Table 1. Total Emission Fees Assessed, Air Pollutant Emissions, and Average Fee Rates
By Ton, FY 2003
Total Tons Emitted
Total Emissions Assessed a Fee
Emissions Fee, Estimated
Average Dollar per Ton Cost
Facilities Grouped by Tons of Emissions
50,000 to 95,000 8,000 to 50,000 4,000 to 8,000
Number of Accounts
Source: Calculated by authors from “FY 2003 Air Emissions Fee Data” provided by TCEQ, November 2002.
Rather than simply lifting the cap and assessing the full $28.63/ton fee on all emissions, another option would be to reduce the dollar per-ton cost while removing the cap. For example, if the fee was lowered to $18/ton and the cap was lifted, the state would gain the same amount – or slightly more -- of revenue, but the cost would be more equitably distributed among large and small facilities (see Table 4).
The federal government allows states to adjust their fee collections and satisfy the fee demonstration requirement for Title V by providing EPA with a “detailed fee demonstration” if fees are less than the $25 (adjusted) per ton per year fee (EPA, Title V Fee Demonstration and Additional Fee Demonstration Guidance, Nov. 1993).
The fee change would affect different sized facilities in various manners, as facilities releasing large amounts of pollution would pay more per-ton and facilities releasing small amounts would pay less.
Another option would be to raise the air emissions cap from 4,000 to 8,000 tons. Table 5 shows how such a change would impact different categories of companies. An analysis of the FY 2003 Emissions Fee Database shows that only about 50 of these companies would be impacted by this change, only about 30 of them significantly (more than $50,000). In the process, about $7 million more would be raised to adequately fund the Title V Program, or alternatively, fees could be reduced for the vast majority of fee payers.
In conclusion, we recommend that the 78th Legislature change the Title V air emission fee to either eliminate or reduce the “volume discount.” Doing so would raise more revenues for the Clean Air Program and give large industries an economic incentive to reduce pollution. (By charging the most-polluting industries more, the TCEQ might also be able to reduce fees for all industries overall.)