JBM C.S.H.B. 2333 75(R)BILL ANALYSIS NATURAL RESOURCES C.S.H.B. 2333 By: Lewis, Ron 4-9-97 Committee Report (Substituted) BACKGROUND In its report to the House Joint Interim Committee on TNRCC Funding, the Texas Natural Resource Conservation Commission (TNRCC) identified additional funding support that would be required to satisfy existing federal and state statutory mandates for water quality, water supply, public drinking water and water utility programs. Additional funding requirements can be met through revision and restructuring of existing fee revenue authority. To more equitably assess additional costs and to make more effective use of broad based fees currently assessed, amendments to current law are required. C.S.H.B. 2333 will increase the maximum annual wastewater inspection fee that may be assessed for the largest industrial or municipal wastewater treatment facilities. The increase will enable the TNRCC to apportion any additional costs of water quality programs equitably among all sizes of facilities without disproportionate effects on small communities or businesses. Under current law, wastewater inspection fees may be increased to fund the federal wastewater permit program (NPDES) contingent on federal delegation of the program. The bill will also increase the maximum annual fee that is assessed with delegation of the program to ensure the ability to fund the federal permit program. Under current law, entities holding wastewater permits must pay two annual fees, the inspection fee and a regional water quality assessment fee for the recovery of costs of water quality assessments under the Clean Rivers Program. The bill will allow the consolidation of the two assessments into one fee for more efficient administration without amending the limits on the maximum Clean Rivers fee or the total amount of revenue that may be collected for the regional water quality assessment program. In addition to water quality programs, the bill will broaden and clarify the uses that may be made of fees assessed for public water supply systems in the state. The amendments will provide for the support of additional water supply, drinking water and water utility program needs through this broad based revenue source. PURPOSE To provide for expanded and amended authority to assess fees for the recovery of costs of existing federal and state mandates for water resource management programs. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. However, in Section 2, the bill amends existing rulemaking authority of the TNRCC in amended Section 26.0291, Water Code. Also, in Section 3, the bill amends existing rulemaking authority of the TNRCC in amended Section 341.041, Health & Safety Code. SECTION BY SECTION ANALYSIS SECTION 1. Amends Sections 26.0291(a)-(c), Water Code (effective until delegation of NPDES permit authority), by adding a provision that clarifies that wastewater treatment inspection fee revenues may be expended to enforce statutory requirements related to the quality of the water resources of the state. This Section also increases the maximum annual inspection fee from $11,000 to $25,000. Further, this Section adds a new Subsection 26.0291(f) which allows the TNRCC to consolidate fees assessed against a wastewater permit holder under Section 26.0135 with the assessment of a wastewater inspection fee authorized under Section 26.0291. In addition, the new Subsection states that, in consolidating these assessments, the TNRCC may not recover under Subsection 26.0135(h) revenues in excess of the amounts authorized by that section. Finally, under Subsection 26.0291(f), the TNRCC is required to ensure that any revenues collected from wastewater permit holders under Section 26.0135 are allocated to meet the purposes of the regional water quality assessment program authorized under that section. SECTION 2. Amends Sections 26.0291(a)-(c), Water Code (effective upon delegation of NPDES permit authority), by adding a provision that clarifies that wastewater treatment inspection fee revenues may be expended to enforce statutory requirements related to the quality of the water resources of the state. This Section also increases the maximum annual inspection fee from $25,000 to $40,000. Further, this Section adds a provision to authorize expenditures required for the NPDES program contingent on delegation of the program. In addition, this Section extends the prohibition against increasing a fee paid by a local government to fund NPDES programs from August 31, 1999, to August 31, 2001. Finally, this Section adds a new Subsection 26.0291(f) which allows the TNRCC to consolidate fees assessed against a wastewater permit holder under Section 26.0135 with the assessment of a wastewater inspection fee authorized under Section 26.0291. In addition, the new Subsection states that, in consolidating these assessments, the TNRCC may not recover under Subsection 26.0135(h) revenues in excess of the amounts authorized by that section. Also, under this Subsection, the TNRCC is required to ensure that any revenues collected from wastewater permit holders under Section 26.0135 are allocated to meet the purposes of the regional water quality assessment program authorized under that section. SECTION 3. Amends Section 341.041, Health and Safety Code, to add provisions that fees paid by public water systems may be used to supplement other money available to pay the commission's expenses for oversight and technical assistance to water and wastewater utilities to ensure the delivery of safe and adequate water and wastewater services under the Water Code, technical assistance to underground water conservation districts organized under Chapter 36, Water Code, water resource management programs and the regulation of water rights authorized under the Water Code, and oversight of and technical assistance to conservation and reclamation districts under the Water Code other than those organized and operating under Chapter 36, Water Code. Finally, this Section also makes conforming changes. SECTION 4. Provides that Section 26.0291(f) of the Water Code (effective until delegation of NPDES permit authority), as added by Sections 1 and 2 of this Act, is effective only if the 75th Legislature enacts legislation which becomes law to extend the expiration date of Section 26.0135(h), Water Code, relating to the funding for the Clean Rivers Program. Further, if Section 26.0135(h), Water Code, is not extended beyond that date, Section 26.0291(f), Water Code, as added by Sections 1 and 2 of this Act, has no effect. SECTION 5.Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE SECTION 1. Proposed Section 26.0291(b), Water Code. In the original, the amount of the fee could not exceed $65,000 for each waste discharge permit held by the a permittee, effective September 1, 1998, but this provision was deleted in the substitute. SECTION 1. Proposed Section 26.0291(c)(4), Water Code. In the original, this provision required that, effective September 1, 1998, fees deposited in the water quality fund could be used to pay for regional assessment of water quality in the state's watersheds and river basins and the implementation of regional water quality management functions under Sections 26.0135 and 26.0136. Proposed Section 26.0291(c)(4), Water Code, was deleted in the substitute. SECTION 1. Proposed subsection (f) of Section 26.0291, Water Code, was added to the substitute and was not in the original measure. SECTION 2. Proposed Section 26.0291(b). The original included a provision that stated that the annual waste treatment fee imposed by the TNRCC could not exceed $80,000 for each waste discharge permit held by a permittee, effective September 1, 1998. This provision was deleted in the substitute. SECTION 2. Proposed Section 26.0291(c)(5). In the original, this provision required that, effective September 1, 1998, fees deposited in the water quality fund could be used to pay for regional assessment of water quality in the state's watersheds and river basins and the implementation of regional water quality management functions under Sections 26.0135 and 26.0136. This Subsection was deleted in the substitute. Proposed Section 26.0291(c)(5) was deleted in the substitute. SECTION 2. Proposed Subsection (f) of Section 26.0291, Water Code, was added to the substitute and was not in the original measure. SECTION 3. In the original, there was a provision in proposed Section 341.041(a), Health & Safety Code, that stated that public drinking water fees could be used to supplement other money available to pay the TNRCC's expenses for oversight of and technical assistance to "conservation and reclamation districts under the Water Code." That provision was Section 341.041(a)(4). In the substitute, proposed Section 341.041(a), Health & Safety Code, breaks that singular provision from the original into two provisions (Section 341.041(a)(3) and (a)(5)). Subsection (a)(3) states that public drinking water fees can be used to supplement other money available to pay the TNRCC's expenses for "technical assistance to underground water conservation districts organized and operating under Chapter 36, Water Code." Subsection (a)(5) states that public drinking water fees can be used to supplement other money available to pay the TNRCC's expenses for "oversight of and technical assistance to conservation and reclamation districts under the Water Code other than a district described by Subdivision (3)." SECTION 4. The language in Section 4 of the substitute was not in the original measure. Section 4 in the original was the emergency clause. The emergency clause is in Section 5 in the substitute.