2020-01-27                     House Journal                      Page 1470
HB 217                                                                                                                        
HOUSE BILL NO. 217 by the House Rules Committee by request of                                                                   
the Governor, entitled:                                                                                                         
                                                                                                                                
     "An Act relating to fees levied by resource agencies for designated                                                        
     regulatory services; and providing for an effective date."                                                                 
                                                                                                                                
was read the first time and referred to the Resources and Finance                                                               
Committees.                                                                                                                     
                                                                                                                                
The following fiscal note(s) apply:                                                                                             
                                                                                                                                
1.  Zero, Dept. of Natural Resources                                                                                            
2.  Indeterminate, Dept. of Environmental Conservation                                                                          
                                                                                                                                

2020-01-27                     House Journal                      Page 1471
The Governor's transmittal letter dated January 21 follows:                                                                     
                                                                                                                                
"Dear Speaker Edgmon:                                                                                                           
                                                                                                                                
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill relating to fees levied by resource                                                      
agencies for designated regulatory services. Designated regulatory                                                              
services include control of solid waste facilities, disposal of waste into                                                      
state waters, certification for federal permits under the Clean Water                                                           
Act, authorization for use of appropriation of water, administration of                                                         
emission control for air quality programs, and regulation of registered                                                         
pesticides and broadcast chemicals.                                                                                             
                                                                                                                                
Currently, resource agencies can only assess a fee based on the "direct                                                         
costs" incurred by the agency. This bill adds "indirect costs" to the                                                           
basis of the fee. Adding indirect costs more accurately reflects the real                                                       
costs that an agency incurs for services rendered. Applying an indirect                                                         
rate to fees for regulatory services will allow resource agencies to                                                            
recover overhead costs, such as accounting, procurement, operations,                                                            
information technology and centralized service costs. An indirect rate                                                          
fee also allows resource agencies to recoup the full direct cost of                                                             
personal services salary and benefits, which is currently capped at 149                                                         
percent of the base salary. Application of an indirect rate fee would                                                           
enhance program receipt revenue, which could reduce unrestricted                                                                
general fund expenditures in program areas within our resource                                                                  
agencies.                                                                                                                       
                                                                                                                                
I urge your prompt and favorable action on this bill.                                                                           
                                                                                                                                
Sincerely,                                                                                                                      
/s/                                                                                                                             
Mike Dunleavy                                                                                                                   
Governor"