SUNSET EXTENSION: AIR QUALITY FEES

Senate Bill 530 as passed by the Senate

Sponsor:  Sen. Rosemary Bayer

House Committee:  Appropriations

Senate Committee:  Appropriations

Complete to 9-27-19

SUMMARY:

Senate Bill 530 would amend Part 55 of the Natural Resources and Environmental Protection Act (NREPA) by extending the current air quality fee sunsets from October 1, 2019, to October 1, 2023. The bill would also restructure facility categories and fee rates.

Present facility categories are statutorily defined as follows:

Category I – Facilities that annually emit 100 tons or more of any air pollutant.

Category II – Facilities that annually emit 10 tons or more of any single air pollutant or 25 tons or more of any combination of air pollutants. Category II facilities that meet the definition of a category I facility are considered category I facilities.

Category III – Facilities that annually emit air pollutants but do not meet the thresholds established for category I or II facilities.

The annual air quality fee charged to category I facilities is $5,250 plus an air emissions charge of $51.15 per ton. Category II facilities are charged $1,795 plus the aforementioned air emissions charge; category III facilities are charged $250 annually.

Exception for large electric providers

Category I municipal electric generating facilities that emit 730 to 5,000 tons annually pay an air quality fee of $41,830. Category I municipal electric generating facilities that emit more than 5,000 tons annually pay the air quality fee and air emissions charge specified above for category I facilities.

Exception for small electric providers

Category I electric generating facilities that emit less than 730 tons annually and all category II electric generating facilities are subject to the emissions charge of $51.15 per ton.

The bill would revise these facility categories as follows:

Category A – Electric providers that annually emit 100 tons or more of any air pollutant

Category B – Nonelectric providers that annually emit 100 tons or more of any air pollutant

Category C – Facilities that do not fit category A or B and are considered major sources of air pollutants as determined by annual emissions below 100 tons of any air pollutant

Category D – Facilities that do not fit category A, B, or C; do not house equipment that meets a permit to install exemption and do not have an active permit to install; and are stripper well properties

Category E – Facilities that do not fit category A, B, C, or D and have an active Title V opt-out permit

Category F – Facilities that do not fit category A, B, C, D, or E

           

The bill would also revise the air quality fees incurred by facilities in these categories as follows:

Category A – Facility charge between $5,250 and $45,000 as determined by annual emissions and emissions charge of $53 per ton

Category B – Facility charge between $5,250 and $21,000 as determined by annual emissions and emissions charge of $53 per ton

Category C – Facility charge between $2,500 and $4,500 as determined by annual emissions and emissions charge of $53 per ton

Category D – Facility charge between $1,795 and $2,500 as determined by annual emissions and emissions charge of $53 per ton

Category E – Facility charge between $250 and $1,795 as determined by annual emissions

Category F – $250 annually

Exception for municipal electric providers

Municipal electric generating facilities that emit more than 646 tons annually would pay an air quality fee of $50,000. Municipal electric generating facilities that emit less than 646 tons annually would pay an air quality fee equal to the sum of a facility charge between $5,250 and $21,000 as determined by annual emissions and an emissions charge of $53 per ton.

The air quality fees are paid by owners and operators of facilities that emit air pollutants and are necessary for Michigan to maintain compliance with the federal Clean Air Act. These fees are collected by the Department of Environment, Great Lakes, and Energy (EGLE) and credited to the Emissions Control Fund. Revenue from this fund primarily supports EGLE’s Air Quality Division, which monitors air quality, abates air pollution, and maintains compliance with federal requirements. The fee structure was revised in       FY 2014-15 and ranges from $250 to $356,000 based on facility and emissions levels. The fee sunset was last extended in 2015 to October 1, 2019.

MCL 324.5501 and 324.5522


FISCAL IMPACT:

Senate Bill 530 is likely to increase revenue for EGLE. The bill provides for the continued collection of air quality fees by extending the sunsets on these fees, which otherwise would expire October 1, 2019. These fees generated $9.6 million in FY 2017-18 revenue under current rates; the revised rates proposed in the bill are projected to generate an additional $400,000 in annual revenue, raising annual fee revenue to $10.0 million total.

                                                                                                                       

                                                                                                Fiscal Analyst:   Austin Scott

This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.