SENATE BILL NO. 216 An Act relating to fees or assessment of costs for certain services provided by state government, including hearing costs related to the real estate surety fund; fees for authorization to operate a postsecondary educational institution or for an agent's permit to perform services for a postsecondary educational institution; administrative fees for self-insurers in workers' compensation; business license fees; fees for activities related to coastal zone management, training relating to emergency management response, regulation of pesticides and broadcast chemicals, and subdivision plans for sewage waste disposal or treatment; and providing for an effective date. Co-chairman Halford advised that in order to avoid the accumulation of amendments that occurred for SB 215, a draft CSSB 216 (Fin) (version "K", dated 5/1/96) was prepared for review by members. He further referenced a sectional analysis of the bill. The Chairman then called for a motion for adoption of the draft as a mark-up vehicle. Senator Randy Phillips so MOVED. No objection having been raised, CSSB 216 (Fin) was ADOPTED. Co-chairman Halford explained that new substantive provisions include: 1. Language that allows municipalities to charge prisoners for the cost of incarceration of municipal prisoners. 2. A gasohol repealer. The Co-chairman next referenced Amendment No. 3, proposed by the Dept. of Environmental Conservation. JANICE ADAIR, Director, Division of Environmental Health, Dept. of Environmental Conservation, came before committee. She explained that the amendment would allow the department to charge a fee for review of subdivision plans to ensure they comply with waste water laws under Title 46. Authority is presently vested in the department unless adopted by a local government. Anchorage and Valdez have elected to take over this function. The department is thus not involved in those reviews. The department reviews subdivision plans to ensure proper disposal of sewage in areas where there is no community system. Language within Amendment No. 3 was in the original bill but taken out by Senate Labor and Commence, in part because the department had general funds to support the activity. Those funds have since been cut. Without fee authority, the department will no longer be able to review subdivision plans. Co-chairman Halford asked if subdivision plan review by the Dept. of Environmental Conservation was required by other law. Ms. Adair responded, "No, Sir. It's under Title 46 only." Senator Sharp asked if most of the plans are designed by registered engineers. Ms. Adair answered affirmatively. She explained that engineers lay out subdivisions based on Title 29 requirements. However, there is no requirement (within that title) that engineers ensure that sewage can be properly disposed of. That requirement is within the Dept. of Environmental Conservation, and DEC has been relied upon to provide that part of the review. In response to a further question regarding fees, Ms. Adair said the fiscal note was based on a flat rate based on the size of the subdivision. Senator Sharp attested to complaints from constituents who have hired registered engineers to do work that must be submitted to DEC when the department does not have a registered engineer reviewing the work. Ms. Adair said the department is required to have a registered engineer review the work. Senator Sharp expressed concern over a flat fee. He attested to complaints from those with professionally designed subdivisions who are delayed by department review and reworking of subdivisions that have not had the benefit of professional assistance. Ms. Adair acknowledged having heard similar complaints on a number of department programs. She concurred in need to deal with the problem. In response to a question from Senator Rieger, Ms. Adair said that authority to review subdivisions is in AS 46.03.090. Amendment No. 3 would simply provide authority to change fees for review. Co-chairman Halford voiced his understanding that authority to review does not constitute a requirement to review. He suggested that there is no enforcement mechanism. Ms. Adair concurred. She added that the chances of a subdivision having failing, on-lot septic systems rises when the department has not done the review. The department has assisted developers modify subdivision layout or size of the lots to preclude problems. If that is not done, the purchaser ends up "getting stuck with the bill to develop a sewage system that can be accommodated on their lot." Review is thus a preventive exercise. Co-chairman Halford said he had a problem with small subdivisions of large lots. He suggested that review should not be necessary for subdivisions of less than four lots where none of the lots are smaller than several acres. Ms. Adair concurred that subdivisions cited by the Co-chairman are generally not a problem. The department tends not to review larger subdivisions due to lack of staff. Discussion followed concerning requirements embodied within HB 80. Additional discussion followed regarding division of large parcels (10 acres was used as an example) into two halves and whether or not that should come under DEC review. When Senator Rieger cited an example of 10 acres posed for subdivision into one-acre lots, Ms. Adair said it would probably be subject to DEC review if on-lot sewage disposal is involved. The department would review the lots to ensure that they are developable. If the subdivision would be hooking up to a community sewage system, the situation is different. If a lot must accommodate sewage disposal, it will probably also have to accommodate drinking water. Further discussion of developability followed. Co-chairman Halford voiced need to exempt subdivisions of less than four lots where no lot is less than one acre before he could support the language within Amendment No. 3. The fee will give the department ability to set, drive, and run the program. The program must have bounds. While there is no direct enforcement mechanism in terms of recording, there is still a general requirement. Ms. Adair asked that she be given an opportunity to contact department engineers to determine whether one acre would be an appropriate cutoff. Senator Sharp expressed support for comments by the Co-chairman. He voiced reluctance to provided ability to charge fees for a program for which "I get nothing but complaints that DEC shouldn't even be in the business," particularly when professional engineers do the design work. Discussion followed among members regarding costs associated with redesign and delay of an entire season due to failure to gain timely approval of designs. Co-chairman Halford directed that Ms. Adair work with department engineers to return appropriate amendment language to committee. PAUL GROSSI, Director, Division of Workers' Compensation, Dept. of Labor, next came before committee. He referenced Section 4 and advised that it would allow the department to assess a fee upon self-insurers, similar to that charged employers who have to purchase a workers' compensation insurance policy. The fee would be 4% on the previous year's claim experience. That would be similar to the 2.7 percent premium tax assessed against employers who purchase workers' compensation insurance. Co-chairman Halford asked if there was significant opposition. Mr. Grossi responded negatively. He acknowledged that no one wants to pay more. However, those who are self-insured view this as a significant service in that they can save money by exercising control over their own claims. DWIGHT PERKINS, Special Assistant, Dept. of Labor, next spoke before committee. He referenced an updated fiscal note and explained that it reflects removal of municipalities, school districts, and regional education attendance areas per action taken in Senate Labor and Commerce. Co-chairman Halford referenced CSSB 216 (Fin) and explained that Amendment No. 4 was included with exception of the requirement that the municipality charge a fee no less than the state fee. Amendment No. 5, adding an application fee on the exploration incentive credit, was also included. Amendment No. 3 containing the DEC fee for subdivision review remains the only outstanding amendment. Senator Zharoff inquired regarding marine and harbor facility fees within Section 7 (Page 3) of the bill. NANCY SLAGLE, Director, Division of Budget Review, Office of Management and Budget, explained that language would allow municipalities to charge fees to cover operation and repair work at state harbor and marine facilities. Municipalities have not previously been able to charge sufficient amounts to maintain the facilities. SAM KITO, III, Special Assistant/Legislative Liaison, Dept. of Transportation and Public Facilities, advised of 100 marine and harbor facilities owned by the state. There are contracts for management and operation of approximately 84 facilities. The proposed bill would allow the department additional authority to contract and require that a community establish a fund to take care of extended deferred maintenance and replacement costs of float facilities within harbors. Senator Zharoff asked for a list of facilities impacted by the bill. Co-chairman Halford directed that the meeting be briefly recessed. RECESS - 12:00 NOON RECONVENE - 12:10 P.M. Janice Adair from the Dept. of Environmental Conservation returned to committee and offered the following language for incorporation within Amendment No. 3: The fees authorized by this subsection may not be levied for reviews of subdivisions being divided into four lots or less where each lot is at least one acre in size. The foregoing would exclude larger subdivisions that gave rise to committee concern. Co-chairman Halford asked if the department would support inclusion of the foregoing amendment as the bill makes its way through the House. Ms. Adair responded affirmatively. Senator Sharp MOVED for adoption of Amendment No. 3 as redrafted by the department. No objection having been raised, Amendment No. 3 was ADOPTED as redrafted. Senator Rieger MOVED to tighten the title to reflect the content of the bill. No objection having been raised, a title amendment was ADOPTED. Co-chairman Halford noted that associated fiscal notes should reflect program receipt increases and general fund decreases. He suggested that fiscal notes not be considered new revenue sources for net adds to the operating budget. Members concurred in that understanding. Senator Sharp MOVED for passage of CSSB 216 (Fin) with individual recommendations and accompanying fiscal notes.No objection having been raised, CSSB 216 (Fin) was REPORTED OUT* of committee with a $22.0 fiscal note from Dept. of Environmental Conservation (Statewide Pub.Services), zero notes from Dept. of Military & Veterans Affairs, and Office of the Governor (OMB) as well as the following revenue (program receipt) notes: Dept. of Revenue $6,000.0 Dept. of Labor 384.5 Dept. of Education 30.0 Dept. of Natural Resources 10.0 Office of the Governor (Human Rights) 5.1 Dept. of Commerce & Economic Development 841.3 Dept. of Environmental Conservation (Lab.) 100.0 Co-chairman Frank and Senator Sharp signed the committee report with a "do pass" recommendation. Co-chairman Halford and Senators Phillips, Rieger, and Zharoff signed "no recommendation." [*See pages 8 and 9 of these minutes for action rescinding passage of CSSB 216 (Fin).] CS FOR SENATE BILL NO. 216(FIN) An Act relating to fees, assessments, and costs for certain functions of state or municipal government including hearing costs related to the real estate surety fund, fees for authorization to operate a postsecondary educational institution or for an agent's permit to perform services for a postsecondary educational institution, fees of the state Commission on Human Rights, administrative fees for self-insurers in workers' compensation, fees relating to applications for exploration incentive credits, charges to prisoners, marine and harbor facility use fees, business license fees, fees for training relating to management of hazardous substances and emergency management response, fees for regulation of pesticides and broadcast chemicals; and subdivision plans for sewage waste disposal or treatment; relating to a tax exemption; and providing for an effective date. At this point in the meeting, Co-chairman Frank asked that CSSB 216 (Fin) be brought back before committee. He then MOVED to rescind committee action passing the bill. He expressed a preference for subdivision review at the municipal rather than state level and voiced need to more closely review the fee section. No objection having been raised, committee action passing CSSB 216 (Fin) was RESCINDED. [Co-chairman Halford left the meeting at this time, and Co- chairman Frank assumed the chair.]