ENVIRONMENTAL QUALITY

ENVIRONMENTAL QUALITY

Summary: House Passed, HB 4358, H-1

FY 2007-08

Analyst: Kirk Lindquist

		FY 2007-08	FY 2007-08	FY 2007-08	FY 2007-08	*Difference: House* *From FY 2006-07 YTD*
	FY 2006-07 YTD	Executive	House	Senate	Enacted	*Amount*	%
IDG/IDT	$18,034,200	$18,411,800	$18,411,800			$377,600	2.1
Federal	137,429,200	132,274,300	132,739,700			(4,689,500)	(3.4)
Local	0	0	0			0	0.0
Private	450,000	455,100	455,100			5,100	1.1
Restricted	249,758,500	187,690,000	171,681,900			(78,076,600)	(31.3)
GF/GP	30,787,700	32,796,400	49,621,100			18,833,400	61.2
Gross	$436,459,600	$371,627,600	$372,909,600			*($63,550,000)*	*(14.6)*
FTEs	1,567.7	1,567.7	1,567.7			0	0.0

Note: FY 2006-07 figures include the results of supplementals and Executive Order (EO) actions

through June 30, 2007..

Overview

The Department of Environmental Quality supports environmental protection, conservation, and cleanup and redevelopment programs and regulatory efforts established to protect, restore, and reuseMichigan’s air, water, and land resources. More than half of Department’s annual revenue is collected from permits and licenses.

Summary of Major Budget Issues

One-time FY 2006-07 restricted and federal fund appropriations eliminated: ($65,397,800).

Reduce Drinking Water Revolving Fund program: ($7,516,400 Gross, $1,347,400, GF/GP).

Restricted Fund fee increases: $16,258,100.

Major Budget Changes From FY 2006-07 YTD Appropriations	FY 2006-07 YTD	House Change From YTD
*1. Restricted Fee Revenue* Executive Recommendation increases fee revenue for 8 different restricted funds: Increased Revenue FY 2008 Rev. · Air Emissions Fees $5,500,000 $16,576,000 · Land & Water Fees 5,862,000 8,062,000 · Solid Waste Fees 1,800,000 6,000,000 · Groundwater Discharge 1,800,000 3,084,500 · Poll. Prevention Fees 2,400,000 4,800,000 · Haz. Waste User Fees 1,200,000 2,800,000 · Onsite Waste Water Mgt. 598,000 598,000 · Mineral Wells Reg. Fees 75,000 215,000 The House does not include these increases. A General Fund funding shift is provided instead, allowing the department to continue regulatory programs without fee adjustments.	Gross Restricted GF/GP	$22,900,450 22,900,450 $0	$0 (16,258,100) $16,258,100
*2. Deposits into Drinking Water Revolving Fund* Reduces General Fund appropriation to the Drinking Water Revolving Fund. This reduction affects the amount of matched Federal revenue to this fund. Sufficient funding is available to meet expected demand for community applications for drinking water construction project loans.	Gross Federal Restricted GF/GP	$95,579,900 80,000,000 11,400,000 $4,179,900	($7,516,400) (6,169,000) 0 ($1,347,400)
*3. One-time Restricted Fund Appropriations* Deletes funding for the following FY 2007 appropriations: · Strategic Water Quality Initiative $40,000,000 · Environmental Prot. Bond Fund 15,500,000 · CMI Environmental Response 8,747,800 · CMI Pollution Prevention 100,000 · St. Clair Shores: Lange/Revere Canals 500,000 · St. Louis Water Supply Wells 300,000	Gross Restricted	$66,061,000 66,061,000	($65,147,800) (65,147,800)
*4. Refined Petroleum Product Cleanup Program Revenue* Program funding is reduced to reflect expected revenue levels.	Gross Restricted	$22,000,000 22,000,000	($2,000,000) (2,000,000)
*5. Septage Waste Compliance Program Revenue* Program funding is reduced to reflect expected revenue levels.	Gross Restricted	$1,525,000 1,525,000	($1,125,000) (1,125,000)
*6. Air Quality Renewable Operating Permit Program* Program increase covers staffing and IT development costs required under the Federal Clean Air Act for the Renewable Operating Permit program (Title V). Lost federal revenue is replaced by GF/GP: $340,600	Gross Federal Restricted GF/GP	$23,948,500 5,708,900 14,806,200 $3,433,400	$1,000,000 (340,600) 1,000,000 $340,600
*7. Great Lakes Protection Grants* Grant levels are reduced to reflect the amount of revenue expected from the Great Lakes Protection Fund. Interest earnings have not been sufficient to sustain the current grant level.	Gross Restricted	$2,000,000 2,000,000	($1,000,000) (1,000,000)
*8. Outdoor Bio-watch Network* Federal funding from the Department of Homeland Security is provided to expand the existing Bio-watch program to include indoor monitoring.	Gross Federal Restricted GF/GP	$23,948,500 5,708,900 14,806,200 $3,433,400	$575,000 575,000 0 $0
*9. Information Technology: Information Lifecycle Content Management System (ILCM)* To provide efficiency gains in information storage, document handling and related business processes.	Gross IDT Federal Restricted GF/GP	$6,810,400 52,800 1,915,200 4,310,900 $531,500	$500,000 0 0 500,000 $0
*10. Expedited Water/Waste Water Permit Program (New)* Allows expenditure of revenue collected for expedited permit reviews, pursuant to PA's 601 and 602 of 2006.	Gross Restricted	$0 0	$400,000 400,000
*11. Clean* *Michigan* *Initiative Administrative Funding* Reduces appropriated support for administrative costs related to the Clean Michigan Initiative program.	Gross Restricted	$1,111,700 1,111,700	($785,700) (785,700)
*12. Economic Adjustments* Provides support for negotiated civil service 4.0% wage increase, retirement plan contributions, and employer share of health insurance premiums.	Gross IDG Federal Private Restricted GF/GP	N/A N/A	$5,500,700 178,200 1,334,600 5,100 3,231,900 $750,900

Major Budget Changes From FY 2006-07 YTD Appropriations

FY 2006-07 YTD

House Change

From YTD

1. Restricted Fee Revenue

Executive Recommendation increases fee revenue for 8 different restricted funds:

Increased Revenue FY 2008 Rev.

· Air Emissions Fees $5,500,000 $16,576,000

· Land & Water Fees 5,862,000 8,062,000

· Solid Waste Fees 1,800,000 6,000,000

· Groundwater Discharge 1,800,000 3,084,500

· Poll. Prevention Fees 2,400,000 4,800,000

· Haz. Waste User Fees 1,200,000 2,800,000

· Onsite Waste Water Mgt. 598,000 598,000

· Mineral Wells Reg. Fees 75,000 215,000

The House does not include these increases. A General Fund funding shift is provided instead, allowing the department to continue regulatory programs without fee adjustments.

Gross

Restricted

GF/GP

$22,900,450

22,900,450

(16,258,100)

$16,258,100

2. Deposits into Drinking Water Revolving Fund

Reduces General Fund appropriation to the Drinking Water Revolving Fund. This reduction affects the amount of matched Federal revenue to this fund. Sufficient funding is available to meet expected demand for community applications for drinking water construction project loans.

Gross

Federal

Restricted

GF/GP

$95,579,900

80,000,000

11,400,000

$4,179,900

($7,516,400)

(6,169,000)

($1,347,400)

3. One-time Restricted Fund Appropriations

Deletes funding for the following FY 2007 appropriations:

· Strategic Water Quality Initiative $40,000,000

· Environmental Prot. Bond Fund 15,500,000

· CMI Environmental Response 8,747,800

· CMI Pollution Prevention 100,000

· St. Clair Shores: Lange/Revere Canals 500,000

· St. Louis Water Supply Wells 300,000

Gross

Restricted

$66,061,000

66,061,000

($65,147,800)

(65,147,800)

4. Refined Petroleum Product Cleanup Program Revenue

Program funding is reduced to reflect expected revenue levels.

Gross

Restricted

$22,000,000

22,000,000

($2,000,000)

(2,000,000)

5. Septage Waste Compliance Program Revenue

Program funding is reduced to reflect expected revenue levels.

Gross

Restricted

$1,525,000

1,525,000

($1,125,000)

(1,125,000)

6. Air Quality Renewable Operating Permit Program

Program increase covers staffing and IT development costs required under the Federal Clean Air Act for the Renewable Operating Permit program (Title V). Lost federal revenue is replaced by GF/GP: $340,600

Gross

Federal

Restricted

GF/GP

$23,948,500

5,708,900

14,806,200

$3,433,400

$1,000,000

(340,600)

1,000,000

$340,600

7. Great Lakes Protection Grants

Grant levels are reduced to reflect the amount of revenue expected from the Great Lakes Protection Fund. Interest earnings have not been sufficient to sustain the current grant level.

Gross

Restricted

$2,000,000

2,000,000

($1,000,000)

(1,000,000)

8. Outdoor Bio-watch Network

Federal funding from the Department of Homeland Security is provided to expand the existing Bio-watch program to include indoor monitoring.

Gross

Federal

Restricted

GF/GP

$23,948,500

5,708,900

14,806,200

$3,433,400

$575,000

575,000

9. Information Technology: Information Lifecycle Content Management System (ILCM)

To provide efficiency gains in information storage, document handling and related business processes.

Gross

IDT

Federal

Restricted

GF/GP

$6,810,400

52,800

1,915,200

4,310,900

$531,500

$500,000

500,000

10. Expedited Water/Waste Water Permit Program (New)

Allows expenditure of revenue collected for expedited permit reviews, pursuant to PA's 601 and 602 of 2006.

Gross

Restricted

$400,000

400,000

11. Clean Michigan Initiative Administrative Funding

Reduces appropriated support for administrative costs related to the Clean Michigan Initiative program.

Gross

Restricted

$1,111,700

1,111,700

($785,700)

(785,700)

12. Economic Adjustments

Provides support for negotiated civil service 4.0% wage increase, retirement plan contributions, and employer share of health insurance premiums.

Gross

IDG

Federal

Private

Restricted

GF/GP

N/A

N/A

$5,500,700

178,200

1,334,600

5,100

3,231,900

$750,900

Major Boilerplate Changes From FY 2006-07

		*Sec. 210. Great Lakes Water Diversion* – DELETED Requires notification of the Legislature and provision of public meetings on any request received by the State ofMichigan to divert water from theGreat Lakes.
		*Sec. 210. Contingency Fund Transfers* – NEW Provides $30,000,000 in authorized transfer authority for unanticipated Federal grant revenue, $5,000,000 for restricted revenue, $100,000 for local revenue, and $100,000 for private revenue.
	*Sec. 218.* *Michigan* *Great* *Lakes* *Areas* *of Concern –* DELETED Directs Department to develop a strategy, with the federal EPA and public advisory councils, to removeMichigan's Great Lakes Areas of Concern from the federal list.
	*Sec. 219. Prohibition of Disciplinary Actions For Legislative Contacts* – DELETED Provides that state employees who communicate with the Michigan Legislature shall not be disciplined.
	*Sec. 220. Criminal and Civil Fine Revenue* – DELETED Requires report of criminal and civil fine revenue collected during FY 2005-06.
	**Sec. 223. EPA Regulatory Innovation Agreement –DELETED** Intent that department renews its agreement with the Federal EPA to help farms and farm operations prevent or minimize agricultural pollution risks.
**Sec. 227. Oil or Alternative Fuels Refinery Permits –DELETED** Requires a report on permits necessary to construct and operate proposed refineries, and requires the department to expedite the permit process for these facilities.
**Sec. 503. Processing Regulatory Compliance Guide –DELETED** Requires publication of a guide containing state regulatory requirements for fruit and vegetable processors.

Sec. 705. Environmental Cleanup Site List – DELETED

Lists cleanup projects funded through the environmental cleanup and redevelopment program.

Sec. 801. Notice of Department Orders – Suspended Sale of Petroleum Products – DELETED

Requires48-hour notice to Legislature before Department issues an order suspending sale of petroleum products by a wholesale or retail operator.

Sec. 802. Sewerage Discharge Elimination Plan – NEW

Requires preparation of a plant to eliminate sewerage discharges into water resources by 2015.

Sec. 803. Concentrated Animal Feeding Operations (CAFO) Report – NEW

Requires Department and the Department of Agriculture to prepare a report on the CAFO inspection program.

Sec. 803 (FY 07). Waste Disposal in Deep Wells, Cities of Romulus and Taylor – DELETED

Requires report to City ofRomulus and/or City ofTaylor if hazardous waste or hazardous waste constituents are discharged or released.

Sec. 902. Federal Drinking Water Act Technical Assistance – DELETED

Specifies allocation of 2% of available funds for safe drinking water technical assistance activities.