Gov. Kehoe signs AIM's air pollution control program funding bills

July 9, 2026 - Governor Mike Kehoe today signed HCS SB 953 (Sen. Jason Bean and Rep. Colin Wellenkamp). The bill addresses funding issues for the Air Pollution Control Program in the Missouri Department of Natural Resources by implementing a solution recommended by Associated Industries of Missouri and other industry groups.

Traditionally, funding for the air pollution control program has been provided by permit fees levied on businesses that create emissions. The fee is based partially on the level of emissions. The dust from quarries or cotton gins and emissions from manufacturing facilities are common examples. So, when companies reduce their emissions, their fees also are reduced. At the same time, costs to operate the Missouri Department of Natural Resources (MDNR) Air Pollution Control Program increase with inflation. In fact, businesses have reduced their emissions so much that MDNR is predicting a revenue shortfall. Without this bill, companies that have achieved lower emissions would be punished because the fees they pay need to be increased so the air pollution control program may remain solvent and functioning. As emissions are expected to decline in the future, a long-term solution is needed.

Senate Bill 953 makes two changes in how MDNR’s funds are handled. Right now, unused funds in various MDNR accounts, which are funded by permit fees, may be swept into the state’s general revenue fund. This legislation would end that practice. If the fees are paid to support the fund and the fund is going broke, the state should not transfer money out of such funds.

Secondly, the bill creates a transfer by earmarking a portion of the existing general revenue sales and use taxes already paid by utility companies to fund the programs. This small transfer (about $3 million) combined with existing permit fees and stopping the sweeping of funds will fix the projected shortfall for the air pollution control program. If unaddressed, the federal EPA could take over the air pollution control program – an outcome Missouri businesses want to avoid.

Importantly, companies that pay environmental fees today would continue to pay the same fees they are currently paying. Only the increased need for funding is addressed by this bill.

Changes regarding makeup of the Clean Water Commission and specifying when Commissioners must exempt themselves from discussion and voting on issues to avoid conflicts of interest are also included in the bill.

The bill exempts agricultural nonpoint sources from certain permitting requirements under the Missouri Clean Water Law.

The clean water program at DNR is also facing revenue shortfalls and stakeholders are meeting to raise fees to support the program. AIM opposed removing the cap entirely and compromise language increasing the cap was not included in the final bill.

Finally, the bill addresses return water flows to a reservoir from a water reclamation facility.

This bill is necessary to help ensure the Missouri Department of Natural Resources air and water pollution control programs receive the funding they require to properly enforce and help Missouri businesses comply with environmental laws. There are no fee increases in the bill, but the bill will allow fees to be set at an appropriate level as determined by the stakeholder businesses that pay the fees.

SS SB 1033 (Sen. Jason Bean and Rep. Dane Diehl) was also signed by Governor Kehoe today. It contains the same funding solution for the air pollution control program as SB 953. However, SB 1033 does not contain the water program changes in that bill. An exemption from motor vehicle emissions inspections for commercial farm vehicles that are 10 years old or older is added and the bill provides that an owner or operator of a cotton gin that emits a certain amount of air contaminants shall not be required to submit air dispersion modeling to the Missouri Department of Natural Resources to obtain a construction permit for the cotton gin.

If you have any questions regarding these bills, please contact Ray McCarty (rmccarty@aimo.com) or Matthew Smith (msmith@aimo.com).