HB 2636 -
By Representative Smith
ADOPTED 02/18/2014
Beginning on page 5, line 1, strike all of section 5 and insert the following:
"Sec. 5 RCW 70.94.162 and 1998 c 245 s 129 are each amended to
read as follows:
(1) The department and delegated local air authorities are
authorized to determine, assess, and collect, and each permit program
source shall pay, annual fees sufficient to cover the direct and
indirect costs of implementing a state operating permit program
approved by the United States environmental protection agency under the
federal clean air act. However, a source that receives its operating
permit from the United States environmental protection agency shall not
be considered a permit program source so long as the environmental
protection agency continues to act as the permitting authority for that
source. Each permitting authority shall develop by rule a fee schedule
allocating among its permit program sources the costs of the operating
permit program, and may, by rule, establish a payment schedule whereby
periodic installments of the annual fee are due and payable more
frequently. All operating permit program fees collected by the
department shall be deposited in the air operating permit account. All
operating permit program fees collected by the delegated local air
authorities shall be deposited in their respective air operating permit
accounts or other accounts dedicated exclusively to support of the
operating permit program. The fees assessed under this subsection
shall first be due not less than forty-five days after the United
States environmental protection agency delegates to the department the
authority to administer the operating permit program and then annually
thereafter.
The department shall establish, by rule, procedures for
administrative appeals to the department regarding the fee assessed
pursuant to this subsection.
(2) The fee schedule developed by each permitting authority shall
fully cover and not exceed both its permit administration costs and the
permitting authority's share of statewide program development and
oversight costs.
(a) Permit administration costs are those incurred by each
permitting authority, including the department, in administering and
enforcing the operating permit program with respect to sources under
its jurisdiction. Costs associated with the following activities are
fee eligible as these activities relate to the operating permit program
and to the sources permitted by a permitting authority, including,
where applicable, sources subject to a general permit:
(i) Preapplication assistance and review of an application and
proposed compliance plan for a permit, permit revision, or renewal;
(ii) Source inspections, testing, and other data-gathering
activities necessary for the development of a permit, permit revision,
or renewal;
(iii) Acting on an application for a permit, permit revision, or
renewal, including the costs of developing an applicable requirement as
part of the processing of a permit, permit revision, or renewal,
preparing a draft permit and fact sheet, and preparing a final permit,
but excluding the costs of developing BACT, LAER, BART, or RACT
requirements for criteria and toxic air pollutants;
(iv) Notifying and soliciting, reviewing and responding to comment
from the public and contiguous states and tribes, conducting public
hearings regarding the issuance of a draft permit and other costs of
providing information to the public regarding operating permits and the
permit issuance process;
(v) Modeling necessary to establish permit limits or to determine
compliance with permit limits;
(vi) Reviewing compliance certifications and emissions reports and
conducting related compilation and reporting activities;
(vii) Conducting compliance inspections, complaint investigations,
and other activities necessary to ensure that a source is complying
with permit conditions;
(viii) Administrative enforcement activities and penalty
assessment, excluding the costs of proceedings before the pollution
control hearings board and all costs of judicial enforcement;
(ix) The share attributable to permitted sources of the development
and maintenance of emissions inventories;
(x) The share attributable to permitted sources of ambient air
quality monitoring and associated recording and reporting activities;
(xi) Training for permit administration and enforcement;
(xii) Fee determination, assessment, and collection, including the
costs of necessary administrative dispute resolution and penalty
collection;
(xiii) Required fiscal audits, periodic performance audits, and
reporting activities;
(xiv) Tracking of time, revenues and expenditures, and accounting
activities;
(xv) Administering the permit program including the costs of
clerical support, supervision, and management;
(xvi) Provision of assistance to small businesses under the
jurisdiction of the permitting authority as required under section 507
of the federal clean air act; and
(xvii) Other activities required by operating permit regulations
issued by the United States environmental protection agency under the
federal clean air act.
(b) Development and oversight costs are those incurred by the
department in developing and administering the state operating permit
program, and in overseeing the administration of the program by the
delegated local permitting authorities. Costs associated with the
following activities are fee eligible as these activities relate to the
operating permit program:
(i) Review and determinations necessary for delegation of authority
to administer and enforce a permit program to a local air authority
under RCW 70.94.161(2) and 70.94.860;
(ii) Conducting fiscal audits and periodic performance audits of
delegated local authorities, and other oversight functions required by
the operating permit program;
(iii) Administrative enforcement actions taken by the department on
behalf of a permitting authority, including those actions taken by the
department under RCW 70.94.785, but excluding the costs of proceedings
before the pollution control hearings board and all costs of judicial
enforcement;
(iv) Determination and assessment with respect to each permitting
authority of the fees covering its share of the costs of development
and oversight;
(v) Training and assistance for permit program administration and
oversight, including training and assistance regarding technical,
administrative, and data management issues;
(vi) Development of generally applicable regulations or guidance
regarding the permit program or its implementation or enforcement;
(vii) State codification of federal rules or standards for
inclusion in operating permits;
(viii) Preparation of delegation package and other activities
associated with submittal of the state permit program to the United
States environmental protection agency for approval, including ongoing
coordination activities;
(ix) General administration and coordination of the state permit
program, related support activities, and other agency indirect costs,
including necessary data management and quality assurance;
(x) Required fiscal audits and periodic performance audits of the
department, and reporting activities;
(xi) Tracking of time, revenues and expenditures, and accounting
activities;
(xii) Public education and outreach related to the operating permit
program, including the maintenance of a permit register;
(xiii) The share attributable to permitted sources of compiling and
maintaining emissions inventories;
(xiv) The share attributable to permitted sources of ambient air
quality monitoring, related technical support, and associated recording
activities;
(xv) The share attributable to permitted sources of modeling
activities;
(xvi) Provision of assistance to small business as required under
section 507 of the federal clean air act as it exists on July 25, 1993,
or its later enactment as adopted by reference by the director by rule;
(xvii) Provision of services by the department of revenue and the
office of the state attorney general and other state agencies in
support of permit program administration;
(xviii) A one-time revision to the state implementation plan to
make those administrative changes necessary to ensure coordination of
the state implementation plan and the operating permit program; and
(xix) Other activities required by operating permit regulations
issued by the United States environmental protection agency under the
federal clean air act.
(3) The responsibility for operating permit fee determination,
assessment, and collection is to be shared by the department and
delegated local air authorities as follows:
(a) Each permitting authority, including the department, acting in
its capacity as a permitting authority, shall develop a fee schedule
and mechanism for collecting fees from the permit program sources under
its jurisdiction; the fees collected by each authority shall be
sufficient to cover its costs of permit administration and its share of
the department's costs of development and oversight. Each delegated
local authority shall remit to the department its share of the
department's development and oversight costs.
(b) Only those local air authorities to whom the department has
delegated the authority to administer the program pursuant to RCW
70.94.161(2) (b) and (c) and 70.94.860 shall have the authority to
administer and collect operating permit fees. The department shall
retain the authority to administer and collect such fees with respect
to the sources within the jurisdiction of a local air authority until
the effective date of program delegation to that air authority.
(c) The department shall allocate its development and oversight
costs among all permitting authorities, including the department, in
proportion to the number of permit program sources under the
jurisdiction of each authority, except that extraordinary costs or
other costs readily attributable to a specific permitting authority may
be assessed that authority. For purposes of this subsection, all
sources covered by a single general permit shall be treated as one
source.
(4) The department and each delegated local air authority shall
adopt by rule a general permit fee schedule for sources under their
respective jurisdictions after such time as the department adopts
provisions for general permit issuance. Within ninety days of the time
that the department adopts a general permit fee schedule, the
department shall report to the relevant standing committees of the
legislature regarding the general permit fee schedules adopted by the
department and by the delegated local air authorities. The permit
administration costs of each general permit shall be allocated
equitably among only those sources subject to that general permit. The
share of development and oversight costs attributable to each general
permit shall be determined pursuant to subsection (3)(c) of this
section.
(5) The fee schedule developed by the department shall allocate
among the sources for whom the department acts as a permitting
authority, other than sources subject to a general permit, those
portions of the department's permit administration costs and the
department's share of the development and oversight costs which the
department does not plan to recover under its general permit fee
schedule or schedules as follows:
(a) The department shall allocate its permit administration costs
and its share of the development and oversight costs not recovered
through general permit fees according to a three-tiered model based
upon:
(i) The number of permit program sources under its jurisdiction;
(ii) The complexity of permit program sources under its
jurisdiction; and
(iii) The size of permit program sources under its jurisdiction, as
measured by the quantity of each regulated pollutant emitted by the
source.
(b) Each of the three tiers shall be equally weighted.
(c) The department may, in addition, allocate activities-based
costs readily attributable to a specific source to that source under
RCW 70.94.152(1) and 70.94.154(7).
The quantity of each regulated pollutant emitted by a source shall
be determined based on the annual emissions during the most recent
calendar year for which data is available.
(6) The department shall, after opportunity for public review and
comment, adopt rules that establish a process for development and
review of its operating permit program fee schedule, a methodology for
tracking program revenues and expenditures, and, for both the
department and the delegated local air authorities, a system of fiscal
audits, reports, and periodic performance audits.
(a) The fee schedule development and review process shall include
the following:
(i) The department shall conduct a biennial workload analysis. The
department shall provide the opportunity for public review of and
comment on the workload analysis. The department shall review and
update its workload analysis during each biennial budget cycle, taking
into account information gathered by tracking previous revenues, time,
and expenditures and other information obtained through fiscal audits
and performance audits.
(ii) The department shall prepare a biennial budget based upon the
resource requirements identified in the workload analysis for that
biennium. In preparing the budget, the department shall take into
account the projected operating permit account balance at the start of
the biennium. The department shall provide the opportunity for public
review of and comment on the proposed budget. The department shall
review and update its budget each biennium.
(iii) The department shall develop a fee schedule allocating the
department's permit administration costs and its share of the
development and oversight costs among the department's permit program
sources using the methodology described in subsection (5) of this
section. The department shall provide the opportunity for public
review of and comment on the allocation methodology and fee schedule.
The department shall provide procedures for administrative resolution
of disputes regarding the source data on which allocation
determinations are based; these procedures shall be designed such that
resolution occurs prior to the completion of the allocation process.
The department shall review and update its fee schedule annually.
(b) The methodology for tracking revenues and expenditures shall
include the following:
(i) The department shall develop a system for tracking revenues and
expenditures that provides the maximum practicable information. At a
minimum, revenues from fees collected under the operating permit
program shall be tracked on a source-specific basis and time and
expenditures required to administer the program shall be tracked on the
basis of source categories and functional categories. Each general
permit will be treated as a separate source category for tracking and
accounting purposes.
(ii) The department shall use the information obtained from
tracking revenues, time, and expenditures to modify the workload
analysis required in subsection (6)(a) of this section.
(iii) The information obtained from tracking revenues, time, and
expenditures shall not provide a basis for challenge to the amount of
an individual source's fee.
(c) The system of fiscal audits, reports, and periodic performance
audits shall include the following:
(i) The department and the delegated local air authorities shall
((prepare annual reports and shall submit the reports to, respectively,
the appropriate standing committees of the legislature and the board of
directors of the local air authority)) periodically report information
about the air operating permit program on the department's web site.
(ii) The department shall arrange for fiscal audits and routine
performance audits and for periodic intensive performance audits of
each permitting authority and of the department.
(7) Each local air authority requesting delegation shall, after
opportunity for public review and comment, publish regulations which
establish a process for development and review of its operating permit
program fee schedule, and a methodology for tracking its revenues and
expenditures. These regulations shall be submitted to the department
for review and approval as part of the local authority's delegation
request.
(8) As used in this section and in RCW 70.94.161(14), "regulated
pollutant" shall have the same meaning as defined in section 502(b) of
the federal clean air act as it exists on July 25, 1993, or its later
enactment as adopted by reference by the director by rule.
(9) Fee structures as authorized under this section shall remain in
effect until such time as the legislature authorizes an alternative
structure following receipt of the report required by this subsection."
EFFECT: Restores the Department of Ecology's air operating permit reporting requirements, but directs the Department to report the information online, rather than submit it to the Legislature.