Original Notice.

     Preproposal statement of inquiry was filed as WSR 11-15-062.

     Title of Rule and Other Identifying Information: Rule amendment for WAC 332-24-221 Specific rules for burning that requires a written burning permit.

     Hearing Location(s): Natural Resources Building, Room 172, 1111 Washington Street S.E., Olympia, WA, on October 28, 2011, at 1:00 p.m.; and at the Institute for Extended Learning, Colville Center, Dominion Room, 985 South Elm, Colville, WA 99114, on October 31, 2011, at 1:00 p.m.

     Date of Intended Adoption: December 1, 2011.

     Submit Written Comments to: Darrel Johnston, P.O. Box 47037, Olympia, WA 98504-7037, e-mail dnrburnfee@dnr.wa.gov, fax (360) 902-1757, by October 31, 2011, by no later than 4:30 p.m.

     Assistance for Persons with Disabilities: Contact Darrel Johnston by October 19, 2011, TTY (360) 902-1125 or (360) 902-1300.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The objective of the proposed rule making is to comply to the maximum extent possible with the statutory direction in RCW 70.94.6534 that the department of natural resources (DNR) shall set burning permit fees at a level necessary to cover the costs of the silvicultural burning program. DNR is proposing to increase permit fees by $80.00 plus $0.50 per ton of debris to be burned, as authorized in 2ESHB 1087 passed by the 2011 Washington state legislature. DNR's ability to comply fully with statutory direction is limited to the fee increase level authorized in 2ESHB 1087. WAC 332-24-221 will be amended to reflect the maximum fee increase authorized by the legislature and to remove the one year term limit on burn permits. The fee increase will apply to all permits issued by DNR for burning on DNR protected lands and to federal burning conducted under the DNR smoke management plan.

     Reasons Supporting Proposal: The Washington State Clean Air Act (RCW 70.94.6534) directs DNR to set burn permit fees by rule at the level necessary to cover the costs of its burning program after receiving recommendations on such fees from the public. Current burn permit fees cover approximately eighteen percent of program costs. Increasing permit fees as authorized by the 2011 Washington state legislature allows DNR to comply to the maximum extent possible with the statutory direction in RCW 70.94.6534.

     Statutory Authority for Adoption: RCW 70.94.6534. The 2011 legislature, in 2ESHB 1087, authorized DNR to increase permit fees by up to $80.00 plus $0.50 per ton of debris to be burned.

     Statute Being Implemented: RCW 76.04.205 and 70.94.6534.

     Rule is not necessitated by federal law, federal or state court decision.

     Name of Proponent: DNR, governmental.

     Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Darrel Johnston, 1111 Washington Street S.E., Olympia, WA, (360) 902-1300.

     A small business economic impact statement has been prepared under chapter 19.85 RCW.

     The objective is to comply to the maximum extent possible with the statutory direction in RCW 70.94.6534 to set permit fees at a level necessary to cover the costs of the silvicultural burning program. DNR's ability to comply fully with this direction is limited to the level authorized in 2ESHB 1087.

     CONTEXT:

     Existing Silvicultural Burn Program: Through authority provided in Washington's forest protection laws (RCW 76.04.205) and Clean Air Act (RCW 70.94.6534), DNR is responsible for regulating burning of forest debris on forestlands where DNR provides fire protection. DNR accomplishes this through implementation of regulatory rules (chapter 332-24 WAC) and the smoke management plan (SMP). The SMP was developed in collaboration with small forest landowners, large forest landowners, federal land managers, and the department of ecology and provides for a limited burning program that protects human health and safety from the effects of outdoor burning while allowing the use of fire under controlled conditions to maintain healthy forests and meet land management needs.

     The current silvicultural burn program involves the following:

•	DNR region staff to issue and comply permits following on-site review of proposed burns, providing fire prevention and safety education and permit conditioning to mitigate fire escape and nuisance smoke.
•	DNR smoke management staff responsible for daily approval/denial of large burns based on SMP criteria and overview of SMP implementation.
•	Technology (meteorological models, burn permit database, web-based telephony system) used in evaluating daily burn approvals, tracking and reporting of smoke emissions, and burner notification of fire safety and air quality burn bans.
•	Program administration.

     The number of silvicultural burn permits issued has declined since 1999 due largely to the phasing out of DNR-issued land clearing burn permits and more recently due to reduced timber harvest as a result of declining log prices (see Figure 1). The number of burn permits fell to a new low in fiscal year (FY) 2009. In FY 2010, two thousand two hundred thirteen burn permits were issued, about the same number as in FY 2009.

     At the time fees were first authorized in 1991, DNR and the forest fire advisory board determined that the cost of the program was approximately $80 for a permit to burn one hundred tons or less of forest debris (the minimum permit size). The decision was made to implement a sliding fee structure based on the tonnage permitted, with the minimum fee initially set at $20 for a permit of one hundred tons or less. The intent was to raise fees over time to eventually cover the full cost of the program.

     This strategy was compromised in 1993, when Initiative 601 became law and limited any fee increases to a factor based on the rate of inflation and population growth. Each year from 1995 to 1999, fees were raised at the allowed rate without making significant progress toward the statutory direction to recover the full costs of the program through fees. With inflation relatively low over the last several years (and therefore the amount that fees could be increased annually also being low), DNR has not increased permit fees since 1999. Under WAC 332-24-221, the current fee for a one hundred ton or less burn permit is $25.50 and as shown in Figure 2 for amounts over one hundred tons. Although the schedule lists fees in five hundred ton increments up to ten thousand tons, the largest permit issued to a nonfederal landowner in FY 2010 was for one thousand four hundred sixty tons, at a fee of $651.

Figure 2. Current Silvicultural Burn Permit Fee Schedule (WAC 332-24-221)

Tons			Current Fee
0		100		$25.50
101		500		127
501		1,000		391
1,001		1,500		651
1,501		2,000		914
2,001		2,500		1,175
2,501		3,000		1,438
3,001		3,500		1,697
3,501		4,000		1,959
4,001		4,500		2,222
4,501		5,000		2,483
5,001		5,500		2,746
5,501		6,000		3,007
6,001		6,500		3,271
6,501		7,000		3,532
7,001		7,500		3,794
7,501		8,000		4,056
8,001		8,500		4,318
8,501		9,000		4,580
9,001		9,500		4,843
9,501		10,000		5,102
10,001				5,365 plus $0.50/ton for tons over 10,000

     Figure 3 shows burn permit fees collected in FY 2010 by landowner type. A total of $127,891 was received under the program. Federal agencies paid $31,064 of this total representing their share of the program's smoke management implementation under the SMP. DNR does not provide fire protection to federal lands and therefore does not issue burn permits or regulate federal burning for fire protection and safety, all of which are additional costs incurred by DNR in permitting burns on DNR protected lands. To address this, the SMP provides for cost allocation among burner groups resulting in a lower fee for federal burning when compared to burning conducted on DNR protected lands. Since federal burners are not issued permits, the following description of FY 2010 fees will summarize the permits issued to nonfederal landowners.

Figure 3. Burn Permit Fees for FY 2010 by Landowner Type

Landowner Type	# of Parties		# of Permits		Tons	Amount of Fees	Tons/Permit		Fees/Permit	Fees/Ton
Industrial	33		491		94,140	$49,272.50	192		$100.35	$0.52
Other Private	67		77		4,757	$2,978.50	62		$38.68	$0.63
Individuals	1,372		1,393		22,872	$36,739.50	16		$26.37	$1.61
Non-Federal Public Agency	22		125		13,976	$7,836.50	112		$62.69	$0.56
Non-Federal Total	1,494		2.086		135,745	$96,827.00	65		$46.42	$0.71
Federal Public Agency	8		145			$31,064.10
TOTAL	1,502		2,231			$127,891.10

     Of the nonfederal landowners, one thousand four hundred ninety-four different parties were issued two thousand eighty-six permits to burn 135,745 tons of forest debris and paid $96,827 in permit fees. The "average" permit was issued for sixty-five tons at a fee of $46.42 per permit or $0.71 per ton.

     Thirty-three large industrial forestland owners were issued twenty-four percent of the permits, accounting for sixty-nine percent of the tonnage and fifty-one percent of the total fees paid. Sixty-seven other private parties (small forestry-related businesses, land holding companies, outdoor recreation organizations, etc.) were issued four percent of the permits, accounting for four percent of the tonnage and three percent of the total fees. A total of one thousand three hundred seventy-two individuals (individual persons, couples, or family trusts) were issued sixty-seven percent of the permits, accounting for seventeen percent of the tonnage and thirty-eight percent of the total fees. Finally, twenty-two nonfederal public agencies were issued six percent of permits, accounting for ten percent of the tonnage and eight percent of the total fees.

     In FY 2010, the $127,891 collected in burn permit fees funded approximately eighteen percent of the program's annual $700,000 cost. To meet the direction in the state Clean Air Act to set permit fees at a level necessary to cover the costs of the program, the legislature authorized DNR in 2ESHB 1087 to increase current permit fees by up to $80.00 plus $0.50 per ton for each ton of material burned in excess of one hundred tons. The increase authorized by the legislature is anticipated to generate $364,500 in fees, which is eighty-seven percent of the $420,000 funding level considered to be needed to deliver a minimal burn program.

     PROPOSED RULE : The proposed rule change would increase burn permit fees by the legislatively authorized amount of up to $80.00 plus $0.50 per ton for each ton of material burned in excess of one hundred tons, as shown in Figure 4.

Figure 4. Proposed Revision to Burn Permit Fee Schedule (WAC 332-24-221)

Tons			Current Fee		New Fee
0	100		$25.50		$105.50
101	500		127		357
501	1,000		391		846
1,001	1,500		651		1,356
1,501	2,000		914		1,869
2,001	2,500		1,175		2,380
2,501	3,000		1,438		2,893
3,001	3,500		1,697		3,402
3,501	4,000		1,959		3,914
4,001	4,500		2,222		4,427
4,501	5,000		2,483		4,938
5,001	5,500		2,746		5,451
5,501	6,000		3,007		5,962
6,001	6,500		3,271		6,476
6,501	7,000		3,532		6,987
7,001	7,500		3,794		7,499
7,501	8,000		4,056		8,011
8,001	8,500		4,318		8,523
8,501	9,000		4,580		9,035
9,001	9,500		4,843		9,548
9,501	10,000		5,102		10,057
10,001			5,365		10,395 plus $0.50/ton for tons over 10,000

     SMALL BUSINESS IMPACTS: A small business economic impact statement (SBEIS) is required by the Regulatory Fairness Act (chapter 19.85 RCW) to consider the impacts on small businesses of administrative rules adopted by state agencies. The statute defines small businesses as those with fifty or fewer employees. To determine whether the proposed rule will have a disproportionate cost impact on small businesses, the impact statement compares the cost of compliance for small business with the cost of compliance for the ten percent of businesses that are the largest businesses required to comply with the proposed rule.

     In this analysis, it is assumed that the number of permits to be issued annually in the future will be the same as the number issued in FY 2010 (two thousand eighty-six to nonfederal parties and one thousand nine hundred sixty-one to private parties) and therefore the FY 2010 data will be used as representative of future years. On one hand, the number of burn permits should increase when cyclical timber markets recover and the volume of timber harvest increases. On the other hand, it is expected that increased utilization of forest debris for biomass will limit increases in numbers of burn permits issued when log markets improve. Also the higher burn permit fees will likely act to reduce the number of permits requested.

     Small Business Analysis: Burning permits issued to one thousand three hundred seventy-two individual landowners account for ninety-two percent of all permits issued. Some of these individual landowners are appropriately considered to be "businesses" as they are managing and harvesting timber on their property for income producing purposes and need burning permits as part of their timber harvest activity. However, most individuals obtaining burn permits are not "businesses" in the normal sense in that their properties are not being managed for income producing purposes but rather their need to burn silvicultural debris is incidental to their noneconomic use and enjoyment of their properties, such as thinning and removal of forest understory to mitigate wildfire threat to existing structures.

     Because of the ambiguity of treating individual landowners as "businesses" to meet the intent of the SBEIS, the required analysis will be done both including and excluding the one thousand three hundred seventy-two individual landowners. Both analyses will exclude all public agencies since they are not private businesses. The one hundred private organizations which include industrial forest landowners, smaller forestry-related businesses, land holding companies, outdoor recreation organizations, etc., are included in both analyses as businesses.

     The Regulatory Fairness Act at RCW 19.85.040 states that one or more of the following measures are to be used as a basis for comparing costs:

     (a) Cost per employee;

     (b) Cost per hour of labor; or

     (c) Cost per one hundred dollars of sales.

     Cost per employee is used for the analysis below since there is no applicable data available for the other two measures.

     Figure 5 shows the small business impact analysis including all one thousand four hundred seventy-two private burn permittees as businesses. The "ten percent of businesses that are the largest business [businesses] required to comply with the proposed rule" is comprised of all one hundred private firms and organizations plus forty-seven individuals. These one hundred forty-seven permittees (ten percent of one thousand four hundred seventy-two) have an average of 31.7 employees. This is based on the one hundred firms and organizations having an average of 46.0 employees each (derived from available employment data for thirty-nine of these one hundred parties) and forty-seven individuals having an average of 1.5 employees each (see below).

Figure 5. Comparison of Impact to Small Businesess [Businesses] Versus Largest 10% of Businesses Including Individuals

Group of Permittees	# of Permittees		# of Permits		Current Fees		Proposed Fees		Fee Increase		Fee Increase per Party		# of Employees		Average # of Employees		Fee Increase per # of Employees
10% Largest	147		636		$55,203		$156,708		$101,505		$691		4,667		31.7		$21.75
90% Smallest	1,325		1,325		$33,788		$139,788		$106,000		$80		1,988		1.5		$53.33
	1,472		1,961		$88.991		$296,496		$207,505		$141		6,655		4.5		$31.18

     The individual permittees are considered to be households of individuals or couples (or family trusts) with an average of 1.5 persons each. The average fee increase per employee for the small businesses outside the largest ten percent (all one thousand three hundred twenty-five are "small businesses" since they all have under fifty employees) is $53.33 as compared with $21.75 for the ten percent of businesses that are the largest businesses. Therefore, this analysis determines that the proposed rule will have a disproportionate cost impact on small businesses.

     Figure 6 shows the results of the small business impact analysis excluding the one thousand three hundred seventy-two individual permittees. The comparison is based on the thirty-nine out of one hundred firms and organizations for which there is employment data available. It is assumed that the thirty-nine fairly represents the one hundred. Four parties (ten percent of thirty-nine) represent the ten percent of businesses that are the largest businesses and they have an average fee increase per employee of $2.41 (or $1.32 under the multiple-unit permit scenario¹). Four additional parties have over fifty employees each and are therefore not considered to be small businesses for this analysis. The remaining thirty-one parties which have less than fifty employees each represent the small businesses in this analysis and they have an average fee increase per employee of $71.53 (or $42.98 under the multiple-unit permit scenario). Therefore, this analysis also determines that the proposed rule will have a disproportionate cost impact on small businesses.

Figure 6. Comparison of Impact to Small Businesess [Businesses] Versus Largest 10% of Businesses For Business [Businesses] with Employment Data Available, Excluding Individuals

Group	# of Businesses		Average # of Employees		Average # of Permits		Average Current Fees		Average Proposed Fees		Average Fee Increase		Fee Increase per # of Employees
Top 10%	4		231		7		$191		$749		$558		$2.41
Over 50 Employees/Not in Top 10%	4		100		31		$2,791		$7,997		$5,206		$52.06
Under 50 Employees	31		15		7		$573		$1,653		$1,080		$71.53
Total	39		46		9		$762		$2,211		$1,449		$31.53

     Reducing Costs for Small Businesses: RCW 19.85.030 and [19.85].040 address an agency's responsibility in rule making to consider how costs may be reduced for small businesses, based on the extent of disproportionate impact on the small businesses. The statute states that "if the agency determines it cannot reduce the costs imposed by the rule on small businesses, the agency shall provide a clear explanation of why it has made that determination."

     The only way to significantly reduce the disproportionate cost impact on small businesses would be to lower the fee increase on the permits with the least tonnage (up to one hundred tons) significantly below the $80 increment proposed in the rule change and authorized by the legislature. For illustrative purposes, if in an attempt to avoid the disproportionate cost impact on small businesses the least tonnage permit fee was raised from $25.50 to only $45.50 instead of to the proposed $105.50 and all the larger tonnage permits remained at the proposed fee levels, approximately $100,000 less in fees would be collected. Absent additional funding from another source, DNR would need to develop a process to prioritize permit requests, resulting in the reduced availability of burning as a management tool to address fire hazard abatement, silvicultural, and forest health needs. If a permit prioritization process was instituted, some landowners would not be able to obtain a permit when needed and would incur increased costs to use alternative methods in meeting land management goals. These may include hauling away the material, leaving it lie in place, or piling it up on the property. Another factor justifying the disproportionate cost impact on small business is simply the fact that DNR's cost to process and administer a permit is roughly the same regardless the amount of tonnage covered by the permit.

     Estimated Number of Jobs Created or Lost: RCW 19.85.040 (2)(d) requires that the SBEIS include "an estimate of the number of jobs that will be created or lost as the result of compliance with the proposed rule."

     As shown in Figure 5, the total fee increase on private parties is $207,505 but it is spread across one thousand four hundred seventy-two different parties. Because of the relatively low absolute magnitude of the amount of fee increases on any single party, it is very improbable that any jobs would be lost directly. Those parties faced with the proposed $80 increase on the smallest tonnage permits will simply absorb the cost or elect not to get a permit to burn. Ten large industrial forest landowners would incur total fee increases over $1,000 each under the proposed rule, but for eight of those the cost is less than $100 per employee (and it is $271 and $810 per employee for the other two firms). Therefore, it is reasonable to conclude that no jobs will be lost as a result of compliance with the proposed rule.²

¹ Under the current burn permit program, DNR requires one permit for each burn unit (site or location). Some parties, especially large industrial forest landowners, have many burn units each year and therefore needed to acquire several permits each year. As the proposal to increase the fee schedule was working its way through the legislative process, DNR agreed with large industrial forest landowners to implement a new multiunit permit under which all proposed burn units within a DNR region during the year could be placed under one permit.

² If the $207,505 total fee increase was incurred by one or only a few forestry and logging firms (rather than being spread across one thousand four hundred seventy-two parties) and that firm or those few firms reduced their total output by the total amount of $207,505, then approximately 3.6 jobs would be lost in the state based on the 17.30 total jobs per $1 million final demand multiplier for the forestry and logging sector as specified in the 2002 Washington input-output model.

     A copy of the statement may be obtained by contacting Darrel Johnston, 1111 Washington Street S.E., P.O. Box 47037, Olympia, WA 98504-7037, phone (360) 902-1300, fax (360) 902-1757, e-mail darrel.johnston@dnr.wa.gov.

     A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Darrel Johnston, 1111 Washington Street S.E., P.O. Box 47037, Olympia, WA 98504-7037, phone (360) 902-1300, fax (360) 902-1757, e-mail darrel.johnston@dnr.wa.gov.

September 16, 2011

Randy Acker

Deputy Supervisor

OTS-4127.1

AMENDATORY SECTION(Amending WSR 99-12-085, filed 6/1/99, effective 7/2/99)

WAC 332-24-221   Specific rules for burning that requires a written burning permit.   Persons not able to meet the requirements of WAC 332-24-205 and 332-24-211 must apply for a written burning permit through the department. In addition to the rules outlined in WAC 332-24-205, the following are additional requirements for written permits:

     (1) ((Written burning permits will be in effect for one year from the validation date, unless suspended or revoked.

     (2))) Fees for written burning permits will be charged and collected pursuant to chapter 70.94 RCW and shall be ((twenty-five)) one hundred five dollars fifty cents for under one hundred tons of consumable debris; and for burns one hundred tons of consumable debris and greater as follows:

Consumable Debris				Fee schedule
100	-	500 tons			$((127)) 357
501	-	1,000 tons			((391)) 846
1,001	-	1,500 tons			((651)) 1,356
1,501	-	2,000 tons			((914)) 1,869
2,001	-	2,500 tons			((1,175)) 2,380
2,501	-	3,000 tons			((1,438)) 2,893
3,001	-	3,500 tons			((1,697)) 3,402
3,501	-	4,000 tons			((1,959)) 3,914
4,001	-	4,500 tons			((2,222)) 4,427
4,501	-	5,000 tons			((2,483)) 4,938
5,001	-	5,500 tons			((2,746)) 5,451
5,501	-	6,000 tons			((3,007)) 5,962
6,001	-	6,500 tons			((3,271)) 6,476
6,501	-	7,000 tons			((3,532)) 6,987
7,001	-	7,500 tons			((3,794)) 7,499
7,501	-	8,000 tons			((4,056)) 8,011
8,001	-	8,500 tons			((4,318)) 8,523
8,501	-	9,000 tons			((4,580)) 9,035
9,001	-	9,500 tons			((4,843)) 9,548
9,501	-	10,000 tons			((5,102)) 10,057
10,001	+	tons			((5,365)) 10,395 plus $0.50 per ton for tons over 10,000

For purposes of this section, consumable debris is the amount of debris that the department determines will be consumed by the proposed burning.

     (((3))) (2) Written burning permits are not considered valid unless all of the following conditions apply:

     (a) The written permit has been signed by the applicant agreeing to follow all requirements of chapter 332-24 WAC, the smoke management plan in effect at the time of the burning, and any additional terms and conditions specified by the department in writing; and

     (b) The required permit fee has been secured or paid according to approved department procedures; and

     (c) The person doing the burning has the permit in possession while burning and is complying with all terms and conditions of such permit, the smoke management plan in effect at the time of the burning, and all applicable portions of chapter 332-24 WAC.

     (((4))) (3) Permits are written only for the burn site and fuel quantity ((that is presented at the time of the inspection)) represented to the department on the permit application. Addition of fuel((,)) or changing the burn site, after the ((site inspection has been made)) permit application has been submitted to the department, is prohibited unless a new ((inspection is made)) permit application is submitted and ((an)) any added permit fee is paid, if required.

[Statutory Authority: RCW 70.94.660 and 76.04.205. 99-12-085, § 332-24-221, filed 6/1/99, effective 7/2/99; 98-13-068, § 332-24-221, filed 6/15/98, effective 8/1/98; 97-12-033 (Order 640), § 332-24-221, filed 5/30/97, effective 7/1/97; 96-12-020, § 332-24-221, filed 5/29/96, effective 7/1/96. Statutory Authority: RCW 70.94.660. 95-12-023 (Order 629), § 332-24-221, filed 5/31/95, effective 7/1/95; 94-14-063 (Order 619), § 332-24-221, filed 7/1/94, effective 8/1/94. Statutory Authority: RCW 76.04.015, 76.04.205 and 70.94.660. 92-14-096 (Order 599), § 332-24-221, filed 6/30/92, effective 7/31/92. Statutory Authority: RCW 76.04.015. 87-11-005 (Order 504), § 332-24-221, filed 5/8/87.]

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