Department of Fish and Wildlife Legislative Response: Hydraulic Project Approval (HPA) Fees, Types, Cost Analysis, and Forecasted Revenue

Overview

Hydraulic Project Approval Legislative Directive

This document is the Department of Fish and Wildlife (WDFW) response to SHB 1128: Section 307 (27) of the 2007-2009 Washington State operating budget requires WDFW to develop a fee schedule for the Hydraulic Project Approval (HPA) program by December 1, 2008.

$1,190,000 of the general fund--state appropriation for fiscal year 2008 are provided solely to replace state wildlife account funds for the hydraulic project permitting program, including the development of a permit fee schedule for the hydraulic project approval program to make the program self supporting. Fees may be based on factors relating to the complexity of the permit issuance. The fees received by the department must be deposited into the state wildlife account and shall be expended exclusively for the purposes of the hydraulic project permitting program. By December 1, 2008, the department shall provide a permit fee schedule for the hydraulic project approval program to the office of financial management and the appropriate committees of the legislature."

The recommended fee schedule is forecasted to generate approximately $4.5 million in revenue each fiscal year, which is expected to offset approximately the same amount in expenses the Department incurs each fiscal year. Chapter 77.55 RCW, which authorizes the Department to issue HPAs for hydraulic projects, does not allow the Department to impose fees for any aspect of the HPA program. The Legislature has never granted the Department authority to charge fees for HPAs.

A 2002 task force report to the legislature provided multiple arguments against instituting fees for HPAs, including:

• HPAs sometimes are duplicative with other permits; applicants should not have to pay for HPAs when other permits cover similar elements.
• HPA fees reward inefficiencies, WDFW should implement cost-saving procedures to make program efficient.
• Levying fees could discourage habitat improvement projects.
• Fees may increase regulatory overlap.

Conversely, the 2002 task force argued that establishing a HPA fee structure would stop subsidizing the costs for "...reviewing and regulating construction projects that impact or harm fish life." The report references four additional points for establishing HPA fees:

• Fees could instill accountability and improve services offered.
• Fees create a funding source for protecting fish and their habitats.
• Fees would foster program improvements that would help protect our state's quality of life.
• Most natural resources permitting programs in state and local government are fee based.

While the task force could not reach consensus on whether fees should be charged for HPAs, they did reach the following condensed conclusions on some parameters that must be considered if fees are adopted.

• Any fees collected should be dedicated to the HPA Program.
• Before any fees are collected the Department needs to demonstrate improvements in the HPA Program.
• Implement a mechanism for periodic review of the HPA Program and an annual report should be produced to report the fees collected.
• Any fees structure should consider the complexity of each type of HPA.
• The Department needs to increase staff accessibility and consultation to applicants prior to applying and paying for HPAs.
• Fees should be equitable and structured to recover the Department's expenses.

To develop a fee schedule meeting the requirements of SHB 1128 WDFW analyzed HPA program data collected over 20 years. Following development of a draft of this document, WDFW convened a meeting of key stakeholders that would be impacted by fees for HPAs and solicited comments from them. We revised the fee schedule in response to some of those comments.

The outline below provides a comprehensive review of the HPA fee schedule, activities involved to recover expenses for issuing HPAs, and the forecasted revenue from HPAs:

1. Common HPA Projects and Customer Base: Describes the customers and the types of HPA projects by businesses and governments.
2. Quantity of HPAs Issued Annually: Defines the number of HPAs the Department is forecasting to issue each fiscal year.
3. Types of HPAs Issued: WDFW recommends five different types of HPAs that the public can purchase or modify, as necessary.
4. Department Costs for Issuing and Managing HPAs: Provides the Department's Administrative and Technical costs for issuing all HPAs.
5. Recommended HPA Fee Schedule: Describes a fee schedule for each HPA type, and a fee schedule that allows the Department to recover costs for issuing permits.
6. Forecasted Revenue vs. Program Costs: Presents the forecasted revenue for all HPAs types, along with the forecasted expenses to issue and manage HPAs.