Committee reviews bill shifting CAFO permit fees from agriculture fund to ANR; JFO calls revenue impact de minimis

The Senate Committee on Finance reviewed language that would clarify ANR's authority over concentrated animal feeding operation (CAFO) permits and shift fee collection for CAFO permits from the agricultural water quality special fund to ANR's environmental permits fund.

Staff and witnesses described the change as part of a federal corrective-action process tied to the Clean Water Act and NPDES permitting. "The federal Clean Water Act requires delegated state agencies to run ... NPDES permits," a committee staff explainer said. The bill's stated purpose, witnesses said, is to clarify ANR's sole authority for CAFO permitting while preserving the continuing role of the Agency of Agriculture in other state agricultural water-quality efforts.

The Joint Fiscal Office (JFO) testified that revenue shifts would be small relative to recent general-fund transfers into the agricultural water quality special fund. "These permit revenue streams are a relatively small amount relative to the size of recent transfers," James Duffy of the Joint Fiscal Office said, noting that in fiscal year 2024 combined large and medium farm permits generated $239,000 for the Ag Water Quality Special Fund while the same fund received a $6,700,000 transfer from the general fund that year.

Under the bill's language, farms that must hold ANR CAFO permits would pay the ANR permit fee rather than the Agency of Agriculture operating fee. Large farms — whose permit structures also include siting and other factors — would not be required to pay both permits' fees; if they hold a large CAFO permit, the bill would require only the ANR permit fee. Medium farms that require CAFO coverage would likewise pay the CAFO permit fee to ANR rather than a separate medium-farm operating fee to the Agency of Agriculture.

Committee members asked about appropriation and implementation costs. Witnesses said the bill itself makes no appropriation; but they noted that the enacted budget (separately) includes an $850,000 general-fund appropriation to ANR to support the additional permitting work if the delegated program proceeds.

Committee members also asked whether shifting fees will require larger transfers from the general fund to preserve Ag Water Quality programming. JFO noted that some lost fee revenue could increase the need for future general-fund transfers but that the scale of permit fees was small compared with recent transfers; only a subset of current permit holders would move to ANR fees under the bill.

No formal amendment or final committee vote on the bill occurred at the meeting. Committee members agreed to hear from Agency of Agriculture staff and to review side-by-side bill language and any proposed amendments before further action.