Legislature(1997 - 1998)
03/20/1998 01:48 PM House FIN
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* first hearing in first committee of referral
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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."
Co-Chair Therriault provided members with a proposed
committee substitute, work draft 0-LS0573\L, dated 3/18/98
(copy on file).
MIKE TIBBLES, STAFF, REPRESENTATIVE THERRIAULT observed that
the legislation is not intended to be a solution for
everyone. It attempts to address some of the serious
concerns about how statutes, under AS 44.46, can be
interpreted. An attempt was made to include interested
parties in the discussions. Concerns by the Department of
Environmental Conservation and industry were considered and
incorporated into the proposed committee substitute where
possible. Changes incorporated by the proposed committee
substitute do not modify the intent. The legislation allows
the Department of Environmental Conservation enough
authority to ensure that users of the system pay for the
actual direct costs of services being provided. The
legislation has built in safeguards to prevent abuses and
ensure that general governmental functions, which benefit
the State, are paid for by the state. Inquiries for
information and training of DEC staff are two examples where
the State benefits and should therefore carry the cost.
Mr. Tibbles reviewed the proposed committee substitute:
* Section 1 still requires that the Department establish
fixed fees for direct costs. A technical change has
been made to make this section permissive and relocate
all references to restrictions and limitations to
another section of the bill.
* Section 1(a)(1) gives DEC the authority to charge for
other services relating to agriculture, animals, food,
drugs, cosmetics, and public accommodations and
facilities.
Mr. Tibbles noted that Ms. Adair previously testified that
the language "other services" was originally attached to
these types of functions. By removing this language, the
Department of Environmental Conservation's authority to
charge for many legitimate direct costs was inadvertently
removed. This amendment was added to correct that
situation.
* Section 1(a)(3) adds authority for the Department of
Environmental Conservation to charge for "sanitary
surveys, determinations, classifications, and
monitoring waivers".
* Section 2 (e) contains new language for the negotiated
agreements. It requires the Department of
Environmental Conservation, at the request of an
applicant, to negotiate a fee for service that is based
upon the actual hourly wage rate of the employees
performing the service. In addition, it may include
travel and third party inquiries.
Mr. Tibbles observed that this subsection is a result of
the realization that there are complex situations where a
fixed fee is not appropriate. It is intended to provide
the Department with the flexibility to deal with those
complex situations while placing restrictions to limit the
charge to an appropriate level.
* Subsection (f) increases the restricted use pesticide
fee from $25 to $30.
Mr. Tibbles noted that this change is in response to Ms.
Adair's concern that there may not be enough receipts to
cover the required state match for the pesticide program.
* Subsection (g) adds a new subsection clarifying that
the Department of Environmental Conservation may not
charge for conferring with or providing information to
third parties.
? Subsection (h) permits the Department of Environmental
Conservation to charge an hourly rate for the solid
waste program and is set out to be repealed in the year
2000 by section 3 of the bill.
Mr. Tibbles explained that since the Department is currently
charging an hourly fee for the industrial solid waste
program, this change would authorize them to continue to do
so under the direct cost restrictions. It also gives them
time to establish by regulation reasonable fixed fees and to
offer negotiated fee arrangements.
* Subsection (i) adds a definition of "actual direct
costs" to the bill. This subsection is intended to
place restrictions on what can and cannot be included
as part of the fixed fee.
In response to a question by Representative Kelly, Co-Chair
Therriault explained that subsection (g) clarifies that if
the Department spends time answering questions about an
application for a third person, the applicant will not be
automatically billed for the Department's time. The
Department would be serving the public's interest.
Representative Davies asked if third party would exclude
consultants, engineers, hydrologists, or attorneys that are
representing the permittee. Mr. Tibbles recounted that
conversations with the Alaska Legal Services indicated that
persons acting as an agent or a legal representative of a
permittee would be included as consideration of that
permittee or applicant; however, the language could be
changed to clarify the intent.
STEVE BORELL, EXECUTIVE DIRECTOR, ALASKA MINER'S ASSOCIATION
suggested that the proposed committee substitute be amended
to included a new section under AS 44.46.025(a)(7).
(7) Certification of federal permits or authorizations
under 33 U.S.C. 1341 (sec. 401 Clean Water Act)
provided there will be only one paid inspection per
year for items covered by this subsection;
Mr. Borell noted that several miners have expressed concern
that if the Department of Environmental Conservation were to
charge per inspection, that this could be used by third
parties for harassment. The Department of Environmental
Conservation follows-up on complaints regarding discharge
violations. Without a limitation on the numbers of
inspections that could be charged against a miner, opponents
of mining could make spurious complaints.
Representative Davies acknowledged the intent of proposed
subsection (7). He questioned if complaints resulting in
violations should result in a charge. Mr. Borell observed
that operators do all they can to correct violations.
Mr. Borell observed that meetings with the Department of
Environmental Conservation indicated that there was a $450
thousand dollar shortfall in the Division of Water's budget
that needed to be covered by fees. Industry worked with the
Department on the concept of fees. At the last meeting it
became clear that the Department was attempting to raise
$1.5 million dollars through fees. At that time industry
brought the issue to the Legislature to define the
relationship between general fund and fees.
Mr. Borell referred to language deleted on page 1, line 10,
"and other services provided by the department." He
maintained that this would have allowed the agency to charge
for anything, anytime.
JANICE ADAIR, DIRECTOR, DIVISION OF ENVIRONMENTAL HEALTH,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION commended the work
by Mike Tibbles, staff, Representative Therriault.
Ms. Adair reviewed remaining areas of concern.
1. Training is limited to permittees and applicants.
Ms. Adair observed that most of the training is not for
permittees or applicants. Most of the training is for waste
water and water system operators or installers. In
addition, training of food service employees, pool spa
operators and sanitary surveyors would not be covered.
2. Fees are limited to activities surrounding (a)(2), (6)
and (7):
- certifications;
- inspections;
- training;
- permit preparations and administration; and
- plan review and approval.
Ms. Adair pointed out that registering pesticides allowed
under (a)(8) does not involve any of the above activities.
3. (g) Does not allow the Department to charge a fee for
conferring with 3rd parties.
Ms. Adair did not interpret the language in subsection (g)
in the same manner as Mr. Tibbles. She asked for further
clarification that agents of the applicant are not included
under (g). She pointed out that statutes require that
certain permits be publicly noticed. She observed that
these notices have been charged to the applicants.
4. Actual Direct Cost
Ms. Adair observed that "actual direct cost" refers to the
actual hourly rate of employees directly engaged in
providing the service. The Department currently establishes
a flat fee for most of their programs. Annual costs of the
employees involved in the activity are added. This is
divided by the number of works each employee provides per
year to determine an hourly rate for each employee. She
stated that it would be difficult to determine the actual
cost of the employees involved. Employees in the same job
class are paid different amounts due to longevity. She
observed that the newest employee would be the cheapest.
She expressed concern with the exclusion of support staff.
She stressed that clerical staff is involved in permit
preparations. Flat fees include a factor for clerical
services. She observed that seafood inspections include 15
minutes of clerical staff for every hour of technical staff.
There is approximately 30 minutes of clerical support for
every hour of technical staff for the solid waste program.
Ms. Adair noted that some employees included in the flat
rate are responsible for supervising other employees. She
observed that her involvement is not charged.
Ms. Adair maintained that actual direct cost would affect
local governmental involvement. She stressed that local
governments are waiting for fees to cover the cost of
programs. If fees do not cover costs it will be difficult
to get local governments to take on certain programs that
they could better administer.
Ms. Adair noted that federal and state laws require sanitary
surveys. There are areas that where private surveys are not
available.
5. Employee Training
Ms. Adair emphasized that a well-trained employee saves
private companies money. Untrained state employees are at a
disadvantage when negotiating with well-trained industry
representatives. She maintained that the public interest is
not served when state employees are not well trained.
6. Ban on Hourly fees
Ms. Adair acknowledged that the ban does not apply to the
Air Program. She observed that the Solid Waste Program has
an hourly fee structure. Other flat rate programs have
hourly fees. After hour inspections are offered to meat
processing plants for an hourly fee. Hourly inspections are
only done at the request of the processor. Applications,
which are withdrawn during the review process, are charged
an hourly rate for work completed.
7. Low Pesticide Levels
Ms. Adair maintained that pesticide levels are too low. She
observed that 2,000 to 3,000 pesticides are sold in the
state of Alaska. The Department of Environmental
Conservation estimated that 95 percent are unrestricted use
pesticides. Based on this amount the Department estimates
that it will be $15.5 thousand dollars short of what is
needed to run the program. She spoke in support of
retaining the Department's ability to set registration fees
by regulations.
Representative Davies questioned if users could initiate
hourly fees. Ms. Adair noted that after hour inspections
are currently at the request of processors. The Department
also initiates hourly fees when applications are withdrawn
during the review process. She suggested that hourly fees
be excluded for water permits only.
In response to a question by Representative Kohring, Ms.
Adair explained that the Environmental Protection Agency
registers pesticides based on the chemical makeup of the
pesticide product. The Department of Environmental
Conservation registers pesticides used in the State. The
primary reason pesticides are registered is for the issuance
of monitoring waivers for drinking water systems. If a
pesticide has not been used in the State, public water
systems can be issued monitoring water waivers for that
pesticide.
KEN FREEMAN, EXECUTIVE DIRECTOR, RESOURCE DEVELOPMENT
COUNCIL, (RDC) ANCHORAGE spoke in support of HB 28. He
thanked the sponsor and staff for their work on HB 28. He
observed that RDC supports fixed costs and cooperative
funding agreements. He spoke in support of fixed fees. He
maintained that standardized fees should be established for
the most common permits. He proposed an aggressive general
permits program. Mr. Freeman also provided the Committee
with further written remarks (Copy on file.)
RICK HARRIS, SENIOR VICE PRESIDENT, SEALASKA CORPORATION,
JUNEAU expressed frustration with various aspects of the
permitting system. He expressed concern that the goal of
the permitting system is to raise money, not to serve the
public. He observed that the permitting agency has a
monopoly. He asserted that built in protections should
exist. He spoke in support of a general permit for routine
classes of activities. He maintained that permittees should
be charged for actual direct costs. He stressed that
permittees should not be burdened with a lot of indirect or
agency overhead costs.
Mr. Harris observed that the legislation limits fees to the
actual direct costs and allows flexibility. He acknowledged
the need for fees, but emphasized the need for protections
to keep the system in control.
Representative Davies suggested that the clearest way to
charge actual direct costs would be through hourly fees.
In response to a question by Representative Davies, Mr.
Harris emphasized that agencies perform public services. He
stressed that agencies should help pay for overhead costs.
He proposed that actual employee time spent on a project
should be charged to the applicant. Lights, power and other
overhead and administrative costs should be paid by the
agency. The cost of employees directly engaged in providing
the service should be charged. He felt that clerical staff
working directly on permits should be included. General
support staff in the Department, such as the commissioner's
administrative assistant, should not be included. He
maintained that broader overall costs are the role of the
government.
HB 144 was HELD in Committee for further consideration.
(Tape Change, HFC 98 -72, Side 2)
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