Legislature(1995 - 1996)

04/13/1995 08:05 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
             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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