Legislature(1997 - 1998)
04/29/1998 03:50 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.