Legislature(1997 - 1998)
02/25/1998 01:40 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 144
"An Act authorizing the Department of Environmental
Conservation to charge certain fees relating to
registration of pesticides and broadcast chemicals;
and providing for an effective date."
BARBARA COTTING, STAFF, REPRESENTATIVE JEANNETTE JAMES,
explained that HB 144 had been submitted at the request of
the Alaska Department of Environmental Conservation (DEC),
Division of Environmental Health.
She advised that DEC oversees the use of pesticides in
Alaska, a service which consists of applicator training and
certifications, issuing permits for public use projects,
and ensuring pesticides are used correctly, which includes
that manufacturers register their products with the State.
Ms. Cotting noted that the program would be partially
funded by the federal government with a State match.
Each state pays for its share of the pesticide program
through a registration fee levied ON chemical
manufacturers. DEC would like to implement this in Alaska,
but statutory authority would be required. At this time,
no Alaskan would be required to pay the fee since there are
no chemical manufacturers in the State. DEC initially
proposed to charge $100 fee per label. Ms. Adair thought
that rate would not impact the large manufacturers' bottom
line, but would instead have a positive impact on the
general fund providing a projected annual savings of
$56,600 dollars to be replaced by program receipts.
MIKE TIBBLES, STAFF, REPRESENTATIVE GENE THERRIAULT,
provided a sectional analysis of the proposed legislation,
work draft #0-LS0573\B, Lauterbach, 2/24/98. He pointed
out that Section #1 would provide language from the
original bill indicating that the Department would have the
authority to collect fees for the registration of
pesticides and broadcast chemicals. It would also
eliminate the Department's authority to charge fees for
"other services provided by the Department".
Section #2 would establish a new subsection (e), which
would permit the Department to collect fees relating to
water and wastewater operator training. That item would be
singled out into its own subsection because it no longer
would appropriately fit under the direct costs of
permitting.
Mr. Tibbles continued, Section #2 would also establish a
new subsection (f) which would divide pesticides and
broadcast chemicals into two classifications; one being
restricted use chemicals under federal regulation, and the
second, all other pesticides (targeting household chemicals
such as bleach, disinfectants and insect repellents). The
fee for restricted use chemicals has been established at a
higher rate to account for the greater administrative costs
associated with those chemicals.
Additionally, Section #2 would establish a new subsection
(g) which would prohibit the Department from charging an
hourly fee under (a) of that section.
Co-Chair Therriault spoke to the fiscal impact relating to
the committee substitute. If some of the program receipt
authority was removed for something that already had a fee,
the Department would no longer then have that authority.
The Department would need to be backed by general funds
which should be reflected in the fiscal note.
JANICE ADAIR, (TESTIFIED VIA TELECONFERENCE), DIRECTOR,
DIVISION OF ENVIRONMENTAL HEALTH, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION, commented to the concerns
presented by the proposed committee substitute. Currently,
there is an hourly fee charged for solid waste, requested
by municipalities that did not want to subsidize other
communities. She agreed that it would be easier for the
Department not to have an hourly fee, but that it had been
initiated at the communities request.
Last year, industrial solid waste was reflected in a
separate component. The Department was given authority to
cover all costs and travel through the fees. Ms. Adair
continued, the Department recently completed a public
notice regarding the hourly fee rates. She advised that
the Department does not know how to implement such a
procedure without an hourly fee assessment unless the
client pays more.
Ms. Adair spoke to an additional concern for the Department
to provide site-specific determination for wastewater
permits. She recommended that Mike Conway address that
concern for Committee members.
Ms. Adair spoke to the deletion of "other surfaces
provided" and how that would affect communities need for
compliance with the certification process. The Department
is also responsible for providing sanitary surveys for
public water systems and a variety of functions, which are
not associated with the permit or plan aspect and in which
a fee is associated.
Co-Chair Therriault asked if the service would be
discontinued without the specific fee. Ms. Adair replied
that it would depend on the amount of general funds
allocated. She pointed out that the benefit about
implementing the fee is that those that use the service are
the ones who pay. General funds would not have that same
correlation.
STEVE BORELL, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE
DIRECTOR, ALASKA MINERS ASSOCIATION, INC., ANCHORAGE,
pointed out that concern regarding user fees has surfaced
as State revenues have decreased. He questioned how much
of the DEC budget should be generated from user fees versus
how much should come from the general fund.
Mr. Borell stated that the Alaska Miners Association has
been working in collaboration with DEC, discussing changes
to user fee collection. He thought that HB 144 had
originally been written to address fees associated with
pesticides.
Mr. Borell spoke to the work draft. In Section #1, the
first item clarifies that the intent of existing statute AS
44.46.025(a) is to allow user fees for "the applicable
direct costs" for items listed, including certification of
federal water discharge permits and processing water
discharge permits. By the change proposed in removing the
language "and other services provided by the Department"
would clarify the intent and limit user fees applicable to
direct costs. He believed that DEC would then still be
able to charge user fees but that they would be limited to
direct costs.
Mr. Borell continued, Section #2, Line 26, the change would
prohibit DEC from charging hourly fees for the items
listed. He stated that this action would benefit DEC, as
well as private industry. He stressed that the difficulty
and cost to administer an hourly fees program is
significant.
Mr. Borell added that Alaska Miners Association has not had
the opportunity to determine if the changes in the "B"
version would affect DEC's ability to enter into
reimbursement agreements. He believed that it is important
for DEC to be able to enter into such agreements for large
projects. The agreements are negotiated between the
company and the State and would define work objectives, the
work to be done, the final products, and the time schedule
for completion. Major companies are generally not opposed
to such agreements if they provide increased certainty and
predictability of the total cost.
Co-Chair Therriault noted that the Committee could provide
the Alaska Miners Association clarification for the
reimbursable agreements. He asked if DEC was planning to
provide a fee packet of regulations for the storm water run
off.
MIKE CONWAY, DIRECTOR, AIR/WATER QUALITY DIVISION,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION, replied to date,
there is not a package for those services and there is no
plan to create such a package. Currently, the Division has
the authority to charge a fee for that service.
Co-Chair Therriault asked if the language were changed to
"other direct services" as suggested by Representative J.
Davies, would that address the concern of the Alaska Miners
Association. Ms. Adair replied that the problem continues
to be solid waste. The Department would need to address
the decision made last year by the Legislature to have
industrial solid waste fully supported by fees.
Co-Chair Therriault questioned concerns regarding
pesticides contained in the legislation. Ms. Adair
responded that the Department is trying to cover $55,500
dollars, the federal grant match received for pesticide
management in Alaska. She discussed the distinction
between restricted use pesticides which are more regulated
and those that cause problems because of their high toxic
levels.
Representative J. Davies asked the amount, which could be
considered problematic. Ms. Adair responded that it would
be important to determine how many pesticides would be
considered restricted use. The registration program is
only a few months old. Originally, the Division requested
that a temporary registration fee of $100 dollars be in
place until a regulatory limit had been established. After
the market survey had been completed, the Division realized
that $100 dollars was too high and decided that $50 dollars
should be the cap.
Representative J. Davies asked if a general fee would be in
place until regulations had been adopted. Ms. Adair noted
that it would. She had envisioned doing it in a regulatory
process, which would provide an opportunity to work with
those affected by the change.
Representative J. Davies asked if there would be any impact
on the reimbursement agreements. Ms. Adair stated that
there would not, although, she asked if a prohibition on
hourly fees would be placed in statute for DEC regulations.
She questioned if that would be interpreted as a
prohibition on the hourly fees and reimbursable services
agreement.
JERRY REINWAND, REPRESENTING THE CHEMICAL SPECIALITY
MANUFACTURERS ASSOCIATION, JUNEAU, noted that the groups
which he represents had provided a survey of the average
number of products per state, which amounted to
approximately 8800. A $100 dollar fee could create a
hardship. He noted that the Association would be more
comfortable with a statuary procedure in place and that a
system be established to create a reasonable number. He
believed that if the Department was delegated the
authority, they would be receiving taxation authority,
which is a concern for the private industry. Mr. Reinwand
added that the Association is also concerned with the
differentiation used between household products and
products used for commercial and industrial purposes.
Co-Chair Therriault inquired if there was information
available from other states regarding the more restrictive
amount. Mr. Reinwand replied that the consumer household
breakdown amounted to approximately 65% of the national
registration. Mr. Reinwand reiterated that by providing
the agency with the discretion could create a tax situation
and he felt that authority should be more appropriately
decided by the Legislature. He urged that a cap be
established.
Representative J. Davies pointed out that there is not a
good way to measure the number. He believed that Alaska
would have a lower amount than the national average.
Representative G. Davis voiced his concern with the section
of the bill which establishes the fees. He acknowledged
that many of the complaints received by the Department are
in regard to high fees.
Co-Chair Therriault noted that HB 144 would be HELD in
Committee for further discussion.
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