HB 361: "An Act relating to charges for state services; requiring that fees levied by resource agencies for designated regulatory services be based on the actual and reasonable direct cost of providing the services, except in the case of certain negotiated or fixed fees; relating to negotiated or fixed fees of resource agencies; relating to invoices for designated regulatory services; establishing a petition process regarding fees charged by resource agencies for regulatory services; and providing for an effective date."
00HOUSE BILL NO. 361 01 "An Act relating to charges for state services; requiring that fees levied by 02 resource agencies for designated regulatory services be based on the actual and 03 reasonable direct cost of providing the services, except in the case of certain 04 negotiated or fixed fees; relating to negotiated or fixed fees of resource agencies; 05 relating to invoices for designated regulatory services; establishing a petition 06 process regarding fees charged by resource agencies for regulatory services; and 07 providing for an effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 37.10.050 is repealed and reenacted to read: 10 Sec. 37.10.050. Charges for state services; collection, accounting, and 11 deposit of state money. (a) A state agency may not charge a fee for the provision 12 of state services unless the fee (1) is set or otherwise authorized by statute; and (2) 13 where a regulation is necessary, is set by or provided for in a regulation that meets the 14 standards of AS 44.62.020 and 44.62.030. Unless specifically exempted by statute, a
01 state agency authorized to collect or receive fees, licenses, taxes, or other money 02 belonging to the state shall account for and remit the receipts, less fees to which the 03 collector is entitled by statute or regulation, to the Department of Revenue at least 04 once each month. The commissioner of administration shall separately account under 05 AS 37.05.142 for receipts deposited under this subsection. A fee or other charge that 06 is set by regulation may not exceed the estimated actual costs of the state agency in 07 administering the activity or providing the service unless otherwise provided by the 08 statute under which the regulation is adopted; however, this limitation does not apply 09 to sales of property by a state agency or fees charged by a resource agency for a 10 designated regulatory service as defined in AS 37.10.058. 11 (b) Money collected for the state shall be deposited by the collector in the 12 nearest bank to the account of the Department of Revenue when the Department of 13 Revenue directs this to be done. 14 (c) Each state agency shall annually review fees collected by the agency. By 15 October 1, each state agency shall submit a report to the office of management and 16 budget regarding existing fee levels set by the agency by regulation and adjustments 17 made to fee levels by the agency during the previous fiscal year, and recommended 18 adjustments in fees set by statute that the agency collects. Each year by December 15, 19 the office of management and budget shall submit a report to the Legislative Budget 20 and Audit Committee summarizing the reports and recommendations and the extent to 21 which the fee adjustments have been incorporated in the governor's budget. Within 22 30 days after the convening of each regular session of the legislature, the committee 23 shall prepare a report on the status of fee regulations and making recommendations for 24 changes in regulations or statutes as appropriate. The committee shall notify the 25 legislature that the report is available. 26 * Sec. 2. AS 37.10 is amended by adding new sections to read: 27 Sec. 37.10.052. Fees levied by resource agencies for designated regulatory 28 services; reimbursable service agreements. (a) Except as provided in this section, 29 in a negotiated agreement reached under this section, or in AS 37.10.056(a) or (b), a 30 fee levied by a resource agency for a designated regulatory service must be based 31 solely on the actual and reasonable direct cost incurred by the resource agency in
01 providing the regulatory service to the person on whom that fee is levied, computed 02 on a time-and-expense basis. 03 (b) Except in the case of a standard designated regulatory service for which 04 a resource agency has established a fixed fee under (c) of this section, a resource 05 agency shall, at the request of the person who will be billed for a designated regulatory 06 service, endeavor to negotiate a reimbursable service agreement for provision of that 07 service. An agreement that is reached under this subsection is a contract that is 08 enforceable by either party under generally applicable contract remedies provided by 09 law. An agreement reached under this subsection may include 10 (1) the amount of the fee; 11 (2) the structure or methodology by which the fee will be charged; 12 (3) deadlines, sequences, or milestones for the provision of the 13 regulatory service; and 14 (4) other matters reasonably related to the cost of, or procedures for, 15 the provision of the regulatory service. 16 (c) Notwithstanding (a) of this section, each resource agency shall, by 17 regulation, establish a list of fixed fees for standard designated regulatory services that 18 it provides. A fixed fee adopted under this subsection may not exceed $250, unless 19 the resource agency determines that the fee represents the average actual and 20 reasonable direct cost incurred by the resource agency in providing the standard 21 designated regulatory service. The resource agency shall provide an explanation of the 22 basis for this determination upon request. 23 Sec. 37.10.054. Invoices for designated regulatory services. (a) A resource 24 agency providing a designated regulatory service shall employ a uniform accounting 25 and invoicing system that will provide an invoice that is reasonably convenient to the 26 reader, contains the information required by (b) of this section, and is reasonably 27 susceptible to audit. 28 (b) If a fee is charged for a designated regulatory service on a time-and- 29 expense basis, the resource agency shall, on a monthly basis, provide the person who will be 30 billed for the service with an invoice for the services performed during that month. Unless 31 an agreement reached under AS 37.10.052(b) otherwise provides, the invoice must set out, in
01 time increments of not greater than one-quarter hour for each employee, and separately for 02 each expenditure, the purpose of the time or expenditure in sufficient detail to permit a 03 reasonable person to determine whether the time or cost was an actual and reasonable direct 04 cost. 05 (c) If a person believes that an invoice rendered under (b) of this section 06 exceeds the actual and reasonable direct cost of providing the designated regulatory 07 service, the person may, within 30 days after receiving the invoice, request the office 08 of management and budget to review the invoice. The office of management and 09 budget shall, within 30 days after receiving a request for review under this subsection, 10 review the matter de novo under the standards of this section and take action 11 appropriate under those standards. If the office of management and budget affirms the 12 resource agency's decision, the person requesting review must pay the actual and 13 reasonable direct cost of the review. 14 Sec. 37.10.056. Petitions to adopt regulations. (a) A person requiring a 15 designated regulatory service from a resource agency may petition the resource agency 16 to adopt regulations that would 17 (1) amend or supplement the resource agency's list of standard 18 designated regulatory services issued under AS 37.10.052(c); or 19 (2) establish, for a category of designated regulatory services, a fixed 20 fee that is 21 (A) confined to the distinct economic sector in which the 22 petitioner is or proposes to be engaged; 23 (B) where necessary, limited by geography, facility size or 24 capacity, or other relevant factors so as to provide a reasonable assurance that 25 only similarly situated regulatory services, with respect to cost, are included 26 within the fixed fee; and 27 (C) based on the average actual and reasonable direct cost 28 incurred by the agency in providing the designated regulatory service. 29 (b) A person requiring more than one regulatory service for an activity may 30 petition the resource agency that will provide the services, or, if more than one agency 31 will provide a regulatory service, the office of management and budget, to adopt
01 regulations establishing a single fee for all regulatory services that are required for that 02 class of activities. The single fee under this subsection must be 03 (1) confined to the distinct economic sector in which the petitioner is, 04 or proposes to be, engaged; 05 (2) where necessary, limited by geography, facility size or capacity, or 06 other relevant factors so as to provide a reasonable assurance that only similarly 07 situated activities, with respect to cost, are included within the fixed fee; and 08 (3) based on the sum of the average actual and reasonable direct cost 09 of each designated regulatory service required for the activity and the average fee 10 customarily charged for a regulatory service other than a designated regulatory service 11 discounted by the amount of savings that may be achieved by avoiding regulatory 12 overlap, and, where applicable, coordinating multi-agency review of the activity to the 13 maximum extent possible. 14 (c) The resource agency shall act under (d)(1) of this section on a petition filed 15 under (a)(1) of this section if it appears likely that the regulatory service is a standard 16 designated regulatory service as defined in AS 37.10.058. The agency or the office 17 of management and budget, as appropriate, shall act under (d)(1) of this section on a 18 petition filed under (a)(2) or (b) of this section if it appears likely that the agency or 19 office will be able to develop a fixed or single fee for the service or activity that meets 20 the applicable standards of (a)(2) or (b) of this section. 21 (d) Within 30 days after receipt of a petition under (a) or (b) of this section, 22 the agency or the office of management and budget, as appropriate, shall 23 (1) schedule for public hearing under AS 44.62.190 - 44.62.215 the 24 subject matter of the petition and propose regulations that would implement a proposed 25 new fixed or single fee; or 26 (2) deny the petition and serve upon the petitioner a statement setting 27 out the agency's reasons for denial. 28 (e) The agency shall adopt proposed regulations with respect to the subject 29 matter of a petition filed under (a) or (b) of this section if, on the basis of the record 30 developed during the public comment process, the agency finds that the proposed fixed 31 or single fee meets the applicable requirements of this section.
01 Sec. 37.10.058. Definitions. In AS 37.10.050 - 37.10.058, 02 (1) "actual and reasonable direct cost" means the actual hourly rate of 03 salary and benefits of each agency employee, including clerical staff, directly involved 04 in providing the service, multiplied by the number of hours reasonably spent in 05 performing the service, together with the actual and reasonable expenditures for goods 06 or third-party services made in providing that service; "actual and reasonable direct 07 cost" does not include 08 (A) the costs and salaries of administrative, support, or 09 supervisory personnel who are not directly engaged in providing the service; 10 (B) other budgeted overhead expenses, including rent and 11 utilities; 12 (C) interagency charges; 13 (D) public notice or public consultation costs when the notice 14 or consultation is not required by law; 15 (E) costs related to an appeal of permit issuance by a person 16 other than the applicant for that permit; 17 (F) expenses that are not reasonably necessary to comply with 18 the law under which the regulatory service is provided; or 19 (G) expenses incurred by employees who do not possess the 20 education, other qualifications, or experience that would customarily be 21 expected of a person providing an analogous service in the private sector; 22 (2) "actual hourly rate of salary and benefits" means the hourly 23 increment of salary due the state employee under the salary schedule applicable to that 24 employee, multiplied by 135 percent to account for the cost of employment benefits 25 paid by the state to or on behalf of the employee; 26 (3) "agency" means a board, commission, or agency in the legislative, 27 judicial, or executive branch, but does not include the University of Alaska or a public 28 corporation; 29 (4) "designated regulatory service" includes a regulatory service related 30 to the following regulatory programs: 31 (A) control of solid waste facilities under AS 46.03.020(10)(D)
01 and (E); 02 (B) regulation of sewerage systems and treatment works and 03 wastewater disposal systems, and drinking water systems, under AS 46.03.720; 04 (C) regulation of the disposal of waste into waters of the state 05 under AS 46.03.100; 06 (D) certification of federal permits or authorizations under 33 07 U.S.C. 1341 (sec. 401, Clean Water Act); and 08 (E) a coastal management consistency determination relating to 09 a permit or authorization issued under a program listed in (A) - (D) of this 10 paragraph, if the determination is made by the agency issuing the permit or 11 authorization; 12 (5) "distinct economic sector" means a commercial or industrial 13 segment, or other category of land or water use, that, because of common operational, 14 environmental, or other factors, tends to generate similar regulatory services; each of 15 the following is an example of a "distinct economic sector": (A) oil and gas 16 exploration, development, and production; (B) oil and gas processing and refining; (C) 17 mineral exploration, development and production; (D) coal exploration, development 18 and production; (E) commercial fishing; (F) seafood processing; (G) timber harvest; 19 (H) timber processing; and (I) residential development; nothing in this paragraph 20 precludes a resource agency from further subdividing activities listed in (A) - (I) of 21 this paragraph into more appropriate subcategories; 22 (6) "fee" means a charge assessed or requested by a state agency for 23 the provision of a service to, the incurring of a burden or cost because of, or the 24 conferring of a benefit upon, a person; 25 (7) "permit" includes a permit, license, certificate, or coastal 26 management consistency determination; 27 (8) "regulatory service" includes the following services provided by a 28 resource agency: 29 (A) an analysis, deliberation, testing, inspection, or other review 30 related to the application for or issuance, modification, extension, or revocation 31 of a permit; and
01 (B) an inspection, testing, monitoring, or compliance review 02 undertaken under law or the terms of a permit; 03 (9) "resource agency" means the Department of Environmental 04 Conservation, the Department of Fish and Game, and the Department of Natural 05 Resources; 06 (10) "standard designated regulatory service" means designated 07 regulatory services for categories of activities that do not generally raise complex or 08 controversial legal, technical, or policy issues, including the permitting or inspecting 09 of activities customarily associated with small-scale mining, oil, gas, forestry, and 10 commercial fishing operations. 11 * Sec. 3. AS 44.46.025(a) is amended to read: 12 (a) Except as otherwise provided in AS 37.10.050 - 37.10.058, the [THE] 13 Department of Environmental Conservation may adopt regulations that prescribe 14 reasonable fees, and establish procedures for the collection of those [THE] fees, to 15 cover the applicable direct costs [, NOT INCLUDING TRAVEL,] of inspections, 16 permit preparation and administration, plan review and approval, and other services 17 provided by the department relating to 18 (1) agriculture and animals under AS 03.05; food, drugs, and cosmetics 19 under AS 17.20; and public accommodations and facilities under AS 18.35; 20 (2) certificates of inspection for motor vehicles under AS 46.14.400 or 21 46.14.510; 22 (3) [SEWERAGE SYSTEM AND TREATMENT WORKS AND 23 WASTEWATER DISPOSAL SYSTEMS, AND DRINKING WATER SYSTEMS, 24 UNDER AS 46.03.720; 25 (4) REPEALED 26 (5) REPEALED 27 (6)] water and wastewater operator training under AS 46.30; 28 [(7) CONTROL OF SOLID WASTE FACILITIES UNDER 29 AS 46.03.020(10) AND 46.03.100;] 30 (4) [(8)] certification of laboratories conducting environmental analyses 31 of public drinking water systems or of oil or hazardous substances, or conducting other
01 analyses required by the department [; 02 (9) CERTIFICATION OF FEDERAL PERMITS OR 03 AUTHORIZATIONS UNDER 33 U.S.C. 1341 (SEC. 401, CLEAN WATER ACT)]. 04 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section 05 to read: 06 REGULATIONS. Each resource agency providing a designated regulatory service may 07 proceed to adopt regulations necessary to implement this Act. Regulations to implement a 08 provision of this Act take effect under AS 44.62 (Administrative Procedure Act), but not 09 before the effective date of secs. 1 - 3 of this Act. 10 * Sec. 5. Section 4 of this Act takes effect immediately under AS 01.10.070(c). 11 * Sec. 6. Sections 1 - 3 of this Act take effect July 1, 2001.