Legislators Abhor Fee Increases, Sign Off on Them Anyway

After much grumbling, state legislators on two government oversight committees have reluctantly acquiesced to fee increases that will extract millions of dollars from the Tennessee Valley Authority, dentists, veterinarians and an array of Tennessee businesses.
“We had a choice between bad and worse,” declared Senate Government Operations Committee Chairman Mike Bell, R-Riceville, after his committee and its House counterpart, meeting jointly, more or less signed off Wednesday on the fee increases.
He and other members of the panels also said they are looking for ways to give the committees more teeth and to hold government departments, boards and commissions more accountable.
“This is a place to fuss,” said House Republican Caucus Chairman Glen Casada, R-Franklin, speaking of last week’s special meeting for consideration of rules proposed by various state entities.

Things will go beyond fussing when the General Assembly returns into session in January and the Government Operations Committees resume regular weekly meetings. Casada made that prediction in response to a remark that most of the meeting seemed devoted to “chewing out” government officials.
“I think you’re going to see even more chewing in the committee next year,” he said.
Officially, the committees gave a “neutral recommendation” to one set of Tennessee Department of Environment and Conservation (TDEC) fee increases for entities emitting air pollution and made no decision on increases for those in the radiological health arena. The latter range from X-ray machines operated by doctors, dentists and veterinarians to companies licensed to store radioactive waste.
But as a practical matter, the official committee inaction had the same effect as approval of the rules. Under state law, the panels have a right to reject rules, including fee increases promulgated by government entities; but the rejection wouldn’t take effect until next year when the Legislature is back in session and adopts the annual “omnibus rules bill,” which amounts to final legislative approval of the hundreds of rules and regulations adopted annually by various state agencies, departments, boards and commissions.
“We need something between disapproval and the nuclear option,” said Rep. John Ragan, R-Oak Ridge, a member of the House panel.
Under the new air pollution control permit rules, the fee will increase from $39 per ton of emitted pollutants to $56 per ton for electricity-generating units, which covers TVA steam plants. For businesses and manufacturers that produce pollution, the fee increases from $39 to $40.
The new fee levels were set by TDEC after extensive negotiations with TVA and affected industries, represented by the Tennessee Chamber of Commerce and Industry. Collectively, the new pollution fees will bring in an extra $3 million per year to keep the program on sound financial footing, proponents said.
TVA is basically neutral on the increased fees that it will pay, said Alan M. Leiserson, a TDEC attorney. New federal regulations require more extensive monitoring and enforcement activities, he said, driving up program costs.
Wayne Scharber, a Chamber vice president, appeared before the panels to urge approval, assuring the lawmakers that the new levels are necessary to comply with a law requiring fees be high enough to cover the cost of enforcement programs.
But the legislators were not convinced.
“Fee increases are so abhorrent to me… It’s kind of tough to do (approve the increases) with what you are providing to us,” Bell told Leiserson at one point. “We have a strong aversion to raising fees.”
TDEC operates its air pollution enforcement under an agreement with the federal government. If the state fails to meet federal standards, the federal government could take over enforcement and apply a “presumptive fee” that would be even higher than the new levels proposed by TDEC, Scharber and Leiserson said.
The same situation applies in the radiological health program. The fee increases there amount to more than 30 percent on average, varying considerably according to the type of permit held, and will bring in about $1.3 million per year in revenue for the program.
For X-ray machines, the fee is levied on the basis of how many “tubes” a given machine has. Some dental X-ray machines have one, some two. The fee will increase from $65 to $85 per tube for dental X-ray machines. There are seven categories of “tube” fees. For an “industrial and educational radiation” machine, the fee increases from $900 to $1,170.
There are multiple categories of licenses for handling radiological materials. For example, the annual fee for a license for “radiation inspection services” will increase from $600 to $850, according to TDEC documents. The fee for a “low level radioactive waste disposal facility” will increase from $375,000 to $450,000.
The legislators questioned TDEC officials and Scharber at length about several aspects of program operations, ranging from the asserted need to keep about $1 million in reserve for the air pollution enforcement program to the increased mileage rate paid to state employees for their trips in making inspections.
A general theme was that TDEC was not providing them with enough information to justify operating expenses and show that efforts are underway to cut costs and operate more efficiently.
On the efficiency front, Leiserson said the radiological health program has reduced its staff in recent years from 73 to 60 employees, but costs have still escalated as federal regulations change, requiring more detailed inspections in some categories, and the number of licenses issued has increased in some cases — from about 14,000 X-ray tubes in 2001 to 18,600 in 2012, for example.
Rep. G.A. Hardaway, D-Memphis, complained that TDEC had not investigated the impact of the higher fees on the cost of providing health care. Rep. Ron Lollar, R-Bartlett, complained that legislators had not been advised in advance of fee increase plans and that top-ranking officials had not appeared personally instead of sending representatives.
“They need to take some of the heat, too. They need to keep us informed of what they’re doing,” said Lollar. “The way things happened in the past are not necessarily the way we want things to happen in the future.
“A new day is coming,” he said.

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