(a) A person named as permittee in a permit issued under this chapter shall pay to the department all assessed emission fees established under this section.

(b) The department shall establish by regulation an emission fee rate. The rate shall be set on the basis of dollars per ton of air pollutant emitted. The department shall assess emission fees annually on or before July 1 based on a stationary source's estimated assessable emissions for the subsequent fiscal year. The department may allow installment payments of assessed emission fees.

(c) For a stationary source that begins operation during a fiscal year, the department shall prorate the first year's fee to cover the time period occurring before the next annual payment date. The owner or operator shall pay the initial emission fee upon commencement of lawful stationary source operation unless authorized to pay by installments under (b) of this section. The first year's emission fee may not duplicate a fee paid by a permittee under AS 44.46.025 for the same emissions units for the same time period. If the fees would otherwise be duplicative, the department shall provide a credit toward the emission fee in the amount of the unused balance of the fee collected under AS 44.46.025. The unused balance to be credited shall be based on prorating the total original fee under AS 44.46.025 for the time period for which an emission fee applies.

(d) The department shall design the emission fee rate to distribute the total annual incurred costs described under (h) of this section in a manner so that each permittee is assessed an annual emission fee that reflects an equitable apportionment of the fees paid by each stationary source type, size, or category. In making an apportionment under (f)(6) of this section, the department shall consider factors such as exemptions or reduced rates for small amounts of emissions, limits upon assessable emissions, exempting small business facilities from the costs of the small business assistance program established under AS 46.14.300, air pollution prevention efforts, and other factors that may ensure fair distribution of the costs described under (h) of this section.

(e) [Repealed, § 88 ch 56 SLA 2005.]

(f) The department shall set the emission fee rate in regulation to implement the policy established in (d) of this section. The department shall base the regulation on the findings of a report, which the department shall make available to the public with proper notice before adoption of the regulation, that examines

(1) fees assessed;

(2) alternative fee rates or formulas;

(3) types, sizes, or categories of stationary sources, their respective emission quantities, and their previous or proposed fee burden;

(4) apparent inequities encountered in the initial fee rate;

(5) total costs incurred or anticipated to be incurred under (h) of this section; and

(6) other factors that ensure fair distribution of the costs described in (h) of this section.

(g) The department shall periodically, and at least every four years, evaluate the fee rate set under this section to determine if it is responsive to the policy established in (d) of this section and shall provide its findings in a report.

(h) In this section,

(1) “assessable emission” means the quantity of each air pollutant for which emission fees are assessed and is the lesser of

(A) the stationary source's potential to emit, in tons per year, each air pollutant; or

(B) the projected annual rate of emissions, in tons per year, of each air pollutant by the stationary source based upon previous actual annual emissions if the permittee can demonstrate to the department its previous actual annual rate of emissions through monitoring, modeling, calculations, or other method acceptable to the department;

(2) “emission fees” mean fees assessed to recover costs incurred by the department and other state or local governmental agencies for the implementation of minor permits, for the implementation of construction permits, and for operating permits to the extent required under 42 U.S.C. 7661a(b)(3)(A) and federal regulations implementing that provision, for execution of the permit program established under this chapter that are generally not associated with service provided to a specific facility, including the costs incurred by the department or a local air quality program to comply with AS 46.14.010 and 46.14.015; the costs may include rent, utilities, permit program management, administrative and accounting services, and other costs as identified by the department in regulations; the fees shall also be sufficient to recover the cost of the small business assistance program under AS 46.14.300 - 46.14.310.