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DAR File No. 32201

This filing was published in the 01/01/2009, issue, Vol. 2009, No. 1, of the Utah State Bulletin.

Natural Resources, Water Rights

R655-14

Administrative Procedures for Enforcement Proceedings Before the Division of Water Rights

NOTICE OF PROPOSED RULE

DAR File No.: 32201
Filed: 12/09/2008, 01:18
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The proposed changes incorporate two substantive amendments which increase the time for filing hearing requests from seven (days to fourteen days following the date of an initial order, and also place a maximum cap on the penalty assessed for failure to submit well driller reports.

Summary of the rule or change:

This filing increases the time for filing hearing requests, and places a maximum cap on the penalty assessed for failure to submit well driller reports.

State statutory or constitutional authorization for this rule:

Subsection 73-2-1(4)(g) and Sections 73-2-25, 73-2-26, and 73-3-25

Anticipated cost or savings to:

the state budget:

The proposed amendments will result in minimal costs to reprint the rule once the amendments are made effective.

local governments:

The proposed amendments do not apply to local governments; no costs or savings are anticipated.

small businesses and persons other than businesses:

The proposed amendments do not apply to a small business, no costs or savings are anticipated.

Compliance costs for affected persons:

The significant changes proposed should actually decrease compliance costs for affected persons because one allows increased time for requesting a hearing and the other puts a cap on the total amount of the penalty that can be assessed for each violation for failure to submit a well log.

Comments by the department head on the fiscal impact the rule may have on businesses:

There is no anticipated fiscal impact to businesses from these rule amendments. Michael Styler, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Natural Resources
Water Rights
1594 W NORTH TEMPLE
SALT LAKE CITY UT 84116-3154

Direct questions regarding this rule to:

Kaelyn Anfinsen at the above address, by phone at 801-538-7370, by FAX at 801-538-7442, or by Internet E-mail at KAELYNANFINSEN@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

02/02/2009

This rule may become effective on:

02/09/2009

Authorized by:

Jerry Olds, Director

RULE TEXT

R655. Natural Resources, Water Rights.

R655-14. Administrative Procedures for Enforcement Proceedings Before the Division of Water Rights.

R655-14-11. Options for Adjudicative Enforcement.

(1) The State Engineer may pursue any combination of the following administrative and judicial enforcement actions depending upon the circumstances and gravity of each case.

(a) Notice of Violation: a formal notice of a suspected violation issued in accordance with Section 73-2-25 which:

(i) Cites the law, rule, regulation, permit and/or order allegedly violated;

(ii) States the facts that form the basis for the State Engineer's belief that a violation has occurred;

(iii) States the administrative fine, enforcement costs, and/or other penalty to which the respondent may be subject;

(iv) Specifies a reasonable deadline or deadlines by which the respondent:

(A) Shall comply with the requirements described in the Notice of Violation, and/or

(B) Shall pay the administrative fine and enforcement costs, and/or

(C) Shall submit a written plan or proposal setting forth how and when the respondent proposes to replace water taken without right.

(v) Informs the respondent:

(A) Of the right to file a timely written request for a hearing on the alleged violation, the administrative penalties defined, or both;

(B) That the respondent must file said written request for a hearing with Division within [seven (7)]fourteen (14) days after service of the Notice of Violation;

(C) That said written request shall strictly comply with R655-14-16;

(D) That said notice shall become the basis for a Final Judgment and Order of the Presiding Officer upon the respondent's election to waive participation or failure to timely respond or otherwise participate in the proceeding, and

(E) That the Enforcement Engineer may treat each day's violation as a separate violation in describing the Initial Administrative Penalty under Subsection 73-2-25 (2)(b)(ii); that is, the administrative penalty continues to accrue each day from the time the violation begins until compliance is achieved.

(vi) Identifies the individual to whom correspondence and inquiries regarding the Notice of Violation should be directed;

(vii) States to whom and the date by which the administrative fine and enforcement costs shall be paid if the respondent elects to waive or fails to request an adjudicative hearing in a timely manner and elects to pay the fine and costs; and

(viii) States the State Engineer's authority to pursue further administrative or judicial enforcement action.

(b) Cease and Desist Order (CDO): an immediate compliance order issued pursuant to Section 73-2-25 either upon discovery of a suspected violation of the Water and Irrigation Code or in combination with a Notice of Violation, which:

(i) Cites the law, rule, license, permit, notice and/or order allegedly violated;

(ii) Describes the act or course of conduct that is prohibited by the Cease and Desist Order;

(iii) Orders the respondent to immediately cease the prohibited act or prohibited course of conduct;

(iv) States any action deemed necessary by the Enforcement Engineer to confirm compliance and assure continued compliance;

(v) Takes effect immediately upon the date issued or within such time as specified by the Enforcement Engineer in the CDO; and

(vi) States the administrative penalties to which the respondent may be subject for any violation of the CDO.

(c) Court Action

(i) Civil: direct recourse to a court of competent jurisdiction either in addition to or in lieu of administrative action where:

(A) It is necessary to enforce a Final Judgment and Order and seek civil and/or administrative penalties

(B) An imminent threat to the public health, safety, welfare or environment exists which warrants injunctive or other emergency relief; or

(C) A pattern of continuous, significant violations exists such that administrative enforcement action alone is unlikely to achieve compliance; or

(D) The court is the most convenient or appropriate forum for resolution of the dispute.

(ii) Criminal: referral to the County Prosecutor or the Attorney General's Office for prosecution or criminal investigation where:

(A) The alleged act or failure to act may be defined as a criminal offense by state law;

(B) Enforcement is beyond the jurisdiction or investigative capability of the State Engineer; or

(C) Criminal sanctions may be appropriate.

(d) Miscellaneous - other enforcement options may be pursued to achieve compliance. Additional options include, but are not limited to:

(i) Joint actions with, or referrals to, other federal, state or local agencies;

(ii) Direct legal or equitable actions in state or federal court; and/or

(iii) Denial, suspension or revocation of state-granted licenses, approvals permits or certifications.

(2) Unless otherwise stated, all notices, orders and judgments are effective upon the date issued.

(3) Combinations of enforcement actions are not mutually exclusive and may be concurrent and/or cumulative.

(4) An IO may be incorporated into a Default Order if the respondent fails to participate as defined herein.

 

R655-14-14. Procedures For Determining Administrative Penalties, Enforcement Costs and Water Replacement.

(1) An administrative fine shall not exceed the maximum amounts established by statute at Subsection 73-2-26 (1), as such may be amended.

(2) For violations per Subsections 73-2-25(2)(a)(i) through (vii), the following procedures shall be employed:

(a) Administrative Fines: This penalty shall be based primarily on the actual economic benefit estimated to result or potentially to result from the violation. The economic benefit may come in the form of a direct economic benefit as income derived directly from the unlawful activity or it may come in the form of avoided costs that would otherwise be incurred in order to comply with a specific statute, rule, notice or order from the State Engineer. The administrative fine assessment procedure used (direct economic benefit or avoided costs) will be that which produces the greater fine. In order to implement the punitive intent of this penalty, a multiplier is to be calculated and applied to the estimated actual direct economic benefit or avoided costs.

(i) "Direct Economic Benefit" Initial Administrative Fine Calculations. The initial administrative fine shall be calculated in the following manner:

(A) The daily economic benefit is equal to the gross income that is or could potentially be realized from the violation (without regard for production costs, taxes, etc.) divided by the number of days of violation. For water right violations, the daily economic benefit is calculated using the gross income through a full period of beneficial use, divided by the number of days in the period of beneficial use.

(B) The daily administrative fine is equal to the product of the daily economic benefit and the multiplier to be calculated as described in paragraph (iii) below.

(C) The initial administrative fine is equal to the product of the daily administrative fine and the number of days of continuing violation to the date the IO is issued, but shall not exceed the product of the highest calculated total realized economic benefit and the penalty multiplier.

(D) The total initial administrative fine will have a maximum value of four times the direct economic benefit or the statutory maximum fine, whichever is less.

(ii) The multiplier for penalties based on direct economic benefit shall be calculated utilizing the following statutory considerations. (Statutorily required considerations relative to the quantity of water taken and the gravity and impact of the violation are accommodated in the calculations of the economic "benefit" and "injury.")

(A) Whether the violation was committed knowingly or unknowingly;

(B) The economic injury to others;

(C) The length of time over which the violation has occurred; and

(D) The violator's efforts to comply.

(iii) The penalty multiplier is the sum of the points calculated using Table 1:

 

TABLE 1


DIRECT ECONOMIC BENEFIT PENALTY MULTIPLIER

CONSIDERATION / CRITERIA MULTIPLIER POINTS
Knowing or unknowing violation
Knowing . . . . . . . . . . . . . . . . . . . . . .1.00
Unknowing . . . . . . . . . . . . . . . . . . . . .0.00
Economic injury to others
Greater than $15,000 . . . . . . . . . . . . . . . 1.00
$10,000 to $15,000 . . . . . . . . . . . . . . . . 0.75
Less than $10,000 or injury is not measurable or
there is no evidence others suffered economic
injury . . . . . . . . . . . . . . . . . . . . . 0.50
Length of violation
Three (3) or more years of violation . . . . . . . 1.00
More than one (1), but less that three (3)
years of violation . . . . . . . . . . . . . . . .0.75
One (1) year or less of violation . . . . . . . . .0.50
Violator's efforts to comply prior to Initial Order
Violator has made no efforts to comply . . . . . . 1.00
Violator has made limited but ineffective
efforts to comply . . . . . . . . . . . . . . . . 0.75
Violator has made reasonable and partially
effective efforts to comply . . . . . . . . . . . 0.50
Violator fully complied prior to issuance
of Initial Order . . . . . . . . . . . . . . . . 0.00

 

(iv) "Avoided Cost Economic Benefit" Initial Administrative Fine Calculation: In some cases, including but not limited to violations under Subsections 73-2-25 (2)(a) (iii) through (vii), an economic benefit may result from an avoided cost of compliance with a notice or order from the State Engineer, or from failure to obtain a necessary approval, permit or license. In the case of a failure to comply with a prior notice or order, the daily administrative fine commences with the day following the compliance date in the notice or order. In the event of a failure to obtain a necessary approval, permit or license, the period of violation is deemed to begin on the first day the unauthorized activity is commenced. The economic benefit and daily administrative fine for an "avoided cost economic benefit" shall be calculated in the following manner:

(A) The total realized economic benefit is equal to the highest calculated avoided costs of failing to implement specific actions required by a statute, rule, notice or order from the State Engineer.

(B) The daily administrative fine is equal to the product of $20 or 5% of the total realized economic benefit, whichever is greater, and the penalty multiplier to be calculated as described in paragraph (vi), below.

(C) The initial administrative fine is equal to the product of the daily administrative fine and the number of days of continuing violation preceding the date of the IO, but shall not exceed the product of the highest calculated total realized economic benefit and the penalty multiplier.

(D) The total initial administrative fine will have a maximum value of three times the economic benefit or the statutory maximum fine, whichever is less.

(v) The statutory considerations applicable to producing the multiplier for an avoided cost economic benefit are: (Statutorily required considerations relative to the quantity of water taken and the gravity and impact of the violation are accommodated in calculations of the economic "benefit" and "injury.").

(A) Whether the violation was committed knowingly or unknowingly;

(B) The economic injury to others; and

(C) The violator's efforts to comply.

(vi) The penalty multiplier is the sum of the points resulting from Table 2:

 

TABLE 2


AVOIDED COST ECONOMIC BENEFIT PENALTY MULTIPLIER

CONSIDERATION / CRITERIA MULTIPLIER POINTS
Knowing or unknowing violation
Knowing. . . . . . . . . . . . . . . . . . . . .1.00
Unknowing . . . . . . . . . . . . . . . . . . . 0.00
Economic injury to others
Greater than $15,000. . . . . . . . . . . . . . 1.00
$10,000 to $15,000 . . . . . . . . . . . . . . 0.75
Less than $10,000 or injury is not measurable
or there is no evidence others suffered
economic injury . . . . . . . . . . . . . . . .0.50
Violator's efforts to comply prior to Initial Order
Violator has made no efforts to comply . . . . .1.00
Violator has made limited but ineffective
efforts to comply . . . . . . . . . . . . . . .0.75
Violator has made reasonable and partially
effective efforts to comply . . . . . . . . . .0.50
Violator fully complied prior to issuance
of Initial Order . . . . . . . . . . . . . . . 0.00

 

(b) Replacement of Water: This penalty will be initially calculated as the product of 100% of the amount unlawfully taken and the penalty multiplier previously calculated, but not to exceed 200% of that unlawfully taken. If replacement of water unlawfully taken is deemed to be infeasible by the Enforcement Engineer or the Presiding Officer, this penalty will not be further considered.

(c) Reimbursement of Enforcement Costs: This penalty will be initially based on a standard requiring 100% reimbursement of the State Engineer's enforcement costs to the date of the IO.

(3) For violations related to unlawful natural stream channel alteration or dam safety regulations per Subsections 73-2-25(1)(a)(vi) and (vii), the following procedures shall be employed:

(a) Daily Administrative Fine: All enforcement activities for unlawful natural stream alteration or dam safety violations must statutorily result from violation of a prior notice or order. Statute provides for a daily administrative fine with the day following the compliance date in the notice/order being counted as the first day of violation. The calculated daily administrative fine would apply to violations continuing beyond the compliance date set forth in the notice or order. The economic benefit and daily administrative fine shall be calculated in the following manner:

(i) For stream alteration and dam safety violations, there may be a direct economic benefit, or there may be an avoided cost economic benefit deriving from:

(A) Initiating an activity without the benefit of proper permitting and/or,

(B) Failing to implement specific actions required by a notice, order or permit from the State Engineer.

(ii) The daily administrative fine is equal to the product of $20 or 5% of the total realized economic benefit, whichever is greater, and the multiplier to be calculated as described in paragraph (iii), below.

(iii) The penalty multiplier is calculated as the sum of the points from Table 3 or Table 4, as may be appropriate:

 

TABLE 3


STREAM ALTERATION PENALTY MULTIPLIER

CONSIDERATION / CRITERIA MULTIPLIER POINTS
Knowing or unknowing violation
Knowing . . . . . . . . . . . . . . . . . . . . 1.00
Unknowing . . . . . . . . . . . . . . . . . . . 0.00
Gravity of violation
Natural stream environment harmed to
significant levels not readily
reversible by mitigation efforts . . . . . . . 1.00
Natural stream environment harmed to moderate
levels partially reversible by
mitigation efforts . . . . . . . . . . . . . . 0.75
Natural stream environment harmed to minor levels
readily reversible by mitigation efforts. . . .0.50
Violator's efforts to comply prior to Initial Order
Violator has made no efforts to comply . . . . .1.00
Violator has made no reasonable or effective
efforts to comply . . . . . . . . . . . . . . .0.75
Violator has made reasonable and partially
effective efforts to comply . . . . . . . . . .0.50
Violator achieved full compliance prior to
issuance of Initial Order . . . . . . . . . . .0.00

 

TABLE 4


DAM SAFETY PENALTY MULTIPLIER

CONSIDERATION / CRITERIA MULTIPLIER POINTS
Knowing or unknowing violation
Knowing . . . . . . . . . . . . . . . . . . . . 1.00
Unknowing . . . . . . . . . . . . . . . . . . . 0.00
Gravity of violation
Failure to comply with a notice or order for
a high-hazard or moderate-hazard dam:
1) Related to building, enlarging or
substantially altering same without prior
approval or authorization; OR
2) Addressing an existing unsafe condition . .1.00
Failure to comply with a notice or order for
a high-hazard or moderate-hazard dam:
1) Addressing a developing unsafe condition OR
2) Requiring monitoring or critical dam
performance indicators; OR
Failure to prepare and file acceptable required
operational documents, OR
Failure to comply with a notice or order for
a low-hazard dam related to building, enlarging
or substantially altering same without prior
authorization . . . . . . . . . . . . . . . . .0.75
Failure to comply with a notice or order for
a high-hazard or moderate-hazard dam related
to routine operation or maintenance activities, OR
Failure to comply with a notice or order for
a low-hazard dam to address an existing or developing
unsafe condition . . . . . . . . . . . . . . . 0.50
Violator's efforts to comply prior to Initial Order
Violator has made no efforts to comply . . . . .1.00
Violator has made limited reasonable or
effective efforts to comply . . . . . . . . . .0.75
Violator has made reasonable and partially
effective efforts to comply . . . . . . . . . .0.50
Violator achieved full compliance prior to
issuance of Initial Order . . . . . . . . . . .0.00

 

(iv) The total administrative fine shall not exceed the product of the highest calculated total realized economic benefit and the penalty multiplier.

(b) Reimbursement of Enforcement Costs is initially based on a standard requiring 100% reimbursement of the State Engineer's enforcement costs to the date of the Initial Order.

(3) For violations under Subsection 73-2-25(2)(a)[(iii)](viii) related to failure to submit a report required by Section 73-3-25, the following procedures shall be employed:

(a) The daily administrative fine is equal to $5.00.

(b) The number of days of continuing violation commences 90 days after the day on which the well driller license lapses.

(c) The initial administrative fine is equal to the product of the daily administrative fine and the number of days of continuing violation to the date the IO is issued, up to a maximum fine of $200.

(d) The total administrative fine shall not exceed the product of the daily administrative fine and the number of days of continuing violation, up to a maximum fine of $200.

(e) Reimbursement of enforcement costs is initially based on a standard requiring 100% reimbursement of the State Engineer's enforcement costs to the date of the Initial Order.

(4) For violations under Subsection 73-2-25(2)(a)(ix) related to engaging in well drilling without a license required by Section 73-3-25, the following procedures shall be employed:

(a) The direct economic benefit is equal to the gross income that is or could potentially be realized (without regard for production costs, taxes, etc.) from engaging in well drilling (as defined herein) without a license.

(b) The total initial administrative fine is equal to the product of the direct economic benefit resulting from the violation and the penalty multiplier described in paragraph (c) below.

(c) The penalty multiplier is calculated as the sum of the points from Table 5.

 

TABLE 5


WELL DRILLING PENALTY MULTIPLIER

CONSIDERATION/ CRITERIA . . . MULTIPLIER POINTS
Knowing or unknowing violation
Knowing . . . . . . . . . . . . . 1.50
Unknowing . . . . . . . . . . . . 1.00

Gravity of Violation
New well construction . . . . . . 1.00
Deepening a well . . . . . . . . 0.80
Renovating a well . . . . . . . . 0.60
Abandoning a well . . . . . . . . 0.40
Cleaning/developing a well . . . 0.20

 

(d) The total administrative fine shall not exceed the product of the direct economic benefit and the penalty multiplier.

(e) Reimbursement of enforcement costs is initially based on a standard requiring 100% reimbursement of the State Engineer's enforcement costs to the date of the Initial Order.

(5) Post-Initial Order penalty adjustments: Subsequent to issuance of the IO, the Presiding Officer may make adjustments to the initial administrative fine; the requirement for replacement of water unlawfully taken; requirements pertaining to violations of stream channel alteration or dam safety regulations; and/or the requirement for reimbursement of enforcement costs. Such adjustments may be based on one or more of the following considerations:

(a) Errors or Omissions in Calculation of an Initial Administrative Penalty: If shown by acceptable evidence or testimony that any fact used in calculation of the economic benefit, of the quantity of water unlawfully taken, or of the penalty multiplier was in error, or that a significant fact or group of facts was omitted from consideration, the Presiding Officer shall recalculate the initial administrative penalties taking consideration of the corrected or additional fact(s).

(b) Reduction in Penalty Multiplier: The penalty multiplier used in calculating the Initial Administrative Penalties may be reduced according to Table 6 on the basis of the respondent's efforts to comply after receiving the IO.

 

TABLE 6


PENALTY MULTIPLIER REDUCTION

CONSIDERATION / CRITERIA MULTIPLIER POINTS
Respondent's efforts to comply with
the Initial Order
Respondent has made extraordinary efforts
to successfully achieve full and prompt
compliance with the IO. . . . . . . . . . . . .1.00
Respondent has made efforts to successfully
achieve full and prompt compliance with the
IO, but these efforts are not extraordinary . .0.50
Respondent has made efforts that achieve full
compliance with the IO, but the efforts were
neither extraordinary nor prompt . . . . . . . 0.25
Respondent has made no efforts to comply or has made efforts
that fail to achieve full compliance with
the IO . . . . . . . . . . . . . . . . . . . . .0.00

 

If the Presiding Officer determines that the penalty multiplier should be reduced according to the table above, the appropriate number of points will be subtracted from the penalty multiplier used in calculating the initial administrative penalty and the penalty will be re-calculated with the new multiplier.

(c) Failure to take reasonable and effective measures to achieve full and prompt compliance with the requirements of the IO will allow the daily administrative fines to continue to accrue as provided in rule at Subsection R655-14-12(4) until full compliance is achieved.

(d) Adjustments to recovery of enforcement costs:

(i) If shown by acceptable evidence or testimony that any expense incurred by the State Engineer and assessed for reimbursement resulted from activities not pertinent to the violation, the Presiding Officer may reduce that portion of the reimbursement requirement accordingly.

(ii) Pursuit of an enforcement action after issuance of the IO will continue to require the expenditure of varying amounts of staff time and may require acquisition and analysis of special data or information. Such costs may be added to the initial reimbursement requirement, specifically including all costs incurred that are unique to the enforcement action under consideration.

(e) Mitigating Factors: Other factors which the Presiding Officer may consider in amendment of initial penalties for incorporation into a Final Order or Consent Order may include, as appropriate:

(i) Ability to pay: This factor will be considered only if raised by a respondent and only if the respondent provides all necessary information to evaluate the claim. The burden to demonstrate inability to pay rests solely on the respondent. The Presiding Officer shall disregard this factor if a respondent fails to provide sufficient or persuasive financial information. If it is determined that a respondent cannot afford the full monetary penalties prescribed by this rule, or if it is determined that payment of all or a portion of the monetary penalties will preclude the respondent from achieving compliance or from carrying out remedial measures which are deemed more important than the deterrent effect of the monetary penalties, the following options may be considered by the Presiding Officer:

(A) A delayed payment schedule with full payment of monetary penalties to be made at a date not exceeding 180 days from the date the Final Judgment and Order is issued; or

(B) A direct reduction of the monetary penalties, which reduction is deemed by the Presiding Officer to be consistent with achieving the purposes of the enforcement action and the aims of equity and justice.

(C) A portion of the monetary penalties may be suspended with conditions as determined by the Presiding Officer, which suspension is deemed by the Presiding Officer to be consistent with achieving the purposes of the enforcement action and the aims of equity and justice. Failure by a respondent to adhere to the conditions of the suspension may result in an Order of reinstatement of any part of the suspended monetary penalties, which will be due and payable immediately upon reinstatement.

 

R655-14-16. Request for Hearing.

(1) Regardless of any other provision of the general laws to the contrary, all requests for a hearing shall be in writing and shall be filed with the Division within [seven (7)]fourteen (14) calendar days of the date the IO was issued.

(2) The request for a hearing shall state clearly and concisely the specific facts that are in dispute, the supporting facts, the relief sought, the State Engineer Agency Action (SEAA) number, and any additional information required by applicable statutes and rules.

(3) The Presiding Officer may, upon the Presiding Officer's own initiative or upon the motion of any party, order any party to file a response or other pleading, and further permit either party to amend its pleadings in a manner just to all parties.

(4) The Presiding Officer shall, if it is determined a hearing is warranted, give all parties at least three (3) days notice of the date, time and place for the hearing. The Presiding Officer may grant requests for continuances for good cause shown.

(5) Any party may, by motion, request that a hearing be held at some place other than that designated by the Presiding Officer, due to disability or infirmity of any party or witness, or where justice and equity would be best served.

 

KEY: water rights, enforcement, administrative penalties

Date of Enactment or Last Substantive Amendment: [July 8, 2008]2009

Authorizing, and Implemented or Interpreted Law: 73-2-1(4)(g); 73-2-25; 73-2-26; 73-3-25

 

 

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact Kaelyn Anfinsen at the above address, by phone at 801-538-7370, by FAX at 801-538-7442, or by Internet E-mail at KAELYNANFINSEN@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.

Last modified:  12/30/2008 2:25 PM