Hazard designations for dams are assigned based on downstream hazard potential in the event of a dam failure (NAC 535.140). A high hazard designation is assigned to a dam if there is reasonable potential for loss of life and/or extreme economic loss. A significant hazard designation is assigned to a dam if there is a low potential for loss of life but an appreciable economic loss. Lastly, a low hazard designation is assigned to a dam if there is a vanishingly small potential for loss of life and the economic loss is minor or confined entirely to the dam owner's own property. These hazard designations are initially determined at the time dam design plans are reviewed, however, hazard designations can and do change as downstream conditions alter as a result of development. The hazard designation is not dependant on type of dam and in no way reflects the safety or condition of the dam.
Dams can be further categorized as unsafe/emergency or unsafe/non-emergency structures. The definitions of these categories are self-explanatory. A structure in poor condition and in need of rehabilitation with a low hazard downstream designation may be categorized as "unsafe/non-emergency" structure, whereas a dam in need of rehabilitation with a significant or high hazard downstream designation may be categorized as an "unsafe/emergency" structure.
The necessity for developing and maintaining an Emergency Action Plan (EAP) is directly related to the hazard designation.