DNR Stay Rule Could Encourage Growth To Go

By Benita Dodd

After two years of planning, Gadget & Gizmo Inc. is eager to set up its Southeast regional headquarters in Georgia. All that stands in the way is the air emissions permit it needs from the state Environmental Protection Division. And a little hiccup called the Stay Rule, which essentially gives any third party that appeals the permit within 30 days the ability to hinder the company’s plans indefinitely.

Jack Smith, a farmer in Carroll County, has applied for a water withdrawal permit. He needs the permit in time to get his irrigation system installed in order to obtain a bank loan next year based on the anticipated harvest value.

“If that permit is issued but there is a stay and it’s held over, it doesn’t do me any good to put in an irrigation system in the month of July,” Georgia Agribusiness Council spokesman Bryan Tolar recently told a committee of the Board of Natural Resources. “That ship has sailed for the year.”

It’s no wonder that the board heard impassioned warnings from utility, industry and agriculture representatives about the potential for abuse of the Department of Natural Resources’ 22-year-old rule. The stay applies automatically “upon the filing of a petition for review of the order or action.” A permittee appealing a denial is clearly intent on justifying the need to move the permit along, not in delaying progress or undermining the application. Unfortunately, third-party appellants opposing DNR approval of a permit need not justify their appeal, either; plans can be halted without merit or imminent resolution.

A perennial funding shortfall at the DNR and its growing mandate aren’t helping. The staffing shortage has contributed to a backlog of about 500 permit applications in the Air Protection Branch alone, according to EPD Director Carol Couch. An air permit application currently averages two years to process, and the automatic stay rule could add up to nine months more. It’s an invitation to industry to go elsewhere, and it can delay the farmer’s crop and the utility from meeting the community’s future needs.

Couch is committed to eliminating that backlog in permits within a year, and is working toward a 90-day turnaround for permit applications. Clearly, adequate funding is a priority for the department to meet that goal. DNR statistics appear to support Couch’s lack of concern about abuse of the stay rule: The EPD averages about 4,000 appealable actions in a year; there were just four third-party appeals among 51 filed from June 2003 through May 2004.

Others, however, are seriously concerned. Especially as the agency works on improving efficiency, as Couch is promising, there’s nothing to prevent the stay rule becoming an effective and frequent weapon against industry. Overzealous activists have the capability to hinder economic growth – or profit from threatening to do so – in the name of environmental issues. Georgia’s two-year-long permit process is interminable compared with the three- to six-month average for an air quality permit in neighboring states. The state risks being at a competitive disadvantage.

And the DNR statistics don’t tell all the story, the committee was told time and again. Attorney Greg Blount, representing the Georgia Textile Manufacturers Association, recounted how one industry facing a third-party lawsuit was threatened with permit delays unless the suit was settled for more monetary damages. Attorney Jim Stokes, representing MEAG Power, points out that, “Regardless of the merits, the permittees have been forced to compromise perfectly valid permits in order to move forward with construction without risk of expensive delays.”

“The bottom line is that under the stay rule, third party appellants of EPD’s legally issued air construction permits are handed strategic victories through forced settlements,” Stokes notes. “This is an issue of basic fairness.”

In the days before budget woes and government consolidation, a DNR administrative law judge was dedicated to the agency’s cases. One possible solution is to restore that position to the DNR, expediting cases with an expert’s oversight. Another is to allow the permittee to move ahead with the project pending the case’s resolution – at its own risk.

The concerns of citizens and stakeholders deserve a thorough examination to ensure that their communities are not negatively impacted. For the most part, such concerns already have been aired in processes from public notice to comment to hearings. The opportunity to appropriately appeal the agency’s decision in a timely fashion is warranted, too. Sound scientific review should not succumb to haste disguised as efficiency.

But time is of the essence, and there is room for reform of the stay rule without reducing public input. Georgia’s growth and development, its industries and citizens, deserve better than a future of uncertainty under an open-ended DNR stay rule.

Benita M. Dodd is vice president of the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (June 4, 2004). Permission to reprint in whole or in part is hereby granted, provided the author and her affiliations are cited.

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