[Federal Register: October 18, 2005 (Volume 70, Number 200)]
[Notices]
[Page 60496-60497]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18oc05-42]
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DELAWARE RIVER BASIN COMMISSION
Notice of Proposed Rulemaking; Proposed Amendment to the Basin
Regulations--Water Supply Charges and Comprehensive Plan Relating to
Certificates of Entitlement
AGENCY: Delaware River Basin Commission.
SUMMARY: The Delaware River Basin Commission (``Commission'' or
``DRBC'') will hold a public hearing to receive comments on proposed
amendments to the Commission's Basin Regulations--Water Supply Charges
and Comprehensive Plan concerning certificates of entitlement. No
changes in the substance or administration of the rule are proposed.
The purpose of the proposed amendments is to clarify the language of
the rule to conform to the Commission's past decisions and current
practices in order to provide better notice to users as to how the
Commission is implementing its entitlements program and to avoid future
controversy.
Background. The Delaware River Basin Compact (``Compact''), the
1961 statute that created the DRBC and defined its powers, authorizes
the Commission to charge for the use of facilities that it may own or
operate and for products and services rendered thereby. Compact, Sec.
3.7. Congress limited this authority by providing that the Commission
cannot charge for water withdrawals or diversions that could lawfully
have been made without charge as of the effective date of the Compact.
Id., Sec. 15.1(b).
By Resolution No. 64-16A in 1964 the Commission authorized a water
charging program. It provided for the revenues generated by the program
to be used for repayment of the nonfederal share of the investment cost
of water supply storage facilities associated with federal projects
within the Basin. In anticipation of Commission investment in storage
at the Beltzville Lake and Blue Marsh Reservoir projects in
Pennsylvania, the Commission by Resolution No. 1971-4 defined, among
other things, the means by which it would establish water charging
rates. Consistent with Section 15.1(b) of the Compact, Resolution No.
1971-4 provided that charges would be applicable only to the amount of
water withdrawn in excess of the amount taken or legally entitled to be
taken by an entity during the preceding year. By Resolution No. 74-6,
the Commission instituted a system of water supply charges for surface
water withdrawals within the Basin. That resolution provided for the
issuance of certificates of entitlement to then-current water users,
establishing the amount of water each could lawfully take from the
surface waters of the Basin without charge, consistent with Section
15.1(b) of the Compact. The resolution provided that a certificate of
entitlement was not transferable, except under limited circumstances
set forth in enumerated exceptions.
Because entitlements treat users that commenced water withdrawals
before the enactment of the Compact more favorably than users who
commenced water withdrawals later, even though all users benefit
equally from the facilities financed by water supply charges, courts
and the Commission have emphasized the need to eliminate entitlements
over time. Both the Commission and the courts have construed narrowly
the exceptions to the rule that entitlements are not transferable, and
the Commission has in its decisions consistently held that changes in
ownership or control would extinguish a certificate. However, the
language of the regulations has never explicitly defined ``changes in
ownership or control.'' As a consequence, in the decisions that the
Commission has been asked to make in its adjudicatory capacity and that
the courts have subsequently been asked to decide, the matter of what
constitutes a change of ownership or control has been controversial.
In 1994, in response to a ruling by the Third Circuit in Texaco
Refining and Marketing, Inc. v. DRBC, 824 F. Supp. 500 (D.Del. 1993),
aff'd., No. 93-7475 (3d Cir. June 24, 1994) (per curiam), the
Commission adopted Resolution No. 94-20. That resolution incorporated
an explicit ``ownership and/or control'' test and eliminated the merger
exception included in the Commission's regulations at the time. In
addition, the exception for corporate reorganizations embodied in
Section 5.2.1.F.2 of the Water Charging Regulations was amended to
apply only when the reorganization ``does not affect ownership and/or
control.''
In spite of the 1994 amendment, some members of the Basin community
have continued to interpret the language of the rule in a manner
contrary to the Commission's consistent interpretation. To avoid
further controversy, the Commission proposes a more thorough revision
of the language, intended to remove any ambiguity.
Key Provisions. In addition to defining ``change in ownership and/
or control'' with much greater specificity, the proposed revisions also
make clear that a merger at any tier in a corporate organization will
extinguish a certificate held by a subsidiary in the same way as if the
merger had occurred at the subsidiary level. Although the Commission
has interpreted its rule this way in the past, the rules have never
been explicit on this point.
The proposed amendments preserve and clarify the corporate
reorganization exception contained in the current regulation. The
Commission traditionally has not extinguished an entitlement in the
case of an internal reorganization, and it does not propose a change in
this practice.
The proposed amendments also preserve the existing exception for
agricultural uses. Historically, agriculture has been treated
differently than other uses. For purposes other than agriculture, an
entitlement is issued to a user and would not be transferable to a
different user, even if the use remained the same. In the case of
agriculture, however, an entitlement effectively runs with the land, as
long as the land remains in agriculture. The proposed amendments
provide that an entitlement can be reissued to the successor of a
holder of a certificate issued for agricultural water use, provided
that the successor demonstrates that the water will continue to be used
for agricultural irrigation purposes.
DATES: The public hearing will be held on Wednesday, December 7, 2005
at approximately 2:30 p.m. as part of the Commission's regularly
scheduled business meeting. The time is approximate because the
Commission will conduct hearings on several dockets (project approvals)
beforehand, beginning at approximately 1:30 p.m. The hearing will
continue until all those who wish to testify are afforded an
opportunity to do so. In the event that all those who wish to testify
cannot be heard on December 7, the hearing will be continued at a date,
time and location to be announced by the Commission Chair that day.
Persons wishing to testify at the hearing are asked to register in
advance with the Commission Secretary by phoning 609-883-9500,
extension 224. Written comments will be accepted through Tuesday,
January 10, 2006.
[[Page 60497]]
ADDRESSES: The text of the proposed amendment and the text of the
current regulation are posted on the Commission's Web site, http://www.drbc.net.
The public hearing will be held in the Goddard Room at
the Commission's office building, located at 25 State Police Drive in
West Trenton, New Jersey. Directions to the Commission's office
building are also posted on the Commission's Web site. Written comments
should be addressed to the Commission Secretary as follows: by e-mail
to paula.schmitt@drbc.state.nj.us; by fax to the Commission Secretary--
609-883-9522; by U.S. Mail to the Commission Secretary, DRBC, P.O. Box
7360, West Trenton, NJ 08628-0360; or by overnight mail to the
Commission Secretary, DRBC, 25 State Police Drive, West Trenton, NJ
08628-0360.
FOR FURTHER INFORMATION CONTACT: Please contact Commission Secretary
Pamela Bush, 609-883-9500 x203, with questions about the proposed rule
or the rulemaking process.
Dated: October 12, 2005.
Pamela M. Bush,
Commission Secretary and Assistant General Counsel.
[FR Doc. 05-20789 Filed 10-17-05; 8:45 am]
BILLING CODE 6360-01-P