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E-M:/ DEQ informs House about NPDES Fee Bill (SB 252) needs and consequences

The below letter from DEQ Director Steve Chester to the members of the Michigan House that was sent last week explains problems with the proposed NPDES (water pollution) permit fee bill (SB 252) as well as the actual effect of historic and continuing under-funding of the program.  Taken together with the excellent report in the Detroit News on Sunday by reporter Brad Heath about effectively uncontrolled pollution of our waterways (http://www.detnews.com/specialreports/2003/polluters/index.htm ), this candid assessment by DEQ shows just how deep a hole the Engler/Harding administration dug for Michigan’s water pollution control program.


There is NO WAY for Michigan to assure that we stop losing more and more places where people are able to drink the water, swim in it or eat fish from it, much less reverse the trend, if we continue a starvation funding program. Unfortunately that is EXACTLY what the weakened bill that came out of the Senate did, and what the even more disastrous bill that came out of the House Government Operations committee does. What is particularly disturbing is the continued palaver from the Michigan Manufacturers Association that this is somehow forcing the regulated industries (read: those that dump pollution into water therefore need water permits, which actually constitutes a tiny percentage of Michigan’s businesses) to pay twice for regulation by paying for both the Single Business Tax and the fees.  These guys seem to have learned accounting the knee of Enron and Arthur Anderson!!  In fact, the shift to fees means the costs would be put on THOSE WHO MUST HAVE PERMITS BECAUSE THEY ARE DISCHARGING POLLUTANTS, not on those who DON’T need permits, who currently are subsidizing the permittees.  The business community that does not need water pollution permits is being taken for a ride by the MMA in particular, as are all the rest of Michigan’s taxpayers whose hard earned dollars will continue to subsidize polluters – Michigan taxpayers are the ones who will pay twice financially (for the program and the clean up of any problems) and again for the lost health, welfare and enjoyment of our waters as a result of insufficient fees.


I have not attached the fact sheet referred to here, and hope maybe that will be made available on a DEQ or other website for people to reference.   This bill, SB 252, could come up at anytime when the full House is in session.


Anne Woiwode





                                                                        October 3, 2003



TO:                  Members of the Michigan House of Representatives


FROM:            Steven E. Chester, Director


SUBJECT:      Senate Bill (SB) 252 (H-3); National Pollutant Discharge Elimination System (NPDES) Fee Bill



Before you for consideration and adoption is SB 252 (H-3), a bill to set fees for the NPDES Program.  The Department of Environmental Quality (DEQ) supports the bill with important amendments (attached). 


I wish to thank the Chairman and members of the House Committee on Government Operations for working with the DEQ to address a number of concerns raised during Committee deliberations.  The DEQ greatly appreciates the commitment of the Chairman and members to report a bill that provides $3 million in fees, per the Fiscal Year (FY) 2004 budget agreement reached between the Administration and the Legislature. 


The DEQ still has significant concerns with the bill as reported by the Committee. 


First, the bill does not raise $3 million in fees.  Once the DEQ was able to fully evaluate the fees actually raised in the version before you, it became clear that there is a shortfall of at least $90,000, due to a very problematic provision in H-3 that sets a $100 fee for facilities that do not discharge (page 10, lines 9-11).  The DEQ recommends eliminating this provision for the following reasons: 


·       Eliminating this provision would ensure the budget target of $3 million in fees is met. 


·       There is no justification for this low fee.  The cost of developing and issuing an NPDES Permit is the same regardless of whether a facility uses the NPDES Permit to discharge or not.  There are also compliance costs associated with overseeing the NPDES Permit including facility inspections and report reviews.  The fee should be the same fee for the appropriate category for these facilities.  In no case should the fee be less than a general permit fee. 


Secondly, the DEQ strongly opposes the repeal of the Annual Wastewater Report and the Critical Materials Register (page 16, lines 6-8).  These are essential tools that enable the DEQ and others to proactively prevent and reduce pollution, protect the environment, and safeguard public health, while reducing the financial costs of cleanup borne by the public and private sectors.  Attached is a Fact Sheet that provides compelling arguments for retaining these important tools. 


Also, the DEQ strongly opposes changing the court of venue provisions in the present law (page 4, lines 24-27).  As written, this bill inexplicably allows defendants in civil litigation initiated by the DEQ to engage in “judge shopping,” and mandates that the courts grant a change of venue if requested by a defendant.  Under the provisions of this bill, there will be legitimate concerns about fairness and impartiality in cases where there may be substantial public interest and media coverage.  The DEQ believes it is important that the state maintain the option to file with the Ingham County Circuit Court, which is experienced in handling state government cases.  Further, the DEQ notes that existing provisions in the law enable the courts to adequately address appropriate venue questions.  At a minimum, this provision raises concerns about increased agency travel, time, and expense for the DEQ and the Department of Attorney General to effectively prosecute those who violate the law. 


Finally, the DEQ strongly opposes the provisions in the bill that eliminate the application fee and discounts the annual permit fee by 15 percent if a department fails to make a decision on a permit application by the deadline (page 8, lines 18-24).  I want to emphasize that the DEQ intends to meet the agency decision deadlines set in the act.  However, factors beyond the DEQ’s control may make it impossible to meet the time frames (cuts in state General Funds or federal Grants, hiring freezes, etc.).  Taking away additional funds because deadlines are not met will only reduce the available resources to process applications in a timely manner and make the situation worse.  The DEQ is required to report to the Legislature on compliance with the deadlines; and if problems arise with the DEQ meeting deadlines, the Legislature and the DEQ will be well positioned to correct the problems based on the specific issues causing the delays. 


Finally, I want to underscore that the DEQ views the FY 2004 budget agreement combining new NPDES fees and continued General Fund support as an important compromise that would:


·       Maintain the current NPDES Program in Michigan at a level close to current state and federal funding. 


·       Establish a fee for NPDES Permits in Michigan for the first time and allocate fee charges to all NPDES Permit holders. 


·       Provide for the continuation of a stable funding level for Michigan’s NPDES Program. 


·       Provide for a modest increase in support for compliance inspections, a critical program function. 


·       Demonstrate to Michigan citizens and the United States Environmental Protection Agency that Michigan is committed to maintaining and improving its NPDES Program even in difficult budget times. 


Having said that, the DEQ also notes that without the full $7.2 million for the NPDES Program initially proposed by the administration, the following Program deficiencies will occur: 


·       Compliance assistance, which was initially requested by the regulated community, will not be funded at any level. 


·       Approximately one-third of the inspections needed for facilities with NPDES Permits will not occur. 


·       Approximately one-half of the needed inspections for Industrial Pretreatment Programs will not occur. 


·       Adequate staff resources will not be available to address all of the escalated enforcement cases that may arise. 


The likelihood that state General Fund resources will continue to be scarce, and may be further reduced in the current fiscal year, continues to fuel DEQ concerns about the lack of adequate staff to fulfill all of its NPDES Program mandates.  Eight of 28 Permit staff have already been lost in the past eight years due to past budget cuts.  Further, it is important to note that the current bill sets the new fee levels for five years without any provisions to adjust them, even to keep pace with inflation. 


In closing, I pledge that the DEQ will continue to work with the members of the Legislature to expeditiously complete its work on this and the remaining DEQ fee bills needed to fulfill our mutual FY 2004 budget commitments. 



cc:    Stanley F. Pruss, Deputy Director, DEQ

         Jim Sygo, Deputy Director, DEQ

         Carol Linteau, Legislative Liaison, DEQ

         Dennis Fedewa, DEQ

         Richard Powers, DEQ



Anne Woiwode, Director

Sierra Club Mackinac Chapter

109 East Grand River Avenue,  Lansing, MI  48906

ph: 517-484-2372 fx: 517-484-3108 e: anne.woiwode@sierraclub.org

website:  http://michigan.sierraclub.org