Legislature(1999 - 2000)
03/06/2000 09:04 AM Senate 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
SENATE BILL NO. 271
"An Act relating to fees charged for inspections by
the Department of Environmental Conservation; and
providing for an effective date."
SUE MOSSGROVE, Staff, Senator Robin Taylor stated that SB
271 had been introduced as a matter of fairness for all
businesses providing food services from restaurants to day
care centers. She noted that currently food inspection
fees are included as a part of the permit process within
Department of Environmental Conservation Food Safety and
Sanitation Program.
Ms. Mossgrove continued that during the interim, the
Administrative Regulation and Review Committee held a
hearing to review the increased fees proposed by the
Department of Environmental Conservation. She added that
while they continue to raise fees, they have not proved the
services for which they have charged. She noted that
several business owners have complained that this practice
is unfair; for example, the fees for one establishment
showed an increase from $75 in 1995 to $525 in 1999. She
commented that another showed their fees increasing from
$50 to $985. She disclosed that in the last two years they
were inspected only one time.
Ms. Mossgrove asserted that the Department of Environmental
Conservation changed rate setting from one permit for the
entire establishment, to individual permits and fees based
on type of facility and risk. She noted that by separating
food inspection fees from the permit process and not
allowing Department of Environmental Conservation to charge
for a service until they provide it, the sponsor hoped to
bring equity to the businesses around the state.
Senator Phillips asked for an example of the Department of
Environmental Conservation charging for an inspection
without following through on this service.
Ms. Mossgrove presented an example of a business out at Dot
Lake, a restaurant and convenience store that was charged
$75 for an initial permit. She noted that this same
business a few years later is paying for two separate
permits, one for $150.00 and the other for $575.00 and
added that this business was only inspected once over the
last two years.
Senator Adams asked if the sponsor would consider
established rates for these inspections. He noted that the
present statutes do not allow for this.
Ms. Mossgrove responded that she did not think Senator
Taylor would oppose such a measure. She noted that in
previous legislation, the Department of Environmental
Conservation was given the authority to charge fees without
set guidelines on what is reasonably allowed.
Senator Green clarified that if a business cannot get their
license to operate they do not pay fees for an inspection.
She referred to the attached fiscal note and pointed out
that schools are exempted as well as charitable
organizations. She asked what any of these charities were.
Ms. Mossgrove stated that she could give no specific
examples of these entities.
Senator Green asked if Head Start could be one of them?
Ms. Mossgrove stated that she believed so and noted that
there was some discussion about other daycare facilities
being overburdened with fees, which Head Start was exempt
from.
Senator Green referred to discussions with the Finance
Subcommittee Chair for Department of Environmental
Conservation and the potential of a refund for overcharges
and increases. She asked if these considerations were
taken into account while drafting this legislation.
Ms. Mossgrove responded that no, this had not been
considered.
BETTY REVIS testified via teleconference from Tok. She
stated that she runs a coffee cart, which only serves
coffee and tea. She pointed out that even though this is
the only service she provides, she is nonetheless charged
the same inspection fees as a grocery store down the
street. She continued that when she opened her business in
1993, she was required to pay $50.00 for inspections and
noted the fees were presently increased to $210.00. She
stated that she did not understand the reasoning for this
or the fairness of it. She concluded that her business had
not been inspected, this year or last.
JANIS ADAIR, Director, Division of Environmental Health,
Department of Environmental Conservation testified via
teleconference from Anchorage that the fees charged to
businesses have been equally problematic for them. She
noted that the fees for inspection were raised due to a
funding switch from general funds to general fund program
receipts. She continued that the remaining general funds
were reduced by the conference committee last year. She
stated that these two things have exacerbated the
situation. She added that it has been years since the
department has been able to inspect every permitted
facility. She pointed out that these inspections are
conducted from a "risk based" perspective, to help
understand why some facilities and businesses are not
charged. She then explained how fees are broken into
schedules and how they are allocated. She also explained
why this proposed legislation would mean multiple billings
to customers and additional increased costs.
Tape: SFC - 00 #47, Side B 9:51 AM
Ms. Adair noted that Head Start and public schools are
exempted from these inspection fees, but because they are
considered high-risk facilities, the department conducts
inspections anyhow. She noted that children are more
susceptible to food-borne illnesses than others. She
responded to Ms. Revis' concerns by noting that the
department intends to amend food service regulations, which
will exempt espresso and coffee carts from the permitting
and fee process.
Co-Chair Torgerson wondered how many facilities are
inspected as versus those being billed.
Ms. Adair responded that this depends on the year, since
any given year, inspectors quit and she noted that some of
these same employees periodically go on family leave. She
added that taking these factors into account, about fifty
percent of the deemed facilities were inspected overall.
She noted that most of these were seafood related, about 80
percent, since the department is mandated by the federal
government to do so.
Senator Wilken asked if the department bills 100 percent of
these facility, but that only 40 percent of these are
inspected.
Ms. Adair responded that there are a host of facilities,
which the department inspects and a subset of these are
charged a fee. She noted that Senator Wilken was correct,
that the department does charge a fee, which includes the
total cost of the program, including inspections, but not
all of these are inspected.
Senator Wilken asked if some of the establishments receive
a bill for inspection, but are not inspected.
Ms. Adair responded that if a facility receives a bill,
this reflects an allocation of the cost of the program,
including the amount of inspection. She added that the
food service aspect of the program was changed from a mix
of general funding programming fees to 93 percent of
programming fees, therefore, the cost of the program at
seven percent would consist roughly of travel. She
continued that the "costed-out" amount must be allocated
across all users that are permitted and not exempted from a
fee. Ms. Adair and Senator Leman discussed how the billing
process worked for this inspection program.
Co-Chair Torgerson asked if Alaska has laws requiring that
a facility be inspected every year.
Ms. Adair responded that there was not, much less a law
requiring an inspection. She noted that an inspection is a
way to determine compliance with food safety laws. She
added that the Food and Drug Administration recommends that
full service restaurants be inspected at least twice a
year, but the department does not have the staff to do
this. She explained in detail how inspections are
presently conducted and noted that she would be happy to
work with the Committee on this legislation.
Co-Chair Torgerson noted that he would contact Ms. Adair
for a list of inspections, those businesses inspected and
how much money is charged.
Senator Leman asked if the department would support the
divestiture of some of these duties to some of the larger
municipalities to conduct their own food service
inspections such as which, Anchorage is currently involved.
Ms. Adair responded that the department has considered
this, but found that in the smaller communities the economy
of scale does not exist.
Co-Chair Torgerson ordered the bill HELD in Committee.
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