Legislature(1995 - 1996)
04/13/1995 08:05 AM House STA
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 13, 1995
8:05 a.m.
MEMBERS PRESENT
Representative Jeannette James
Representative Scott Ogan
Representative Brian Porter
Representative Caren Robinson
Representative Ed Willis
Representative Joe Green
MEMBERS ABSENT
Representative Ivan Ivan
COMMITTEE CALENDAR
HB 91: "An Act amending the area within designated marine
park units of the Alaska state park system, and adding
marine park units to the Alaska state park system."
PASSED OUT OF COMMITTEE
HB 218: "An Act relating to the payment of certain trucking
operators.
PASSED CSHB 218(STA) OUT OF COMMITTEE
WITNESS REGISTER
TED MERRELL, Member
Juneau Area Parks Advisory Board
3240 Fritz Cove Road
Juneau, Alaska 99801
Telephone: 789-7876
POSITION STATEMENT: Supports HB 91
SANDY WILLIAMS, Member
Juneau Planning Commission
Box 765
Douglas, Alaska 99824
Telephone: 364-2243
POSITION STATEMENT: Supports HB 91
BILL GARRY, Area Superintendent
Division of Parks and Outdoor Recreation-Southeast Area
Department of Natural Resources
400 Willoughby Avenue
Juneau, Alaska 99801-1796
Telephone: 465-4563
POSITION STATEMENT: Supports HB 91
SUE SCHRADER, Member
Juneau Kayak Club
10780 Mendenhall Loop Road
Juneau, Alaska 99801
Telephone: 789-4649
POSITION STATEMENT: Supports HB 91
AMY SKILBRED, Representative
Juneau Audubon Society
4477 Asby Way
Juneau, Alaska 99801
Telephone: 780-4649
POSITION STATEMENT: Supports HB 91
GAIL BILLS, Member
Juneau Area State Board of Parks
536 Park Street, Apt. A
Juneau, Alaska 99801
Telephone: 586-9566
POSITION STATEMENT: Supports HB 91
CLIFF LOBAUGH
334 OFritz Cove Road
Juneau, Alaska 99801
Telephone: None
POSITION STATEMENT: Supports HB 91
NANCY WATERMAN, Representative
Parks and Recreation Advisory Board Committee
Borough of Juneau Assembly
227 Gastineau Avenue
Juneau, Alaska 99801
Telephone: None
POSITION STATEMENT: Supports HB 91
BOB EAKMAN, General Manager
Alaska Independent Truckers Association
1443 W. Northern Lights Blvd.
Anchorage, Alaska 99503
Telephone: 276-1934
POSITION STATEMENT: Supports HB 218
BILL EVANS, Owner
Eagle Equipment
P.O. Box 870076
Wasilla, Alaska 99687
Telephone: 745-1942
POSITION STATEMENT: Supports HB 218
KAREN CHASSE, Representative
Qwik Sand Trucking
2641 Lyvona Lane
Anchorage, Alaska 99502
Telephone: 243-7080
POSITION STATEMENT: Supports HB 218
PREVIOUS ACTION
BILL: HB 91
SHORT TITLE: MARINE PARKS ADDITIONS/CHANGES
SPONSOR(S): REPRESENTATIVE(S) ROBINSON,Elton
JRN-DATE JRN-PG ACTION
01/17/95 52 (H) READ THE FIRST TIME - REFERRAL(S)
01/17/95 52 (H) TRA, STA, RES, FIN
03/29/95 (H) TRA AT 01:00 PM CAPITOL 17
03/30/95 993 (H) TRA RPT 4NR
03/30/95 993 (H) NR: MACLEAN, WILLIAMS, BRICE, G.DAVIS
03/30/95 993 (H) ZERO FISCAL NOTE (DNR)
04/13/95 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 218
SHORT TITLE: PROMPT PAYMENT OF TRUCKING SUBCONTRACTORS
SPONSOR(S): REPRESENTATIVE(S) JAMES BY REQUEST
JRN-DATE JRN-PG ACTION
03/01/95 531 (H) READ THE FIRST TIME - REFERRAL(S)
03/01/95 531 (H) STATE AFFAIRS, TRANSPORTATION,
JUDICIARY
03/07/95 (H) STA AT 08:00 AM CAPITOL 102
03/07/95 (H) MINUTE(STA)
03/23/95 (H) STA AT 08:00 AM CAPITOL 102
04/06/95 (H) STA AT 08:00 AM CAPITOL 102
04/06/95 (H) MINUTE(STA)
04/13/95 (H) STA AT 08:00 AM CAPITOL 102
ACTION NARRATIVE
TAPE 95-48, SIDE A
Number 000
The meeting of the House State Affairs Standing Committee was
called to order by Chair Jeannette James at 8:05 a.m. Members
present at the call to order were Representatives James, Porter,
Green, Robinson, and Willis. Members absent were Representative
Ivan. Representative Ogan arrived at 8:10 a.m.
HB 91 - MARINE PARKS ADDITIONS/CHANGES
CHAIR JEANNETTE JAMES announced the first item on the agenda was HB
91 by Representative Robinson. She called on Representative
Robinson to provide the sponsor statement for this bill.
Number 025
REPRESENTATIVE CAREN ROBINSON expressed her appreciation for the
committee hearing this bill. She stated this bill was not
originally her idea, but was brought forward at the request of the
community of Juneau. She expected that many of the committee
members may have already voted on this bill, as it passed through
the House last year, before getting held in the Senate Rules
Committee. This bill would designate 13 islands in the Juneau area
state marine parks. These islands are located in Lynn Canal and
are currently public lands. They have been determined as
unsuitable for real estate or resource development. She said in
1977, these islands were nominated for selection by the city/
borough of Juneau for recreational purposes. In 1989, the state
selected the Channel Islands from the federal government under the
Alaska Statehood Act. Designation of these islands as parks
requires legislative action, but the city and borough of Juneau has
identified protection of these islands as a priority in the Juneau
Coastal Management Plan and the Juneau State Land Plan.
Establishing these lands as a state park would protect the quality
of their future recreational use. She stated the boundaries of the
park would be at the 20 fathom line around each island. It is
essential to provide a management plan to protect recreational use
to accommodate future needs. Only state park management can
consolidate water, intertidal, and upland uses in a single entity
with adequate enforcement authority to protect and provide for the
safe uses of these resources. Creation of Juneau Channel Island
State Marine Park is urgently needed and would be an outstanding
addition to Alaska state parks, by providing an island complex
unique to the state park system. She urged the committee to pass
this bill on to the next committee and stated there were many
residents from the Juneau to testify on this bill.
Number 092
CHAIR JAMES asked if there were any questions from the committee
for Representative Robinson.
REPRESENTATIVE JOE GREEN verified that one of those to testify was
from the Department of Natural Resources.
TED MERRELL, Member, Juneau Area Parks Advisory Board, stated he
was testifying in support of HB 91. He said he had lived in the
Juneau area for 32 years and had used these islands every year for
recreational use. He can remember having the beaches mostly to
himself, but as the community of Juneau has tripled in size, so has
the demand for these islands for recreational purposes. He said
that currently there was increasing vandalism and littering of
these islands, because there was currently no management system in
place. He thought passage of HB 91 would allow a minimal level of
management to be put in place, under the Division of Parks. He
felt this would initially consist of some signs and rules to be
complied with voluntarily. He also thought further degradation of
these islands would be halted until a long-range management plan
and minimal facilities could be established in the future. He
argued more and more waterfront was being developed and placed off
limits to public recreation each year, and so urged passage of this
bill.
Number 143
REPRESENTATIVE BRIAN PORTER asked why if these islands were
selected by the city and borough of Juneau, then why doesnt the
community of Juneau establish these islands as municipal parks.
MR. MERRELL stated he was not familiar with why this had not been
done.
REPRESENTATIVE ROBINSON thought that by law this had to be done by
legislative action. She explained that testimony would be coming
from both a local municipal parks board and a Juneau area state
parks board.
SANDY WILLIAMS, Member, Juneau Planning Commission, stated he was
a 35 year resident of Alaska and a retired state employee. He
reiterated the city and borough of Juneau does support HB 91. He
thought the reason they did not establish a municipal park was that
they had selected all of the land they were allowed under the
selection process. He said he did not view this bill as a lock
up bill, but argued this would allow generations in the future to
use these lands for recreational purposes. By putting them under
the management of the Division of Parks, they would be managed with
volunteer help at no added expense to the state. He envisioned a
future with 50,000 residents of Juneau and felt these islands would
be an attribute to meeting the community's recreational needs. He
thought the Juneau area was going to need these types of facilities
to maintain its quality of life with its growing population. Thus,
he saw this bill as an opportunity for future generations to enjoy
the quality of life that Juneau residents do today. He offered to
answer any questions.
Number 218
CHAIR JAMES asked what would be the situation if the legislature
did not pass this bill.
MR. WILLIAMS thought these islands would continue to be used for
recreational purposes, but would not have any coordinated effort
for maintaining the cleanliness and quality of the area. He
thought that by putting them under the Division of Parks, there
would be a coordinated management effort.
Number 242
BILL GARRY, Area Superintendent, Division of Parks and Outdoor
Recreation, Southeast Area, Department of Natural Resources, said
he was here to express the departments support for this bill and
to answer any questions from the committee. He stated the reason
they had given this bill a zero fiscal note was that they felt they
could manage this area with volunteer assistance. He thought they
could manage these islands for recreational use better than the
Division of Lands, who he said did not even have a boat to get to
them. He stated they would be managed under Title 41 of Alaska
statutes, which allows the islands to be under cohesive management
of the waters, tidelands, and uplands. He reiterated that the city
and borough of Juneau had selected their entitlement of lands and
these lands would exceed their allowed amount, meaning they would
have to give up much of their core land downtown.
CHAIR JAMES asked if he could explain the map of the park behind
him.
MR. GARRY explained the blue lines approximated the 20 fathom line
around the islands to be included in this bill. He said whereas
most park borders are done by description of sections, lines, etc.,
it was felt the 20 fathom line would be easier for most boaters to
know the boundaries of the park. Thus, the bill was amended last
year to designate the boundaries of the park in this fashion. He
said the bill would also amend the Shelter Island State Marine
Park, by redesignating its boundaries as the 20 fathom line. He
mentioned that part of Shelter Island would be retained by the
United States Forest Service and would not be selected by the
state.
Number 309
REPRESENTATIVE GREEN asked if he anticipated any amenities being
added to the park, which would cost the state extra money in the
future. He noted the bill currently had a zero fiscal note.
MR. GARRY said he did not anticipate adding any facilities, at
least not in the near future. He stated they wanted to expose the
people to a better educational system of how to use the beaches,
pick up their litter, and generally how to maintain the park during
use. He thought good use would preclude abuse of the park area.
REPRESENTATIVE PORTER verified the Channel Islands were those shown
on the map and that they were not selected by the city and borough
of Juneau.
MR. GARRY agreed, saying these islands were selected by the state.
He stated the city and borough has encouraged that selection.
Number 347
SUE SCHRADER, Member, Juneau Kayak Club, supported HB 91. She said
she had personally paddled to every one of the listed islands. She
wanted to point out that these islands were pretty much accessible
from the road system within a few hours of paddling. She also
stated they were all very small, which made them unsuitable for any
type of resource development. She said she was routinely running
into more visitors to these islands each season. She commented
that having lived in the Puget Sound area, where 91 percent of the
coastline was in private ownership, she could attest to the value
of having public beaches accessible to everyone.
Number 376
AMY SKILBRED, Representative, Juneau Audubon Society, stated the
organization supported placing these islands into a state park.
She argued these islands are used for recreational purposes and
will continue to be in the future. She thought if they were placed
in a state park setting, then groups such as theirs would volunteer
to help manage these islands and the park. They thought that
placing these islands in a marine park was the wisest use of them.
GAIL BILLS, Member, Juneau Area State Board of Parks, said she was
a resident of Juneau for 20 years. She mentioned that should the
Division of Lands continue to manage these islands, they do not
have legal authority to insure they are being used properly. She
said she wanted to make a plea for cheapo camping facilities for
families in Juneau. She stated that you could take your children
to these islands and really feel like youve gone somewhere. She
did not think this was an effort to lock up lands and pointed out
there were already numerous cabins for sale on a constant basis.
She felt that by putting these islands into a park setting would
help to maintain them better for recreational use by the residents
of Juneau.
Number 435
CHAIR JAMES noted that Representative Ogan had arrived about 20
minutes earlier.
CLIFF LOBAUGH, Resident of Juneau, stated his surprise that this
legislation had not passed the legislature already. He felt it was
a waste of time to have this bill referred to so many committees in
the House and Senate, when there was such a consensus from the
residents of Juneau. He thought there should be no concern about
any fiscal impact on the state, saying that if you put any
facilities on them, they would float away at a 20 foot tide. He
said the state and borough had already disposed of all of the
islands large enough for private development. He argued the only
opposition to this bill was from the legislature, who kept
postponing the passage of this bill. He thought more money would
be spent on these public hearings than on the costs for this
proposed park. He said there were several organizations who had
already pledged to help maintain these islands as parks, especially
the Boy Scouts. He argued this bill should have been passed
several years ago. He mentioned the largest of these islands were
Shelter Island, Benjamin Island, and Coghlan.
Number 494
NANCY WATERMAN, Representative, Parks and Recreation Advisory Board
Committee, Borough of Juneau Assembly, wanted to express the
support of the committee for HB 91.
Number 500
CHAIR JAMES asked if there was anyone else who wished to testify.
Hearing none, she asked for a motion from the committee to pass
this bill on to the next committee.
REPRESENTATIVE PORTER said he did not intend to object to this bill
passing out of committee, but wanted to mention he heard a lot of
contradictory testimony. He thought there seemed to be a lot of
expectations about what the state was going to do to assist in
halting the degradation of these recreational sites, but there was
also a zero fiscal note. He argued it could not be both ways. He
thought if this area was to be maintained by volunteers, then why
not just do this and not expect the state to take responsibility
for what will eventually be fiscal responsibility for a new park.
REPRESENTATIVE ROBINSON mentioned the numerous letters of support
for this bill from the Alaska Outdoor Council and others. She
emphasized she had no doubt that the community of Juneau would take
full responsibility for the maintenance of this park. She stated
she had already talked to volunteer organizations who pledged to
help maintain this area as a park facility. She reiterated these
lands were already being used for recreational use and they were
just proposing to place them under the appropriate agency with the
authority and statutes to maintain them. They thought there would
be considerable cooperation with local organizations to help
maintain these lands for recreational use indefinitely. If this
bill fails to pass, they will continue to be used as they are and
the community will continue to come back every year to ask for them
to be redesignated as state park lands. She pointed out that the
legislature had just approved a similar situation for the community
of Ketchikan. She also stated that supporters of this bill
understood that the legislature was serious about cutting the
budget and she pledged to bring back pictures of the volunteers
cleaning up the area this summer.
Number 550
REPRESENTATIVE GREEN expressed his concern to Mr. Garry that once
this land is made into a state park, there would be tremendous
pressure on the Park Service to add amenities. Thus, he was
wondering if the zero fiscal note was really accurate.
MR. GARRY responded that user-fees were not practical, as the
Division of Parks would then have to provide services to the park.
He thought it was appropriate to try to continue the use as it is
currently, combined with an education program to teach people how
to make better use of the islands. He thought the advantages would
be that they already have a working system with the volunteer
organizations in the community and have a legal system in place to
help prevent abuse of the facilities. He stated he would not
disagree that if they had to occupy the islands to maintain the
park, it would cost money. He thought it was more likely that they
would just need to put up a few signs and educate on the wise use
of the area. He predicted this would cost under $1000, which they
could absorb within their current budget. If necessary, they had
the option to charge for day use of the park.
Number 606
REPRESENTATIVE GREEN stated he was not advocating they charge for
use of this facility, as he could see this area did not fit the
normal situation of parks where you could charge at the gate. He
thought it was more reasonable that the current type of use would
continue, which made Representative Porters question more
applicable of why then is it necessary to change the current
designation of the islands. If you are planning to do more, then
why not a fiscal note. He stated he could not help but to think
this would cost the state more money.
CHAIR JAMES stated she shared the same concerns as her colleagues
about the budget and had some questions based on her assumptions
about the zero fiscal note and from some of the testimony given.
She asked Mr. Garry how many staff members he had working for him.
MR. GARRY replied he had 12 positions for the entire Southeast
region, 6 full-time and 6 seasonal employees.
CHAIR JAMES asked if he was active with the volunteer parks
programs.
MR. GARRY said they were and listed several examples.
CHAIR JAMES mentioned there was some considerable reductions in the
budget for the Division of Parks. She asked if any of those
reductions would affect him in the Southeast area.
MR. GARRY responded he was not aware of any parks in the Juneau
area that would be shut down as a result of budget cuts. He said
he was not the best person to discuss these budget cuts, but was
not aware of any that would affect the Juneau area.
CHAIR JAMES stated her assumption was that when he was saying there
would be extra duties, but the division could absorb them, that
there was a little room in their budget. She pointed out though,
that with budget cuts, there isnt a lot of room before you end up
having to reduce staff. She said she did not share some of the
fears about extra costs, because she knew of examples in Interior
Alaska, where private organizations volunteered to take care of
some of the responsibilities of maintaining various parks. She
could visualize that similar organizations could be developed
within the community of Juneau. She thought it could be guaranteed
that the state budget would be decreasing and not growing. Thus,
she thought it would be pretty embarrassing for the Division of
Parks to request more money next year, after testifying that they
would not be incurring any extra expense as a result of turning
these islands into a state park. She was not anticipating this
would happen, because of the testimony given.
Number 668
MR. GARRY agreed they would not be asking for any additional money
or positions. He said he felt comfortable taking on responsibility
for these islands with the offered volunteer assistance for
maintaining them.
CHAIR JAMES asked if there were any other questions or comments
from the committee.
REPRESENTATIVE SCOTT OGAN asked if there were any resolutions of
support from the city and borough of Juneau.
REPRESENTATIVE ROBINSON replied that there were and also mentioned
that they had support from the Alaska Outdoor Council. She
reiterated that this bill pretty much had a consensus from the
community of Juneau. She also mentioned that with regard to added
facilities, she had heard the opposite from the community that they
wanted to preserve these islands in their natural state for
recreational use.
CHAIR JAMES commented that she did have concern about the possible
necessity of restrooms and garbage facilities. She thought this
could also be accomplished by volunteer support.
REPRESENTATIVE OGAN apologized for arriving late and asked who
currently owned these islands.
MR. GARRY replied that the uplands had just been transferred from
the Bureau of Land Management to the state. Thus, all of the land
was now owned by the state of Alaska.
TAPE 95-48, SIDE B
Number 000
REPRESENTATIVE OGAN discussed a recent trip he had taken to the San
Juan islands and said he was impressed. He asked if they should
not consider some of the larger islands for development and the
growth of Juneau.
REPRESENTATIVE ROBINSON answered that he had missed this testimony,
but that these were really small islands, and the lands suitable
for sale to the private sector had already been sold. She stated
most of these islands were really steep mountainous territory.
Thus, she stated the best use of these islands were for parks.
CHAIR JAMES asked if there were any other questions or comments
from the committee. Hearing none, she asked for a motion to pass
this bill to the next committee.
Number 066
REPRESENTATIVE ED WILLIS moved that the committee pass HB 91 out of
committee with attached fiscal notes and individual
recommendations.
CHAIR JAMES asked if there were any objections. Hearing none, the
bill passed out of committee. She stated the next bill on the
agenda was HB 218.
HB 218 - PROMPT PAYMENT OF TRUCKING SUBCONTRACTORS
Number 097
CHAIR JAMES announced the next item on the agenda was HB 218. She
stated she had drafted a new sponsor statement, which she felt
would clarify some of the previous concerns. She said this bill
was filed at the request of the Alaska Independent Truckers
Association to provide for their prompt payment. Recent events
have demonstrated the inability of truckers to receive prompt
payment. She argued this was not only an economic issue, but a
safety issue as well. To solve this, she recommended that the
truckers would need to organize their own contract and billing
system, which they are currently doing. She stated that
subcontractors are covered under statutes for prompt pay and
employees are covered by labor laws. She pointed out this statute
support does not include the owner-operators of trucks. She
thought the independent owner-operators of trucks must be able to
depend on prompt payment in order to maintain their trucks to
guarantee safe operation of them on our roads. She pointed out
this bill was specific to the owner-operator of trucks and did not
include any other segment of small business. She said the truckers
were instituting a system of semi-monthly billings and this bill
would allow for those bills to be paid within 14 days. She stated
there were people to testify on teleconference and she would like
to hear their testimony before any other discussion of this bill by
the committee.
Number 142
BOB EAKMAN, General Manager, Alaska Independent Truckers
Association, expressed his support of HB 218. He mentioned they
did have problems getting paid, occasionally being delayed as long
as six months. He said this type of situation cannot continue and
agreed that semi-monthly billing would be a partial solution. He
pointed out the owner-operators are unique in that they are
sometimes hired for a job as they are driving for another, and so
cannot always get a signed contract. He thought this was something
the industry would have to strive for. He stated they asked for
the twice monthly billing law in order to keep their trucks
maintained and in compliance. He pointed out that the long haul
truckers already are required to be paid on a twice monthly basis,
regardless of whether or not those companies hiring them got paid
or not. In closing, he argued that everyone in the state was
affected by the lack of owner-operators getting paid promptly. He
argued when there was a delay in payment, the first thing to be
compromised was the maintenance of their trucks.
BILL EVANS, Owner, Eagle Equipment, reiterated that prompt payment
for independent owner-operators was an issue of public safety. He
stated there were three incidents he was aware of where the lack of
prompt payment led to poor maintenance of trucks, which caused the
deaths of individuals involved in accidents. Thus, he thought it
was going to be a question of who would die next. He stated he had
equipment that he would not allow on the highway, because he did
not have the money to keep them maintained. He commented he had
just recently received payment for work he had completed the
previous July, after several phone calls and duplication of the
paperwork. He said he was a small business and needed the
guarantee of prompt payment, so that he could pay his bills and
keep his trucks properly maintained. He reiterated his main
concern was public safety.
Number 288
REPRESENTATIVE OGAN verified that Mr. Evans had trucks he could not
afford to repair and operate, because he had not received payment
for work completed.
MR. EVANS agreed.
REPRESENTATIVE OGAN asked if independent truckers had the right to
attach liens on jobs, when not receiving payment.
MR. EVANS stated this was the case in some instances, if the
owner-operator could find the contractor and get all of the
paperwork completed. He gave an example of a personal
circumstance, where he had tried to collect payment and could not
locate the contractor and had to duplicate paperwork and phone
calls without success.
REPRESENTATIVE OGAN asked whether the contractors were required to
be bonded.
MR. EVANS agreed, but reiterated it was difficult to make contact
with them.
CHAIR JAMES explained that the problem was with the brokers. She
stated the contractors may pay the broker, who may or may not pay
the owner-operators. She explained the reason that the
owner-operator is not covered by law is that they are not
considered subcontractors. She further pointed out that the broker
may or may not be bonded, and so this may not be an option of
recourse for the owner-operators. She added that those brokers
that are responsible, usually put their truck drivers on payroll.
She stated her investigation documented that the real problem was
usually with the brokers, but argued that outlawing brokers would
really hinder entrepreneurial enterprises that create jobs. She
thought that a requirement of prompt payment following semi-monthly
billing would at least eliminate those brokers that were not
responsible.
MR. EVANS agreed and stated he would be glad to be placed on the
payroll of a company as an employee.
Number 344
MR. EAKMAN stated the owner-operators would agree to be placed on
payroll if there was no other alternative. He said they were
independent businessman, who had to carry insurance and get a
business license. Thus, he argued that most of the owner-operators
would agree to go on payroll as an employee, but would prefer to
remain as independent businessmen.
REPRESENTATIVE OGAN asked if the brokers had any type of
performance bonds or surety bonds required when they bid on jobs.
He stated he assumed they were bidding as a subcontractor.
MR. EAKMAN answered there was no bonding requirements for the
brokers themselves.
REPRESENTATIVE OGAN thought it would be more reasonable to require
bonding for the brokers as subcontractors. He thought
owner-operators would then have something they could attach with
liens. He stated that should the brokers lose their surety bond,
because of lack of payment of their bills, they would then not be
able to stay in business, as no one would insure them.
Number 381
CHAIR JAMES stated she was not sure that this would apply in this
situation. She mentioned that the brokers qualify as
subcontractors and receive their payment within seven days after
payment to the prime contractor. She added that everyone is
covered except the owner-operators under the current law. She
stated that under current law, the only way the truckers would be
covered would be if they were listed as payroll, which is not
applicable as they provide not only their labor, but their trucks
and equipment also.
Number 399
REPRESENTATIVE PORTER stated the only difference he saw between the
provision for paying the subcontractor and this bill, was that the
subcontractor received payment 7 days after the prime contractor
gets paid, where this bill requires payment to the owner-operator
14 days after billing. It does not take into account whether the
subcontractor got paid or not. He did not think this necessarily
created a fair situation.
CHAIR JAMES suggested this was the same situation as payroll. She
said subcontractors are required to meet payroll, whether or not
they receive their payment. She stated that the responsible
brokers are already paying their owner-operators on a semi-monthly
basis.
Number 417
REPRESENTATIVE PORTER stated he did not disagree with her
statements, but argued there was a difference in that this bill
covers a relationship between two entrepreneurs and the other
situation is a businessman/employee relationship. He pointed out
this bill was requiring one entrepreneur to be paid by another who
may or may not have been paid.
CHAIR JAMES agreed, arguing that if a broker does not have
sufficient funds to pay an owner-operator, who would otherwise be
on payroll, they will not be in business.
REPRESENTATIVE PORTER thought this was maybe the case with the
broker, because the contractor did not pay them.
Number 423
REPRESENTATIVE GREEN said he could understand the concerns of
Representative Porter, but thought Chair James was trying to
establish a mini-call. He explained that a contractor receives
segments of their pay as they progress through the contract. He
added that the owner-operators do not have this ability, citing
stories of truckers having their jobs change en route. He
understood that the problem was that owner-operators were not in
the position to contract and make calls.
CHAIR JAMES stated she had studied this issue thoroughly and could
even cite names of individuals involved. She thought this was a
situation that needed some type of control, and that this bill was
the best way to implement it. She said the owner-operators were
already implementing a system of semi-monthly billing and whenever
possible, would try to get the terms of their contracts written
down. She pointed out that these people are unique in that they
are independent contractors, that fit the mold of payroll
employees. She thought this bill would give the owner-operators an
opportunity to write the prime contractor and state they are not
getting paid. This would allow the prime contractor to require the
subcontractor to pay these people when receiving future payments.
Number 477
REPRESENTATIVE OGAN disagreed that owner-operators fit the mold of
payroll employees. He argued they were running a business, getting
the tax benefits, and were writing off the depreciation of their
equipment. He further stated they were working their own hours.
Thus, he felt they were not really payroll-type employees. He said
that with the benefits of owning a business, come some risk. He
stated he did not have a problem with affording owner-operators
some protection for prompt pay, but not on a semi-monthly basis. He
argued they needed to follow the same type of system as the rest of
the construction industry, which was that they would get paid seven
days after the subcontractor got paid.
Number 493
REPRESENTATIVE ROBINSON said she supported this bill, but was
curious as to why the sponsor chose a schedule of 14 days, rather
than another period of time such as 30 days.
Number 498
CHAIR JAMES replied that she thought this period of time was
generous, in that it was routine in the industry to pay on a
semi-monthly basis. She said that long-haul truckers get paid on
a semi-monthly basis.
MR. EVANS agreed this was a standard schedule for the industry,
giving an example of a job he had hauling snow for the state of
Alaska. He said that he was paid every two weeks from the state on
this job.
KAREN CHASSE, Qwik Sand Trucking, said she wanted to address
Representative Ogans comments about filing a lien against the
subcontractors bond. She said the law currently requires them to
file a lien within 90 days of completing work on the job. The
normal pay situation was to wait more than 90 days for payment.
Thus, they were too late to be able to file a lien when they
realized they were not going to get paid. She commented her
husband had been involved with the trucking industry for over 20
years and was the owner of Qwik Sand Trucking. They considered
themselves a small business and filed all of the required
paperwork, carried insurance, and billed monthly. She argued they
were only asking to be paid in a prompt manner and failed to
understand how anyone can be opposed. She thought the contractors
had been taking advantage of the owner-operators for years to the
point that most of the truckers were afraid to even ask for their
money for fear of being black-balled. She stated the brokers
were afraid to ask for their money for the same reason. She argued
the whole system worked on fear and intimidation. She said there
were many owner-operators who wished to testify, but were too
scared. She thought the only way this situation could be stopped
was by passage of this bill. She offered to answer any questions
from the committee.
Number 564
REPRESENTATIVE PORTER asked what the difficulty would be if this
bill were amended to read that the owner-operator would be paid x
number of days after the broker or subcontractor got paid. He
thought this would be more in line with the laws for payment to
subcontractors.
MS. CHASSE said the problem was that the prime contractors were not
paying the subcontractors in a timely manner. She stated the
subcontractors/brokers were not asking for their money, as they
were just as intimidated as the owner-operators.
REPRESENTATIVE PORTER said he did not doubt the validity of this,
but asked what she suggested to do in a situation where the broker
was not paid by the prime contractor, but under this bill would be
required to pay the owner-operators regardless.
MS. CHASSE thought this bill would force the broker to demand their
money from the prime contractor.
Number 597
REPRESENTATIVE OGAN commented that some of the statements he heard
made him shake his head. He said he had been in business himself
for 20 years and never felt intimidated to ask for his money. He
stated he wanted to help, but was uncomfortable with the provision
requiring payment within 14 days. He would rather see an approach
along the line of payment for subcontractors, requiring payment a
certain amount of time after the contractor gets paid. He thought
that with the way the bill was written, it was placing an undue
burden on the subcontractors/brokers. He said the demands were
just too great to have a payroll situation for an independent
businessman. He stated that everyone else was on a 30-day cycle
for payment.
CHAIR JAMES reiterated that twice a month was standard for the
trucking industry.
Number 629
REPRESENTATIVE ROBINSON noted this bill was additionally referred
to the Transportation and Judiciary Committees. She thought the
Transportation Committee might be more appropriate to deal with the
concerns raised. Thus, she moved to adopt the proposed committee
substitute, Version G, dated 3/6/95, as the working document for
the committee.
CHAIR JAMES asked if there were any objections. Hearing none, the
committee substitute was adopted.
Number 649
REPRESENTATIVE ROBINSON moved to pass CSHB 218(STA), Version G,
dated 3/6/95, out of committee with individual recommendations and
with the suggestion that the sponsor work with those members who
had concerns, to see that they were addressed before the bill is
heard in the next committee.
CHAIR JAMES agreed that the Transportation Committee was the
appropriate place for these concerns to be heard. She asked if
there were any objections.
Number 657
REPRESENTATIVE OGAN objected for purposes of discussion. He said
he would like to see this bill amended to fit standard contracting
practices, where the owner-operators would be paid in x amount of
days after the subcontractor/broker. He also suggested they look
at some bonding requirements for the brokers. He also recommended
that the owner-operators get together with their association and
draft contracts, and then not go to work before contracts are
written and signed. He stated it seemed as if this was a situation
of Big Brother helping out people who do not do their paperwork
and then get in trouble. He stated that having mentioned his
concerns, he would remove his objection.
CHAIR JAMES asked if there were any other objections. Hearing
none, CSHB 218, Version G, dated 3/6/95, passed out of committee.
ADJOURNMENT
CHAIR JAMES adjourned the meeting at 9:37 a.m.
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