non-Exposure Certification (NEC). These businesses are conditionally excluded from complying with the SWPPP and monitoring requirements of the GIP if all of the following conditions are met:

1. There is no exposure of industrial materials and activities to rain, snow, snowmelt, and/or runoff;

2. All unauthorized non-stormwater discharges have been;

3. The discharger has certified and submitted NEC coverage;

4. The discharger has satisfied all other NEC requirements.

While the filing of an NEC will significantly reduce the regulatory obligations and costs, preparing the NEC certification -- which must be executed by the legally responsible party under penalty of perjury -- will likely require the assistance of a qualified professional who is conversant with the new GIP requirements.

The new GIP is significantly more comprehensive than it predecessor. Moreover, the number of businesses that will be subject to the new GIP requirements is likely to increase by as much as a factor of 20. The number of qualified professionals available today to service the huge increase in demand is very limited. It is recommended that businesses begin planning for compliance with the new GIP now.

-Rosenbaum is a partner in the law firm of Opper & Varco LLP. His practice focuses in the areas of environment, land use and natural resources, with an emphasis on water quality and land use laws affecting infrastructure and renewable energy projects. Rosenbaum is also a dedicated volunteer for the BIA San Diego and sits on several committees, including Storm Water, to help those within the building industry. He can be contacted at swr@envirolawyer.com.

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