SB 0593 - Fiscal Note

Fiscal Note - SB 0593 - Creates an expedited permit review process for construction of new air pollution sources

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 2431-02

BILL NO. SB 593

SUBJECT: Air Permit Reviews

TYPE: Original

DATE: January 30, 1998

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Natural Resource Protection Fund	$0	$0	$0
Total Estimated Net Effect on All State Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None	$0	$0	$0
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

FISCAL ANALYSIS

ASSUMPTION

The Department of Natural Resources (DNR) assumes this proposal allows anyone desiring an expedited review of a permit to construct an air contaminant source to reimburse the DNR for the costs of an expedited review. The costs would include overtime or consultant services. The DNR assumes the fees for the expedited review would be in addition to any other fees in the statute, including the fees in chapter 643.075 that limits the amount the department may charge an applicant.

The DNR receives approximately 800 air construction permits applications annually. Currently, the DNR allows facilities to request a Preconstruction Prohibition waiver which allows facilities to begin construction before the actual permit is issued, provided the other requirements for the waiver are met. The department estimates that 10% of the air construction permit applications received are accompanied with a Preconstruction Prohibition waiver request.

The DNR assumes that facilities requesting this waiver would also want to expedite the department's review of the construction permit. Accordingly, the department estimates they would receive approximately 80 requests annually (10% of 800 air construction permit applications) for an expedited permit review. The DNR assumes the number of applicants requesting an expedited review could be significantly higher.

Since this legislation provides that the fees associated with the expedited reviews are in addition to the other fees in this chapter, the DNR assumes the $50 per hour cap established in section RSMo 643.075 does not apply. DNR also assumes it takes an average of approximately 20 hours to review an air construction permit application.

DNR assumes the current contract rate is $65 per hour. To expedite these permits, the department assumes this rate could be as high as $175 per hour. Using the $65 per hour rate as a reasonable market rate, the department assumes department costs to expedite reviews would range between approximately $100 per hour (assuming time and a half) and $130 per hour (assuming double time). In the cases of expedited air construction permit reviews, the department director would authorize overtime pay for these activities.

Assuming 80 expedited air construction permit applications, the cost to expedite the review would range from approximately $160,000 (80 permits x $100 per hour x 20 hours) to $208,000 (80 permits x $130 per hour x 20 hours).

ASSUMPTION (continued)

DNR assumes they are currently receiving $80,000 for the review of these 80 permits (80 permits x $50 per hour x 20 hours). Therefore, the differential costs would range from approximately $80,000 ($160,000 expedited - $80,000 currently) to $128,000 ($208,0000 expedited - $80,000 currently).

Based on information from the State of Minnesota, who passed identical legislation in 1994,

Oversight assumes the number of companies requesting an expedited review of their permit would very small. In the first two years of the program in Minnesota there were 21 companies who requested an expedited review. Oversight assumes the number of companies who would request the Missouri DNR expedite the review of their permit would range from 0 to 50 each year.

Oversight also assumes this proposal would allow the DNR to charge fees in addition to the $50 per hour fee allowed in RSMo., 643.075. Oversight assumes the additional overtime would not exceed $100 per hour. Therefore, the incremental cost of the expedited review would be $50 and hour. Assuming a permit review takes an average of 20 hours, the additional cost for an expedited permit review would be $1,000. For 0 to 50 expedited permit reviews each year, total fees and costs would range from $0 to $50,000.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
NATURAL RESOURCES
PROTECTION FUND
Income - DNR
Expedited Permit Review Reimbursements	$0	$0	$0
	to	to	to
	$50,000	$50,000	$50,000
Costs - DNR
Expedited Permit Review Costs	$0	$0	$0
	to	to	to
	($50,000)	($50,000)	($50,000)
Net Estimated Effect of
NATURAL RESOURCES
PROTECTION FUND	$0	$0	$0
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
	$0	$0	$0
FISCAL IMPACT - Small Business

This proposal may have a fiscal impact on small businesses who seek an expedited review of their air permits.

DESCRIPTION

This act creates an option for an "expedited review" of a permit to construct an air contaminant source. A permit applicant may offer to reimburse the Department of Natural Resources for costs of staff overtime or private consultants needed to review the permit in an expedited manner. The Department may refuse the offer or accept the offer if permit approval priorities will not be disrupted by the expedited review. Reimbursements for staff overtime and consultant costs are not subject to the current limit of fifty dollars per hour for construction permit reviews, and may be established at competitive market prices.

Reimbursements shall be placed in an appropriate fund and used only to reimburse extra costs incurred under expedited reviews.

Reimbursement shall not affect the Department's decision on the permit or what conditions are to be included in the permit.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Department of Natural Resource

Jeanne Jarrett, CPA

Director

January 30, 1998