Industrial Facilities May Be Denied Business Permits Without Proof of Storm Water Coverage

California regulates storm water discharges from industrial facilities under the federal Clean Water Act through its Industrial General Storm Water Permit (IGP). A facility obtains coverage by filing notice of its intent to comply with the IGP with the State Water Resources Control Board (“State Board”). The IGP identifies which industrial facilities need to comply by their Standard Industrial Classification (SIC) code, which is determined based on the primary purpose of the business. (See the U.S. Department of Labor website for SIC codes.)

But what if an industrial facility does not recognize that it should seek IGP coverage, or simply chooses not to comply?

SB 205 squarely targets these unpermitted facilities by requiring all cities and counties that issue business licenses to verify IGP coverage before issuing a new or renewed business license. Business license applicants will now be required to provide—under penalty of perjury—their primary SIC code with any business license application. For any business with a primary SIC code that triggers IGP coverage, SB 205 prohibits issuance of a new or renewed business license unless the applicant can provide proof of IGP coverage. (See the State Board’s list of which kinds of SIC codes trigger IGP coverage here.)

A city or county may allow for a 90-day grace period for business license renewals to prove IGP coverage, provided each jurisdiction chooses to adopt such a grace period.

Expect SB 205’s rollout to be a little rocky. SB 205 did not get much press, so many business license applicants are likely to be surprised. It is also unclear exactly how many unpermitted industrial facilities may be out there, although it could be a significant number. And some businesses may not know their primary SIC code. Cities and counties must also establish new procedural and recordkeeping processes, which may take time to implement.

For unpermitted facilities, the learning curve for complying with the IGP will be steep and expensive. IGP coverage requires a business to take a number of steps to comply including, but not limited to, performing a pollutant source assessment, drafting a Storm Water Pollution Prevention Plan, installing best management practices to manage storm water, and developing a site map. Even sophisticated operators regularly consult legal counsel and professional storm water consultants to ensure IGP compliance.

While municipalities are already required to identify and report unpermitted industrial facilities to the appropriate Regional Water Quality Control Board under the terms of their municipal separate storm sewer system (MS4) permits, SB 205 also gives the State Board the authority, upon request, to require cities and counties to report IGP coverage information submitted by business license applicants.

For any facility discovering that it needs IGP permit coverage due to SB 205, quickly retaining a professional storm water consultant and legal counsel will be the shortest path to ensuring compliance with both California’s storm water permitting regime and obtaining a new or renewed business license.

The State Board has published information about SB 205 compliance for industrial businesses and cities and counties on its website, here.

This document is intended to provide you with general information regarding how California regulates industrial facilities under the federal Clean Water Act. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions.