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INSIGHT: California Industrial Companies—Your Business License Now Depends on Stormwater Permitting

Jan. 27, 2020, 9:00 AM

A new law in California took effect Jan. 1 and requires industrial business owners applying to a city or county for a new or renewed business license to demonstrate enrollment in a National Pollutant Discharge Elimination System (NPDES) stormwater permit, if it’s required.

This may seem rather pedestrian on its face, but the impact on California facilities is potentially significant and may even require retention of legal counsel and an environmental consultant in order to ensure compliance. Failure to comply will result in delay or denial of a business license, effectively prohibiting the business from starting its operations.

Stormwater Permits Still Required

What has not changed is that nearly all industrial facilities are typically required to obtain Industrial General Stormwater Permit (IGP) coverage. Industrial businesses, including but not limited to those operating facilities engaged in manufacturing, transportation, power generation, mining, recycling, sewage or wastewater treatment, landfill operations, or feedlots, are affected.

The IGP regulates industrial stormwater discharges and authorized non-stormwater discharges from industrial facilities in California. To do so, a facility must file a Notice of Intent (NOI) to comply with the State Water Resources Control Board (Water Board). What has changed is that the new sections in the Water Code (13383.10) and the Business and Professions Code (16000.3 and 16100.3) apply significant teeth to these longstanding requirements.

The new law, SB 205, prohibits California cities and counties from issuing a new or renewed business license until and unless the applicant can show that it has obtained IGP coverage. In other words, failure to comply with the IGP program could conceivably leave a facility with no valid business license to operate (until it comes into compliance).

Obtaining permit coverage typically requires the business to draft a Stormwater Pollution Prevention Plan (SWPPP), likely involves the assistance of a Qualified Industrial Stormwater Practitioner (QISP), and could also require taking steps to determine pollutant sources and levels and manage storm water discharges. The business owner must enroll the business under the IGP using the Stormwater Multiple Application and Report Tracking System (SMARTS).

90-Day Grace Period Optional

While a city or county can opt in to provide a business with a 90-day grace period, whether it does so is up to each individual jurisdiction. If the business falls within a regulated standard industrial classification (SIC) code, but the owner does not believe IGP coverage is required, the owner should contact the Water Board to determine whether the business qualifies for a Notice of Non-Applicability.

Businesses that are otherwise required to obtain coverage under the IGP but can certify that no industrial materials, equipment, or activities are exposed to storm water may be eligible for a No Exposure Certification. It is important to note that having a construction stormwater permit does not meet the requirements of SB205.

Stormwater permitting and evaluation can take time, so it is vital that industrial businesses consult with competent environmental professionals early on in the business startup process to ensure the permitting is in place by the time the business license needs to be in effect in order to avoid costly delays.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Andrew Cooper is a partner at Van Ness Feldman LLP with over 25 years of experience with environmental law. He’s an experienced litigator with considerable expertise on the environmental aspects of transactions, and currently focuses much of his practice on shepherding clients around environmental challenges to an advantageous closing.

Maureen B. Hodson is a compliance specialist at EHS Support with over 15 years of experience advising clients on a wide range of environmental matters, including regulatory compliance in the areas of waste, air, and water and assessment of environmental risks in connection with complex business transactions in a wide variety of industries. In addition, Maureen has eight years of environmental and insurance litigation experience, and is skilled at guiding owners of contaminated property through the allocation and cost recovery process.

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