Legislature(1997 - 1998)

02/25/1998 01:40 PM FIN

Audio Topic
* first hearing in first committee of referral
+ 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."                                          
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.                            
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                              
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.                                  
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                      
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                        
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                               
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                    
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                      
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                       
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                            
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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