Topic:
ECONOMIC DEVELOPMENT; EMPLOYMENT (GENERAL); EXECUTIVE AGENCIES; PERMITS; STATE BOARDS AND COMMISSIONS;
Location:
ECONOMIC DEVELOPMENT;

OLR Research Report


June 23, 2008

 

2008-R-0356

EXPEDITED PERMITTING FOR ECONOMIC DEVELOPMENT

By: John Rappa, Principal Analyst

You asked us to describe Rhode Island's Certificate of Critical Concern permitting process and indicate if it was instituted by law. You also wanted to know if other states, including Connecticut, have instituted similar processes.

SUMMARY

Rhode Island's Certificate of Critical Concern is a process the legislature established in 1991 for designating economic development projects for expedited permitting. A project qualifies for designation based on its size or the number of jobs it will create. The designation requires each state permitting agency to act on a permit application for that project ahead of other pending applications and report to the applicant, the state's lead economic development agency, and, in some cases, the governor until the agency grants or denies the permit.

An online survey of seven states suggests that Rhode Island's method for expediting permits is unique. Four states, including Massachusetts and New York, set the stage for rapid permitting by identifying and resolving the regulatory issues associated with developable sites before someone proposes to develop them (i.e., pre permitting sites).

Florida, like Rhode Island, designates economic development projects based on their economic impact, but it requires state and local interagency teams to identify regulatory issues, eliminate duplicative requirements, and consolidate and streamline the permitting process (i.e., coordinated permitting). Washington uses interagency teams to issue environmental permits for transportation projects. It adopted this method as part of a broader, ongoing effort to improve permitting policies and practices.

Louisiana and Minnesota expedite environmental permits for applicants who agree pay for the extra time and expense incurred to process their applications.

Connecticut does not have a formal, expedited permitting process, but the interagency Responsible Growth Steering Council is currently studying how to improve permitting processes. Executive Order 15 established the council to coordinate development policy and capital planning in a way that promotes economic growth without depleting natural resources. In addition, the legislative Responsible Growth Task Force recently recommended that the council coordinate how agencies act on projects (Report of the Responsible Growth Task Force to Governor M. Jodi Rell, February 4, 2008, p. 6).

EXPEDITED PERMITTING

Priority Permitting

The Rhode Island legislature established the Certificate of Critical Concern permitting process to spur the state's economic development (1991 RI Pub. Law ch. 346, codified at R.I. Gen. Laws 42-117-1 to 42-117-9). It does this by requiring state agencies to act on permit applications for designated economic development projects ahead of other pending applications.

Eligible Economic Development Projects

A project qualifies for expediting permitting based on its physical size or its projected economic impact and the support it receives from its host municipality. It qualifies based on size if it will construct or rehabilitate a minimum 50,000 square foot facility, half of which must house offices, research, or manufacturing. It also qualifies if it:

1. creates at least 100 full-time jobs whose average income is at least 105% of the state's average; and

2. half of the full-time jobs go to people who work at least 30 hours a week and did not previously work for the project's sponsor (i.e., high wage full-time employees.)

Besides meeting the size or job creation criterion, the proposed project must receive municipal support. Because development projects often require approvals from different municipal commissions and departments (e.g., zoning site plans and building permits), the municipality must coordinate the process for obtaining these approvals to the maximum extent the law allows.

Administration

The quasi-public Rhode Island Economic Development Corporation (RIEDC) determines if a project meets these criteria (i.e., is a Project of Critical Economic Concern) before state agencies can give priority to its license or permit application. The project's developer must apply to RIEDC for certification, and RIEDC must grant or deny it within 45 days after receiving the application. The application must describe the project and specify the number and types of jobs it will create, new tax revenues it will generate, and other economic benefits it will provide.

If RIEDC approves the application, the developer receives an authorization for expedited permit review, which he or she must file with each license or permit application. The authorization lasts for two years, but RIEDC may extend it for up to two years. RIEDC may revoke the authorization if the sponsor does not apply for a permit within three months after receiving the authorization. It can also do this if the sponsor significantly changes the project's scope.

The authorization requires an agency to account for the status the developer's permit application. Within three months after receiving a completed application, the agency must submit a status report to the developer and RIEDC. If the agency has not acted on the application by then, it must report monthly on the application's status of the next three months. If the agency has still not acted on the application after six months, it must submit the monthly status report to the governor as well as the sponsor and RIEDC.

Performance

The developer must periodically report to RIEDC on whether the project is meeting its economic goals. He or she must do so after completing certain phases or the entire project. RIEDC may revoke the certification if the project fails to attain the goals, and the developer may be subject to statutory penalties.

PRE PERMITTING SITES

At least four states set the stage for expedited permitting by identifying and addressing potential regulatory problems for specific sites before a developer proposes to develop them. As Table 1 shows, these sites that are already zoned for commercial and industrial uses and supported by roads, sewers, and other infrastructure. (They will approve a site without infrastructure if it can be provided within 180 days after a developer submits a proposal to develop it.)

Site owners must control the site, have it mapped and photographed, assesses its environmental condition, delineate any wetlands, certify that the site has no archeological or historic conditions, and identify the local and state permits needed to develop it. New York and Oklahoma approve sites for specific uses, such as high technology manufacturing or aerospace parks. Massachusetts approves sites for any minimum 50,000 square foot commercial or industrial facility. Indiana does not limit approval to specific types of business uses.

Indiana, Massachusetts, and New York reimburse site owners for specified legal and planning costs. They and Oklahoma market the sites as part of their efforts to attract new businesses and retain existing ones. They also assign interagency teams to expedite the permitting when a developer proposes a project for the site.

Massachusetts and Oklahoma's emphasize expedited permitting for municipal permits and approvals. Massachusetts approves sites only if the host municipality agrees to issue the required permits within 180 days after receiving a permit application. Oklahoma imposes no similar requirement, but believes that its program helps municipalities understand and address businesses' site needs (www.okcommerce.gov).

Table 1: Selected States Pre Permitting Programs

Program

Elements

States

Indiana

Massachusetts

New York

Oklahoma

Program Name

Shovel Ready Program

Priority Development Site

Build Now—NY

Site Ready Program

Certifying State Agency

Quasi-public Indiana Economic Development Corporation

Interagency Permitting Board

Quasi-public Empire State Development

Commerce Department

Eligible Owners

Municipal agency

Local economic development corporation

Developer

End user

Utility

Private and public property owners

Municipalities

Public authorities

Real estate developers

Municipalities

Local Economic Development Commissions

Site Certification Requirements

Site owned or optioned by eligible owners

Municipal support

Site maps and photos

Supporting infrastructure, including high speed communications

Priority given to sites located near transit service and other developments

Zoned commercial or industrial

Approved under zoning for minimum 50,000 sq. ft. uses

Sufficient developable contiguous acreage

Transportation access

Proper zoning

Outside 100-year flood plain

No environmental issues

Utilities available

No wetlands, endangered species, or archaeological or historic sites

Completed Phase I environmental assessment

Utilities in place or provided within 180 of site's development

Site control

Eligible Reuses

Unrestricted

Commercial or industrial uses meeting 50,000 sq. ft. size minimum

High Technology Manufacturing

Warehouse and Distribution

Multi-tenant Business and Technology Parks

Mega Parks

Aerospace Parks

Industrial Parks

Warehouse and Distribution Parks

Business Service Parks

Research and Development Parks

Rural Business and Commerce Parks

Planning Reimbursement Grants and Eligible Expenses

Lesser of $10,000 or 50% of eligible expenses:

Title search

Environmental Assessments

Wetlands Delineation

Maps and photos

Copying

Up to $150,000 grants to municipalities to cover legal and technical costs of adopting local expedited permitting system

Proposed projects get priority for state development dollars

Up to $100,000 matching grants for environmental reviews, zone changes, and archeological and historical surveys and engineering

No grants (But $1,000 fee imposed on applications for site certification)

Site Marketing

Listed in Indiana Site and Building Database

Online marketing through Executive Office of Housing and Economic Development

Site marketing through Empire State Development

Included in Oklahoma Site Advantage Marketing Campaign

Expedited Permitting

Interagency Fast Access Site Team (FASTeam)

Local expedite permitting, including single point of contact, streamline permitting, and maximum 180-day permit approval deadline

Help from the Governor's Office of Regulatory Reform for obtaining state permits

Indirect: process of identifying and certifying sites intended to help municipalities understand and address developers' needs

COORDINATED EXPEDITED PERMITTING PROCESS

Florida

Like Rhode Island's expedited permitting process, Florida's is available only to projects that will create jobs or produce other specified economic benefits (1996 Fla. Laws, 1504, 1677, codified at Fla. Stat. 403.973). And, like Rhode Island's process, the state's led economic development agency must certify if a project meets these criteria. But Florida uses a different method to expedite permits, one that requires the permitting agencies jointly to review a project before any permit applications are filed.

A developer must apply for expedited permitting to the Governor's Office of Tourism, Trade, and Economic Development (OTTED), which must act on the application within five days after receiving it. If it approves the application, OTTED must call the permitting agencies to a “pre application meeting,” within 14 days after approving the application. The meeting may include the representatives of municipal permitting agencies if the municipality chose to participate in the process.

During the meeting, the agencies must review their respective permitting processes and identify any significant issues that could delay or deny the application. They must also consolidate their processes for reviewing permit applications into a 90-day schedule incorporating all required deadlines, meetings, and notices. In doing so, the agencies must minimize or eliminate duplicative requirements. Within 30 days after the meeting, the agencies must give the developer a written report identifying any significant issues and concerns.

The agencies must consider the developer's permit applications ahead of other pending applications and issue their final decisions within 90 days after receiving a completed application. They may extend the deadline upon the developer's request or if unforeseen circumstances prevented them meeting the deadline.

Washington

As the name suggests, Washington's Multi-Agency Permitting (MAP) Teams coordinate the processes different agencies use to approve transportation projects. Each team consists of representatives of the Ecology, Fish and Wildlife, and Transportation departments and share

the same office. Each team identifies potential permitting risks, develops cooperative processes, and consolidates environmental requirements and permitting for transportation project managers.

The MAPs seek to reduce the time it takes to complete transportation projects without significantly harming the environment. They represent a broader effort by the interbranch Transportation Permit Efficiency and Accountability Committee to coordinate and streamline the environmental permitting process for these projects. The legislature created the committee in 1991 under the Environmental Permit Streamlining Act (codified at RCW 47.06C).

EXPEDITED PERMITTING SURCHARGE

Environmental protection agencies in Louisiana and Minnesota expedite permits by allowing staff to work overtime processing an application or hiring consultants to do so. But the staff may do this only if the applicant agrees to pay the additional costs.

The Louisiana Department of Environmental Quality can expedite initial or modified permits needed to construct new facilities. It may do the same for permit renewals that are needed for new construction or activities that create jobs or boost productivity. Its regulations specify how the department must determine those costs (La. Admin. Code Tit 33 1805).

The Minnesota Water Pollution Control Authority expedites permits only when it cannot issue them according to an applicant's reasonable schedule. The law authorizes the authority to accept reimbursement for staff overtime or consultant services needed to expedite the permit (Minn. Stat. 116.07 subd. 4(d)).

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