Legislature(1997 - 1998)

03/06/1998 01:50 PM House 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."                                          
Committee members that the language referencing direct and                     
indirect costs would limit the Department by charging only                     
direct costs.  The stipulation has been part of AS                             
44.60.025(a) since it was first adopted by the Legislature                     
in 1990 in passage of HB 85.                                                   
Direct versus Indirect Costs.  Ms. Adair stated that in                        
1993, when the Legislature passed legislation establishing                     
the comprehensive air program in the State (HB167), it                         
included what is now AS 44.46.025(c), and allowed DEC to                       
include in its air permit fees both direct and "indirect"                      
costs.  Adding the authority for "indirect" costs was                          
necessary because AS 46.14.400(h), also a part of HB 167,                      
prohibits the Department from delegating or enabling                           
another department or government entity (i.e.                                  
municipalities) from establishing air permit fees or                           
collecting them.  Therefore, since the air fees established                    
by DEC were intended to cover the costs of a municipality                      
that might run the air permitting program rather than just                     
the department's own costs of providing the service, the                       
term "indirect" was added to give the necessary authority.                     
Other Services Provided by the Department.  Ms. Adair spoke                    
to the language, which originated in AS 44.46.025(a)(1)                        
relating to the food and public facility activities of DEC.                    
The language was moved into the introductory paragraph of                      
AS 44.46.025(a) as part of SB 99, which passed the                             
Legislature in 1993.                                                           
The language was moved in recognition of the fact that                         
there are a number of other services the Department                            
provides which directly benefit individuals.  The                              
Legislature wanted DEC to charge for those services.  Ms.                      
Adair noted, currently, the types of services charged for                      
that are not included as part of an inspection, permit                         
preparation, administration or plan review and approval                        
? Laboratory analyses of food products for export;                             
? Certification of seafood products for export;                                
? Certificates of Origin for seafood products for                              
? Sanitary surveys of public drinking water                                    
? Domestic wastewater installer certification;                                 
? Dog and cat health certificates;                                             
? Food Service facility recognition program                                    
? Monitoring waivers for public drinking water                                 
? Determinations of whether or not a public water                              
system is groundwater under the direct influence                               
of surface water;                                                              
? Determination of optimal corrosion control for a                             
public water system that exceeds the lead and                                  
copper action levels;                                                          
? Certified Pool and Spa operator training;                                    
? Various other training opportunities as they                                 
arise and are needed.                                                          
Ms. Adair continued, there are some services in the current                    
statuary list for which the Department can charge fees that                    
are not part of an inspection permit or plan approval.  The                    
proposed amendment to the introductory paragraph would make                    
the Department's authority to charge a fee for those                           
services highly questionable.                                                  
This would create a problem of funding, not authority.  In                     
a program that is heavily reliant on fees, every hour of an                    
employee's time must be charged to a project.  The costs                       
incurred by answering questions about a facility or permit                     
have to be covered.  The only way to do that is to charge                      
the costs to the project because there are insufficient                        
general funds to cover the costs.                                              
Water and Wastewater Operator Training.  Ms. Adair noted                       
that in this section, DEC specifies how to address the                         
advisory board because they cover the training and                             
certification of operators for certain public water and                        
wastewater systems.  The primary authority used for                            
domestic wastewater certified installers program is found                      
in AS 46.03.020(a)(10)(D).                                                     
Prohibition on Hourly Fees.  She noted that hourly fees are                    
"tough" for the Department.  The reason that they exist is                     
that those who pay these fee have asked for them.                              
Currently, the only fees on the books that would be                            
affected by the prohibition are the solid waste fees.  For                     
the new industrial solid waste component, the prohibition                      
would create a large problem since the Department was given                    
direction by the Legislature, last session, to make that                       
aspect of the solid waste program fully funded by fees.                        
Reimbursement Agreements.  Ms. Adair pointed out that the                      
Department's ability to enter into these funding                               
arrangements has been supported in previous testimony                          
before the Committee.  These arrangements are used for                         
large development projects, primarily mines.  They                             
essentially pay the cost for DEC services.  Ms. Adair                          
thought that for site-specific determinations in the water                     
quality program area, an hourly fee would be the fairest                       
fee to establish.                                                              
Pesticide registration.  Ms. Adair continued that if the                       
Department has fees strictly based on the cost to the                          
Department to register a pesticide product, it would be                        
approximately $100 dollars per label.  However, the                            
Department needs only to cover the match for the federal                       
pesticide grant.  If pesticides are not divided into                           
categories, it would appear that a $50 dollar per label fee                    
for all products would bring in enough money to provide the                    
match.  She recommended that a $50 dollar label might be                       
too high, depending on how many of the 2,000-3,000                             
pesticides the market survey found being sold in the State.                    
Ms. Adair pointed out that the distinction between a                           
household pesticide and a non houseshold pesticide made in                     
the bill is problematic for the Department.  She added that                    
if categories had to be divided, it would be much easier to                    
determine between restricted use and non-restricted use                        
pesticides.  If these categories were to be delineated, it                     
would become an administrative nightmare for the Department                    
and the companies involved.                                                    
Co-Chair Therriault asked how many chemicals registered in                     
the State would fall under "restricted".  Ms. Adair noted                      
that it would be the smallest amount presented.  She added                     
that the Department's proposed number of 2,000 - 3,000 was                     
based on a recently conducted market survey.  She pointed                      
out that Alaska does not have a lot of pesticides being                        
used in comparison to other states.  Most of the                               
agriculture here is organic.  She reiterated that the                          
determination is problematic and is another reason why the                     
Department would like to have the fee established in a                         
regulatory process which matches the federal grant.                            
Co-Chair Therriault commented that the proposed committee                      
substitute would not preclude the Department from entering                     
into the reimbursable service agreement.                                       
Ms. Adair noted that the proposed water fees are creating                      
angst and that they have not gone out for public comment                       
yet.  She stated that many changes occur during the public                     
comment process.                                                               
Co-Chair Therriault asked if there was an appeal process                       
available for those who want to challenge their permit                         
application.  Ms. Adair replied there is.  Some cases have                     
been more informal than others.  The regulations are in the                    
process of being amended.                                                      
Co-Chair Therriault questioned if training Department                          
personnel was included in the fees.  Ms. Adair responded                       
that the hourly fees only cover the actual personnel                           
service costs plus a certain percentage of the common                          
costs.  The fees do not cover costs associated with travel                     
or training.  This requires a well-trained staff.  Ms.                         
Adair concluded her testimony.                                                 
HB 144 was HELD in Committee for further consideration.                        
(Tape Change HFC 98- 57, Side 2).                                              

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