Public hearing held on MDNR fee increase to support Air Pollution Control Program

By Ray McCarty, president/CEO, Associated Industries of Missouri

August 29, 2024 - The Missouri Air Conservation Commission today held public hearings on regulation changes necessary to increase air permit fees. The fee increases were negotiated with stakeholders through a lengthy process.

While Associated Industries of Missouri (AIM) participated in the discussions regarding the fee increases, the Regulatory Environmental Group for Missouri (REGFORM), led by Roger Walker, actually negotiated the specific fee increases and AIM fully supports the resulting fee increase proposals. Roger Walker testified in support of the fee increases at the hearing and noted a legislative proposal by AIM could alleviate the need for the fee increases.

As discussed throughout this process, the proposed fee increases only provide about half of the amount the Missouri Department of Natural Resources believes will be necessary to sustain the program. Discussions will continue regarding the projected shortfall.

"Roger Walker, Kevin Perry and the REGFORM group have done an excellent job representing Missouri business stakeholders in this process," said Ray McCarty, president and CEO of AIM. "We are thankful for their hard work throughout this process."

Associated Industries of Missouri proposed legislation in the 2024 Legislative Session that would have allocated a portion of currently collected sales and use taxes from utility companies to a special dedicated fund that would be used solely to provide funding for the Air Pollution Control Program. Due to the near total blockage of legislation in the Missouri Senate, the bill only received a legislative hearing and did not advance. AIM plans to ask legislators to consider the plan again in the upcoming 2025 Legislative Session.

"The Air Pollution Control Program's current funding is doomed to always be insufficient to support the program," said McCarty. "As companies improve the quality of their air emissions, the amount they pay in fees is reduced. Because the cost for services provided by the MDNR increases, and revenues supporting the program are reduced, the program will always project a shortfall. Fee increases may help temporarily, but will constantly need to be increased to keep pace with inflation. This financially punishes companies that are successful in reducing pollution. The opposite should be true. Our plan would allocate a portion of taxes already paid by utility company customers, including facilities with permits, to support air pollution enforcement and regulation compliance assistance. Because the amount would be based on sales and use taxes, the amount would naturally increase with inflation without costing Missouri citizens and businesses any additional money."

Sen. Jason Bean (R-25) filed the legislation, SB 1483, in the 2024 session. The AIM plan would have resulted in $3.2 million in additional revenue for the air pollution control program in the first full year following implementation. If the legislation were approved, the current fee increases considered by the Commission today would no longer be necessary. The legislation was supported by AIM, the Missouri Forest Products Association, Missouri Limestone Producers Association, the American Council of Engineering Companies (ACEC-MO), and the Missouri Department of Natural Resources. There was no opposition expressed in the hearing on the bill.

"We will try to pass the legislation again in the upcoming 2025 Legislative Session and, if it is passed and signed into law, the MDNR will withdraw the fee increases proposed in the regulation changes heard today by the Commission," said McCarty.

McCarty expects the sales and use tax funding proposal to be a top priority of AIM in the 2025 Legislative Session.