DOVER – Fees connected to regulatory programs services provided by the Delaware Department of Natural Resources and Environmental Control (DNREC) and the Delaware Department of Transportation (DelDOT) will be receiving long-awaited updates thanks to legislation sponsored by Rep. Deb Heffernan and Rep. Eric Morrison.
The fees – like those charged by DNREC’s Divisions of Water, Air Quality, Waste and Hazardous Substances, and Watershed Stewardship for permit applications and renewals, registrations, inspections and licenses – fund 52% of DNREC’s budget.
These fees have not changed since 1991.
In the past 34 years, expenses for employee salaries, technology, administrative costs and new program responsibilities have increased significantly. However, because their designated funding source remains the same, sacrifices have had to be made: staff positions have gone unfulfilled, monitoring equipment has not been repaired, inspections have not been done, and money that could go to other environmental uses is filling that revenue gap. So while costs have increased, income has not.
HB 175, sponsored by Rep. Deb Heffernan, updates certain DNREC statutory fees and establishes or updates certain permit and licensing fees for regulatory activities within the DNREC divisions of Air Quality, Waste and Hazardous Substances, Water, and Watershed Stewardship.
The intent of the new and increased fees is to bring revenue generated by fees more in line with the cost of the regulatory programs and activities they support, including the cost of employees who work in those areas. By increasing revenue via fee changes rather than requesting more funding from the State General Fund, DNREC is ensuring that the individuals and entities who use the services are funding the associated costs, rather than pushing that burden on Delaware taxpayers.
“Delawareans rely on DNREC to protect our air, water, and coastline, and I think we can all agree that they should have the resources they need to do that job well,” said Rep. Debra Heffernan.
“It’s been more than 30 years since DNREC’s fee structure was last updated, and since then, the cost of providing their essential services has increased significantly. HB 175 will give DNREC the tools and funding that they need to protect our environment effectively and optimize the permitting process, all while making sure that the entities who use DNREC’s services are the ones paying for those costs, not the taxpayers.”
The projected revenue for these programs with the proposed fees is $7.2 million, compared to $1.9 million if fees are left unchanged. That’s a $5.3 million increase in revenue if the proposed fees are enacted.
“DNREC has a responsibility to protect, monitor and improve Delaware’s water, air, land and coast. That is the purpose of our regulatory programs, and those activities require employees, technology, research and other costs. Not having funding to support those programs means we are not protecting those resources as efficiently as we could,” said DNREC Secretary Greg Patterson.
“DNREC is appreciative of the legislators – and many of the businesses and organizations that pay these fees – understanding that it is time to make sure the permits, license and other fees we charge for our services actually cover our costs.”
The fee proposals under HB 175 are as follows:
- Division of Air Quality: fee increases and new fees affecting construction, operation and variance permits for “natural minor” equipment that create air emissions, emergency generators, and complex natural minor permits
- Division of Waste and Hazardous Substances: fee increases affecting hazardous waste facilities, underground storage tanks, aboveground storage tanks, accidental release prevention program, gas dispensing facilities, solid waste facilities, recycling and composting facilities, and scrap tire disposal businesses.
- Division of Water: fee increases, new fees, and fee decreases affecting licenses for installers, inspectors and operators, wells, water system allocations, wastewater systems, and subaqueous permits/leases.
- Division of Watershed Stewardship: fee increases and new fees affecting sediment and stormwater plan review and beach construction.
There will be no increased fees for State Parks, such as park entrance fees, or wildlife activities, including fees associated with fishing and hunting.
Fee changes outlined in HB 175 will become effective 180 days after the bill’s enactment, though the additional $5.3 million in revenue will take multiple years to be fully realized as many of the changed fees are for permits and renewals that are not annual.
“It’s time for us to bring our DNREC user fees in alignment with the real costs associated with the services that are provided to our community,” said Sen. Trey Paradee, co-chair of the Joint Finance Committee and Senate prime sponsor of HB 175.
“By modernizing these fees, we’re enabling DNREC to continue funding its critical environmental preservation and management work — all while ensuring that the users of these DNREC services are the ones bearing the costs.”
HB 175 is supported by the Delaware State Chamber of Commerce, the Committee of 100, the League of Women Voters of Delaware, the Delaware Nature Society, and the Sierra Club Delaware Chapter.
HB 164, sponsored by Rep. Eric Morrison, aims to create more reliable funding sources and increase revenue in the Transportation Trust Fund (TTF).
The TTF was established in 1987 to provide a dedicated source of revenue to finance the construction and maintenance of Delaware’s transportation system.
Revenue generated by DelDOT’s operations, primarily tolls, motor vehicle and driver fees, and motor fuel taxes, goes into the TTF.
In turn, the TTF supports DelDOT’s work to improve safety, maintain roads and bridges, provide new multi-modal connections, deliver new microtransit routes in the DART Reimagined Plan, address frequently flooded roads, and modernize tolling equipment.
“In the 10 years since we last increased fees, DelDOT has worked to maintain and improve our transportation system while providing the services that keep Delaware moving. Additional revenue is necessary for two primary reasons – rising costs and declining motor fuel tax revenue. These fee increases will allow the department to continue to meet the growing need for infrastructure investments across our state in the years ahead,” stated Secretary of Transportation Shanté Hastings.
There are multiple factors contributing to the need for more reliable funding sources in the TTF, including current and projected motor fuel tax decreases, inflationary increases for professional services and construction, and operating cost increases.
All states and the District of Columbia employ a state motor fuel tax (MFT) in addition to the 18.4 cents per gallon federal MFT.
Gas tax rates vary greatly state by state, and range from 8.95 cents per gallon to 62.9 cents per gallon. Delaware’s current MFT is 23 cents.
MFT’s were once considered a well-designed user fee for state-funded roads and other transportation infrastructure, because the vehicles that used these roads were gas-powered. However, innovation in vehicle construction and fueling methods has naturally led to a need for a change in how and where fees are collected.
“Delaware’s motor fuel tax was established in 1970. We are living in a wildly different world now then we were then, and our transportation fee system needs to reflect that,” said Rep. Eric Morrison.
“We need to commit to working closely with DelDOT for regular reassessments to ensure that everyone who uses our roads are contributing fairly to their maintenance and safety, without adding any undue burdens to taxpayers.”
Under HB 164, Delawareans would see an increase in toll charges on Route 1 at Biddles Plaza (Middletown) and Dover, on the I-95 toll, and the US301 State Line Toll. The Route 1 and I-95 toll charges have not changed since 2014 and 2007, respectively. Increases will range from $0.50 to $1.50.
Other changes under HB 164 include a new Alternative Fuel Vehicle Registration Fee, and new and increased DMV fees.
“Delaware is just one of a handful of states who have not implemented an electric vehicle registration fee — despite the work we’re doing to increase our EV infrastructure,” said Sen. Marie Pinkney, Senate prime sponsor of HB 164. “This legislation will adjust for the growing adoption of EVs while maintaining a reliable stream of transportation revenues.”
Both bills now head to the Senate.
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