Governor Mark Dayton has signed important legislation into law that reforms Minnesota’s process for completing environmental review and permitting of major projects. This legislation, identified as HF 1, was a high priority of both the Minnesota legislature and the business community and received broad, bipartisan support as part of an agenda to attract and retain businesses in Minnesota. Environmental groups wasted no time in unfairly and incorrectly characterizing the legislation as “the chicken guarding the henhouse” (StarTribune, 3/3/11) or that it “rolls back” environmental protections currently in law (StarTribune, 3/4/11). The legislation speeds up the process of completing environmental review and permitting and will reduce the associated costs. It does not alter in any respect current regulatory standards nor the government’s ability to strictly regulate and enforce those standards.  

Business owners have complained for years that Minnesota’s overly-burdensome and expensive environmental review and permitting requirements discouraged business start ups and expansions, costing the state much-needed jobs and tax base. By coincidence, the day before Governor Dayton signed HF 1, the Office of the Legislative Auditor issued its long-awaited report, concluding that Minnesota’s environmental review and permitting process takes too long to complete.  

So what does the new legislation do to address the current problem?

First, it establishes as a goal (not a mandate) that the two agencies primarily responsible for issuing major environmental permits in Minnesota, the Department of Natural Resources (“DNR”) and the Pollution Control Agency (“PCA”), issue or deny a permit within 150 days of receiving a completed application. The responsible government agencies have 30 days to review an application for completeness and have the right to return it to the applicant if something is missing. The agency must notify the project proposer within 30 days of receipt of the application whether the permit application is complete. If the application is incomplete, the notice must identify deficiencies and advise the project proposer on how deficiencies can be remedied. The 150-day clock starts over when the permit application is resubmitted with the missing information. While the goal is only that, a goal, the new legislation requires semi-annual reports documenting why the goal was not met for a given application. The legislation does not change the requirement that the requested permit be approved before work can commence on the proposed project.

Second, the new law allows projects with a wastewater discharge to commence construction in advance of receiving their wastewater permit. Prior to the amendment, Minnesota ‘s law was more stringent that federal law and laws in neighboring states, prohibiting the start of construction prior to issuance of a wastewater discharge permit.

Third, the legislation allows proposers of projects requiring and EIS to submit a preliminary draft EIS prepared by their consultants, with an appendix containing “all studies and other sources of information used to substantiate the analysis contained in the preliminary draft….” The reviewing governmental authority may “require” additional studies and information and retains full authority to review, modify and determine completeness and adequacy of the draft EIS. This change by itself has the potential to make the enivornmental review process faster and save project applicants tens of thousands of dollars, if not substantially more, by eliminating duplication of effort between the project proposer and the government agency. During legislative hearings on HF 1, one witness testified that his company had expended millions of dollars to complete environmental review for a project, a substantial portion of which was spent on its own consultants, the government’s consultants and the government personnel involved with completing the review. This change does not reduce regulatory scrutiny by the government, including its ability to engage consultants to advise it (the costs of which are paid by the project applicant) nor does it alter any environmental standard applicable to the proposed EIS.

Third, HF 1 requires that the appropriate government agency make a final decision on a pending permit application within 30 days of completing an EIS, when the background to support the permit was prepared alongside the EIS; this time period can be longer under some circumstances.

Fourth, the new law requires new information when the MPCA adopts environmental standards. When the MPCA proposes rules to adopt standards for air quality, water quality, solid waste or hazardous waste, the MPCA’s supporting documents must assess the difference between the proposed standard and existing federal standards, similar standards in bordering states and other states in U.S. EPA Region 5(Illinois, Indiana, Ohio and Michigan)

Finally, any party that disagrees with a final decision regarding an environmental assessment worksheet (“EAW”) or EIS retains the right to challenge that decision in court. HF 1 removes the requirement for most projects that such challenges be first brought in district court and instead allows review directly by the Minnesota Court of Appeals and, if necessary, the Minnesota Supreme Court. Judges reviewing these challenges are limited to reviewing the information used by the government entity that made the environmental review decision. No “fact finding” occurs.. Yet this change by itself can shave many months and tens of thousands of dollars off the cost of completing environmental review, without reducing protections afforded by the regulatory and judicial systems.

None of the changes made to Minnesota’s process for completing environmental review and permitting alters the authority of Minnesota government agencies to enforce strict environmental standards to protect Minnesota’s precious natural resources, such as air and water. But the changes included in HF 1 will increase the possibility that significant new projects will be proposed and actually completed in Minnesota, allowing new jobs and taxes to be kept in Minnesota. That is good news for all Minnesotans.