* 1999-00 through 2001-02 reflect enacted appropriations.
* 2002-03 and 2003-04 reflect Executive recommended appropriations.

The Department of Environmental Conservation (DEC) is responsible for conserving and improving the State's natural resources and environment, as well as controlling water, land and air pollution, to enhance the health, safety and general welfare of New York State's residents. DEC responsibilities also include administering previous environmental bond act funds, and administering the State's Environmental Protection Fund (EPF).

The Department is included in the Transportation, Economic Development and Environmental Conservation appropriation bill.

State Operations

The Executive proposes 3,301 full-time equivalent (FTE) positions in State Fiscal Year (SFY) 2003-04, a net decrease of 234 positions below SFY 2002-03 levels, attributed to an early retirement incentive within the Department. This net decrease results from the attrition of 171 General Fund FTE's, combined with the attrition of 63 Special Revenue Funds Other FTE's.

The Executive proposes State Operations General Fund appropriations totaling $99,321,000 in State Fiscal Year (SFY) 2003-04, reflecting a net decrease of $9,715,500 or 8.9 percent, from SFY 2002-03 levels. Included in this decrease are the following:

• an $8.6 million personal service decrease resulting from the reduction of 241 FTE positions; including $4.7 million related to half-year savings from the reduction of 171 positions from an early retirement incentive within the Department, $3.9 million related to full-year savings from 70 positions shifted to Special Revenue-Other Funds and Capital Projects Funds within the Department (40 are shifted to the Environmental Protection Fund (EPF), seven to the Clean Water State Revolving Loan Fund (CWSRF), 18 to the Environmental Regulatory Account and five to the Mined Land Reclamation Account);
• a $1.3 million nonpersonal service net decrease in the Operations Program resulting from General Fund leasing cost shifts totaling $1.6 million: $330,000 to the Low Level Radioactive Waste Account; $500,000 to the Conservation Fund; $500,000 to the Oil Spill Fund; and $255,000 to the Recreation Account. These cost shifts are offset by a $300,000 increase for vehicle financing, real property leases, electricity, telecommunications and supplies; and
• a $100,000 nonpersonal service increase for inflationary costs and a $100,000 increase for Maintenance Undistributed Funds in the Environmental Enforcement Program, for costs related to the New York City watershed agreement.

The Executive proposes State Operations Special Revenue Other appropriations totaling $211,331,800, a net decrease of $16,292,400 or 7.2 percent. This decrease is primarily related to the elimination of $28,000,000 from the Site Investigation and Construction Account of the Hazardous Waste Remedial Fund which reflects the proposed transfer of Superfund administration costs (254 positions) to a new Capital Projects Fund, the Remedial Program Transfer Fund (see Remediation Programs section below). This decrease is partially offset by $11.7 million of increases from the following:

• $2.5 million from the Waste Tire Management and Recycling Account to fund a new Waste Tire Management Program (see new Environmental Fee Increases section below);
• $1.1 million from the shift of 18 FTE positions from the General Fund to the Environmental Regulatory Account and inflationary costs;
• $1.1 million related to nonpersonal service cost shifts from the General Fund Operations Program to the Indirect Account;
• $500,000 in the Environmental Enforcement Conservation Fund Account for technologies to increase law enforcement productivity. This increase corresponds to a reduction in overtime law enforcement personal service costs;
• $500,000 increase in the Operations Conservation Fund Account related to the shift of General Fund lease costs;
• $400,000 increase from the shift of seven positions from the General Fund to the Clean Water State Revolving Loan Fund (CWSRF) and inflationary increases;
• $300,000 from the shift of four positions from the General Fund to the Mined Land Reclamation account and inflationary increases;
• $300,000 related to a shift in General Fund nonpersonal service costs to the Low Level Radioactive Waste Account as well as inflationary increases. These costs will be funded from New York State Energy Research and Development Authority (NYSERDA) payments from monies rebated to New York from the Federal government;
• $300,000 increase in the Forest Program Natural Resources Account for the full-year cost of seven positions associated with oil and gas lease expansion;
• $200,000 increase in the Forest and Lands Recreation Account to reflect a shift of non-personal service costs from the General Fund;
• $100,000 for the Conservationist Magazine associated with an anticipated increase in the subscriber base;
• $4,400,000 in personal service and fringe benefit costs for inflation and contractual services; and
• $100,000 decrease in Maintenance Undistributed funds in the Forest and Lands Program Natural Resources Account for the U.S. Forest Service Forest Inventory and Analysis Program.

The Executive also proposes a State Operations Special Revenue Fund Federal appropriation of $86,928,000 in SFY 2003-04, a decrease of $6,441,000 or 6.9 percent from SFY 2002-03 levels. This decrease is attributed to the following Federal environmental conservation grant changes:

• $5,100,000 decrease in Lands and Forests Grants;
• $3,800,000 decrease in Water Grants;
• $500,000 decrease in Air Resources Grants;
• $200,000 decrease in Solid Waste Grants;
• $200,000 decrease in Indirect Grants;
• $1,800,000 increase in Fish, Wildlife, and Marine Grants; and
• $1,600,000 increase in Conservation Spills Management Grants.

Conservation Fund

The Executive proposes a total of $47,005,000 from the main account of the Conservation Fund in SFY 2003-04, an increase of $1,859,700 or 4 percent from SFY 2002-03 levels. This increase is attributable to fishing and hunting license fee increases enacted as part of the SFY 2002-03 State budget. This level maintains funding of $1,600,000 for costs associated with the operation and maintenance of the Department's automated computer license system, and $1,000,000 for the Return a Gift to Wildlife Program. Other Conservation Fund appropriations include:

• $77,000 from the Guides License Account unchanged from SFY 2002-03 levels;
• $100,000 from the Habitat Account for the improvement and development of public access for wildlife-related recreation and study, unchanged from SFY 2002-03 levels;
• $210,000 from the Surf Clam/Ocean Quahog Account, unchanged from SFY 2002-03 levels;
• $206,000 from the Migratory Bird Account, unchanged from SFY 2002-03 levels; and
• $2,265,000 from the Marine Resources Account, reflecting a reduction of $80,000 in funding for the Department's Lobster Trap Tag Program.

Environmental Fees

The Executive recommends several environmental fee increases and the imposition of new fees projected to generate $44,850,000 in SFY 2003-04 and $67,350,000 on a full annual basis. These proposals would:

• impose a new $2.50 per tire fee on all new tire sales. Revenue from this fee would support a new Waste Tire Management Program (see Waste Tire Management section below), generating $22,500,00 in SFY 2003-04 and $45,000,000 in SFY 2004-05. This fee would provide General Fund relief of $20,000,000 in SFY 2003-04 and $42,500,000 on a full annual basis;
• create a new Hazardous Waste Generator Surcharge, which would be deposited into a new Remedial Program Transfer Fund (see Remediation Programs section below). This new surcharge would range from $4,000 up to $360,000 per facility each year and is estimated to result in additional annual revenues of $18,100,000;
• increase State Pollution Discharge Elimination (SPDES) fees on power plants and industrial facilities. Current fees are $40,000 for power plants and range from $375 to $37,500 for industrial facilities. Under the Governor's proposal, fees would increase to $50,000 for power plants and range from $475 to $47,500 for industrial facilities, resulting in additional annual revenues of $1,500,000;
• double Petroleum Bulk Storage (PBS) facility registration fees. The current range of $50 - $250 for five years would increase to $100 - $500, resulting in additional annual revenues of $1,300,000. Currently PBS facility registration fees are deposited into the Oil Spill Fund. The Governor proposes transferring these funds to a new Remedial Program Transfer Fund (see Remediation Programs section below).
• increase fees for underground and surface mining. Current fees range from $1,200 to $2,000 per acre. Under the Governor's proposal this range would be increased to $1,500 to $4,000 per acre, resulting in additional annual revenues of $750,000;
• increase various user fees at DEC campgrounds and facilities. These non-statutory fee increases are anticipated to result in additional annual revenues of $500,000; and
• increase by over 50 percent existing oil, gas and solution mining depth fees resulting in additional annual revenues of $200,000. Current fees which are partially based upon the depth of the well drilled, range from $125 to $2,625 per 500 feet.

Waste Tire Management Program

The Executive proposes Article VII legislation to create a new Waste Tire Management Program. This Program would create a funding source and mechanism for abating existing scrap tire stockpiles and develop in-State markets for recycling stockpiled, and newly generated, waste tires.

This Program would be funded by a new fee of $2.50 per tire on new tire sales. It is anticipated that this fee will result in revenues of $22,500,000 in SFY 2003-04 and $45,000,000 on a full annual basis. The Governor's proposal deposits these funds into the General Fund for budget relief and transfers $2,500,000 to the Waste Tire Management and Recycling Account for abatement of non-compliant waste tire stockpiles, market development, demonstration projects, research, education, capital investments and administrative costs.

Aid to Localities

The Executive proposes total local assistance funding of $461,000 in SFY 2003-04, a net decrease of $4,049,030 or 89.8 percent, below SFY 2002-03 levels. This net decrease is attributable to the following:

• an $11,000 appropriation for the Village of Pulaski to construct sewer collection systems, reflecting a $4,700 increase above SFY 2002-03 levels;
• a $450,000 appropriation for Adirondack Landfills (Essex and Hamilton Counties), reflecting no change from SFY 2002-03 levels;
• a $2,624,230 decrease related to the elimination of funding for local assistance grants from the Community Projects Fund;
• a $1,057,000 decrease related to the transfer of funding for the State's participation in various water commissions (Interstate Environmental, Susquehanna River Basin, Ohio River Basin, New England Interstate, Delaware River Basin, and Great Lakes) to the Environmental Protection Fund (EPF);
• a $200,000 decrease related to the elimination of funding for Cornell Community Integrated Pest Management; and
• a $172,500 decrease related to the elimination of funding for the Town of North Elba/ORDA Promotion.

Capital Projects

The Executive recommends Capital Projects Fund appropriations totaling $505,154,000 in SFY 2003-04, a $133,723,000 or 20.9 percent decrease from SFY 2002-03. This net decrease is a result of the following:

• a $142,481,000 decrease in appropriations from the 1996 Clean Water/Clean Air Bond Act. The unappropriated portion of the $1.75 billion authorized by the Bond Act was appropriated in SFY 2002-03. An appropriation of $2,527,000 is recommended from the Bond Act Implementation Fund to maintain support for staff;
• a $125,000,000 decrease in appropriations from the Environmental Protection Fund. A total of $250,000,000 was appropriated in SFY 2002-03, including a $125,000,000 enhancement appropriation from SFY 2001-02 which was not included in the SFY 2001-02 enacted Budget;
• a $3,066,000 decrease in Capital Project Fund appropriations. This funding includes capital support for various infrastructure improvement projects at State campground facilities, education centers and other sites, as well as various shore protection and flood control projects;
• a $23,840,000 increase in Capital Projects Fund - Advance appropriations. This is mainly attributable to a new advance appropriation of $25,000,000 for remedial and monitoring work at inactive hazardous waste disposal sites;
• a new $105,000,000 appropriation from the Governor's proposed Remedial Program Transfer Fund (see Remediation Programs section below);
• a $10,866,000 decrease in appropriations from the 1965 Pure Waters (PWA) and 1972 Environmental Quality Bond Acts (EQBA). A total of $20,025,000 was included in SFY 2002-03 for new and redirected funds. The Governor proposes $9,159,000 in additional PWA ($8,168,000) and EQBA (991,000) appropriations in SFY 2003-04 to support Long Island Sound Comprehensive Management Plan projects and to implement wastewater treatment improvement projects in small upstate communities;
• a $7,670,000 increase in Federal Capital Projects Fund appropriations. Of this amount, $4,045,000 is attributable to an increase in federal capitalization grants for the Clean Water State Revolving Fund (CWSRF) from $146,825,000 to $150,870,000. The remaining amount is attributed to $2,500,000 in new Federal Forest Legacy Program grants and a $1,350,000 increase in Federal Marine Resources funding, offset by a decrease of $225,000 in federal grants for the Clean Vessel Act Pumpout Grant Program;
• a $809,000 increase in appropriations from the Capital Projects Fund for the CWSRF State match. The Governor proposes a total of $30,174,000 for this purpose, supported by bonds issued by the Environmental Facilities Corporation (EFC); and
• $11,000,000 in new appropriation authority from the Capital Projects Fund for operational services of the Department, supported by EFC bonds.

Environmental Infrastructure Bonding

The Executive proposes to authorize the use of proceeds from bonds issued by EFC to support $128,000,000 in DEC programs as follows:

• $10,000,000 for the Onondaga Lake Cleanup Project;
• $11,000,000 for DEC Capital Projects expenditures;
• $43,000,000 in projects supported by the Environmental Protection Fund; and
• $64,000,000 for the identification, classification, investigation and remediation of inactive hazardous waste disposal sites.

In order to accommodate these costs, the Governor proposes to increase EFC's bond cap for environmental infrastructure projects from $135,000,000 to $277,000,000. This authorization also permits EFC to issue bonds to support the West Valley Demonstration Project. It is anticipated that EFC would issue $181,000,000 in State appropriation-backed bonds in SFY 2003-04, which also includes the SFY 2003-04 State match for the CWSRF and reappropriations for environmental infrastructure projects authorized in SFY 2002-03.

Remediation Programs

The Executive proposes a new $138,000,000 Remedial Program Transfer Fund, which would be supported as follows:

• $64,000,000 from State taxpayer supported bonds to be issued by the Environmental Facilities Corporation;
• $5,000,000 from the General Fund;
• $13,000,000 in existing Superfund fees (Generator Fees and Special Assessments);
• $5,100,000 in Superfund Cost Recoveries;
• $18,100,000 from a new Hazardous Waste Generator Surcharge; and
• $33,000,000 in Oil Spill Fund revenues, including $25,300,000 in existing Petroleum Fees; $6,500,000 in Petroleum Cost Recoveries and $1,300,000 from an increase in Petroleum Bulk Storage Fees.

Under this new Program, the statutory Inactive Hazardous Waste Disposal Site (State Superfund) and Oil Spill Programs would be merged with the Department of Environmental Conservation's administrative Voluntary Cleanup Program (which would be codified), to create a single set of clean-up standards. This would be accomplished through Article VII legislation which, generally, would:

• include "hazardous substances" within the definition of "hazardous waste";
• create various liability releases and exemptions;
• establish new standards for level of clean-up;
• establish a new Brownfield Redevelopment Area Program; and
• provide funding sources and financial incentives.

The Executive proposes to transfer $33,000,000 from the new Transfer Fund to support the Oil Spill Program (currently supported 100 percent by industry sources), equivalent to the amount of revenues redirected from the Oil Spill Fund to the new Transfer Fund. The remaining $105,000,000 would be utilized to support the Governor's revised Superfund Program and Voluntary Cleanup Program (VCP), as follows:

• $90,000,000 for Superfund projects;
• $8,000,000 to support the Voluntary Cleanup Program; and
• $7,000,000 for citizen participation and Brownfield Redevelopment Area grants.

In addition to codification of the VCP, the Governor proposes amendments to the Environmental Restoration Program of the 1996 Clean Water/Clean Air Bond Act through Article VII legislation. Specifically the legislation would:

• eliminate the ownership before investigation requirement;
• increase the State share to 90 percent and 100 percent for "off-site" contamination;
• allow municipalities to leverage Federal or other assistance to fund their 10 percent share;
• permit municipal cost recovery prior to State reimbursement and eliminate the profit-sharing requirement;
• allow the State not to recover its costs from responsible parties whose liability arises solely from ownership of the property after hazardous waste was disposed of at the property; and
• allow interim remedial measures to be used in non-emergency cases without public participation and without requiring full cleanup of contamination.

Environmental Protection Fund

The Executive recommends appropriations totaling $125,000,000 from the Environmental Protection Fund (EPF) for SFY 2003-04. The Governor proposes these appropriations as lump-sum amounts for each of the Accounts within the EPF which, if enacted, would provide no statutory guidance on the allocation of funds to be spent on each EPF category.

In addition, the Executive proposes numerous new project categories and amendments to the EPF statute (see Article VII section below). The Executive's proposed allocations for the EPF include $34,150,000 in cost shifts and the addition of new purposes. The Executive proposes to support $43 million of EPF disbursements in SFY 2003-04 with EFC bonds. In addition, the Executive proposes to sweep $20,000,000 from the EPF for General Fund relief.

Although the appropriations are presented as lump-sums, the Governor maintains that in SFY 2003-04, the EPF would be allocated as follows (categories in italics are new programs and/or offloads):

Article VII Proposals

The Executive proposes Article VII legislation which would:

• refinance and alter the State Superfund (see Remediation Programs section above);
• amend the Environmental Restoration Program (Brownfields) of the Clean Water/Clean Air Bond Act (see Remediation Programs section above);
• permanently authorize the use of the EPF for stewardship and parks infrastructure projects, the assessment of natural resource damages in the Hudson River, the implementation of the Hudson River Estuary management plan, county soil and water conservation district activities, the Hudson River Park Project, historic barns projects, beneficial end-use projects at closed municipal landfills and the new Hudson River Valley Commission. This legislation would also amend language in the State Finance Law to increase the maximum amount of money available for transfer if the Environmental Protection Fund faces a fund shortfall from $235,000,000 to $255,000,000;
• create a new Waste Tire Management Program to be financed by a new $2.50 per tire fee on new tire sales (see Waste Tire Management Program section above);
• increase State Pollution Discharge Elimination fees for industrial facilities and power plants to generate an additional $1.5 million per year (see New Environmental Fee Increases section above);
• increase oil and gas depth fees to generate an additional $200,000 per year (see New Environmental Fee Increases section above);
• increase fees for underground and surface mining to generate an additional $750,000 per year (see New Environmental Fee Increases section above);
• make permanent the Heavy Duty Vehicle Inspection and Maintenance Program (set to expire in October 2003) to continue the deposit of approximately $620,000 in annual fees into the Mobile Source Account of the Clean Air Fund to offset the cost of implementing the Program; and
• merge the Greenway Communities Council and Greenway Heritage Conservancy into a new Hudson River Valley Greenway Commission, resulting in administrative savings of $60,000. The Governor proposes a $765,000 appropriation in the Environmental Protection Fund to support the Commission and maintain funding for five positions.