Legislature(1999 - 2000)
03/20/2000 09:02 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= 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."
This was the second hearing for this bill in the Senate
Finance Committee.
SUE MOSSGROVE, Aide to Senator Taylor, testified the sponsor
introduced SB 271 as a matter of fairness for all businesses
providing food services, from restaurants to day care
centers. Currently, she stated food inspection fees are
included as a part of the permit process within the
Department of Environmental Conservation Food Safety and
Sanitation program. However, she noted some establishments
were charged the fees but not receiving services. She said
this legislation was introduced to separate the inspection
fee from the permit process so establishments were not
charged a fee unless they were actually inspected.
Co-Chair Torgerson noted that the member's packets included
information in response to requests made at the previous
hearing by the Committee to the department. He relayed the
Committee's intent at the last meeting was to follow the
sponsor's intent to charge for actual inspections but also
to identify the high risk health areas to possibly adopt
statutes to exempt some facilities from inspections or
require biannual inspections for others.
JANICE ADAIR, Director, Division of Environmental Health,
Department of Environmental Conservation testified via
teleconference from Anchorage and reviewed the handout
provided to the Committee by her division. [Copy on file].
Part 1: Risk Based Inspection Frequency Protocol, Risk
Level = # of routine inspections per year - this showed
how the division views food service facilities to
determine the relative risk it may pose to public
health. It also shows the process preparation or what
was being done with the food, or what types of
physical, microbial and chemical hazards might be
generally present.
Ms. Adair noted that the number of annual inspections shown
on this chart was the ideal not the actual.
Second page of Part 1 showed the considerations that
may increase or decrease the optimal number of annual
routine inspections.
Ms. Adair told the Committee that the division was currently
reviewing compliance history and targeted populations to see
if a facility should be given a lessor or higher risk level
ranking.
Part 2: Inspection Risk Levels by Office - shows where
division offices are located, the numbers of inspectors
in those offices and how the overseen facilities are
divided between each office by the risk level. This
shows the total of risk levels two through four, what
the division concentrates on and then the average
number of facilities per inspector.
Part 3: Food Safety and Sanitation Office Jurisdictions
- a map showing the jurisdiction areas of each office.
Ms. Adair pointed out that the Nome office was run by the
Norton Sound Health Corporation and that the state has a
designated grant to the corporation to operate the program
in that area.
Second page of Part 3 - listing of those communities
shown on the map and which office oversees them.
Part 4: 1999 Food Safety and Sanitation Facilities -
this breaks down the different types of facilities,
gives a count by facility type, whether or not they are
permitted and whether or not they pay a fee. These are
divided by their risk level.
Ms. Adair noted that several of these facility types were
not permitted and did not pay fees. She directed attention
to exempted facilities.
Part 5: Number of Inspections, Fee'd Facilities and
Inspectors by Year - showing the percentages of fee's
facilities that were inspected in the years 1997
through 1999.
Ms. Adair corrected an error on this page changing the
number of Fee'd Facilities in calendar year 1999 to 5022.
She told of the inspectors who took advantage of the
Retirement Incentive Program (RIP) and of other vacant
positions. She also talked about the reduction of the
program. She said the combination of these factors took a
toll on the number of inspections that were performed.
Co-Chair Torgerson asked about the increase of facilities
during the time indicated on the handouts and if these were
new facilities or if the department added existing
facilities to their inspection list. Ms. Adair assured that
this was a dynamic industry with many new businesses
entering continually and that the department had not added
any existing facilities to the program. She said seafood
processors add to the fluctuation because they don't always
operate every year. She explained permits are issued every
year so if a processor does not open in a particular year,
there would be no permit applied for and the facility would
not be counted.
Co-Chair Parnell asked of the number of facilities inspected
each year, what percentages were in Anchorage, Fairbanks and
Juneau. Ms. Adair responded to the facilities in Anchorage
saying the only inspections done in the Municipality of
Anchorage were processors involved in inter-state commerce
and the railroad. She said she would provide information on
Juneau and Fairbanks.
Co-Chair Parnell wanted to know if the state was performing
restaurant inspections in Anchorage, Chugiak or Girdwood.
Ms. Adair replied that Anchorage is the only community that
has adopted its own program and does its own restaurant
inspections. All other restaurant inspections were performed
by the state, she said.
Co-Chair Parnell asked if it wasn't more common in the US
that the local government do restaurant inspections. Ms.
Adair said it was but there are so few facilities in
communities to generate the fees to support a local program.
She stressed that even Anchorage has to fund 50 percent of
the inspection program from its general fund. She estimated
that Juneau could only minimally fund a program and that
other communities could not. She said state inspectors are
sent to communities when needed and can cover several
communities.
Co-Chair Torgerson asked if any other communities had
provided the services in the past but then turned the
program back to the state. Ms. Adair responded that the City
of Fairbanks had collected fees and paid $60,000 to contract
with the state for the inspections. However, she said the
program was dropped after the state fees were increased
because the state could collect more revenue through
increased fees than what could be collected from the city.
Part 6: Revenue Lost from Exempt Food Facilities - this
included Headstart programs in schools and other
charitable food service organizations and the revenues
lost to the program
Co-Chair Torgerson asked if these facilities are exempt from
paying the fee but not from being inspected. Ms. Adair said
that was correct.
Co-Chair Torgerson asked how this information tied into the
information of Part 4, which showed the exempt facilities
broken down by type of facility. Ms. Adair replied that the
information on Part 6 was reflected on the Part 4 chart
except for temporary food service facilities, which did not
fit into any of the categories.
Senator Adams asked if the Anchorage inspectors did
inspections of seafood processors in Dutch Harbor and
Unalaska. Ms. Adair said that was correct however she noted
that currently, the inspector from Valdez was doing the
Aleutian Peninsula inspections because his wife was
currently living there.
Senator Adams asked the frequency of the visits to this
largest seafood processing area in the state. Ms. Adair
explained that Dutch Harbor mostly produces fresh frozen
seafood, which is a very low risk. The remainder of the
processing, such as surimi imitation crab, requires an
inspector to visit three times annually.
Ms. Adair clarified that the retail restaurant fees had
increased and are expected to cover more services that just
the cost of inspections. She stated that the fees cover the
entire cost of the program with the exception of recovery of
travel costs, which is prohibited by statute. She detailed
the other services such as training, response to an
emergency, and resolving complaints. She noted that it is
just as important to a facility to know it is not the cause
of a food borne illness.
Co-Chair Torgerson asked about putting exemptions into
statute for facilities with a low risk level that may not
require an inspection every year.
Ms. Adair responded that there was currently no statutory
requirement for an inspection and that the inspection is
what the department performs to verify compliance to the
food safety requirement. While she was aware that other
states had laws that dictated the number and frequency of
inspections based on the type of facility, she stressed the
system needed to be flexible. She gave as an example, the E.
coli outbreak that was traced to undercooked ground beef.
Before this outbreak, she explained, ground beef was not
considered a threat by the general public. Since the 1993
incidence at Jack-in-the-Box restaurants, those facilities
that serve hamburgers were given a higher risk level, which
requires more frequent inspections.
Co-Chair Torgerson wanted to know why the fiscal note did
not indicate a loss of revenue considering the provision of
SB 271 to inspect only certain facilities. He noted that the
division only performed half of the ideal number of
inspections. Ms. Adair responded that when the vacant
positions were filled, the division hoped to increase the
number of inspections. She warned that if the fees were
taken away, the number of positions would need to be
reduced. She told the Committee that she had figured how to
change the program so everyone pays a flat fee whether or
not the facility was inspected. She added that those
facilities that are inspected would then pay an additional
cost. Therefore, she calculated if the number of inspections
stayed the same, about half of the facilities would pay an
inspection fee and the remaining facilities would pay a flat
fee to support the entire program.
Co-Chair Torgerson asked if the Committee were to consider
the flat fee and also keep Senator Taylor's bill in mind,
the Committee would need to know what the flat fee would pay
for.
Ms. Adair was concerned about charging an extra fee whenever
an inspection was performed. She understood the complaints
that caused the bill to be introduced, but thought it would
only change the complaint. She explained the complaint would
change from "I'm paying for inspections that I'm not
getting" to "Every time they come in and do an inspection,
they hand be a bill even if they don't find anything.
They're in here to pad their budget."
Co-Chair Torgerson agreed in part but did not think the
witness was making the case as to what services the fees
covered. He stated that many facilities do not know what
functions the fee goes to pay for. He wanted to find a
compromise for the department and the bill's sponsor.
Senator Leman asked if it was reasonable to implement a flat
fee or whether some facilities cause the department to exert
more effort and if the fee system should be framed
differently.
Ms. Adair responded that was the reason the department used
permitting time and inspection time to calculate the fee.
She explained that some canneries took up to 18 hours to do
an inspection as opposed to a convenience store that may
only take 30 minutes. The theory, she said was that there
are some kinds of services and some compliance issues that
take more time for the department to process than others.
She noted that is the purpose for the different risk levels.
She added that some facilities that have a proven compliance
record would not need inspections as frequently as others
would.
Co-Chair Torgerson did not think there would be that hard of
time proving the need for different fees for the risk
levels. He did not mind charging more of restaurants for re-
inspections for restaurants with low scores. Ms. Adair noted
there are re-inspection fees already in place for those
facilities that score low and must be revisited to ensure
compliance.
Co-Chair Torgerson stated the reason behind the bill was a
small espresso stand that is charged the same amount as a
200-seat restaurant. He surmised that the risk was
undeniably different.
Senator Green wanted to confirm the exemptions shown on Part
6 and whether the lost revenues represented by the $300,000
lost fees were then calculated into the for-profit fees. Ms.
Adair noted there are general funds in the program but that
most went to support seafood related activities. She said
the lost revenues were off set by higher fees charged to the
retail food service facilities.
Co-Chair Torgerson tried to clarify the $279,920 was the
current amount collected or the total of all costs. Ms.
Adair responded that amount is what the department would
collect if all the facilities were charged a fee, including
the currently exempted facilities.
Co-Chair Torgerson asked what would be the revenue loss if
the additional exemptions were permitted. Ms. Adair answered
$36,625.
Co-Chair Torgerson requested exploring the flat fee for
health services related to facilities by risk and also the
intent of the bill to pay for inspections when they occur
instead of across the board. He asked for another summary
that incorporates these scenarios and includes the current
amount of general fund support for the program.
DOUG RHODES testified via teleconference from Glennallen
about his concerns of the price of the inspections. He told
of being charged for two inspections of his facility, one
for the kitchen portion and the other for the bar portion,
saying the two are located in the same building within ten
feet of each other. He warned this expense would result in
no more small roadside businesses. He thought there were too
many Department of Environmental Conservation employees in
his area and spoke of the frequent travel of inspectors.
Co-Chair Torgerson assured the witness that Committee was
trying to work through his concerns.
Senator Green asked if the two places were inspected on the
same day or different times. Mr. Rhodes said the inspections
were done on the same day.
SENATOR ROBIN TAYLOR did not oppose a flat rate for an
annual permit that included the cost of inspections. He was
concerned about the ability of the department to raise the
fees to cover the costs of the department's program. He
complained that the inspectors were driving new Ford
Explorers to perform the inspections and he understood why
the small operators questioned the amount of their fees.
Senator Taylor continued that the legislature's intent is to
downsize the department but that the department would not
comply.
Senator Leman clarified that the previous year the
Department of Environmental Conservation budget was actually
increased.
Co-Chair Torgerson ordered the bill HELD in Committee.
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