Legislature(1995 - 1996)
05/02/1995 02:04 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 119 - EXEMPT SCHOOLS FROM CERTAIN DEC FEES Number 1160 CO-CHAIR BUNDE noted that since this was the first public hearing on HB 119, he would not ask HESS Committee members to vote on it at this hearing. REPRESENTATIVE GENE KUBINA, sponsor of the bill, explained that HB 119 would exempt schools from having to pay the Department of Environmental Conservation (DEC) fees for inspecting kitchens and food programs. In 1992, the legislature authorized the DEC to charge user fees. This was a way for DEC to pay for part of their budget. Fiscal year (FY) 1993 was the first year the DEC engaged in that practice. REPRESENTATIVE KUBINA continued that during FY 93 and FY 94, the DEC did not charge schools because it did not want to add to the budget problems of the schools. Evidently, the DEC subsequently had some legal counsel which advised that it cannot arbitrarily choose who it is going to charge for services. Therefore, this year, FY 95, the DEC began charging school districts for inspecting kitchens and food programs. REPRESENTATIVE KUBINA said the net effect is a shift of $25,000 from schools to the DEC's budget. The DEC has never charged schools before. Representative Kubina felt the school budget, which has not been getting cost of living increases, is more important than the budget of the DEC. The DEC is also better able to absorb the costs. REPRESENTATIVE KUBINA noted that this is a policy decision by the legislators concerning who is going to pay out of what budget. He feels that the DEC should continue to pay. Therefore, the bill was introduced. Number 1238 CO-CHAIR TOOHEY asked how many visits the DEC makes to a school in a nine month period or each school year. REPRESENTATIVE KUBINA said the DEC makes a minimum of one visit per school year. CO-CHAIR TOOHEY said she could not believe that the charge would be so extensive for one visit. REPRESENTATIVE KUBINA noted that the charge was for several schools. A smaller school district would not pay as much. The total cost, statewide, is about $25,000. That is why there is a fiscal note of $25,000 that would, in essence, come back out of the DEC budget. Representative Kubina asked HESS Committee members to remember that the DEC had not been charging schools up to this point anyway. Number 1280 REPRESENTATIVE DAVIS asked if there are currently other exemptions in this program. REPRESENTATIVE KUBINA said in the original law, nonprofit agencies were exempted. He felt that had it been considered at the time, the legislature would have also exempted schools. REPRESENTATIVE DAVIS asked if nonprofit organizations included senior citizen centers and pioneers' homes. REPRESENTATIVE KUBINA said he felt the exemptions were for homeless shelters and other such entities. REPRESENTATIVE DAVIS said he would like to see a list of current exemptions. Number 1345 KIT BALLANTINE, Acting Director, Division of Environmental Health, DEC, said the only exemption from the fees occur if an entity qualifies as a charitable organization under IRS regulations rather than a nonprofit. Schools do not qualify as charitable organizations. They are therefore not exempt under IRS guidelines and they are therefore not exempt from DEC fees. MS. BALLANTINE said although the legislation was passed in 1992, the fees were not implemented until late in 1993, because of the regulatory process. Therefore, the DEC had not been charging any fees until late 1993. These fees, however, will make a significant difference in the DEC budget. The $25,000 is much needed. MS. BALLANTINE recalled that in 1993, the DEC actually had to ask for a supplemental due to a lack of fee collection. Last year, the DEC actually had to transfer money from another component because it did not collect fees. Therefore, that $25,000 will make a difference in the DEC budget. Number 1406 CO-CHAIR TOOHEY asked how many visits the DEC makes each year to schools. MS. BALLANTINE answered that the DEC makes at least one visit per year per school. The visits and fees would also include any technical assistance, training of food service staff, spot checks, follow up checks, etc., for schools. CO-CHAIR TOOHEY asked if a breakdown chart was available per visit. MS. BALLANTINE said the visits depend on the seating and the type of facility. For example, a large full food service kitchen may serve many satellite kitchens that would warrant a $200 fee. A small satellite kitchen which only serves food would be charged only $25 to $50. The fees are determined by the extent of the food service and the number of seats. Therefore, the scale is sliding. Number 1472 REPRESENTATIVE DAVIS commented that he has studied situations such as this for a number of years. He has problems with a state agency, run with state general fund dollars, suing, fining or charging another state agency. It is just money going around in circles, and no good is done. Last year, the Kenai School District was fined in excess of $200,000 by the Occupational Safety and Health Administration (OSHA). That money went to the Department of Labor. REPRESENTATIVE DAVIS noted that although there is some local input, much of the money for that district is state dollars. The Department of Law fines and sues other agencies, and it is just moving money from one hand to the other. This is ludicrous. He does not know what other method can be employed to discipline or punish state agencies, but there must be another method than creating a paper trail and money exchange. Number 1530 CO-CHAIR TOOHEY said she would like the DEC to train one person in every school kitchen to do the job of the DEC inspectors. REPRESENTATIVE BRICE agreed with Representative Davis in that the funding exchange is circular. The school districts get money from the state. The district must then give the money right back to the state to pay for these inspections. Representative Brice felt that addressing some of these concerns can alleviate a few school district problems. It would be a small step, but it would be the first step in a long journey. Number 1594 REPRESENTATIVE VEZEY stated that the consequences of this bill becoming law are not all that apparent. A law was passed in the Eighteenth Alaska Legislature which mandated that the DEC continue to provide these oversight services and continue to charge fees to pay for the services. If public agencies are exempted from paying these fees, the DEC is put into a position of having to go back and either raise fees where they can or ask the legislature to raise fees on the private sector. REPRESENTATIVE VEZEY said therefore, a tax would be put on the private sector for a service that is being forced upon it. No one in the private sector volunteers for these exemptions. The state says it is going to do something, and those in the private sector are going to pay for it. The DEC would establish fees by regulation. It would be forced to raise fees to remaining entities to cover costs. Number 1644 CO-CHAIR BUNDE added that as the money rotates, there is also a certain amount of evaporation that takes place. He said the bill would be held in committee.