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Legislative Memo

BILL:

S.2008 / A. 3008 (Part Y) Executive Budget

Support

SUBJECT:

Title V Fees

 

DATE:

March 24, 2015

 

The Business Council opposes the proposed increase to the Title V air emission permit fees from $45 per ton up to $90 per ton. The proposed fee increase is unjustified and will have a detrimental effect on New York State businesses.

The proposed increase is a dramatic increase and will be difficult to accommodate at the facility level, as business operating budgets have already been established for the calendar year. The fee for some facilities will increase for a number of facilities by over $100,000.

Before proposing such a fee the DEC needs to reduce the costs of the program by eliminating non-Title V expenses.

  Current Proposed
Base Fee N/A 2500
Less than 1,000 tons  $ 45  $ 60
1,000 to 2,000 tons  $ 50  $ 70
2,000 to 5,000 tons  $ 55  $ 80
5,000 or more  $ 65  $ 90

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 $48.27 per ton.

The DEC has justified a fee increase because of a desire to balance Title V expenditures with Title V revenue. In an audit conducted by EPA in November 2014 the Agency made a determined that “the primary reasons for the reduction in title V fee revenue were continual reduction in total actual emissions and the number of sources subject to the program.”1  EPA went further and stated “Many facilities reduced their actual emissions by operating more efficiently, maintaining proper operations of their emissions control devices, and removing emission units that are no longer needed.”2

The November EPA audit confirmed that in New York Title V spending “was directly relate to or dictated by the amount of emissions in the subject fiscal year.”3  EPA suggests that DEC can resolve the issue of inadequate funds “by reducing the costs of program implementation.”4

The Business Council is open to a discussion of the restructuring of the Title V fees to ensure revenue and expenditures are balanced. New York currently spends more than double than EPA guiding principles. If New York were to use the EPA recommended presumptive fee the program would cost businesses approximately $5 million per year.  In contrast, New York State currently spends close to $14 million per year on the Title V program.

The EPA audit identified that programs operated by the Department of Health and Empire State Development should not be paid for by the Title V fee. EPA suggested that the General Fund cover these expenses. Specifically EPA identified:

In November, when the results of the audit were released, The Business Council offered to work with the Department of Environmental Conservation to meet the requirements of the Title V program. The Department of Environmental Conservation needs to first follow EPA’s recommendation eliminate non-Title V cost from the program.

For these reasons, The Business Council strongly opposes the proposed Title V  permit fee increases.

2. Ibid p.3

3. Ibid p. 10

4. Ibid p. 12

5. Ibid p. 15-16