Appropriations panel advances bill moving motor-fuel inspection fees to DEQ operating fund

The Appropriations Committee's Government Operations Division advanced Senate Bill 2179 after hearing testimony that the bill would transfer revenues from the state's motor-fuel inspection fee into the Department of Environmental Quality's (DEQ) special operating fund to expand gasoline sampling and testing.

Mike Rood, president of the North Dakota Petroleum Marketers Association, urged the committee to give SB 2179 a "do pass" recommendation and said the sampling program "plays an important role ensuring both the retailer and consumer are protected when it comes to gas purchases." David Lott, director of the Department of Environmental Quality, told the committee the agency currently collects about 270 fuel samples per year and would like to expand sampling to roughly 1,000 samples annually.

Beth Jacobson, DEQ's director of accounting, explained how the bill would work in state finance terms: "What would happen is they would transfer that revenue out of the general fund to DEQ special operating fund." Jacobson testified the revenue estimate for the next biennium is about $561,000 and that the department's fiscal note shows roughly $6.32 or $6.52 (amount in the testimony varied) in expenditures for the biennium, including one-time capital costs; she said about $215,000 of the expenditures are for one-time capital assets and the fiscal note also includes about $30,000 to rebuild laboratory engines and an additional one-time cost for three pieces of laboratory equipment.

Lott described the work DEQ performs on retail fuel: "We test for octane and ethanol content" and for diesel he said the lab can test cetane. He told the panel that budget reductions over time had reduced sampling to levels the agency considers insufficient and that DEQ has not previously received money from the inspection fee in its budget even though retailers pay the fee.

Committee members asked whether the funding transfer creates an automatic appropriation to DEQ; committee staff clarified the bill would change where the fees are deposited but the department still needs appropriation authority to spend the monies. Committee discussion also examined who could help collect samples (the Public Service Commission had collected samples at one point but said it needed funding) and whether the program would apply to all taxable fuel sales.

The committee recorded a vote to advance the bill as amended. Roll-call votes recorded in the hearing log show the committee members present voted in favor (Senator Sickler — Aye; Senator Eberly/Erbilig — Aye; Senator Dwyer — Yes; Senator Burkhart — Aye; Senator Wansick/Wanzek — Yes). The action was recorded as "due pass as amended."