ENVIRONMENTAL QUALITY

ENVIRONMENTAL QUALITY

Summary: HB 4358, H-1, CR-1

FY 2007-08

Analyst: Kirk Lindquist

		FY 2007-08	FY 2007-08	FY 2007-08	FY 2007-08	*Difference: Conference* *From FY 2006-07 YTD*
	FY 2006-07 YTD	Executive	House	Senate	Conference	*Amount*	%
IDG/IDT	$18,156,400	$18,411,800	$18,411,800	$0	$18,662,900	$506,500	2.8
Federal	137,682,700	132,274,300	132,739,700	0	131,750,500	(5,932,200)	(4.3)
Local	0	0	0	0	0	0	0.0
Private	450,000	455,100	455,100	0	455,100	5,100	1.1
Restricted	261,002,800	187,690,000	171,681,900	0	188,212,700	(72,790,100)	(27.9)
GF/GP	30,787,700	32,796,400	49,621,100	(100)	31,763,200	975,500	3.2
Gross	$448,079,600	$371,627,600	$372,909,600	($100)	$370,844,400	*($77,235,200)*	*(17.2)*
FTEs	1,567.7	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 September. 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: $16,258,700.

Major Budget Changes From FY 2006-07 YTD Appropriations	FY 2006-07 YTD	Conference Change From YTD
*1. Restricted Fee Revenue* Conference report includes increased fee revenue for 8 different restricted funds -- $16,258,700. New Fee Needed FY 2008 Rev. · Air Emissions Fees $5,903,800 $10,600,000 · Land & Water Fees 2,730,800 2,399,200 · Solid Waste Fees 1,228,100 4,200,000 · Groundwater Discharge 1,803,800 1,303,400 · Poll. Prevention Fees 2,694,700 2,400,000 · Haz. Waste User Fees 1,165,900 1,200,000 · Onsite Waste Water Mgt. 592,500 0 · Mineral Wells Reg. Fees 139,100 140,000 No program expansions are funded from these increased revenues.	Gross Restricted	$22,900,450 $22,900,450	$0 $0
*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	($9,270,600) (8,457,000) 0 ($813,600)
*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).	Gross Federal Restricted GF/GP	$23,948,500 5,708,900 14,806,200 $3,433,400	$1,000,000 0 1,000,000 $0
*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

Conference Change

From YTD

1. Restricted Fee Revenue

Conference report includes increased fee revenue for 8 different restricted funds -- $16,258,700.

New Fee Needed FY 2008 Rev.

· Air Emissions Fees $5,903,800 $10,600,000

· Land & Water Fees 2,730,800 2,399,200

· Solid Waste Fees 1,228,100 4,200,000

· Groundwater Discharge 1,803,800 1,303,400

· Poll. Prevention Fees 2,694,700 2,400,000

· Haz. Waste User Fees 1,165,900 1,200,000

· Onsite Waste Water Mgt. 592,500 0

· Mineral Wells Reg. Fees 139,100 140,000

No program expansions are funded from these increased revenues.

Gross

Restricted

$22,900,450

$22,900,450

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

($9,270,600)

(8,457,000)

($813,600)

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).

Gross

Federal

Restricted

GF/GP

$23,948,500

5,708,900

14,806,200

$3,433,400

$1,000,000

1,000,000

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. 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. 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. 227. Restricted Fund Shortfall Plan* – NEW Provides legislative intent to address restricted fund shortages onJanuary 15, 2008.
**Sec. 503. Processing Regulatory Compliance Guide –DELETED** Requires publication of a guide containing state regulatory requirements for fruit and vegetable processors.

Sec. 706. Audit of Leaking Underground Storage Tank Program – NEW

Provides legislative intent to have the Legislative Auditor General perform a performance audit of the Leaking Underground Storage Tank Program.

Sec. 707. Operational Memoranda – NEW

Bans the use of operational memoranda for selected programs.

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. 902. Federal Drinking Water Act Technical Assistance – DELETED

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