STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BASF CORPORATION,

vs.

Petitioner,

Case No. 17-3684RP

DEPARTMENT OF ENVIRONMENTAL PROTECTION,

Respondent,

and

LEON COUNTY, FLORIDA, AND THE CITY OF TALLAHASSEE,

Intervenors.

/

FINAL ORDER

The final hearing in this case was held on November 28 through 30, 2017, in Tallahassee, Florida, before Bram D.E. Canter, Administrative Law Judge of the Division of Administrative Hearings (“DOAH”).

APPEARANCES

For Petitioner BASF Inc.:

Matthew Z. Leopold, Esquire Martha Harrell Chumbler, Esquire James Parker-Flynn, Esquire Carlton Fields Jorden Burt, P.A. Post Office Box 190

Tallahassee, Florida 32302

For Respondent Florida Department of Environmental Protection:

Lorraine Marie Novak, Esquire Kenneth B. Hayman, Esquire Carson Zimmer, Esquire

Department of Environmental Protection

3900 Commonwealth Boulevard, Mail Station 35

Tallahassee, Florida 32399-3000 For Intervenor Leon County Florida:

Herbert W.A. Thiele, Esquire Leon County Attorney’s Office

301 South Monroe Street, Room 202 Tallahassee, Florida 32301

William B. Graham, Esquire Kevin P. Blodgett, Esquire Carr Allison

305 South Gadsden Street Tallahassee, Florida 32301

Edwin A. Steinmeyer, Esquire Steinmeyer Fiveash LLP

310 West College Avenue Tallahassee, Florida 32301

For Intervenor City of Tallahassee:

Gary V. Perko, Esquire David C. Childs, Esquire Malcolm N. Means, Esquire Hopping Green & Sams, P.A. Post Office Box 6526 Tallahassee, Florida 32314

STATEMENT OF THE ISSUE

The issue to be determined in this case is whether proposed Florida Administrative Code Rule 62-304.305(5) is an invalid exercise of delegated legislative authority.

PRELIMINARY STATEMENT

On December 16, 2016, the Department of Environmental Protection (“DEP”) published a Notice of Proposed Rulemaking in the Florida Administrative Register that would establish in Florida Administrative Code Rule 62-304.305(5) a new Total Maximum Daily Load (“TMDL”) for nutrients in Lake Talquin, and would allocate these loads among specific and general categories of nutrient sources.

The notice also included a summary of the Statement of Estimated Regulatory Costs (“SERC”) for the proposed TMDL. On January 27, 2017, BASF Corporation (“BASF”) filed a lower cost regulatory alternative (“LCRA”) with DEP. On March 6, DEP rejected the LCRA on substantive grounds and because it was untimely filed.

On June 19, DEP published a Notice of Change in the Florida Administrative Register. On June 26, BASF filed a petition challenging the proposed rule. BASF was subsequently granted leave to amend its petition.

Leon County and the City of Tallahassee were granted intervention into the proceeding in support of the validity of the proposed rule.

DEP moved to dismiss BASF’s petition on the basis that BASF lacked standing. The motion was denied.

BASF filed a Motion for Summary Final Order on the issue of whether DEP’s SERC was inadequate. The motion was denied. BASF filed a Second Motion for Summary Final Order, oral argument was heard, and the issues raised in the motion are addressed in this Final Order.

At the final hearing, Joint Exhibits 1-8 were accepted into evidence. Official recognition was taken of chapter 2013-156, Laws of Florida.

BASF presented the testimony of Adrienne Lee; Michael Erickson, who was accepted as an expert in water quality modeling and hydrodynamic modeling; and Thomas Frick, the Director of the Department’s Division of Environmental Assessment and Restoration. BASF Exhibits 1, 9, 10, 14A (only for the comments of Mr. Erickson), 15 (only for the comments of Mr. Erickson), 26, 41, 43, 44, 64A, 64B, 64C, 77, 81, and 103

were accepted into evidence. BASF Exhibit 46 was accepted as a proffer only.

DEP presented the testimony of Julie Espy, Program Administrator of DEP’s Water Quality Assessment program; Thomas Frick, who was accepted as an expert in waterbody/watershed assessment and restoration; and Tim Wool, the United States Environmental Protection Agency’s national expert in water quality modeling, who was accepted as an expert in TMDL

modeling. DEP Exhibits 1-14, 17, 18, 20, 21, 33, 41-43, 45, 47,

51, 53, 60-62, 64-69, and 73 were accepted into evidence.

Intervenor Leon County did not present any witnesses. It offered two exhibits, but they were not accepted into evidence. Intervenor City of Tallahassee did not present any witnesses and did not offer any exhibits into evidence.

The Transcript of the hearing was filed with DOAH. The parties filed proposed final orders that were considered in the preparation of the Final Order.

FINDINGS OF FACT

1. The Parties

   
   

   1. Petitioner BASF is a Delaware corporation that operates a cracking clay facility near Attapulgus, Georgia, about three miles north of the Florida/Georgia border.

   2. Respondent DEP is the state agency authorized under section 403.067, Florida Statutes, to assess waters for the attainment of water quality standards and to develop TMDLs for waters that do not meet the standards.

   3. Intervenor Leon County is the local government in which part of Lake Talquin is located. The County owns and operates stormwater collection systems that discharge nutrients into the Lake Talquin watershed.

      
      

   4. Intervenor City of Tallahassee owns and operates the

      
      

      A.B. Hopkins Power Plant that discharges nutrients into the Lake Talquin watershed.

2. The TMDL Program

   
   

   1. In compliance with section 303(d) of the federal Clean Water Act, section 403.067, Florida Statutes, was enacted to require DEP to assess and list waterbodies for which water quality standards are not being attained and for which technology-based effluent limitations and other pollution control programs are not sufficient to attain water quality standards.

   2. Such “impaired waters” are placed on a “Verified List” by DEP and TMDLs are developed for them.

   3. After a TMDL has been established, a plan for restoring the waterbody is developed and implemented through a basin management action plan (“BMAP”).

3. Lake Talquin

   
   

   1. Lake Talquin is located on the border between Gadsden and Leon Counties in Florida, approximately 20 miles from the Georgia border. It was formed when the Jackson Bluff Dam was constructed on the Ochlocknee River.

   2. The parties disputed the size of the watershed for Lake Talquin. DEP believes the watershed encompasses 1,569 square miles. BASF contends the watershed is about 1,700 square miles,

      
      

      because that is the figure in some Environmental Protection Agency (“EPA”) reports. DEP used the smaller watershed size because four small sub-basins included in the EPA reports are not hydraulically connected to Lake Talquin.

   3. Based on the figure of 1,569 square miles, 73 percent of the Lake Talquin watershed is in Georgia and 27 percent is in Florida.

   4. About 57 percent of the watershed is natural, consisting of upland forest, open water, and wetlands. Urban and residential land uses make up 7 percent of the watershed. Agricultural lands, including rangelands, occupy 36 percent of the watershed.

   5. In 2009, DEP determined that Lake Talquin was impaired for nutrients, using the Trophic State Index. The Trophic State Index for high color lakes like Lake Talquin, is an annual geometric mean of chlorophyll a of 20 micrograms per liter (µg/L), total phosphorus (“TP”) between 0.05 and 0.16 µg/L, and total nitrogen (“TN”) between 1.27 µg/L and 2.23 µg/L, not to be exceeded more than once in any consecutive three-year period.

   6. Chlorophyll a is the target indicator because it indicates the presence of algae.

   7. For water quality assessments to determine whether waters are impaired, DEP has designated waterbody identification units (“WBIDs”). Waterbodies can be divided into more than one

      
      

      WBID, based on hydrologic distinctions. Lake Talquin was divided into two WBIDs, designated 1297C and WBID 1297D. Both WBIDs were determined to be impaired for nutrients.

   8. In 2013, DEP re-evaluated Lake Talquin using the Trophic State Index and found both WBIDs were still impaired for nutrients. Therefore, the Lake Talquin WBIDs remained on the Verified List.

4. The TMDL Model

   
   

   1. DEP collaborated with EPA in developing the Lake Talquin TMDL. Tim Wool, an EPA employee and an expert in the application of water quality models, conducted the modeling used in developing the TMDL.

   2. Mr. Wool used a suite of three models: the Loading Simulation Program C++ (“LSPC”); the Water Quality Analysis Simulation Program (“WASP”); and the Environmental Fluid Dynamics Code (“EFDC”) (referred to collectively as the “TMDL Model”).

   3. LSPC is a watershed model that was utilized to simulate all of the water flows and associated nutrient loads that come off the land surfaces in the upstream sections of the watershed, as well as the surrounding watershed that drains directly into Lake Talquin, including Little River and the Ochlockonee River.

      
      

   4. The WASP model was developed by Mr. Wool and is an advanced water quality model that simulates pollutant “fate and transport.” Three separate WASP models were used; two riverine models, one for the Little River and one for the Ochlockonee River, and a reservoir model for Lake Talquin. The riverine models take the predicted flows and nutrient concentrations from the LSPC model and integrate flows and loads from point sources within the respective watersheds. The WASP output parameters for both Little River and Ochlockonee River tributaries are then loaded into the Lake Talquin WASP model.

   5. The EFDC model is a hydrodynamic model used to simulate aquatic systems. For this application, a three- dimensional EFDC grid was developed for Lake Talquin to provide hydrodynamic inputs to the Lake Talquin WASP water quality model. The three-dimensional model accounts for lateral and surface-to-bottom mixing within Lake Talquin.

   6. The EFDC model integrates the flows predicted from the two riverine WASP models with the flows predicted for the watershed that directly drains into Lake Talquin. The WASP models then take the water transport information predicted by the EFDC model, integrate the loadings from the watershed directly around Lake Talquin, as well as the two main tributaries, and predict the nutrient effect in the reservoir which, in this case, is algal response.

      
      

   7. These models were applied to simulate nutrient loading into various areas of Lake Talquin and predict average annual geometric mean concentrations of chlorophyll a for each year of the period 2006 through 2012. Those results were then used to estimate the amount of TN and TP the Lake could assimilate and still meet the target for chlorophyll a in each year of the 2006-2012 simulation period.

5. The Proposed Rule

   
   

   1. Proposed rule 62-304.305(5) would establish a nutrient TMDL for Lake Talquin:

      Lake Talquin. The nutrient TMDL for Lake Talquin is a seven-year average of annual loads of 915,783 kg/year TN and 76,585 kg/year TP which are intended to achieve the applicable annual geometric mean chlorophyll a criterion for high color lakes, and is allocated as follows:

      
      

      1. The WLA for wastewater point sources is divided between the City of Quincy domestic wastewater facility (NPDES permit FL0029033) and the City of Tallahassee A. B. Hopkins power plant (NPDES permit FL0025518). The allocation to the Quincy wastewater facility for TP is 1,271 kg/year and 4,922 kg/year for TN. The allocation to the Hopkins power plant for TP is 2,187 kg/year and 1,020 kg/year for TN,

         
         

      2. The WLA for discharges subject to the department’s NPDES MS4 Permitting Program is a 27% reduction of TN and a 33% reduction of TP based on average nutrient loads from the 2006-2012 period,

         
         

      3. The LA for nonpoint sources is a 27% reduction of TN and a 33% reduction of TP based on average loads from the 2006-2012 period, and

         
         

      4. The Margin of Safety is implicit.

         
         

      5. While the LA and MS4 WLA for TN and TP has been expressed as the percent reduction needed to attain the applicable Class III nutrient criteria, it is the combined reductions from both anthropogenic point and nonpoint sources that will result in the restoration of nutrient conditions in the impaired waterbody. However, it is not the intent of this TMDL to abate natural background conditions.

         
         

   2. Although the parties addressed at length the differences between the original version of the proposed rule and the final version, only the validity of the final version is at issue in this proceeding. Differences in the original version of the rule are only relevant to BASF’s claim that the proposed rule is invalid because DEP did not revise the SERC when the proposed rule was changed. That issue is discussed later.

6. Facts Related to BASF’s Standing

   
   

   1. The BASF facility discharges wastewater effluent containing large amounts of TN into Attapulgus Creek, which flows into the Little River, which flows into Lake Talquin. The facility is subject to a National Pollutant Discharge Elimination System (“NPDES”) permit issued by the Georgia

      
      

      Environmental Protection Division, which includes limits on BASF’s discharge of nutrients.

   2. Under the proposed rule, the nutrient loading to Lake Talquin contributed by BASF is addressed in paragraph (c), as part of “nonpoint sources.” The load allocation (“LA”) for nonpoint sources in the proposed rule is a 27 percent reduction of TN and a 33 percent reduction of TP.

   3. The record contains numerous statements acknowledging that the proposed TMDL will affect Georgia facilities that discharge nutrients that reach Lake Talquin. For example:

      “DEP has never denied that to reach this TMDL goal, that Georgia sources will have to in some way, form or fashion reduce their emissions.” Lorraine Novak

      
      

      Thomas Frick agreed that “there’s going to have to be load reductions from Georgia.”

      
      

      “[T]his TMDL was going to affect how we deal with permits and issue permits in the State of Georgia.” Dr. Elizabeth Booth, with the Georgia Environmental Protection Division.

      
      

7. Whether the Proposed Rule Contravenes the Law Implemented

   
   

   1. Reassessment Using the NNC

      
      

      1. BASF contends the proposed rule is invalid because Lake Talquin was not reassessed to determine attainment of the Numeric Nutrient Criterion (“NNC”), rule 62-302.531, that went into effect in 2014. BASF asserts that this action is required

         
         

         by section 403.067(3)(c) before a TMDL can be established for Lake Talquin.

      2. DEP divided the State into five basin groups and focuses its assessment efforts on one basin group each year with the intent to cover the entire State over a five-year cycle. Lake Talquin is in the Group 1 Basin. The waterbodies in Basin Group 1 are not yet due to be reassessed.

      3. If a TMDL is established for Lake Talquin, it will be used in future assessments to determine whether Lake Talquin can be removed from the Verified List of impaired waters, not the

         NNC.

         
         

   2. Annual Loads

      
      

      1. BASF contends the proposed rule contravenes

         
         

         section 403.067 because it establishes average annual loads for TN and TP, not a daily load. BASF’s argument is based on the name of the standard--Total Maximum Daily Load.

      2. DEP has adopted over 100 TMDLs for nutrients that establish maximum annual loads, rather than maximum daily loads.

      3. The preponderance of the evidence shows that the science regarding nutrients and their effects on flora and fauna make annual load limitations appropriate.

         
         

   3. Detailed Waste Load Allocations

      
      

      1. BASF contends that the proposed rule contravenes section 403.067(6) by making detailed waste load allocations to the City of Quincy domestic wastewater facility and the City of Tallahassee A.B. Hopkins Power Plant. As explained in the Conclusions of Law, section 403.067(6) allows for detailed waste load allocations as part of a TMDL.

   4. Incomplete Allocation

      
      

      1. BASF contends that the proposed rule, by excluding Georgia nutrient sources, contravenes section 403.067(6)(b), which requires a TMDL to account for all pollutant sources. However, the proposed rule does not state that the maximum loads of TN and TP exclude nutrient contributions from sources in Georgia. DEP’s interpretation of the proposed rule as including all nutrient sources, no matter their origin, is the most reasonable interpretation of the words used in the rule.

   5. Approved Procedures and Methods

   
   

   1. BASF contends that the proposed rule contravenes section 403.067(6)(a), which refers to the use of water quality models “using approved procedures and methods.” Findings applicable to this issue are set forth below in the section entitled “Model Performance.” Because of the modeling problems identified in that section, it is found that the Lake Talquin

      
      

      TMDL modeling was not conducted in accordance with approved methods and procedures.

8. Whether the Proposed Rule is Vague

   
   

   1. Georgia Sources

      
      

      1. BASF contends that the proposed rule is vague because it does not expressly state that the required load reductions for nonpoint sources applies to both Florida and Georgia sources.

      2. The term “nonpoint sources” has a contextual meaning of any nonpoint sources of nutrients that flow to Lake Talquin. The interpretation of the term by DEP to include Georgia nonpoint sources is the most reasonable interpretation.

   2. Unspecified Loads

      
      

      1. The proposed rule requires nonpoint sources to reduce TN by 27 percent and TP by 33 percent “based on average loads from the 2006-2012 period.” BASF contends this requirement is vague because the rule does not identify the loads that must be reduced (27 percent of what?).

      2. By subtracting the specific waste load allocations to the City of Quincy domestic wastewater facility and the City of Tallahassee A.B. Hopkins Power Plant, the combined loads for

         nonpoint sources and the NPDES MS4 Permitting Program can be determined. However, the proposed rule does not identify their individual allocations.

         
         

      3. The proposed rule states that the 27 percent and

         
         

         33 percent reductions for MS4 sources and nonpoint sources are to be applied to “average nutrient loads from the 2006-2012 period,” but the rule does not tell us what these average loads are. It cannot be determined from the proposed rule what initial nutrient loads DEP has allocated to nonpoint sources and which DEP will use in the BMAP process.

   3. Seven-Year Average of Annual Loads

   
   

   1. The proposed rule states that the TMDL is a seven-year average of the annual loads. BASF contends this is vague because it does not inform persons subject to the rule of what seven-year period will be used to determine if TMDL is being achieved.

   2. Mr. Gilbert, who had primary responsibility for development of the proposed rule testified at deposition that it was his “guess” that the seven-year average would be a “rolling average, moving forward” but that the decision would be made after the proposed rule was implemented.

9. Whether the Proposed Rule is Arbitrary or Capricious

   
   

   1. The Rulemaking Process

      
      

      1. BASF contends that the proposed rule is arbitrary and capricious because DEP did not give reasonable consideration to BASF’s comments and objections. The proposed rule was not capriciously developed. The rule development process began in

         
         

         2013 and included several public workshops and hearings. Many meetings with interested persons were held, which included BASF representatives.

      2. As explained in the Conclusions of Law, DEP’s refusal to adopt BASF’s recommendations is not evidence of arbitrariness. Whether the proposed rule is arbitrary depends on whether it is supported by sound science.

   2. The Period 2006-2012

      
      

      1. BASF objects to the 2006-2012 time period of data used for the modeling because it includes two unusually dry years, 2007 and 2011. DEP asserts that using 2006-2012 data was appropriate because the data included high, low, and average rainfall years. One year had above average rainfall (2008), three years had average rainfall (2009, 2010, and 2012), and three years had below-average rainfall (2006, 2007, and 2011).

      2. It was an objective of DEP to protect Lake Talquin during low water flow conditions when nutrients can have a greater adverse impact on flora and fauna. Therefore, including dry years in the modeled period was reasonable.

      3. However, there were problems with the available data for 2007 and the model performance for 2007, which are discussed under the heading “Model Performance.”

         
         

   3. Never to be Exceeded

      
      

      1. In a not altogether clear argument, BASF contends the proposed rule is arbitrary because the TMDL establishes pollutant levels that are not to be exceeded, but the NNC allows for one exceedance in three years. The TMDL would be the nutrient water quality standard for Lake Talquin. The NNC would not apply. The two standards are not intended to be the same.

   4. Flow Correction

      
      

      1. BASF’s primary criticism of the Lake Talquin modeling effort centers on a “flow correction” used with the EFDC model to balance inflows and outflows from Lake Talquin. As explained in EPA’s Modeling Report for Lake Talquin:

         One of the calibration steps in applying EFDC to reservoirs is to adjust inflows and outflows to insure that the predict[ed] water surface elevation of the hydrodynamic model matches the measured water surface elevation. This insures that water mass balance is maintained throughout the simulation period. Because it is virtually impossible to define all inflows (tributary, groundwater, sheet flow) and all outflows (dam release, dam seepage, groundwater loss) EFDC includes a flow balancing utility that can adjust inflow/outflow to maintain the measured water surface elevation. The EFDC flow balancing utility has a limitation of only adding and removing flows at two points. Once the adjusted inflow and outflow time series has been estimated, the user must go back and apply the adjusted flows to all of the inflows and outflows.

         
         

      2. Initially, the EFDC model was not generating surface water levels for Lake Talquin that compared well with available surface elevation gage data. In an attempt to create a better fit between the model simulation and the surface elevation data, Mr. Wool used a “flow balancing utility” that increased inflows to and outflows from Lake Talquin.

      3. The flow correction affected approximately a quarter of the modeling period.

      4. Gage data is not always accurate. Some gages and some types of gage measurements are more reliable than others. The United States Geological Survey (“USGS”) rates the reliability of its gages and gives them margins of error that can range from

         +/- 10 percent for gages deemed by USGS to be “good” to

         
         

         +/- 20 percent for gages deemed to be “poor.”

         
         

      5. The preponderance of the evidence supports Mr. Wool’s determination that the water surface elevation gage data was more reliable than the flow gage data.

      6. BASF described the flow correction as “imaginary water,” but the purpose of the flow balancing utility is to simulate real water inflows and outflows. Mr. Wool was seeking to make the model replicate real inflows and outflows, real nutrient loadings, real water volumes, and real nutrient concentrations.

         
         

      7. BASF claims that “ignoring” some data in order to make adjustments for a better fit with other data is not scientifically acceptable. However, such adjustments to a model are routinely done and are an accepted practice in water quality modeling. There is nothing scientifically unacceptable about giving preference to data that is more reliable.

   5. Model Performance

      
      

      1. BASF showed that the model often performed erratically, making predictions that deviated significantly from even reliable data. Mr. Erickson persuasively opined that the model exhibited “numerical instability,” which is a red flag regarding the reliability of the model outputs.

      2. Mr. Wool did not effectively explain how the model can exhibit numerical instability, but at the same time reliably predict chlorophyll a concentrations.

      3. Furthermore, DEP did not effectively rebut BASF’s evidence that the model performed poorly in low flow conditions. That is significant because those are the conditions when nutrient concentrations would be highest and potential adverse impacts to flora and fauna in Lake Talquin would be greatest. The TMDL is aimed at protecting Lake Talquin when low flow conditions occur.

      4. It was also shown that gage data for 2007, a dry year that drove the TMDL development, was not complete.

         
         

      5. Mr. Wool’s testimony that the model was “very good” when looking at the totality of its predictions for 2006-2012 did not rebut the evidence that the model did not make good predictions in low flow conditions, nor reliably characterize conditions for the year 2007.

      6. DEP failed to prove that the numerical instability, poor model performance in low flow conditions, and missing data for 2007 do not materially detract from the reliability of the model predictions and the TMDL derived from the model.

   6. Sensitivity and Uncertainty Analyses

      
      

      1. BASF contends that the Lake Talquin modeling was flawed because it did not include a sensitivity analysis or an uncertainty analysis.

      2. Mr. Wool showed that several sensitivity analyses were conducted during the model development. BASF did not identify the uncertainty analysis it believed Mr. Wool should have conducted.

      3. BASF’s argument in this regard was based in large part on an EPA guidance document for modeling. The EPA document is not required to be followed in Florida, and Mr. Wool explained that much of the guidance in the document is directed to model development, not model application.

         
         

      4. The problems with the model’s performance, discussed above, were not due to DEP’s failure to conduct sensitivity or uncertainty analyses.

   7. Margin of Safety

   
   

   1. TMDLs are required to include a margin of safety, which can either be implicitly accounted for by choosing conservative assumptions in the development of the TMDL, or explicitly accounted for in the allocation process. The proposed rule states that the Lake Talquin TMDL uses an implicit margin of safety.

   2. BASF contends the margin of safety in the Lake Talquin TMDL is arbitrarily large. However, it cannot be determined what the margin of safety is or whether it is reasonable because the problems with the model’s performance, as found above, make the TMDL calculation unreliable.

10. Whether DEP Failed to Follow Rulemaking Requirements

1. DEP prepared a SERC for the proposed rule when it was originally noticed in December 2016. The SERC estimated the proposed rule would likely have direct or indirect regulatory costs of $5,001,849 per year after implementation.

2. When the proposed rule was changed, DEP did not revise the SERC to change its estimate of regulatory costs.

3. BASF argues that section 120.541, Florida Statutes, required DEP to consider costs to BASF and other Georgia

   
   

   entities, and required DEP to revise the SERC when the proposed rule was changed because the changes increased the costs to BASF and other Georgia entities.

   CONCLUSIONS OF LAW

   
   

   1. Standing

      
      

4. Any person substantially affected by a proposed rule may seek an administrative determination of the invalidity of the rule on the ground that the rule is an invalid exercise of delegated legislative authority. § 120.56(1)(a), Fla. Stat. (2017).

5. A petitioner has the burden of proving its standing by preponderance of the evidence. § 120.56(2)(a), Fla. Stat. (2017).

6. Generally, to establish standing, a party must show the challenged agency action will result in a real and immediate injury in fact and the alleged interest is within the zone of interest to be protected or regulated. See Jacoby v. Fla. Bd.

   of Med., 917 So. 2d 358, 360 (Fla. 1st DCA 2005).

   
   

7. A less demanding test for standing is applicable in rule challenge cases than in licensing cases. See Fla. Dep’t of Prof’l Reg., Bd. of Dentistry v. Fla. Dental Hygienists Ass’n,

   612 So. 2d 646, 651-52 (Fla. 1st DCA 1993).

   
   

8. The parties stipulated to the City and County’s standing to intervene in this proceeding. The record shows they

   
   

   are substantially affected by the proposed rule. Intervenors have standing to participate as parties.

9. Ironically, DEP contends that BASF lacks standing to challenge the TMDL, even though DEP also contends that BASF’s nutrient discharges are the primary reason Lake Talquin is an impaired waterbody and needs a nutrient TMDL. DEP argues that BASF lacks standing to challenge the proposed rule because DEP has no authority to enforce a TMDL against BASF. However, the test for standing to challenge a rule is not whether the promulgating agency can enforce the rule against the challenger, but whether the challenger is substantially affected by the rule.

10. DEP cites no case with similar facts. The federal/state regulatory context of the proposed rule is unique. Section 403.607 acknowledges that Florida’s TMDL program is required by the federal Clean Water Act. The Clean Water Act is cited three times in section 403.067, showing clearly that Florida’s TMDL program is intended to fit into a Clean Water Act regulatory structure. In this structure, Florida, Georgia, and the Federal Government (EPA) all have formal roles in the protection of Lake Talquin.

11. Florida’s role is to establish water quality standards for Lake Talquin. The proposed TMDL is a water quality standard. Georgia’s role is to issue an NPDES permit to BASF

    
    

    with conditions that will assure the BASF discharges do not cause the TMDL to be exceeded. Federal regulations prohibit a state from issuing a NPDES permit to a facility if “the imposition of conditions cannot ensure compliance with the applicable water quality requirements of all affected States.”

    40 C.F.R. § 122.4(d). By adopting the Lake Talquin TMDL, DEP is establishing the water quality standard that governs Georgia’s regulation of BASF’s discharge of nutrients.

12. In any future regulatory context in which BASF is directed by Georgia or EPA to take action as a consequence of Florida’s nutrient TMDL for Lake Talquin, the issue will not be whether the TMDL is valid, but whether the required action to comply with the TMDL is reasonable. This rule challenge proceeding is the only proceeding available to BASF to prevent Florida from adopting the TMDL that Georgia and the EPA will enforce.

13. Although DEP contends it cannot enforce the TMDL against BASF, the State of Florida can seek an order from EPA requiring Georgia to impose such conditions on BASF’s NPDES permit as will prevent the TMDL from being exceeded. See

    33 U.S.C. § 1319. Florida can also file a lawsuit against the EPA to enforce any provision of the Clean Water Act. See

    33 U.S.C. § 1365(a).

    
    

14. These circumstances are unique, but Florida’s courts have recognized standing when a proposed rule will have a collateral regulatory effect, even when the adopting agency has no direct regulatory authority over the challenger. For example, in Televisual Communications, Inc. v. Department of

    Labor & Employment Security, 667 So. 2d 372 (Fla. 1st DCA 1995), the court held that a publisher of educational video programs had standing to challenge a proposed rule regulating physicians, even though the agency had no regulatory authority over the publisher, because the rule had the collateral effect of regulating the publisher by precluding the sale of its videos.

15. BASF is substantially affected by the proposed rule and, therefore, has standing to challenge it.

    1. General Rule Challenge Principles

       
       

16. A person challenging a proposed rule must state with particularity the reasons that the proposed rule is an invalid exercise of delegated legislative authority. § 120.56(2), Fla. Stat. (2017). The petitioner has the burden of going forward with evidence to support the allegations in the petition. Id.

    If the challenger meets this burden, the burden of persuasion shifts to the agency to prove by a preponderance of the evidence that the proposed rule is not an invalid exercise of delegated legislative authority "as to the objections raised." Id.

    
    

17. A proposed rule is not presumed to be valid or invalid. § 120.56(2)(c), Fla. Stat. (2017).

18. The validity of a rule does not turn on whether it represents the best means to accomplish the agency's purposes. See Bd. of Trs. of Int. Imp. Trust Fund v. Levy, 656 So. 2d

    1359, 1364 (Fla. 1st DCA 1995).

    
    

    1. Whether the Proposed Rule Contravenes the Law Implemented

       
       

19. A proposed rule is an invalid exercise of delegated legislative authority under section 120.52(8)(c) if it enlarges, modifies, or contravenes the specific provisions of law implemented. The question to be determined is whether the rule gives effect to a specific law and whether the rule implements or interprets the law’s specific powers and duties. Bd. of Trs. of Int. Imp. Trust Fund v. Day Cruise Ass’n, 794 So. 2d 696, 704

    (Fla. 1st DCA 2001).

    
    

    1. Reassessment Using the NNC

       
       

20. Section 403.067(3)(c), which pertains to the listing of impaired waters, provides as follows:

    If the department has adopted a rule establishing a numerical criterion for a particular pollutant, a narrative or biological criterion may not be the basis for determining an impairment in connection with that pollutant unless the department identifies specific factors as to why the numerical criterion is not adequate to protect water quality. If water quality nonattainment is based on narrative or biological criteria, the specific factors

    
    

    concerning particular pollutants shall be identified prior to a total maximum daily load being developed for those criteria for that surface water or surface water segment.

    
    

21. BASF argues that this section requires DEP to reassess Lake Talquin to determine whether it is attaining the NNC as a prerequisite for establishing a TMDL for Lake Talquin. BASF’s interpretation is strained. DEP complied with section 403.067(3) because, when it assessed Lake Talquin, the NNC was not in effect.

22. Nothing in the plain wording of section 403.067(6), which pertains to TMDL development, requires DEP to reassess a waterbody on the Verified List before developing a TMDL. The statute allows DEP to proceed to develop a TMDL for any waterbody on the Verified List.

    1. Annual Loads

       
       

23. Although the word “daily” is a part of the term “TMDL,” the term is not defined as a daily standard. It is defined in section 403.031(6) as follows:

    “Total maximum daily load” is defined as the sum of the individual wasteload allocations for point sources and the load allocations for nonpoint sources and natural background. Prior to determining individual waste load allocations and load allocations, the maximum amount of a pollutant that a water body or water segment can assimilate from all sources without exceeding water quality standards must first be calculated.

    
    

24. No provision of section 403.067 limits a TMDL to a daily standard.

25. The Legislature has approved non-daily TMDLs for Lake Okeechobee, the Caloosahatchee Estuary, and the St. Lucie River and Estuary. See § 373.4595(1)(f)-(h), (l), (2)(q), (3)-(4),

    Fla. Stat. (2017). For example, section 373.4595 states “[t]he Legislature finds that the Lake Okeechobee phosphorus loads set forth in the total maximum daily loads established in accordance with s. 403.067 represent an appropriate basis for restoration of the Lake Okeechobee watershed.” The Lake Okeechobee TMDL for phosphorus is an annual load standard. See Fla. Admin. Code R. 62.304-700.

    1. Detailed Waste Load Allocation

       
       

26. BASF contends the proposed rule contravenes section 403.067(6) by making two detailed waste load allocations. However, section 403.067(6)(b) clearly states, “[a]llocations may be made to individual basins and sources.”

    1. Incomplete Allocation

       
       

27. BASF contends that the proposed rule, by excluding Georgia nutrient sources, contravenes section 403.067(6)(b), which states the TMDL is intended to establish a maximum loading that will provide for the attainment of water quality standards. However, the most reasonable interpretation of the words used in

    
    

    the rule is that it applies to all nutrient sources, including Georgia sources.

    1. Approved Procedures and Methods

       
       

28. Section 403.067(6)(a) authorizes DEP to develop TMDLs with “mathematical modeling using approved procedures and methods.” Because of the modeling problems found above, the TMDL modeling for Lake Talquin was not in accordance with approved methods and procedures.

    1. Summary

    
    

29. The proposed rule contravenes section 403.067(6)(a) because the TMDL modeling was not consistent with approved methods and procedures.

    1. Whether the Proposed Rule is Vague

       
       

30. Florida’s courts have described an invalidly vague rule as one that forbids or requires the performance of an act “in terms that are so vague that persons of common intelligence must guess at its meaning and differ as to its application.” See e.g., Bouters v. State, 659 So. 2d 235, 238 (Fla. 1995).

31. In ascertaining whether a proposed rule is vague, the rule must be examined on its face. Issues concerning the application of the rule are beyond the scope of a rule challenge proceeding. See Fairfield Communities v. Fla. Land & Water Adjudicatory Comm’n, 522 So. 2d 1012, 1014 (Fla. 1st DCA 1988).

    
    

    1. Georgia Sources

       
       

32. BASF contends the proposed rule is vague because it does not expressly state that the load reductions for nonpoint sources include Georgia sources. DEP’s interpretation of the term to include Georgia nonpoint sources is the most reasonable interpretation.

    1. Unspecified Loads

       
       

33. BASF contends the requirement in the proposed rule to achieve percentage reductions in TN and TP loads for nonpoint sources is vague because the rule does not identify the loads that must be reduced. BASF is correct that it cannot be determined from the proposed rule what initial nutrient loads have been allocated to nonpoint sources by DEP and will used by DEP in the BMAP process.

    1. Seven-Year Average of Annual Loads

       
       

34. BASF contends the reference in the proposed rule to a “seven-year average of the annual loads” is vague because it does not identify the seven-year period that is to be used. DEP did not show that the term has a specific meaning.

35. DEP states that there is no confusion in this regard, citing rule 62-303.720(2)(k). That rule states that a waterbody can be removed from the Verified List when the water attains a nutrient criterion for three consecutive years. However, this rule does not address how attainment is determined. Because the

    
    

    TMDL is expressed as a seven-year average annual load, knowing what this means is necessary to know what this water quality standard is.

    1. Summary

    
    

36. The proposed rule is vague because it does not specify the loads which the percentage reductions apply to, and because it does not identify the seven-year period that determines attainment of the TMDL.

    1. Whether the Proposed Rule is Arbitrary or Capricious

       
       

37. “A rule is arbitrary if it is not supported by logic or the necessary facts; a rule is capricious if it is adopted without thought or reason or is irrational.” § 120.52(8)(f), Fla. Stat. (2017).

38. If an agency rule “is justifiable under any analysis that a reasonable person would use to reach a decision of similar importance, it would seem that the decision is neither arbitrary nor capricious.” Dravo Basic Materials Co., Inc. v.

    State. Dep’t of Trans., 602 So. 2d 632, 634 n.3 (Fla. 2d DCA 1992).

    1. The Rulemaking Process

       
       

39. The rulemaking process was extensive and included general public meetings and stakeholder meetings. The proposed rule was not capriciously developed.

    
    

40. Neither the definition of “arbitrary” in section 120.52(8)(e), nor the case law give a meaning to “arbitrary” that would include failing to adopt the recommendations of interested persons, even when those recommendations are good ones. If an agency proposes a rule based on unsound science, the rule is invalid, whether or not a better alternative was recommended to the agency.

    1. The Period 2006-2012

       
       

41. It was reasonable for DEP to use a time period which included dry years. However, because the data for the year 2007 were incomplete, and the data were critical to the calculation of the TMDL, it caused the reliability of the model results to be compromised.

    1. Never to be Exceeded

       
       

42. BASF argues that the proposed rule is invalid because the TMDL establishes a never-to-exceed standard, rather than a one-exceedance-in-three-years standard like the NNC. However, the two standards are separate and not intended to be the same.

    1. Flow Correction

       
       

43. Applying a flow correction in the TMDL Model and giving preference to water surface elevation gage data over inflow/outflow gage, was reasonable and consistent with accepted modeling practices.

    
    

    1. Model Performance

       
       

44. Section 403.067(6)(a) authorizes DEP to use water quality modeling in the development of TMDLs, but requires that such modeling use “approved procedures and methods.”

45. The preponderance of the record evidence shows the model exhibited numerical instability and poor model performance for critical low flow conditions, making the TMDL unreliable. Therefore, DEP should not have relied on the model’s outputs to establish the TMDL.

    1. Sensitivity and Uncertainty Analyses

       
       

46. BASF contends that the Lake Talquin modeling was flawed because it did not include a sensitivity analysis or an uncertainty analysis, as an EPA guidance document suggested. BASF failed to prove this contention.

    1. Margin of Safety

       
       

47. Section 403.067(6)(a) requires a TMDL to “include a margin of safety that takes into account any lack of knowledge concerning the relationship between effluent limitations and water quality.”

48. It is reasonable for DEP to use conservative assumptions to derive the Lake Talquin TMDL. However, because the TMDL calculation was found to be unreliable, the margin of safety cannot be determined.

    
    

    1. Summary

    
    

49. The proposed rule is arbitrary because it is based on unreliable modeling results.

    1. Whether DEP Failed to Follow Rulemaking Requirements

    
    

50. Section 120.541(2)(c) requires a SERC to include the following:

    A good faith estimate of the cost to the agency, and to any other state and local government entities, of implementing and enforcing the proposed rule, and any anticipated effect on state or local revenues.

    
    

51. BASF’s interpretation of this wording as requiring agencies to consider costs to persons outside of Florida when preparing a SERC is plainly wrong. The statute is clearly referring to other Florida state entities and other Florida local governments. Similarly, the reference in the statute to the effect on state or local revenues does not mean the revenues of other states.

52. Determining that BASF has standing to challenge the rule because it is substantially affected by the proposed rule does not require that costs to BASF be accounted for in the SERC. Legal standing and the SERC requirement serve separate and distinct purposes.

53. There is no reason to believe that the Florida Legislature, in requiring agencies to consider the regulatory

    
    

    costs of a proposed rule on economic growth, job creation, employment, and business competitiveness, was seeking to protect not only Florida and Florida businesses, but was also seeking to protect economic growth, job creation, employment, and business competitiveness in other states.

54. It is concluded, therefore, that DEP did not have to estimate the regulatory costs to BASF or other Georgia entities when it prepared the SERC.

CONCLUSION

Based on the foregoing Findings of Fact and Conclusions of Law, it is determined that DEP did not meet its burden to prove that proposed rule 62-304.305(5) is not an invalid exercise of delegated legislative authority.

DONE AND ORDERED this 2nd day of March, 2018, in Tallahassee, Leon County, Florida.

S

BRAM D. E. CANTER

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 2nd day of March, 2018.

COPIES FURNISHED:

Lorraine Marie Novak, Esquire Department of Environmental Protection Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 (eServed)

Martha Harrell Chumbler, Esquire Carlton Fields Jorden Burt, P.A. Post Office Drawer 190 Tallahassee, Florida 32302 (eServed)

James E. Parker-Flynn, Esquire Carlton Fields Jorden Burt, P.A. Post Office Drawer 190 Tallahassee, Florida 32302 (eServed)

Carson Zimmer, Esquire

Department of Environmental Protection Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 (eServed)

Herbert W. A. Thiele, Esquire Leon County Attorney's Office Room 202

301 South Monroe Street Tallahassee, Florida 32301 (eServed)

Edwin A. Steinmeyer, Esquire Steinmeyer Fiveash LLP

310 West College Avenue Tallahassee, Florida 32301 (eServed)

William B. Graham, Esquire Kevin P. Blodgett, Esquire Carr Allison

305 South Gadsden Street Tallahassee, Florida 32301 (eServed)

David W. Childs, Esquire Hopping Green and Sams

119 South Monroe Street, Suite 300 Tallahassee, Florida 32301 (eServed)

Gary V. Perko, Esquire Hopping Green & Sams, P.A. Post Office Box 6526 Tallahassee, Florida 32314 (eServed)

Malcolm N. Means, Esquire Hopping Green & Sams, P.A. Post Office Box 6526 Tallahassee, Florida 32314 (eServed)

Kenneth B. Hayman, Esquire

Department of Environmental Protection Mail Stop 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000 (eServed)

William L. Anderson, Esquire Crowell & Moring, LLP

1001 Pennsylvania Avenue Northwest Washington, DC 20004

Ken Plante, Coordinator

Joint Administrative Procedures Committee Room 680, Pepper Building

111 West Madison Street Tallahassee, Florida 32399-1400 (eServed)

Ernest Reddick, Program Administrator Department of State

R.A. Gray Building

500 South Bronough Street Tallahassee, Florida 32399-0250 (eServed)

Robert A. Williams, General Counsel Department of Environmental Protection Legal Department, Suite 1051-J Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000 (eServed)

Lea Crandall, Agency Clerk

Department of Environmental Protection Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000 (eServed)

Noah Valenstein, Secretary

Department of Environmental Protection Douglas Building

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000 (eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled to judicial review pursuant to section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing the original notice of administrative appeal with the agency clerk of the Division of Administrative Hearings within

30 days of rendition of the order to be reviewed, and a copy of the notice, accompanied by any filing fees prescribed by law, with the clerk of the District Court of Appeal in the appellate district where the agency maintains its headquarters or where a party resides or as otherwise provided by law.

Docket for Case No: 17-003684RP

Orders for Case No: 17-003684RP