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Legislative Memo

T 518.465.7511
www.bcnys.org

BILL:

S.6809 / A.9809 (Budget, Part EE)

Support

SUBJECT:

Title V Fee Increase

 

DATE:

February 11, 2008

 

The Business Council opposes the Executive Budget proposal to increase Title V air emission permit fees from $45 per ton to $80 per ton. This dramatic increase will be difficult to accommodate at the facility level, as business operating budgets have already been established for the calendar year. Manufacturing and utility facilities will be required to shift resources from other investment categories to accommodate these increased charges. As a result, this increase will have an adverse impact on the competitiveness of our manufacturing sector, and contribute to the state's already high electric power prices.

Title V is a federally mandated permitting program, applicable to "major" air emission sources. About 450 facilities in New York hold Title V permits and would be subject to this fee proposal. Federal law requires states to finance their permitting programs through per ton emissions fees. Fees are structured so that higher air pollutant sources pay more for their Title V permits than sources that emit less pollution. Federal law has an established "presumptive" fee of $25 per ton, with CPI adjustments, applicable to the first 4,000 tons of emissions for each category of criteria pollutant (VOC, NOx, SOx, particulate and lead). The current federal “presumptive” fee is $43.42.

This federal mandate imposes an unfair burden on Title V facilities, since rising program costs coupled with dramatic reductions in emissions, result in a demand for ever higher per ton fees. And emissions have been reduced dramatically – from 570,000 "billable tons" in 1995, to 288,000 in 2006, a nearly 50 percent reduction in emission.

Not only does New York already impose higher fees, and use a high per pollutant cap (6,000 tons), than required by federal law, our fees are also higher than those charged by most states. For example, Ohio charges $41.02, Illinois charges $18.00, and North Carolina charges $17.42 (all three states use a 4,000 ton emission cap). Michigan charges $45.25, but its fee is only applicable to the first 1,000 tons of emissions per category. A recent survey showed at least twelve states with fees at or below $25 per ton.

In recent years, the legislature has approved additional General Fund support for DEC's Division of Air Resources, to help offset the need for increased Title V fees. We believe that this is a reasonable, appropriate alternative. The U.S. EPA's review of state Title V programs have focused on the adequacy of state permitting programs, not the source of program fees. Further, if there is to be any increase in the state's existing $45 per ton cap, it should include more gradual steps, and be applicable to future calendar years, to allow for sufficient planning.