Lawmakers are considering a Montana Department of Environmental Quality-backed bill that would exempt some smaller subdivision applications from environmental review.

Senate Bill 240 sponsor Sen. Jason Small, R-Busby, said the measure would streamline DEQ’s review process while maintaining environmental protections. The proposal is in line with a larger effort state agencies have undertaken to address housing affordability challenges by reducing the time it takes to approve subdivision applications, Small said.

If SB 240 passes, properties that meet four criteria would be exempted from the environmental review process laid out in the Montana Environmental Policy Act. Subdivisions eligible for the exemption would have to be located at least two miles from “high-quality water” — a designation that applies to surface waters with a recognized beneficial use such as irrigation, recreation or fish and wildlife habitat — and meet DEQ’s “nonsignificance” rule, meaning the proposed wastewater treatment is protective of human health and the environment. The development would also have to contain 14 or fewer residential lots and the developer would have to demonstrate that there is adequate water to supply the subdivision and that rights to that supply have been secured.

During a Thursday hearing before the Senate Natural Resources Committee, DEQ Director Chris Dorrington was joined by a lobbyist for the Hospitality and Development Association of Montana in supporting SB 240. Dorrington said the bill would allow DEQ to devote its existing staff resources to reviewing projects with more obvious water quality concerns, such as mining proposals and larger subdivision applications.

SB 240 would apply to a “very small subset” of the approximately 1,300 subdivision applications the department receives on an annual basis, Dorrington said. He also noted that a provision of the bill prevents developers from evading environmental review by breaking a larger development into smaller pieces.

Though SB 240 would not apply to “a ton of applications,” anything to streamline and expedite the permitting process is important, Hospitality and Development Association of Montana  lobbyist Jessie Luther said — “especially given the affordable housing crisis.”

“In the development world, time is money, so anything that helps us get our [projects] completed faster is a good thing,” she added. 

Opponents of the proposal include the Montana Environmental Information Center and Montana Audubon. Representatives of those organizations said they have concerns about unexamined impacts to water quality, wildlife habitat and other environmental impacts state regulators might miss in the absence of a comprehensive review complete with a public comment process.

“[MEPA] assessment is important because one particular source of pollution is not going to answer the question of whether or not a water body is going to be polluted beyond repair,” MEIC Deputy Director Derf Johnson said. “You have to look at that larger context.”

Amy Seaman, Montana Audubon’s director of policy and science, said her organization is concerned SB 240 could encourage haphazard development in open areas that support wildlife habitat and migration corridors.

Those concerns were referenced by Sen. Pat Flowers, D- Belgrade, who asked DEQ staff how the agency would reconcile the exemptions laid out under SB 240 with its Montana Environmental Policy Act directive to consider cumulative impacts. 

DEQ Water Quality Division Administrator Lindsey Krywaruchka said the department’s analysis is limited to the adequacy of the proposed wastewater treatment as established by the Montana Water Quality Act. Other land-use analyses are under the purview of local governments that review subdivision applications before and after DEQ weighs in on water quality impacts, she said. 

Sen. Willis Curdy, D-Missoula, said he’s seen lots of “pop-up subdivisions” in the Bitterroot Valley’s agricultural land and asked Dorrington if the loss of farmland and ranchland factors into the department’s review process under SB 240.

Dorrington said agricultural land conversion would be evaluated by the agency only to the extent that there’s a water right associated with it. He added that SB 240 would exempt only an estimated 50 subdivision applications from review per year.

“DEQ is not, and will not, incentivize houses being built anywhere,” Dorrington added. “The developers do that, the landowners do that.”

Curdy also asked Dorrington if the bill amounts to a departmental attempt to “lessen the workload” in the face of an application backlog. 

Dorrington said the bill is an “appropriate part of” DEQ’s attempt to stay on top of subdivision applications and noted that other proposals to expedite review processes will be discussed in the coming weeks, including House Bill 364, a “private option” bill that would allow independent contractors to review subdivision applications under certain circumstances.

Asked in a follow-up conversation if increasing staffing levels at the DEQ could facilitate faster subdivision review, Small said “that should be looked at also.” 

“Not to put a hit piece on DEQ, but if we’re having issues with staffing, we need to look at that,” he said.

The committee did not take immediate action on SB 240.

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