A new piece of Republican environmental legislation is setting up a major clash with DFL Gov. Mark Dayton, whose agency heads voiced opposition in an often heated committee hearing this week.

The bill would fund the state's major environmental agencies, while also engaging in some sweeping, controversial policy changes that would give the Legislature a stronger hand to curb what Republicans say are overzealous regulators.

But in a sharply worded letter Wednesday, the commissioner of the Pollution Control Agency suggested the bill relied on dishonest budgeting because it would draw down landfill funds and said the regulatory changes would weaken Minnesota's protection of air, land and water.

Rep. Denny McNamara, R-Hastings, strongly defended his bill, at one point raising his voice in a Wednesday hearing because, he said, agency budgets are not as transparent as they should be. "My frustration is I don't know what's in (their budgets)," McNamara exclaimed in the hearing room packed with business and environmental lobbyists and agency staff.

House Republicans are releasing thriftier spending targets than Dayton or their DFL counterparts in the Senate, in an effort to save as much of the state's projected $1.9 billion surplus as possible for tax cuts, roads and bridges and other spending priorities.

The measure does include money to help implement Gov. Mark Dayton's plan to provide buffers around all waterways.

Beyond the budgets, however, the McNamara bill exposes a wide rift between House Republicans and Dayton on major environmental policy issues, such as whether the Legislature should help determine new pollution rules, which opponents say would invite meddling from big industries and local governments.

The conflict could be headed for a veto fight with Dayton, who voiced strong opposition in a Wednesday news conference to the Legislature encroaching on the turf of the executive branch.

"If somebody else in the Legislature wants to run the executive branch, they should run for governor," he said.

House Republicans have some leverage on certain environmental issues because they share common ground with some DFL senators from agriculture and Iron Range districts wary of what they consider regulatory overreach.

Activists fear outcome

"It's a big disappointment," said Steve Morse, executive director of the Minnesota Environmental Partnership, who was a state senator when he helped write legislation in the 1990s that established the landfill cleanup funds the McNamara bill would turn to for money this year.

McNamara, chairman of the House Environment and Natural Resources Policy and Finance Committee, said it makes no sense "leaving millions of dollars lying around without a plan on what to do with the money. I'm sorry, if you're running a little landscape company, it wouldn't make sense," he said, nodding, as he often does, to his small business career. "Let's make it [the money] work for the people of Minnesota," he said in a later interview.

The bill also includes policy changes that have sparked widespread debate this session on whether state environmental rules stifle economic growth and weigh down local government with big costs.

One provision would suspend new water quality rules until the state contracts with an outside agency to complete an analysis of the cost of recent rules. Another would prohibit the PCA from applying a wild rice water quality standard for sulfate until the agency designates waters subject to the standard, widely viewed as a stalling tactic favored by the mining industry.

Another controversial measure would render mostly impotent the Minnesota Pollution Control Agency's Citizens' Board, which is appointed by the governor and has the power to order environmental impact statements and approve or deny certain permits.

The bill passed out of the House committee Thursday on a voice vote.