Legislature(1997 - 1998)

04/29/1998 03:50 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ 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
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                      
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                  
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              
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                   

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