HBA-JLV C.S.H.B. 3528 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3528 By: Counts Natural Resources 4/16/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Under current law, the Texas Natural Resource Conservation Commission (TNRCC) collects separate fees for wastewater treatment inspection and water quality. Revenues of such fees can only be used for very specific purposes. In an effort to improve overall efficiency of TNRCC fee assessment and to enhance the flexibility of TNRCC's funding structure, many would like to consolidate these two fees into a single water quality fee. The use of revenue from the newly consolidated fee could support activities associated with protecting the water resources of the state, including water management programs. C.S.H.B. 3528 consolidates inspection fees into a water quality fee to fund activities associated with the water resources of the state. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.H.B. 3528 amends the Water Code to set forth provisions relating to the consolidation of certain fees and the use of water quality fees. The bill provides that an annual water quality fee is imposed on each wastewater discharge permit holder for each wastewater discharge permit held and on each user of water in proportion to the user's water right, through permit or contract, as reflected in the Texas Natural Resource Conservation Commission's (TNRCC) records. The bill provides that the fee is to supplement any other funds available to pay TNRCC expenses related to the water resources of this state, including the water quality management programs, and any other water resource management programs reasonably related to the activities of the persons required to pay a fee. The bill provides that the fee for each year is imposed on each water right in effect during any part of the year. TNRCC is authorized to establish reduced fees for inactive permits. The bill increases the amount of the fee, from $25,000 to $75,000, for each permit or contract. The bill prohibits the maximum annual fee for a wastewater discharge or waste treatment facility that holds a water right for the use of water by the facility from exceeding $75,000. In determining the fee amount, the bill authorizes TNRCC to consider the reasonable costs of administering the water quality management program and any other reasonable costs. The bill removes provisions prohibiting TNRCC from adopting a rule designed to increase the fee on a treatment works owned by a local government. The bill deletes provisions requiring TNRCC to recover costs from users of water and wastewater permit holders in the watershed. The bill deletes provisions providing that irrigation water rights will not be subject to fee assessment by TNRCC. The bill deletes provisions providing that rules implementing water quality monitoring ensure that program funds are equitably apportioned among basins. The bill deletes provisions prohibiting the assessment of reasonable costs from exceeding $5,000,000 annually. The bill also deletes provisions relating to the deposit and application of recovered costs by TNRCC, and the requirement of TNRCC to submit a written report. The bill repeals provisions relating to the consolidation of fees relating to the recovery of costs for water quality management programs from wastewater permit holders. EFFECTIVE DATE September 1, 2002. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3528 modifies the original to conform to Texas Legislative Council style and format. The substitute provides that the water quality fee is to supplement any other funds available to pay Texas Natural Resource Conservation Commission (TNRCC) expenses related to the water resources of this state, including the water quality management programs. The substitute prohibits the maximum annual fee for the use of water by the facility from exceeding $75,000. The substitute restores to current law provisions relating to requirements of TNRCC and rule requirements.