Legislature(1997 - 1998)
02/25/1998 01:40 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.