Legislature(1997 - 1998)
04/29/1998 03:50 PM Senate RES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
CSHB 144(FIN) - DEC FEES:PESTICIDES AND CHEMICALS
CHAIRMAN HALFORD brought HB 144 before the committee as the next
order of business.
BARBARA COTTING, committee aide, House State Affairs Committee,
stated the legislation resolves a lot of problems that have needed
addressing for a long time. She said the House Finance Committee
has worked extensively on the legislation, and she deferred to
their staff to answer any questions committee members might have.
MIKE TIBBLES, staff to Representative Gene Therriault, said there
was a concern that industry was being charged for items that should
come out of the general fund and are now being included in program
receipts. Initially, they looked at requiring a fixed fee,
however, in looking at the statute, there was confusion about how
the language "and other services provided by the department" should
be interpreted. It was felt it was being interpreted too broadly
and including items that shouldn't be included in the permittee's
cost. That language was removed, but then it started to open up
into other items and excluded certain things they wanted to charge
for. They worked to get it to the point where fees could be
charged for the reasonable functions and have the safety built in
so that there wouldn't be abuses, and, at the same time, have
industry pay for those actual direct costs of the services provided
to them.
Mr. Tibbles presented a section-by-section analysis of CSHB
144(FIN).
Number 475
SENATOR TAYLOR commented that other than for pesticides, it stills
leaves the determination up to the department on what the hourly
fee will be and what the fixed fee will be. MR. TIBBLES
acknowledged that was correct, but he said they were trying to
approach it from the position of what can be charged, trying to
eliminate all indirect costs, therefore forcing the fee down.
SENATOR TAYLOR said by eliminating the indirect costs, the
department will increase their hourly costs in order to recover
the same amount of money. He voiced his position that there should
be more "teeth" put into the bill.
SENATOR TORGERSON asked if the department currently includes
overhead expenses in their hourly billing. MR. TIBBLES replied
that it was his understanding that they do, however, there is a
statutory prohibition against including travel costs, but that is
included in this legislation.
Number 541
SENATOR LINCOLN asked if it is the department that is allowed to
choose either the fixed fee or the actual direct costs. MR.
TIBBLES replied that the fixed fee would have to based upon the
actual direct cost.
Number 585
JERRY REINWAND, representing the Chemical Specialty Manufacturers
Association, said his client has concern with the uncertainty of
what the charges are going to be and the uncertainty as to what the
definition of the product is going to be.
Mr. Reinwand said there is a dispute between the association and
the department as to how many products would actually be
registered. The department figures there would be about 2,000
products registered, however the association figures it would be up
to 8,800 products registered. He noted some states have as many as
13,000 products registered.
He said there is also a dispute between the association and the
department on the definition of what constitutes a pesticide.
Mr. Reinwand said the association simply has a difference of
opinion with the department, and they have no problem with paying
an appropriate fee. They believe that the fee should be set in
statute and the definitions contained in the proposed Resources SCS
are appropriate.
TAPE 98-36, SIDE B
SENATOR GREEN inquired if this is handled in all states through
the equivalent of a DEC. MR. REINWAND responded that he believes
there are states where the agriculture departments actually run
these types of programs and not the environmental agency.
CHAIRMAN HALFORD questioned what the registration of household
products includes and what registration means. MR. REINWAND
responded that even though his client's recommendation is to try to
define these products, in general, by statute, the department still
has a lot of elbow room to define this by regulation. He wasn't
familiar with the meaning of registration.
Number 550
JANICE ADAIR, Director, Division of Environmental Health,
Department of Environmental Conservation, responding to Chairman
Halford's question on the meaning of registration, said
registration, generally speaking, is when the department gets a
copy of a label of a pesticide. The label explains the cautions,
how it can be used, how it shouldn't be used, etc., and this is
kept on file so that they know how it can be used in the state.
The manufacturer is responsible for providing this information to
the department.
Ms. Adair said the department worked with the House Finance
Committee on the legislation, however, they still have problems
with the pesticide section, and it primarily is a disagreement
about how many pesticides there are in use in the state. The
department's registration program just took effect late last year,
so it is just now getting the information on how many pesticides
there are, but based on market surveys done by their pesticide
staff, there is somewhere between two to three thousand of them.
She pointed out there is not much use of restricted use pesticides
in Alaska, and the department does not have a problem with
differentiating between restricted-use pesticides and
nonrestricted-use pesticides.
Ms. Adair showed the committee a label from a product that is
authorized for agricultural and non-agricultural use. However,
with the way the language in the Resources SCS reads, she wasn't
sure what they would call it when it comes to registering it, and
if they would charge the higher fee for registering an
agricultural-use pesticide or lower fee for the household use.
CHAIRMAN HALFORD asked if the department prefers the categories
restricted use and non-restricted use versus the three categories
that are in the Resources SCS. MS. ADAIR responded that was
correct, and that is how it came out of the House Finance
Committee.
MS. ADAIR also related that the department was concerned that the
House Finance Committee's fee amount was not sufficient to match
their federal grant. She said the amount of their grant isn't
driving what they are asking for because the cost is less than the
cost that they put into it, but the whole idea behind this bill
when it was originally introduced was to get rid of $55,000 in
general funds and to supplant that with program receipts that came
from chemical manufacturers outside the state.
Number 416
RICHARD HARRIS, a Senior Vice President with Sealaska Corporation,
said the corporation is involved in industrial resource development
activities and, as such, receives a number of permits each year.
He said they recognize that they are going to have to pay their
share, but they do have a substantial problem with the fees that
were passed in previous legislation.
Sealaska has objected to the current structure, and their
experience is that it has created a gold rush mentality for fees
for every possible regulatory action. Sealaska agrees that it
should be the actual direct costs associated with those permits,
but it should not be required to pay overhead costs associated with
the administration of a department.
Mr. Harris said Sealaska believes that the permittee has to have
some protections. He said we have to ensure that the permittee is
not charged for services that have not been received, and that the
permittee is burdened with the indirect costs, which they believe
should remain a function of the state.
Mr. Harris said HB 144 does help some of the deficiencies that
Sealaska has encountered, and they support the amendments before
the committee.
Number 350
There being no further witnesses to testify on HB 144, CHAIRMAN
HALFORD requested a motion on Amendment No. 1.
SENATOR TORGERSON moved adoption of the following amendment:
Amendment No. 1
Page 3, line 15: Following "for" add "the actual direct costs of"
Hearing no objection to the motion, CHAIRMAN HALFORD stated
Amendment No. 1 was adopted.
Number 340
SENATOR LEMAN moved the adoption of the following Amendment No. 2:
Amendment No. 2
Page 1: Following line 3 insert a new bill section to read:
*Section 1. AS 03.05.025 is amended by adding a new
subsection to read:
(c) Notwithstanding AS 44.46.025, the fee for a seafood
processing permit for a direct-market fishing vessel may not exceed
$100. In this subsection, "direct-market fishing vessel" means a
fishing vessel
(1) that has an overall length of less than 65 feet
and processes the vessel operator's own catch of seafood products
on board the vessel for direct retail sale to consumers; or
(2) of any length if the seafood product that is
harvested by the vessel operator and processed on board the vessel
is tuna."
Page 1, line 4: Delete "Section 1" and insert "Sec. 2"
Renumber the following bill sections accordingly.
Number 320
MS. ADAIR stated the department does not support the amendment.
She said the $100 fee, even at the more limited hourly rate that
the department would use to calculate the fixed fee, would not
cover the department's costs associated with these vessels. She
said on many occasions she has expressed the need to go back and
look at the permit categories because industry has changed since
the categories were first developed, and they are not reflective of
the industry any more. She is in the process of putting together
a work group to look at the permit categories and the fees that go
along with them. The effect of the amendment is that it would take
a group of processors that other processors complain about, lower
their fee to a great amount, and then the state general fund would
have to subsidize the activities involved with those types of
processors.
CHAIRMAN HALFORD asked the current cost charged for the
inspections. MS. ADAIR related that the permit and inspection
together is $400 per year.
SENATOR LINCOLN pointed out that the idea of the amendment was to
get the fees down for the permit and inspection, but the amendment
just speaks to the permit so it is not accomplishing what Senator
Leman had intended.
SENATOR LEMAN moved, as an amendment to Amendment No. 2, to add the
words "and inspection" following the word "permit." He said it was
his intent that this would be the annual cost for these vessels
that would include the permit and any inspections.
MS. ADAIR pointed out if they have an inspection that ends up
finding several deficiencies and necessitates going back and doing
a reinspection, then that operator can just have as many
inspections as he needs. She said that is not how they treat
anyone else, and she wondered why, as a policy, he would want to.
SENATOR LEMAN clarified he wants this to pertain to scheduled
inspections, not for reinspection of violations, and he proposed
doing this as a conceptual amendment to get the wording correctly
crafted.
CHAIRMAN HALFORD stated the conceptual amendment applies to the
$100 fee to the permit and inspection, and that that be the normal
scheduled inspection. There would some leeway for additional
inspections, if required.
CHAIRMAN HALFORD asked if there was objection to the conceptual
amendment to Amendment No. 2. SENATOR LINCOLN objected, stating
she did not think the $100 amount was enough. By a show of hands,
the amendment to Amendment No. 2 was adopted.
CHAIRMAN HALFORD stated Amendment No. 2, as amended, was before the
committee. He said he personally has a problem with exempting the
tuna boats because they are a lot bigger, and the operators don't
live here.
SENATOR TORGERSON moved as an amendment to Amendment No. 2, as
amended, to delete subsection (2) in the amendment, which is the
reference to tuna vessels. CHAIRMAN HALFORD explained that it is
not intended that they fall under the requirements of having a
permit. It deletes them from the $100 exemption, so it may take
a drafting change other than just deleting it from the amendment.
CHAIRMAN HALFORD asked there was any objection to deleting the
exemption for tuna boats. Hearing no objection, he stated that
amendment to Amendment No. 2, as amended, was adopted.
TAPE 98-37, SIDE A
CHAIRMAN HALFORD stated Amendment No 2, as amended, was before the
committee. He added that the conceptual amendment adopted by the
committee would be brought back before the committee to make sure
there was agreement on its wording.
CHAIRMAN HALFORD asked if there was objection to the adoption of
Amendment No. 2, as amended. SENATORS GREEN and LINCOLN objected.
By a show of hands, the amendment carried on a 3-2 vote.
SENATOR LEMAN moved to pass SCS HB 144(RES) out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
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