ARIZONA HOUSE OF REPRESENTATIVES

Fifty-sixth Legislature

First Regular Session

House: APPROP DP 9-6-0-0

HB 2573: environment; 2023-2024

Sponsor: Representative Livingston, LD 28

House Engrossed

Overview

Contains provisions relating to the environment needed to implement the FY 2024 budget.

History

Arizona Water Protection Fund

The Arizona Water Protection Fund provides grants for projects that protect water quality and quantity and maintain, enhance and restore rivers, streams and riparian habitats (A.R.S. § 45-2111). This fund is overseen by a commission that consists of two ex officio members, two advisory members and nine appointed members (A.R.S. §§ 45-2103 and 45-2104).

The Arizona Department of Water Resources (ADWR) provides administrative, technical and legal support to the commission as funding is available (A.R.S. § 45-2114). Since the FY 2013 Environment Budget Reconciliation Bill (BRB), the commission has been authorized to grant ADWR up to $336,000 of the fund's unobligated balance to pay for administrative costs (Laws 2012, Chapter 303, § 10).

Underground Storage Tank Revolving Fund

The Underground Storage Tank Revolving Fund covers certain costs for corrective and non-corrective actions and remediation involving leaking tanks and reimburses ADEQ for costs related to corrective action requirements and fund administration (A.R.S. § 49-1015). This fund receives revenue from a 1˘ excise tax that is annually assessed on each gallon of regulated substances stored in most USTs (A.R.S. § 49-1031). 

ADEQ has been authorized to transfer monies from this fund for administrative costs since the FY 2006 Environment BRB (Laws 2005, Chapter 332, § 5). The amount transferred has been set at $6,531,000 since the FY 2008 Environment BRB (Laws 2007, Chapter 262, § 7). Beginning with the FY 2019 Environment BRB, ADEQ also could use these monies to remediate sewage discharges in Naco and other border areas (Laws 2018, Chapter 280, § 5).

Arizona Navigable Stream Adjudication Commission

The Arizona Navigable Stream Adjudication Commission is a five-member commission that reviews historical evidence, conducts investigations and determines the navigability of Arizona’s 39,039 watercourses at the time of statehood to determine the title and ownership of the streambeds (A.R.S. § 37-1121 et seq.). Since the FY 2016 Environment BRB, the commission has received an appropriation from the Arizona Water Banking Fund to pay for legal expenses (Laws 2015, Chapter 13, § 7).

Water Quality Assurance Revolving Fund

The Water Quality Assurance Revolving Fund (WQARF) finances efforts to identify, monitor and remediate groundwater and overlying soil that has been contaminated by hazardous substances. Statute establishes a formula for providing $18 million annually to WQARF through a combination of various revenues and corporate income taxes (A.R.S. § 49-282). However, this funding formula has been waived since FY 2008 in favor of reducing the amount from corporate income taxes and appropriating monies from several other program funds ADEQ administers. More recently, the FY 2021-2023 Environment BRBs caps the amount of corporate income tax monies transferred to WQARF at $15 million (Laws 2020, Chapter 55, § 4, Laws 2021, Chapter 407, § 11, and Laws 2022, Chapter 312, § 7).

Vehicle Emission Testing Fees

To help Arizona comply with the Clean Air Act, ADEQ operates the vehicle emissions inspection program. Vehicles registered in Area A (the Phoenix metropolitan area and parts of Pinal and Yavapai Counties) and Area B (the Tucson metropolitan area), or that are used to commute to these areas, must pass an inspection to ensure compliance with minimum emissions standards. A vehicle generally cannot be sold or registered in these metropolitan areas until it has passed this inspection (A.R.S. §§ 49-541 and 49-542). Since the FY 2018 Environment BRB, ADEQ has been directed to charge the same fees it charged in the previous fiscal year for tests in Area A (Laws 2017, Chapter 308, § 9).

Arizona Department of Agriculture Fees

The Arizona Department of Agriculture (ADA) administers various program funds and charges fees for services associated with these funds. The ADA's advisory council is a five-member body that reviews policy and assists the director in drafting administrative rules and the department's proposed budget (A.R.S. § 3-104).

The Legislature has set specific conditions on ADA's fee-setting practices since the FY 2013 Environment BRB (Laws 2012, Chapter 303, § 15). Similar to BRBs from previous years, part of the FY 2023 budget bills allowed the department, at the advisory council's recommendation, to continue, increase or decrease existing fees for services in FY 2022. In doing so, the Legislature declared its intent that additional fee revenue could not exceed:

1)   $218,000 to the state General Fund;

2)   $113,000 to the Pesticide Trust Fund; and

3)   $26,000 to the Dangerous Plants, Pests and Diseases Trust Fund.

As part of the FY 2023 budget, the ADA was exempted from rulemaking requirements for the purpose of setting these fees until July 1, 2023 (Laws 2022, Chapter 312, § 9).

Provisions

1.   Authorizes the Arizona Water Protection Fund Commission to grant to ADWR up to $336,000 of its fund's unobligated balance for administrative costs in FY 2024. (Sec. 1)

2.   Authorizes ADEQ to use up to $6,531,000 from the Underground Storage Tank Revolving Fund in FY 2024 for administrative costs and to remediate sewage discharge issues in Naco and other border areas of Arizona. (Sec. 2)

3.   Allows monies appropriated to the Arizona Navigable Stream Adjudication Commission from the Arizona Water Banking Fund to be used for legal fees in FY 2024. (Sec. 3)

4.   Limits to $15,000,000 the amount of corporate income tax monies transferred to WQARF in FY 2024. (Sec. 4)

5.   Directs ADEQ to charge vehicle emissions testing fees in FY 2024 that do not exceed the fees charged in FY 2023 for testing in Area A. (Sec. 5)

6.   Exempts ADEQ from rulemaking requirements until July 1, 2024 for setting vehicle emissions testing fees. (Sec. 5)

7.   Authorizes ADA to continue, increase or lower existing fees charged in FYs 2022 and 2023 in FY 2024 for services provided in that fiscal year. (Sec. 6)

8.   Contains a legislative declaration involving revenues generated from ADA fees. (Sec. 6)

9.   Exempts the ADA from rulemaking requirements until July 1, 2024 for setting fees. (Sec. 6)☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note

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13.                    HB 2573

14.  Initials PAB           Page 0 House Engrossed

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