H.F. 640 Section 1. Section 455B.133, subsection 8, paragraph a, 1 Code 2015, is amended to read as follows: 2 a. (1) Adopt rules consistent with the federal Clean 3 Air Act Amendments of 1990, Pub. L. No. 101-549, including 4 those amendments effective on January 1, 1991, regulations 5 promulgated by the United States environmental protection 6 agency pursuant to that Act, the provisions of this chapter, 7 and rules adopted by the commission pursuant to this chapter, 8 which require the owner or operator of an air contaminant 9 source to obtain an operating permit prior to operation of the 10 source. The rules shall specify the information required to be 11 submitted with the application for a an operating permit and 12 the conditions under which a permit may be granted, modified, 13 suspended, terminated, revoked, reissued, or denied. For 14 sources subject to the provisions of Tit. IV of the federal 15 Clean Air Act Amendments of 1990, operating permit conditions 16 shall include emission allowances for sulfur dioxide emissions. 17 (2) (a) The commission may impose establish fees to be 18 imposed and collected by the department , including operating 19 permit application fees and fees upon regulated pollutants 20 emitted from an air contaminant source, in an amount sufficient 21 to cover , on a state fiscal year basis as described in section 22 455B.133B, all reasonable costs, direct and indirect, required 23 to develop implement and administer the operating permit 24 program as described in subparagraph (1) in conformance with 25 the federal Clean Air Act Amendments of 1990 , Pub. L. No. 26 101-549 . Affected units regulated under Tit. IV of the federal 27 Clean Air Act Amendments of 1990 , Pub. L. No. 101-549, shall 28 pay operating permit fees in the same manner as other sources 29 subject to operating permit requirements, except as provided in 30 section 408 of the federal that Act. 31 (b) The fees collected by the department pursuant to this 32 subsection subparagraph division (a) shall be deposited in 33 credited to the appropriate accounts of the air contaminant 34 source fund created pursuant to section 455B.133B , and shall 35 -1- LSB 2577HV (3) 86 da/nh 1/ 13

H.F. 640 be utilized solely to cover all reasonable costs required to 1 develop implement and administer the programs required by Tit. 2 V of the federal Clean Air Act Amendments of 1990, Pub. L. 3 No. 101-549 , including the operating permit program pursuant 4 to section 502 of the federal that Act and the small business 5 stationary source technical and environmental assistance 6 program pursuant to section 507 of the federal that Act. The 7 amount of the fees credited to and expended from each account 8 of the air contaminant source fund shall be subject to the 9 limitations provided in section 455B.133B. 10 (c) Fees established pursuant to this subparagraph 11 (2) shall not be imposed for the regulation of an activity 12 that exceeds the requirements of the federal Clean Air Act 13 Amendments of 1990. 14 Sec. 2. Section 455B.133B, Code 2015, is amended to read as 15 follows: 16 455B.133B Air contaminant source fund created —— fees and 17 appropriations . 18 1. As used in this section, unless the context otherwise 19 requires: 20 a. “Federal Clean Air Act Amendments of 1990” means Pub. 21 L. No. 101-549, including those amendments effective on 22 January 1, 1991, regulations promulgated by the United States 23 environmental protection agency pursuant to that Act, the 24 provisions of this chapter, and rules adopted by the commission 25 pursuant to this chapter. 26 b. “State fiscal year” means the fiscal year described in 27 section 3.12. 28 2. An air contaminant source fund is created in the office 29 of the treasurer of state under the control of the department. 30 The fund shall be composed of an air emission fee account and 31 an operating permit application fee account as provided in this 32 section. 33 1. Moneys received from the fees assessed pursuant to 34 section 455B.133, subsection 8 , shall be deposited in the fund. 35 -2- LSB 2577HV (3) 86 da/nh 2/ 13

H.F. 640 2. Moneys in the fund shall be used solely to defray 1 the costs related to the permit, monitoring, and inspection 2 program, including the small business stationary source 3 technical and environmental compliance assistance program 4 required pursuant to the federal Clean Air Act Amendments of 5 1990, section 502, Pub. L. No. 101-549, and as provided in 6 section 455B.133A . 7 3. In establishing fees to be imposed and collected by the 8 department pursuant to section 455B.133, subsection 8, the 9 commission shall use the calculated estimate described in this 10 section. The fees collected pursuant to section 455B.133, 11 subsection 8, shall be credited to the fund. The fund may 12 include any other moneys appropriated by the general assembly 13 or otherwise available to and obtained or accepted by the 14 department for deposit in the fund. 15 4. a. The commission shall establish each fee amount based 16 on the department’s calculated estimate of total revenues from 17 all fees predicted to be credited to each account in the fund, 18 but not to exceed a ceiling amount for each account as provided 19 in this section. However, this subsection does not require 20 that an account have a zero ending balance at the close of a 21 state fiscal year. 22 b. Each state fiscal year the department shall recompute its 23 calculated estimate and obtain approval from the commission if 24 an established fee amount must be adjusted. 25 c. (1) The department shall annually convene a Title V fees 26 stakeholder meeting. The department shall provide a report on 27 the fees and budgets to the stakeholders. The department shall 28 consider any recommendations of the stakeholders when computing 29 its calculated estimate for the following state fiscal year. 30 (2) A person invited to attend a stakeholder meeting is not 31 entitled to receive a per diem as specified in section 7E.6 and 32 shall be not reimbursed for expenses incurred while attending 33 the meeting. 34 5. a. The air emission fee account shall include all fees 35 -3- LSB 2577HV (3) 86 da/nh 3/ 13

H.F. 640 established by the commission to be imposed and collected by 1 the department for emission fees for regulated pollutants 2 submitted by major sources as defined in section 502 of the 3 federal Clean Air Act Amendments of 1990, 42 U.S.C. §7661, and 4 as defined in 567 IAC ch. 22. 5 b. (1) The department’s calculated estimate for the 6 air emission fee account shall be computed to produce total 7 revenues sufficient to pay for reasonable direct and indirect 8 costs of implementing and administering the operating permit 9 program as provided in section 455B.133, subsection 8, on a 10 state fiscal year basis. 11 (2) The reasonable direct and indirect costs described in 12 subparagraph (1) shall be limited to all of the following: 13 (a) General administrative costs of administering the 14 operating permit program, including the supporting and tracking 15 of operating permit applications, compliance certification, and 16 related data entry. 17 (b) Costs of implementing and enforcing the terms of an 18 operating permit, not including any court costs or other costs 19 associated with an enforcement action, including adequate 20 resources to determine which sources are subject to the 21 program. 22 (c) Costs of emissions and ambient site-specific monitors. 23 (d) Costs of Title V source-specific modeling, analyses, or 24 demonstrations. 25 (e) Costs of preparing inventories and tracking emissions. 26 (f) Costs of providing direct support to sources under the 27 small business stationary source technical and environmental 28 compliance assistance program as provided in section 455B.133A. 29 (3) The department shall not include in its computations for 30 a calculated estimate, and the commission shall not establish 31 fees, for greenhouse gas emissions as defined in 40 C.F.R. 32 §70.12. 33 c. The department’s calculated estimate for the air emission 34 fee account shall not produce total revenues in excess of eight 35 -4- LSB 2577HV (3) 86 da/nh 4/ 13

H.F. 640 million two hundred fifty thousand dollars during any state 1 fiscal year. 2 d. (1) Moneys in the air emission fee account are 3 appropriated to the department to pay for the reasonable direct 4 and indirect costs specified in paragraph “b” , subparagraph 5 (2). 6 (2) Notwithstanding subparagraph (1), moneys in the air 7 emission fee account are also appropriated to the department to 8 pay for costs associated with implementing and administering 9 regulatory activities, including programs, provided for in 10 division II of this chapter, other than costs covered by any 11 of the following: 12 (a) Operating permit application fees credited to the 13 operating permit application fee account as provided in 14 subsection 6. 15 (b) New source review application fees credited to the major 16 source account of the air quality fund as provided in section 17 455B.133C, subsection 5. 18 (c) New source review application fees credited to the minor 19 source account of the air quality fund as provided in section 20 455B.133C, subsection 6. 21 (d) Notification fees credited to the asbestos account 22 of the air quality fund as provided in section 455B.133C, 23 subsection 7. 24 6. a. The operating permit application fee account shall 25 include all fees established by the commission to be imposed 26 and collected by the department for accepting applications for 27 operating permits submitted by major sources as defined in 28 section 502 of the federal Clean Air Act Amendments of 1990, 42 29 U.S.C. §7661, and as defined in 567 IAC ch. 22. 30 b. (1) The department’s calculated estimate for the 31 operating permit application fee account shall be computed to 32 produce total revenues sufficient to provide for the reasonable 33 direct and indirect costs of implementing and administering 34 operating permit programs described in paragraph “a” . 35 -5- LSB 2577HV (3) 86 da/nh 5/ 13

H.F. 640 (2) The reasonable direct and indirect costs described in 1 subparagraph (1) shall be limited to all of the following: 2 (a) Costs of reviewing and acting on any application for an 3 operating permit or operating permit revision. 4 (b) General administrative costs of administering the 5 operating permit program, including the supporting and tracking 6 of operating permit applications and related data entry. 7 c. The department’s calculated estimate for the operating 8 permit application fee account shall not produce total revenues 9 in excess of one million two hundred fifty thousand dollars 10 during any state fiscal year. 11 d. Moneys in the operating permit application fee account 12 are appropriated to the department to pay for reasonable direct 13 and indirect costs specified in paragraph “b” , subparagraph 14 (2). 15 7. a. The commission or department shall not transfer 16 moneys credited from one account to another account of the 17 fund. 18 b. Notwithstanding section 8.33 , any unexpended balance in 19 the an account of the fund at the end of each state fiscal year 20 shall be retained in the fund that account . 21 c. Notwithstanding section 12C.7 , any interest and earnings 22 on investments from money moneys in the fund an account of the 23 fund shall be credited to the fund that account . 24 Sec. 3. NEW SECTION . 455B.133C Air quality fund —— fees and 25 appropriations. 26 1. As used in this section, unless the context otherwise 27 requires: 28 a. “Federal Clean Air Act Amendments of 1990” means the same 29 as defined in section 455B.133B. 30 b. “State fiscal year” means the fiscal year described in 31 section 3.12. 32 2. An air quality fund is created in the office of the 33 treasurer of state under the control of the department. The 34 fund shall be composed of a major source account, a minor 35 -6- LSB 2577HV (3) 86 da/nh 6/ 13

H.F. 640 source account, and an asbestos account as provided in this 1 section. 2 3. The commission may establish fees to be imposed and 3 collected by the department upon air contaminant sources 4 required by 567 IAC ch. 22, 31, or 33, to obtain a permit, 5 registration, template, or permit by rule, or to provide 6 notification under 567 IAC 23.1(3). In establishing the fees, 7 the commission shall use the calculated estimate described in 8 this section. The fees collected shall be credited to the 9 fund. The fund may include any other moneys appropriated by 10 the general assembly or otherwise available to and obtained or 11 accepted by the department for deposit in the fund. 12 4. a. The commission shall establish each fee amount based 13 on the department’s calculated estimate of total revenues from 14 all fees predicted to be credited to each account in the fund, 15 but not to exceed a ceiling amount for each account as provided 16 in this section. However, this subsection does not require 17 that an account have a zero ending balance at the close of a 18 state fiscal year. 19 b. Each state fiscal year the department shall recompute its 20 calculated estimate and obtain approval from the commission if 21 an established fee amount must be adjusted. 22 c. (1) The department shall annually convene air quality 23 fees stakeholder meetings. The department shall provide a 24 report on the fees and budgets to the stakeholders regarding 25 each account described in this section. The department shall 26 consider any recommendations of the stakeholders when computing 27 its calculated estimate for the following state fiscal year. 28 (2) A person invited to attend a stakeholder meeting is not 29 entitled to receive a per diem as specified in section 7E.6 and 30 shall be not reimbursed for expenses incurred while attending 31 the meeting. 32 5. a. The major source account shall include all fees 33 established by the commission to be imposed and collected 34 by the department for accepting applications for new source 35 -7- LSB 2577HV (3) 86 da/nh 7/ 13

H.F. 640 review permits including permit revisions submitted by major 1 sources as defined in section 502 of the federal Clean Air Act 2 Amendments of 1990, 42 U.S.C. §7661, under new source review 3 programs pursuant to that federal Act, including as provided 4 under 567 IAC ch. 22, 31, and 33. 5 b. (1) The department’s calculated estimate for the major 6 source account shall be computed to produce total revenues 7 sufficient to pay for reasonable direct and indirect costs 8 of implementing and administering new source review programs 9 described in paragraph “a” on a state fiscal year basis. 10 (2) The reasonable direct and indirect costs described in 11 subparagraph (1) shall be limited to all of the following: 12 (a) Reviewing and acting on any application for a new 13 source review permit, including the determination of all 14 applicable requirements and dispersion modeling as part of the 15 processing of a permit or permit revision, or an applicability 16 determination. 17 (b) General administrative costs of administering new 18 source review programs including supporting and tracking of any 19 application for a new source review permit and related data 20 entry. 21 (c) (i) Developing and implementing an expedited new source 22 review permit application process. 23 (ii) Additional fees associated with subparagraph 24 subdivision (i). 25 c. (1) The department’s calculated estimate for the major 26 source account shall not produce total revenues in excess of 27 one million five hundred thousand dollars during any state 28 fiscal year. 29 (2) Notwithstanding subparagraph (1), the department’s 30 calculated estimate for the major source account shall not 31 include the additional fees described in paragraph “b” , 32 subparagraph (2), subparagraph division (c), subparagraph 33 subdivision (ii). 34 d. Moneys in the major source account are appropriated to 35 -8- LSB 2577HV (3) 86 da/nh 8/ 13

H.F. 640 the department to pay for reasonable direct and indirect costs 1 of implementing and administering new source review programs as 2 specified in paragraph “b” , subparagraph (2). 3 6. a. The minor source account shall include all fees 4 established by the commission to be imposed and collected 5 by the department for accepting applications submitted by 6 minor air contaminant sources for construction permits or for 7 providing for registrations, permits by rule, or template 8 permits in lieu of obtaining construction permits, under minor 9 source new source review programs pursuant to the federal Clean 10 Air Act Amendments of 1990, including as provided under 567 IAC 11 ch. 22. 12 b. (1) The department’s calculated estimate for the minor 13 source account shall be computed to produce total revenues 14 sufficient to pay for reasonable direct and indirect costs of 15 implementing and administering minor source new source review 16 programs as described in paragraph “a” on a state fiscal year 17 basis. 18 (2) The reasonable direct and indirect costs described in 19 subparagraph (1) shall include costs associated with a new, 20 modified, or existing minor air contaminant source, and related 21 control equipment. 22 c. The department’s calculated estimate for the minor source 23 account shall not produce total revenues in excess of two 24 hundred fifty thousand dollars during any state fiscal year. 25 d. Moneys in the minor source account are appropriated 26 to the department to pay for reasonable direct and indirect 27 costs of implementing and administering minor source new source 28 review programs as specified in paragraph “b” . 29 7. a. The asbestos account shall include all fees 30 established by the commission to be imposed and collected by 31 the department for accepting notifications involving demolition 32 or renovation projects under the asbestos national emission 33 standard for hazardous air pollutants program pursuant to 567 34 IAC ch. 23. 35 -9- LSB 2577HV (3) 86 da/nh 9/ 13

H.F. 640 b. The department’s calculated estimate for the asbestos 1 account shall be computed to produce total revenues sufficient 2 to pay for reasonable direct and indirect costs of implementing 3 and administering the asbestos national emission standard for 4 hazardous air pollutants program as provided in paragraph “a” 5 on a state fiscal year basis. 6 c. The department’s calculated estimate for the asbestos 7 account shall not produce total revenues in excess of four 8 hundred fifty thousand dollars during any state fiscal year. 9 d. Moneys in the asbestos account are appropriated to the 10 department to pay for reasonable direct and indirect costs of 11 implementing and administering the asbestos national emission 12 standard for hazardous air pollutants program as specified in 13 paragraph “b” . 14 8. Fees established pursuant to this section shall not be 15 imposed for the regulation of an activity that exceeds the 16 requirements of the federal Clean Air Act Amendments of 1990. 17 9. a. The commission or department shall not transfer 18 moneys credited from one account to another account of the 19 fund. 20 b. Notwithstanding section 8.33, any unexpended balance in 21 an account of the fund at the end of each state fiscal year 22 shall be retained in that account. 23 c. Notwithstanding section 12C.7, any interest and earnings 24 on investments from moneys in an account of the fund shall be 25 credited to that account. 26 Sec. 4. EFFECTIVE DATE OF FEES. Notwithstanding section 27 455B.133B, as amended in this Act, or section 455B.133C, as 28 enacted in this Act, the environmental protection commission 29 may establish a designated fee effective on and after January 30 1, 2016. A designated fee is limited to a fee required under 31 this Act to be credited to any of the following funds or 32 accounts: 33 1. For the air contaminant source fund, the operating permit 34 application fee account as provided in section 455B.133B, 35 -10- LSB 2577HV (3) 86 da/nh 10/ 13

H.F. 640 subsection 6, as enacted in this Act. 1 2. For the air quality fund, any of the following: 2 a. The major source account as provided in section 3 455B.133C, subsection 5, as enacted in this Act. 4 b. The minor source account as provided in section 5 455B.133C, subsection 6, as enacted in this Act. 6 c. The asbestos account as provided in section 455B.133C, 7 subsection 7, as enacted in this Act. 8 Sec. 5. CONTINUING EFFECTIVENESS OF EXISTING FEES. Any 9 fee established by the environmental protection commission 10 pursuant to section 455B.133, subsection 8, which is in effect 11 immediately prior to the effective date of this Act shall 12 remain in effect and shall be subject to the provisions of this 13 Act. The fee amount for such a fee in effect immediately prior 14 to the effective date of this Act shall remain in effect until 15 such fee amount is adjusted by the commission as provided in 16 this Act. 17 Sec. 6. TRANSFER OF MONEYS. Any moneys remaining in the 18 air contaminant source fund, as created in section 455B.133B, 19 on the effective date of this Act, shall be transferred to the 20 air emission fee account established within the air contaminant 21 source fund as provided in this Act. 22 Sec. 7. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 23 immediate importance, takes effect upon enactment. 24 EXPLANATION 25 The inclusion of this explanation does not constitute agreement with 26 the explanation’s substance by the members of the general assembly. 27 This bill provides for fees established by the environmental 28 protection commission (commission) and imposed and collected by 29 the department of natural resources (DNR) under division II of 30 Code chapter 455B, relating to regulations on air quality and 31 closely associated with the federal Clean Air Act. The bill 32 relates to the current fee imposed upon regulated pollutants 33 (Code section 455B.133(8)), including under the operating 34 permit program. It also provides for the establishment of 35 -11- LSB 2577HV (3) 86 da/nh 11/ 13

H.F. 640 a new operating permit application fee. Both of these fees 1 are to be credited to newly created accounts within the 2 existing air contaminant source fund created in Code section 3 455B.133B, the air emission fee account and the operating 4 permit application fee account. 5 In addition, the bill provides for three other new fees: for 6 accepting applications for new source review permits submitted 7 by major sources; accepting applications submitted by minor air 8 contaminant sources for construction permits or for providing 9 for registrations, permits by rule, or template permits in 10 lieu of obtaining construction permits under minor source 11 new source review programs; and for accepting notifications 12 involving demolition or renovation projects associated with 13 asbestos. These new fees are to be credited to each of three 14 corresponding accounts established within a new air quality 15 fund, including the major source account, the minor source 16 account, and the asbestos account. 17 The bill provides that if the commission establishes a fee, 18 it must also establish a fee amount based on DNR’s calculated 19 estimate of total revenues from the fee predicted to be 20 credited to the corresponding account sufficient to provide for 21 the reasonable direct and indirect costs of implementing and 22 administering regulations associated with that fee during the 23 state fiscal year, but not to exceed a ceiling amount. DNR 24 must recompute its calculated estimate prior to each state 25 fiscal year (July 1 through June 30) and obtain approval 26 from the commission if an established fee amount must be 27 adjusted for the next state fiscal year. In addition, DNR must 28 annually convene stakeholder meetings at which invitees make 29 recommendations regarding the DNR’s required annual computation 30 of a fee amount to be credited to each account. Moneys in each 31 account are appropriated to DNR to provide for the reasonable 32 direct and indirect costs of implementing and administering 33 regulations associated with that account. 34 The bill prohibits fees from being imposed for the 35 -12- LSB 2577HV (3) 86 da/nh 12/ 13

H.F. 640 regulation of an activity that exceeds the requirements of 1 the federal Clean Air Act. It also prohibits the transfer of 2 moneys between accounts within the same fund, requires that the 3 unexpended balance in an account of the fund at the end of each 4 state fiscal year be retained in that account, and requires 5 that any interest and earnings on investments from moneys in an 6 account of the fund shall be credited to that account. 7 The bill allows the commission to establish fees to be 8 credited to the new accounts of the two funds on or after 9 January 1, 2016. It also provides that any current fees in 10 effect immediately prior to the bill’s effective date are to 11 remain in effect until adjusted by the commission. Finally, 12 moneys remaining in the air contaminant source fund on the 13 effective date of the bill are to be transferred to the fund’s 14 air emission fee account. 15 The bill takes effect upon enactment. 16 -13- LSB 2577HV (3) 86 da/nh 13/ 13