Legislature(2007 - 2008)
03/05/2008 08:11 AM House L&C
| Audio | Topic |
|---|---|
| Start | |
| HB391 | |
| HB350 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 391-STATE CONSTRUCT'N PROJECT LABOR AGREEMENT 8:11:50 AM CHAIR OLSON announced that the first order of business would be HOUSE BILL NO. 391, "An Act relating to project labor agreements." 8:12:01 AM REPRESENTATIVE NEUMAN moved to adopt the proposed committee substitute (CS) for HB 391, labeled 25-LS1493\C, Wayne, 2/26/08, as the working document. There being no objection, Version C was before the committee. 8:12:11 AM REPRESENTATIVE MIKE KELLY, Alaska State Legislature, explained that one provision in the Alaska Gasline Inducement Act (AGIA) requires the successful licensee to enter into a collective bargaining project labor agreement. Collective bargaining project labor agreements require contractors to remit fringe benefit payments into union health and pension plans on behalf of project workers. When non union companies are employed on such projects, their workers must make contributions to the union health, training, and pension contribution plans instead of their own. However, their contributions may provide little or no benefit to them, since the employee may not be employed long enough to meet the vesting thresholds of the union plan. At the same time, the employee is either not contributing to his/her non union company pension plan or is required to contribute to both plans. This bill would provide employees the option to elect to have fringe benefit payments or other contributions made on his/her behalf to either the employer's program or to the applicable union trust fund. This bill would ensure that the project labor agreement contains adequate safeguards to protect non union workers so they will benefit from the pension contributions that they make. REPRESENTATIVE KELLY also pointed out that under HB 391, any state mandated collective bargaining project labor agreement must allow employees to elect whether to participate in the employer's existing fringe benefit plan or in the applicable union trust fund. He related that all unions he is familiar with offer good plans. However, non union companies also offer competitive plans, too. Nevertheless, the point is to allow the employee to make the final decision of which plan to accrue benefits. This bill would require contractors, under collective bargaining project labor agreements, to permit their employees to execute a "Benefits Election Declaration". Thus, HB 391 would support Alaskan workers such that non union workers will have the opportunity to benefit from the pension plans that they have been making contributions. He characterized HB 391 as a bill that addresses a fairness issue, one that would provide equity for non union workers. 8:17:15 AM REPRESENTATIVE KELLY, in response to Representative Neuman, recapped action on HB 177, the Natural Gas Pipeline (AGIA). He noted that he offered an amendment to AGIA that did not require a collective bargaining element. However, HB 177 was amended on the House floor to add the collective bargaining project agreement process. 8:18:43 AM REPRESENTATIVE NEUMAN inquired as to whether a union welding apprentice would have preference over a welder who had worked for 30 years. REPRESENTATIVE KELLY answered that HB 391 does not address hiring preferences, but focuses on the fringe benefits portion. He reiterated his earlier testimony regarding the employee's choice of pension plans. He posed a scenario in which an employee who is hired by the IBEW 1547, but has worked for a non union employer, could elect to select the benefit plan offered by IBEW 1547 or the non union employer with whom the employee has a long history of employment. He further explained that HB 391 has a narrow scope, limited to the selection of the benefit package. This bill would benefit non union employees who may work for six months or a year under a collective bargaining plan by electing to have their benefits continue to go into the non union plan rather than to switch to the union plan, he stated. 8:22:01 AM REPRESENTATIVE NEUMAN inquired as to whether the non union company would be encouraged to increase its benefits to match the union benefit plan. REPRESENTATIVE KELLY opined that an employee certainly would compare plans to select the best benefit plan. CHAIR OLSON announced that public testimony would be held open on HB 391. 8:23:45 AM REBECCA LOGAN, President, Associated Builders and Contractors, Alaska Chapter (ABC), characterized HB 391 as a good bill for all Alaskan workers. Everyone is looking forward to working on some of the mega projects that the state is considering, along with the financial boom, she opined. However, the majority of non union workers are financially disadvantaged under typical project labor agreements by being forced to contribute to fringe benefits in the union trust fund. She posed a scenario in which a typical trade craft fringe benefit package ranges from $14-17 per hour, which translates to a total of $25,000-$36,000 annually that is paid into fringe benefits packages. However, if an employee works on a project that is covered under a project labor agreement and returns to his/her non union job, that person leaves behind fringe benefits paid into the collective bargaining benefits plan. She opined that HB 391 does a good job of addressing that basic issue by allowing them a choice of which plan to opt for during the hiring process. She encouraged members to support HB 391. 8:25:18 AM JAMES GILBERT, President, Udelhoven Oilfield System Services, Inc. (UOSS), read from a prepared statement as follows [original punctuation provided]: My company employs about 450 Alaskan workers. I am here to testify in support of HB 391. Project Labor agreements limit competition by forcing non-union employers to pay benefits twice: once to the union plan and once to their existing plans. This double payment causes non-union contractors to have a bloated labor cost and therefore, to be non- competitive in the bidding process. AGIA mandates that a project labor contract agreement be negotiated at the same time that it mandates that the project owner use Alaska contractors to the maximum extent possible. These two mandates contradict each other. In addition to the double payment standard - standard project labor agreements state that non-union employers who contribute fringe benefits into local, regional, or national trust funds are bound to all lawful terms and conditions of such trust agreements and all amendments thereto. This means that a non- union contractor is bound to cover future unfunded vested liabilities of a union pension plan. Several months ago, a non-union contractor in Fairbanks was given a bill for close to $100,000 for his portion of the unfunded vested liability of a local union pension plan. The threat of such future liability is another barrier to competition. HB 391 goes a long way in addressing some of the unfair, discriminatory terms of a project labor agreement. I encourage your support of the bill. 8:27:15 AM MR. GILBERT, in response to Representative Neuman, answered that without HB 391 project costs would be increased and it is likely that non union companies would not be involved in the project. 8:27:50 AM REPRESENTATIVE LEDOUX stated that Mr. Gilbert has testified that project labor agreements require the employer to bear a portion of unfunded liabilities. She inquired as to whether the sponsor could speak to unfunded liabilities. REPRESENTATIVE KELLY related his understanding that employers are sometimes required to pay a portion of the unfunded vested liability of a local union pension plan, but noted that he is not an expert. In further response to Representative LeDoux, Representative Kelly answered that he thought an employee's decision to elect to select union benefits would trigger the situation that Mr. Gilbert described. 8:29:49 AM DON ETHERIDGE, Lobbyist, Alaska AFL-CIO, applauded Representative Mike Kelly for his work in the best interest of employees who work under the project labor agreement(PLA). The AFL-CIO is not opposed to HB 391. However, he expressed concern over some provisions of the bill. He related his hope to offer specific recommendations as the bill moves through the process and the AFL-CIO attorneys' review any legal issues. 8:31:12 AM MR. ETHERIDGE partially read a prepared statement, as follows: [original punctuation provided] First of all, the notion that the PLAs discriminate against non-union workers is a fallacy. Most non- union workers who have gone to work under the terms of a PLA have realized the superior benefits offered by the joint labor-management trust fund. In fact many of the workers that realize the benefits of a PLA stay on with the unions after the project is completed, once they realize how good the benefits are under the terms of the collective bargaining agreement. Rep. Mike Kelly in his press release identified three primary fringe benefits that would discriminate against non-union employees working under a PLA: health or medical, training, and pension plans. Contrary to the claims the non-union employers fringe benefit plans offered under the project labor agreements do not discriminate against non-union employees. I'd like to address each one in order. MEDICAL: Health plans are typically superior and employees become participants as soon as the minimum qualifying requirements are met. In a typical labor- management sponsored health plan an employee puts in around 300 qualifying hours, usually not more than a month and a half on a 7-10 schedule, and no different than what a long time union member must do to qualify. Additionally, unlike typical non-union plans, participants build up an hour bank that can cover them with the finest medical plans for up to a year after the project is finished. I know of no non-union employer plan that offers comparable health benefits. Typically coverage under non-union plans cease immediately upon termination of the employee. TRAINING: Training contributions make participants eligible to avail themselves of any skill improvement training available to union members as well. If contributions are made on behalf of any employee, that employee is entitled to training such as OSHA st training, Hazwopper, CPR, 1 aid, skill specific upgrade training and dozens of other classes. I don't know of any comparable training programs in the non- union sector. The only question that often arises and which is probably the impetus for the introduction of this bill comes in the context of PENSION CONTRIBUTIONS. I know you are all familiar with defined benefit plans. Universally, DB plans require 5 years of vesting for participants to earn benefits not 10 years like it used to be when the TAPS line was constructed, and the fact is that a gas pipeline project may not last long enough for a new participant to vest, though that is uncertain at this point. Accordingly, organized labor fully expects for the licensee or whomever is negotiating the terms of a PLA to bring up alternatives to defined benefits negotiations, and of course many of the unions offer both defined benefit as well as defined contribution plans and fully expect the unions will agree to some sort of hybrid agreement that would allow fully vested union members to continue with their existing pension plans and an option that would allow what has been suggested in this bill. 8:35:29 AM CHIP THOMA informed members that he has held four good jobs, which have all been union jobs. He related that he was a painter's apprentice in the Washington, D.C. area during high school, which helped him pay for his first year of college. He went on to describe his union jobs working for a mill in the Washington state area and later on the Alaskan pipeline. He also related his own substantial bicycle injury and major surgery that were covered by the excellent medical coverage that was offered in his benefit package. 8:39:12 AM CHAIR OLSON announced that he would hold public testimony open on HB 391.
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