CSHB 361(FIN): "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 and 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."
00CS FOR HOUSE BILL NO. 361(FIN) 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 and fixed fees of resource 05 agencies; relating to invoices for designated regulatory services; establishing a 06 petition process regarding fees charged by resource agencies for regulatory 07 services; and 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 AS 37.10.050 is repealed and reenacted to read: 10 Sec. 37.10.050.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 sale or lease of property by a state agency or fees charged by a resource agency for 10 a 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) Except as provided in AS 37.10.052(a), each state agency shall annually 15 review fees collected by the agency. By October 1, each state agency shall submit a 16 report to the office of management and budget regarding existing fee levels set by the 17 agency by regulation and adjustments made to fee levels by the agency during the 18 previous fiscal year, and recommended adjustments in fees set by statute that the 19 agency collects. Each year by December 15, the office of management and budget 20 shall submit a report to the Legislative Budget and Audit Committee summarizing the 21 reports and recommendations and the extent to which the fee adjustments have been 22 incorporated in the governor's budget. Within 30 days after the convening of each 23 regular session of the legislature, the committee shall prepare a report on the status of 24 fee regulations and making recommendations for changes in regulations or statutes as 25 appropriate. The committee shall notify the 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; negotiated service agreements. (a) Each resource agency shall, by 29 regulation, establish a list of fixed fees for standard designated regulatory services that 30 it provides. A fixed fee adopted under this subsection may not exceed the estimated 31 average reasonable direct cost incurred by the resource agency in providing the
01 standard designated regulatory service. The resource agency shall provide an 02 explanation of the basis for the fixed fee. The resource agency shall review the list 03 of fixed fees at least once every four years, identify any changes in the average actual 04 and reasonable direct cost of providing each standard designated regulatory service for 05 which a fixed fee has been established, and, by regulation, adjust the fees accordingly. 06 The agency shall include the results of its review in the report submitted under 07 AS 37.10.050(c). 08 (b) In the case of a designated regulatory service for which a resource agency 09 has not established a fixed fee under (a) of this section, a resource agency shall, at the 10 request of the person who will be billed for a designated regulatory service, attempt 11 to reach a negotiated service agreement for provision of that service. A negotiated 12 service agreement that is reached under this subsection is a contract that is enforceable 13 by either party under generally applicable contract remedies provided by law. A 14 negotiated service agreement reached under this subsection may include 15 (1) the amount of the fee; 16 (2) the structure or methodology by which the fee will be charged; 17 (3) deadlines, sequences, or milestones for the provision of the 18 regulatory service; and 19 (4) other matters reasonably related to the cost of, or procedures for, 20 the provision of the regulatory service. 21 (c) A person requiring more than one regulatory service, at least one of which 22 is a designated regulatory service, for an activity may petition the resource agency that 23 will provide the services or, if more than one resource agency will provide a regulatory 24 service, the office of management and budget to establish a single fee for all regulatory 25 services that are required for that class of activities. The resource agency or office of 26 management and budget, as appropriate, shall grant the petition if it finds that the 27 proposed fee meets the applicable requirements of this subsection and is likely to be 28 used by the resource agency or office of management and budget more than once. If 29 a petition under this subsection is granted, the resource agency or the office of 30 management and budget shall make available to the public information concerning the 31 single fee, including, a list of regulatory services to be provided and the amount of the
01 fee. If the resource agency or the office of management and budget denies the 02 petition, the agency or office shall provide to the petitioner a statement setting out the 03 agency's or office's reasons for denial. The single fee under this subsection must be 04 (1) confined to the distinct economic sector in which the petitioner is 05 or proposes to be engaged; 06 (2) where necessary, limited by geography, facility size or capacity, or 07 other relevant factors so as to provide a reasonable assurance that only similarly 08 situated activities, with respect to cost, are included within the fixed fee; and 09 (3) based on the estimated average reasonable direct cost of each 10 designated regulatory service required for the activity and the average fee customarily 11 charged for a regulatory service other than a designated regulatory service discounted 12 by the amount of savings that may be achieved by avoiding regulatory overlap and, 13 where applicable, coordinating multi-agency review of the activity to the maximum 14 extent possible. 15 (d) Except for fees determined under (a), (b), or (c) of this section or in 16 AS 37.10.056, a fee levied by a resource agency for a designated regulatory service 17 must be based solely on the actual and reasonable direct cost incurred by the resource 18 agency in providing the designated regulatory service to the person on whom that fee 19 is levied, computed on a time-and-expense basis. 20 (e) Nothing in this section authorizes or requires a resource agency to charge 21 a fee for a designated regulatory service. 22 (f) No action taken by a resource agency or the office of management and 23 budget under (c) of this section is subject to AS 44.62 (Administrative Procedure Act). 24 Sec. 37.10.054. Invoices for designated regulatory services. (a) Unless a 25 negotiated service agreement reached under AS 37.10.052(b) or (c) provides otherwise, 26 a resource agency charging a fee for providing a designated regulatory service other 27 than a standard designated regulatory service for which a fixed fee has been 28 established under AS 37.10.052(a) shall, on a monthly basis, provide the person who 29 will be billed for the service with an invoice for services performed during that month. 30 The invoice must be reasonably convenient to the reader, and reasonably susceptible 31 to audit. The invoice must set out, in time increments of not greater than one-quarter
01 hour for each employee, and separately for each expenditure, the purpose of the time 02 or expenditure in sufficient detail to permit a reasonable person to determine whether 03 the time or cost was an actual and reasonable direct cost. 04 (b) If a person believes that an invoice rendered under (a) of this section 05 exceeds the actual and reasonable direct cost of providing the designated regulatory 06 service, the person may, within 30 days after receiving the invoice, request that the 07 resource agency review the invoice. The resource agency shall review the invoice 08 under the standards of this section and issue its final decision on the invoice within 30 09 days of receipt of a request for review. 10 (c) A person who timely filed a request for review under (b) of this section 11 may appeal a resource agency's adverse final decision to the office of management and 12 budget within 30 days after receipt of the decision. The office of management and 13 budget shall, within 30 days after receiving an appeal under this subsection, review the 14 matter de novo under the standards of this section and AS 37.10.052(d) and take action 15 appropriate under those standards. If the office of management and budget affirms the 16 resource agency's decision, the person appealing must pay the reasonable direct cost 17 of the appeal. 18 Sec. 37.10.056. Petitions to adopt regulations. A person requiring a 19 designated regulatory service from a resource agency may petition the resource agency 20 under AS 44.62.220 and 44.62.230 to adopt regulations that would establish, for a 21 category of designated regulatory services, a fixed fee that is 22 (1) confined to the distinct economic sector in which the petitioner is 23 or proposes to be engaged; 24 (2) where necessary, limited by geography, facility size or capacity, or 25 other relevant factors so as to provide a reasonable assurance that only similarly 26 situated regulatory services, with respect to cost, are included within the fixed fee; 27 (3) likely to be used by the resource agency more than once; and 28 (4) based on the average reasonable direct cost incurred by the agency 29 in providing the designated regulatory service. 30 Sec. 37.10.058. Definitions. In AS 37.10.050 - 37.10.058, 31 (1) "agency" means a board, commission, or agency in the legislative,
01 judicial, or executive branch, but does not include the University of Alaska or a public 02 corporation; 03 (2) "designated regulatory service" means a regulatory service provided 04 under the following regulatory programs: 05 (A) control of solid waste facilities under AS 46.03.020(10)(D) 06 and (E); 07 (B) regulation of sewerage systems and treatment works and 08 wastewater disposal systems, and drinking water systems, under AS 46.03.720; 09 (C) regulation of the disposal of waste into waters of the state 10 under AS 46.03.100; 11 (D) certification of federal permits or authorizations under 33 12 U.S.C. 1341 (sec. 401, Clean Water Act); and 13 (E) a coastal management consistency determination relating to 14 a permit or authorization issued under a program listed in (A) - (D) of this 15 paragraph, if the determination is made by the agency issuing the permit or 16 authorization; 17 (3) "direct cost" means the hourly rate of salary and benefits of each 18 agency employee, including clerical staff, directly involved in providing a regulatory 19 service, multiplied by the number of hours spent in performing the service, together 20 with the expenditures for goods or third-party services made in providing that service; 21 "direct cost" does not include 22 (A) the costs and salaries of administrative, support, or 23 supervisory personnel who are not directly engaged in providing the service; 24 (B) other budgeted overhead expenses, including rent and 25 utilities; 26 (C) interagency charges that would not meet the requirements 27 of AS 37.10.052 - 37.10.058 if those charges had been incurred or invoiced by 28 the agency providing the designated regulatory service; 29 (D) public consultation costs when the consultation is not 30 required by law; 31 (E) costs related to an appeal of permit issuance by a person
01 other than the applicant for that permit; 02 (F) expenses that are not reasonably necessary to comply with 03 the law under which the service is provided; or 04 (G) travel expenses for inspecting businesses having not more 05 than 20 employees; 06 (4) "distinct economic sector" means a commercial or industrial 07 segment, or other category of land or water use, that, because of common operational, 08 environmental, or other factors, tends to require similar designated regulatory services; 09 each of the following is an example of a "distinct economic sector": (A) oil and gas 10 exploration, development, and production; (B) oil and gas processing and refining; (C) 11 mineral exploration, development and production; (D) coal exploration, development 12 and production; (E) commercial fishing; (F) seafood processing; (G) timber harvest; 13 (H) timber processing; and (I) residential development; nothing in this paragraph 14 precludes a resource agency from further subdividing activities listed in (A) - (I) of 15 this paragraph into more appropriate subcategories; 16 (5) "fee" means a charge assessed or requested by a state agency for 17 the provision of a service to, the incurring of a burden or cost because of, or the 18 conferring of a benefit upon, a person; "fee" does not include charges assessed or 19 requested by the Department of Natural Resources associated with pipeline right-of- 20 way leases granted under AS 38.35; 21 (6) "hourly rate of salary and benefits" means the hourly increment of 22 salary due the state employee under the salary schedule applicable to that employee, 23 multiplied by 149 percent to account for the cost of employment benefits paid by the 24 state to or on behalf of the employee; 25 (7) "permit" means a permit, license, certificate, approval, 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, approval, or 30 other review related to the application for or issuance, modification, extension, 31 or revocation 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. 09 * Sec. 3. AS 44.46.025(a) is amended to read: 10 (a) Except as otherwise provided in AS 37.10.050 - 37.10.056, the [THE] 11 Department of Environmental Conservation may adopt regulations that prescribe 12 reasonable fees, and establish procedures for the collection of those [THE] fees, to 13 cover the applicable direct costs [, NOT INCLUDING TRAVEL,] of inspections, 14 permit preparation and administration, plan review and approval, and other services 15 provided by the department relating to 16 (1) agriculture and animals under AS 03.05; food, drugs, and cosmetics 17 under AS 17.20; and public accommodations and facilities under AS 18.35; 18 (2) certificates of inspection for motor vehicles under AS 46.14.400 or 19 46.14.510; 20 (3) sewerage system and treatment works and wastewater disposal 21 systems, and drinking water systems, under AS 46.03.720; 22 (4) [REPEALED 23 (5) REPEALED 24 (6)] water and wastewater operator training under AS 46.30; 25 (5) [(7)] control of solid waste facilities under AS 46.03.020(10) and 26 46.03.100; 27 (6) [(8)] certification of laboratories conducting environmental analyses 28 of public drinking water systems or of oil or hazardous substances, or conducting other 29 analyses required by the department; 30 (7) [(9)] certification of federal permits or authorizations under 33 31 U.S.C. 1341 (sec. 401, Clean Water Act).
01 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section 02 to read: 03 REGULATIONS. Each resource agency providing a designated regulatory service and 04 the office of management and budget may proceed to adopt regulations necessary to 05 implement this Act. Regulations to implement a provision of this Act take effect under 06 AS 44.62 (Administrative Procedure Act), but not before the effective date of secs. 1 - 3 of 07 this Act. 08 * Sec. 5. Section 4 of this Act takes effect immediately under AS 01.10.070(c). 09 * Sec. 6. Sections 1 - 3 of this Act take effect July 1, 2001.