34
2 Water Resources Management Framework
resources. Article 34 of the 1988 Water Law stipulates that a water resources fee
should be levied on units that take water directly from aquifers in cities; fees for
other water taken directly from aquifers, rivers, and lakes may be decided by the
provincial governments. Articles 7 and 48 of the 2002 Water Law stipulate that
the state should implement a water resources fee system. The 2006 Regulation on
the Management of Water Abstraction Permits and Water Resources Fee Collection
provides detailed provisions on the implementation of the water resources fee system
in China.
The 2006 Regulation clearly specifies the conditions for the collection, use, and
management of water resources fees. The Regulation stipulates that the payment of
water resources fees and the application for water abstraction permits should jointly
become key elements of water resources acquisition, and it clarifies the formulation
principles and management agency, as well as the collection scope and objects.
The collection procedure, allocation, and uses of the fee are also elucidated in this
document.
According to Article 28 of the Regulation, the water resources fee collection
standards should be formulated by provincial pricing administrative departments
with the provincial financing department and WAD and then reported to the provincial government for approval. The standards for central and cross-province water
projects with water abstraction permits approved by RBOs should be formulated by
the pricing, financing, and water administrative departments of the State Council. The
fee is collected by the water permit approval agency, with those permits approved by
RBOs collected by the provincial WADs instead. The collection amount is decided
by the collection standard at the abstraction site and the actual abstraction volume.
Furthermore, the abstractor is required to withdraw water according to an approved
annual water abstraction plan; if this plan or quota is exceeded, an overcharge will
be applied to the exceeding volume.
Before the 1988 Water Law, only Shanxi, Liaoning, and Tianjin Provinces in
China, which were suffering water shortages, imposed water resources fees. The
1988 Water Law developed the water resources fee system, but left the implementation decisions to individual provinces. The 1997 Water Sector Industrialization
Policy encouraged provinces to fully collect water resources fees, a measure which
was incorporated into the 2002 Water Law. The 2006 Regulation on the Management
of Water Abstraction Permits and Water Resources Fee Collection details the implementation of the fee system. In 2009, the Ministry of Finance, the National Development and Reform Commission, and the MWR jointly promulgated the Management
Methods of Collection and Use of Water Resources Fees.
At present, all 31 provinces in China have issued water resources fee collection
methods. By 2008, all provinces had started collecting the fee, and a total of 7.3
billion RMB in water resources fees was collected nationwide in that year. Of that
sum, 1.68 billion RMB was levied on industrial water abstraction, 1.31 billion RMB
was collected from domestic water use, 263 million RMB was levied on hydropower
generation, 237 million RMB was levied on water for power generation, and 10
million RMB was levied on agricultural water (Department of Water Resources,
MWR & China Institute of Water Resources and Hydropower Research 2009).
2 Water Resources Management Framework
resources. Article 34 of the 1988 Water Law stipulates that a water resources fee
should be levied on units that take water directly from aquifers in cities; fees for
other water taken directly from aquifers, rivers, and lakes may be decided by the
provincial governments. Articles 7 and 48 of the 2002 Water Law stipulate that
the state should implement a water resources fee system. The 2006 Regulation on
the Management of Water Abstraction Permits and Water Resources Fee Collection
provides detailed provisions on the implementation of the water resources fee system
in China.
The 2006 Regulation clearly specifies the conditions for the collection, use, and
management of water resources fees. The Regulation stipulates that the payment of
water resources fees and the application for water abstraction permits should jointly
become key elements of water resources acquisition, and it clarifies the formulation
principles and management agency, as well as the collection scope and objects.
The collection procedure, allocation, and uses of the fee are also elucidated in this
document.
According to Article 28 of the Regulation, the water resources fee collection
standards should be formulated by provincial pricing administrative departments
with the provincial financing department and WAD and then reported to the provincial government for approval. The standards for central and cross-province water
projects with water abstraction permits approved by RBOs should be formulated by
the pricing, financing, and water administrative departments of the State Council. The
fee is collected by the water permit approval agency, with those permits approved by
RBOs collected by the provincial WADs instead. The collection amount is decided
by the collection standard at the abstraction site and the actual abstraction volume.
Furthermore, the abstractor is required to withdraw water according to an approved
annual water abstraction plan; if this plan or quota is exceeded, an overcharge will
be applied to the exceeding volume.
Before the 1988 Water Law, only Shanxi, Liaoning, and Tianjin Provinces in
China, which were suffering water shortages, imposed water resources fees. The
1988 Water Law developed the water resources fee system, but left the implementation decisions to individual provinces. The 1997 Water Sector Industrialization
Policy encouraged provinces to fully collect water resources fees, a measure which
was incorporated into the 2002 Water Law. The 2006 Regulation on the Management
of Water Abstraction Permits and Water Resources Fee Collection details the implementation of the fee system. In 2009, the Ministry of Finance, the National Development and Reform Commission, and the MWR jointly promulgated the Management
Methods of Collection and Use of Water Resources Fees.
At present, all 31 provinces in China have issued water resources fee collection
methods. By 2008, all provinces had started collecting the fee, and a total of 7.3
billion RMB in water resources fees was collected nationwide in that year. Of that
sum, 1.68 billion RMB was levied on industrial water abstraction, 1.31 billion RMB
was collected from domestic water use, 263 million RMB was levied on hydropower
generation, 237 million RMB was levied on water for power generation, and 10
million RMB was levied on agricultural water (Department of Water Resources,
MWR & China Institute of Water Resources and Hydropower Research 2009).