Alabama health agency may issue bonds as fight over hazardous waste fees ends.

ATLANTA - The Alabama Public Health Finance Authority next year may sell its first bond issue now that state lawmakers have resolved a dispute over the hazardous waste fees that would back the deal, state health officials said Monday.

The $45 million issue has been in the works since 1990, when lawmakers set up the health authority and agreed to set aside a portion of the state waste fees to back the authority's debt obligations.

But it has been on hold because of a dispute between Alabama and out-of-state companies that have objected to paying higher fees than in-state companies on the dumping of waste in Alabama.

That dispute was settled last month when a special legislative session eliminated the difference in fees. From now on, fees will be set according to waste toxicity.

"What we are doing now is monitoring waste fee inflows under the new schedule, in order to make sure that they will be sufficient to cover the $4.5 million yearly allocation that the Legislature his set aside [for the bond issue]," said Melvin Maraman. a staff assistant at the state Department of Public Health. "When everybody is comfortable that is happening, the bond issue will be sold."

Collections under the new waste fee schedule began Oct. 1, the date the legislative session adjourned, Maraman said. Oct. 1 is also the beginning of the state's 1993 fiscal year.

Maraman said the authority is currently targeting midyear 1993 as the date for the first bond sale, which will be underwritten by a syndicate led by Smith Barney, Harris Upham & Co.

The legislators met in special session to change the fee schedule because the U.S. Supreme Court ruled in June that Alabama cannot levy a higher waste disposal tax on companies outside the state than on those in the state.

The high court ruled that the two-tiered rate structure violated the U.S. Constitution's commerce clause forbidding discriminatory interstate trade practices. The state, under this structure, charged out-of-state companies $112 per ton and in-state companies $40 per ton.

Alabama lawmakers over the last several years have considered proposals to make the fee structure equal but have never succeeded.

Last year, for example, Gov. Guy Hunt's plan to set an $85-per-ton charge for all companies stalled after the Alabama Supreme Court ruled in favor of the differential fee structure.

The Legislature last month set four levels of fees, depending on the toxicity of the waste. The fees go as high as $113 per ton for "acutely hazardous" materials, according to legislative aides.

The state estimates that it will bring in $25.5 million from collection of the waste fee this fiscal year, according to Grover Jacobs, executive assistant to state Finance Director Ivan Smith.

In addition to covering the $4.5 million needed to cover the health authority's annual debt service on the bond issue, the waste-fee collections will help the state deal with other costs, such as funding for prisons.

Proceeds from the Health Finance Authority's bond issue will go to upgrading Alabama's deteriorating system of state public health buildings, according to H.E. Harrison, the health department's director of capital expansion.

Harrison said the funds win finance construction of 46 buildings throughout the state and renovations on 36 buildings. "These improvements are long overdue," he said.

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