Cross-posted at CalWatchdog

A special legislative hearing last week exposed the dramatic impact that proposed storm water permitting requirements would have on the state’s businesses, local governments and even public schools.

But even more enlightening was the revelation that the proposed water regulation, estimated to bring in more than $7 billion for the state, made it all the way through the process without any input from those it would effect. Nor was a cost impact analysis ever done.

The State Water Resources Control Board apparently operates under an obscure state law that allows the board to avoid any input or contact from those businesses and municipalities that the regulation would impact.   And the board is not legally required to prepare any financial analysis of the impact of the proposed regulation.

That a state agency would propose another staggering regulation is not surprising. That it can happen without oversight during the process, input from stakeholders, or an accounting to the taxpayers of the state, is outrageous and demonstrative of just how the tail is wagging the dog in California. State government is out of control.

Water Permitting Regulations

Private sector businesses, cities and counties have been operating under a water permit that expired in 2005. Under the proposed new permit, commercial and industrial businesses and would be required to undergo major structural changes in order to comply with new strict regulations for waste management and stormwater runoff. And all businesses would be required to study their parking lots and buildings to find out how much water runoff is entering storm drains.

Many of the business and municipality representatives at the hearing said that the new permit would more than triple their permitting costs. For private sector businesses already suffering under the weight of California’s overwhelming regulatory rulebook, this proposed new permit is evidence of unnecessarily brutal regulations by insensitive public officials, in the midst of a recession.

The California Chamber of Commerce has warned that the proposed regulations go above and beyond what the federal EPA mandates and will result in hundreds of millions of dollars in additional costs with no proven environmental benefits.

Sen. Rod Wright, D-Inglewood, chairman of the Senate Select Committee on California Job Creation and Retention, held back very little as he questioned Tom Howard, Executive Director of the State Water Resources Control Board, about the proposed permit.

“Government doesn’t create jobs — we provide services,” Wright said. “Government lives on the vig — we get a piece of the action. And if there is no action, we get none,” said Wright, referencing a Mafia expression used on the Sopranos.

Wright has been openly critical of the state’s business-killing regulations, which have decimated businesses in his district.

And Wright has been the victim of the legislative process as well. In May, Wright had two bills killed by his own Democratic party. The bills merely attempted to give some regulatory oversight to the Legislature, instead of allowing state agencies to implement regulations without legislative involvement.

Had his bills passed and been signed into law, the State Water Resources Control Board would not have been able to propose the new water permit regulation while avoiding input or accountability for the costs to comply.

Howard testified that the water board has now admitted that complying with the proposed water permit would be extremely difficult and expensive. The Board has agreed to start the process over, rewrite the regulation, hold new discussions, hearings and workshops, and present it again to the Legislature –and of course, all paid for by the taxpayers, again.

Questionable Science

The California Chamber of Commerce reported that a coalition of businesses, taxpayers, and local governments have been questioning the science behind the new storm water permit requirements. The increase in costs with no proven environmental benefits has had the coalition up in arms for months.

Compliance costs could range from tens of thousands of dollars at small businesses and schools, to hundreds of millions of dollars at large facilities owned by ports and industrial facilities, according to the coalition.

The coalition is called “Workable Approach to Environmental Regulation (WATER),” and was out in force at Thursday’s hearing.

“Thousands of California school districts, local governments, recycling facilities, truckers, manufacturers and other businesses currently comply with an Industrial General Storm Water Permit that requires them to manage storm water runoff through best management practices. It already costs businesses dearly to comply, and earns the state millions of dollars every year in permitting fees as well as penalties,” reported the Chamber.

Under the proposed water permit regulation, even cities would be responsible for water runoff containing oil drips from cars parked in public parking lots. City representatives said that if they were forced to comply with the new water permitting regulation, they would have to cut more programs.

One Size Fits All

Senators on the committee expressed concern with a one-size-fits-all approach to the proposed water permit. Given that the permit would regulate private sector and public sector businesses, the concern was legitimate.

However, representatives from several municipalities and groups attached to government appeared more concerned that the costs of complying with the water regulation could not be passed on to taxpayers as a fee or tax increase without a vote of the people.

Sen. Michael Rubio, D-Bakersfield, had a polite but contentious discussion with a representative from California Coastkeeper Alliance about the size and scope of the regulation. Coastkeeper advocates for environmental and clean water regulations. Rubio was concerned that the water board’s regulation favors coastal cities, and should not be applied in the same manner to his inland district.

“It’s a struggle between two Californias — coastal and rural,” Rubio said. Rubio added that regulatory schemes rarely partner with the poorest parts of California. Yet the poorest, rural parts of California always end up paying the most for the regulations.

Wright said that it is apparent that California agencies don’t care about cost. “Back when people were coming to this state, maybe we could do that. But that’s not happening. We have fewer dollars to play with.”

Wright was critical of the attitude within the state’s regulatory agencies. “California is continually leading with our chin,” said Wright. “We are going to end up with clean beaches anyway because there won’t be anyone living here. And it’s not clear that much of what we are doing makes that much of a difference.”