Legislature(1995 - 1996)
04/26/1995 01:37 PM TRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE TRANSPORTATION STANDING COMMITTEE April 26, 1995 1:37 p.m. MEMBERS PRESENT Representative Gary Davis, Chairman Representative Bill Williams Representative Tom Brice Representative Jeannette James MEMBERS ABSENT Representative Beverly Masek, Vice Chairman Representative Jerry Sanders Representative Eileen MacLean COMMITTEE CALENDAR HB 218: "An Act relating to the payment of certain trucking owner-operators." HEARD AND HELD * HB 133: "An Act relating to the Alaska transportation system and local review of public projects." HEARD AND HELD (* First public hearing) WITNESS REGISTER REPRESENTATIVE JEANNETTE JAMES Alaska State Legislature State Capitol, Room 102 Juneau, Alaska 99801 Telephone: (907) 465-4843 POSITION STATEMENT: Prime sponsor of CSHB 218 RICHARD STRAHL, President Alaska Independent Truckers Association 2951 Westwind Court Anchorage, Alaska 99516 Telephone: (907) 345-7081 POSITION STATEMENT: Supported CSHB 218 BOB EAKMAN, General Manager Alaska Independent Truckers Association 1443 West Northern Lights Anchorage, Alaska 99503 Telephone: (907) 276-1934 POSITION STATEMENT: Supported CSHB 218 FRANK DILLON, Executive Director Alaska Trucking Association 3443 Minnesota Drive Anchorage, Alaska 99503 Telephone: (907) 276-1149 POSITION STATEMENT: Opposed CSHB 218 KAREN CHASSE 2641 Lyvona Lane Anchorage, Alaska 99502 Telephone: (907) 243-7080 POSITION STATEMENT: Supported CSHB 218 KATHRYN THOMAS P.O. Box 3005 Kenai, Alaska 99611 Telephone: (907) 776-5515 POSITION STATEMENT: Testified on CSHB 218 BILL EVANS Eagle Equipment P.O. Box 870076 Wasilla, Alaska 99687 Telephone: (907) 745-1942 POSITION STATEMENT: Testified on CSHB 218 REPRESENTATIVE KAY BROWN Alaska State Legislature State Capitol, Room 517 Juneau, Alaska 99801 Telephone: (907) 465-4998 POSITION STATEMENT: Prime Sponsor of SSHB 133 PEGGY MULLEN, Member City Council of Soldotna 355 Lingenberry Avenue Soldotna, Alaska 99669 Telephone: (907) 262-9225 POSITION STATEMENT: Supported SSHB 133 JOHN ISAACS, Member Alaska Chapter, American Planning Association 308 G Street, Number 313 Anchorage, Alaska 99501 Telephone: (907) 274-9319 POSITION STATEMENT: Supported SSHB 133 CHERYL RICHARDSON, Member Alaska Citizens Transportation Coalition 519 West 8th Avenue Anchorage, Alaska 99501 Telephone: (907) 274-3621 POSITION STATEMENT: Supported SSHB 133 KEVIN RITCHIE, Executive Director Alaska Municipal League 213 Second Street, Suite 200 Juneau, Alaska 99801 Telephone: (907) 586-1325 POSITION STATEMENT: Supported SSHB 133 BO BROWNFIELD, Deputy Commissioner Department of Transportation & Public Facilities 3132 Channel Drive Juneau, Alaska 99801-7898 Telephone: (907) 465-6973 POSITION STATEMENT: Supported SSHB 133 with concern NANCY WEBB, Planning Consultant 469 Panorama Drive Fairbanks, Alaska 99712 Telephone: (907) 457-2032 POSITION STATEMENT: Supported SSHB 133 GARY MOORE, Director Planning and Development Tanana Chiefs Conference 122 First Avenue Fairbanks, Alaska 99701 Telephone: (907) 452-8251 POSITION STATEMENT: Supported SSHB 133 WALTER PARKER 3724 Campbell Airstrip Anchorage, Alaska 99504 Telephone (907) 333-5189 POSITION STATEMENT: Supported SSHB 133 PREVIOUS ACTION 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 04/13/95 (H) MINUTE(STA) 04/18/95 1345 (H) STA RPT CS(STA) NEW TITLE 1DP 4NR 1AM 04/18/95 1345 (H) DP: JAMES 04/18/95 1345 (H) NR: PORTER, GREEN, ROBINSON, WILLIS 04/18/95 1345 (H) AM: OGAN 04/18/95 1345 (H) ZERO FISCAL NOTE (DOT) 04/18/95 1345 (H) REFERRED TO TRANSPORTATION 04/26/95 (H) TRA AT 01:00 PM CAPITOL 17 BILL: HB 133 SHORT TITLE: TRANSPORTATION PLANNING SPONSOR(S): REPRESENTATIVE(S) BROWN JRN-DATE JRN-PG ACTION 01/27/95 158 (H) READ THE FIRST TIME - REFERRAL(S) 01/27/95 158 (H) TRA, STA, FIN 03/17/95 777 (H) SPONSOR SUBSTITUTE INTRODUCED -REFERRALS 03/17/95 777 (H) READ THE FIRST TIME - REFERRAL(S) 03/17/95 777 (H) TRANSPORTATION,STATE AFFAIRS,FINANCE 04/26/95 (H) TRA AT 01:00 PM CAPITOL 17 ACTION NARRATIVE TAPE 95-17, SIDE A Number 000 The House Transportation Committee was called to order by Chairman Gary Davis at 1:37 p.m. Members present at the call to order were Representatives Davis, James, Williams and Brice. Members absent were Representatives MacLean, Sanders and Masek. CHAIRMAN GARY DAVIS announced the agenda was to hear testimony on Committee Substitute for HB 218 and Sponsor Substitute for HB 133. He stated it was his intent that neither bill would leave the House Transportation Committee today. He said it was highly unlikely that these pieces of legislation would move through the legislature. He felt the Transportation Committee is the place to work on them during the interim. He said he will take testimony, discussion and debate as well as discuss any amendments. HB 218 - PROMPT PAYMENT OF TRUCKING SUBCONTRACTORS Number 028 CHAIRMAN DAVIS asked Representative James to give her testimony on CSHB 218. REPRESENTATIVE JEANNETTE JAMES, Sponsor of Committee Substitute for HB 218 agreed with Chairman Davis on the fact CSHB 218 cannot be completed this session and the Transportation Committee is the place where it should reside during the interim. She stated this bill was filed upon the request of the Alaska Independent Truckers Association to provide for their prompt payment. She explained recent experiences with brokers as subcontractors has caused great distress due to an inability of the truckers to receive prompt payment. Representative James said this is not only an economic issue, but a safety issue as well. To solve the problems experienced, several things must take place. The truckers must organize their own contract and billing system, which they are doing to support their claim for statute change. Subcontractors currently have statute support for prompt pay. She indicated that the employees are covered by labor laws but this statute support does not include the owner-operators of trucks. REPRESENTATIVE JAMES indicated that the independent truck owners who hire out themselves and their trucks for construction and other short term jobs, need to be able to depend on prompt payment for their services in order to maintain their trucks and to guarantee safe operations on the highways and roads. This legislation is specific to trucking, owner-operator as defined in Section 2, (d), (6) of the bill and does not extend to any other segment of small businesses. The truckers are instituting a system of semi-monthly billings. This legislation would make those billings payable within 14 days which is a reasonable length of time. Representative James asked to quote former Representative Ron Larson, who said "some of my friends tell me this and some of my friends tell me that, then I agree with all my friends." She explained this has been one of those bills that has been somewhat of a separation between some of her friends, because she generally supports trucking as not only a way of life, but as an important part of our economic activity. She said her husband had done a lot of trucking before they came to Alaska. He now drives a school bus. He has a brother that has been in the trucking business most of his life. She stated her point was that she has been exposed to the trucking industry for many years. She said the problem with independent truckers regarding these issues is not an independent truckers problem as much as a problem with the category called brokers. Representative James indicated she was not saying we should not have brokers, but there should be responsible brokers. She explained they fill a need in the construction industry when there are extra trucks needed. A broker shows up and hires the individual trucker to perform an overall trucking responsibility. The subcontractors, in statute, are given a prompt pay and are supposed to be paid in seven days after the prime contractor receives payment. The laborers working on a certified payroll, such as state jobs, must be paid and there are certain guarantees to this. She indicated there was nothing in statute to owner- operators of trucks. They cannot be treated as labor because they are not labor; they have their own truck and cannot be subcontractors because they are not part of the bidding process. By putting some provisions in statute for the owner-operators of trucks, it gives them some clout. She commented that payment to these truckers such as long haul truckers is generally twice a month. She added the truckers she has talked with would be happy to be paid once a month, but 120 days is too long of a time period to go without payment. There is a division between the long haul truckers and the Alaska Independent truckers. She said she felt bad about this and felt there should be no distinction. She supported the idea of working on this issue during the interim and would be happy to listen to any other solutions. She said the bottom line is that we cannot have people driving on the highways and roads, hauling material such as gravel and not being able to get paid. They need to be paid so they are able to keep up the maintenance required on their trucks. She added the truckers who are in the larger businesses might feel if the smaller truckers don't have enough money to be in business, they should not be in business. She said "these truckers got to where they are because there aren't jobs." The reason they have this is because there was not enough labor to be performed by truckers, so they are trying to create their own jobs. She said providing HB 218 for the public and legislative process is an excellent way to bring the problem to the forefront. She said she would be happy to answer any questions. CHAIRMAN DAVIS announced there were a number of people on teleconference and asked for testimony from Robert Eakman from Anchorage. ROBERT EAKMAN asked if Mr. Richard Strahl could testify first. CHAIRMAN DAVIS said, yes. RICHARD STRAHL, President, Alaska Independent Truckers Association stated he has been a trucker in Alaska for 34 years. He supported HB 218. He indicated at the present time they are not in the contract and need this bill and need to be recognized. He made reference to the fact if they work for a broker, they only work directly for a general contractor they need to be recognized as a entity in the contract which would give them a right to ask a broker (indisc.), to ask the general contractor, the Department of Transportation & Public Facilities (DOT/PF) and an engineer out on the site and have to ask where their money is. He was pleased with the billing part and stated it was good for everyone to have their own billing (indisc.). This entitles us to attempt to go through the system to get our money when working for a general contractor or through a broker for a 30-day period and have not received payment. He expressed concern for expedient ways of collecting their money and the fact that the general contractor or the broker will not be around at the time the job is over or if there is the situation where the general contractor is losing money, or the broker is taking that money and using it in other areas for other trucking activities. At the present time, they don't have the opportunity to go to the broker, to the general, or the DOT/PF and find out where the money is passed through, or if it is passed through. The general (indisc.) is to stay out there in your truck for 60-90 days. He remarked it is a scary situation when your truck (indisc.) and someone goes out of business or leaves town and you are left without payment. He made reference to the comment made earlier regarding smaller businesses being able to financially handle themselves. He stated as an individual and a one truck owner-operator or for an owner-operator with a couple of trucks, most everyone's credit is set up on a 30-day situation; that is for fuel, tools and maintenance repairs. He said they need this money in order to pay these people promptly. He said people are very quick at cutting off credit with individual truckers compared to a large general contractor or company. On the job if a person is burning $80 to $90 worth of fuel a day, that means their running a lot, there is a lot of wear on tires, and there are other expenses. He emphasized the need for getting the money where the truckers can pay and keep their credit in force. Currently, there are a lot of general contractors that will pay promptly and have been doing so for years but do not always get the contracts. Through the bidding system they may not get any work this year. If they do, there are only so many people that can work for them. He said so you end up with some of the other contractors who seem reliable enough and pay their bills and gave the contract to a broker because they had hoped to (indisc.) their own costs. He said they can do their job and promise to pay his own truckers and carry out his part of the contract. Where the system falls down is not following through to the independent broker and in many instances (indisc.) without his money for long periods of time. He felt HB 218 would help to close that gap and give people a normal period of time to pay their bills. Number 239 CHAIRMAN DAVIS asked Mr. Strahl to explain the involvement of the broker. He asked for confirmation that a general contractor gets a job and has the independent trucking agency submit estimates and quotes to work that particular job. MR. STRAHL explained from his experience, usually the general contractor is required to bid on a highway job, an inspector will be required to come on site, there will be a certain amount of yardage to be moved, so much asphalt they want and the brokers will give the general contractors bids on doing this work, either by an hour or by a tonnage rate. If this works for the general contractor and he's successful in getting the job and he hires that broker, they already have a set price. At that time, the general contractor knows what price he can do the trucking for because he has a price on it. If it is a reliable broker, he will be able to supply the amount and types of trucks needed to do his job. Some of the advantages, from the general contractors standpoint, as far as getting the right trucks and the amount of trucks, when they are needed, are that you know the price going into the job and that it won't change. Number 277 CHAIRMAN DAVIS asked for confirmation that of all the trucking operations on that job that the broker has submitted, does the general contractor pay the broker? MR. STRAHL said yes (indisc.) contractor with the general contractor the broker (indisc.) the type of materials, if the contract calls for D-1 gravel and the asphalt and the borrow A and borrow B. It would be stated in the contract. Also, the broker is a subcontractor at that time. CHAIRMAN DAVIS asked how the independent truckers are licensed? MR. STRAHL said an independent trucker at that time (indisc.) signed the contract with the general contractor with 10 different trucks, the broker will call 10 of his people and say 10 of his independent owner-operators have turned in paperwork to him, he will call them and ask them to work on a job. He will dispatch them according to the general contractors needs at that time. CHAIRMAN DAVIS asked again what kind of license was needed by an independent trucker. He made reference to it being a business license, but under what SIC code. The trucker is not considered a subcontractor from his understanding. BOB EAKMAN, General Manager, Alaska Independent Truckers Association of Anchorage, interjected and said no he is not a subcontractor. There are two separate codes that use (indisc.) license and one other. He stated he did not have the codes in front of him. CHAIRMAN DAVIS asked Mr. Eakman for his testimony Number 292 BOB EAKMAN, General Manager, Alaska Independent Truckers Association of Anchorage, stated the two most important issues this bill addresses is the recognition and safety which were detailed out in a letter dated April 20, 1995, to Chairman Davis. If the truckers are not paid in a reliable and timely manner, they do not have the necessary means of maintaining their trucks, except to dig into their savings if they have any, or talking someone into giving them credit for 90 to 120 days. He reiterated his comments on safety being one of the biggest factors. The other part of this bill is it provides the truckers with a law to go in other directions, where they do not have that now. Currently, the majority of the work is done on a verbal contract basis. He said it was not uncommon to receive late night phone calls or calls while they are in their trucks. He then stated it is not practical for the trucker to sign a contract every time he has to haul a load. Half the time the state does not know what the jobs are going to be until their let. He said there was no real way for a contract to be signed between a broker and an independent owner-operator for every job for the entire year. He said it was just not practical. He added the fact that the subcontractor or broker did not get his paperwork turned in on time, should not have any bearing on whether the trucker is paid or not. Number 340 FRANK DILLON, Executive Director of the Alaska Trucking Association, explained the association is opposed to HB 218. He stated they represent both long and short haul truckers. They represent all kinds of truckers from all areas of the state from Annette all the way to Barrow and from Dutch Harbor to Tok. They have members who operate one truck and members who operate more than 100 trucks. He stated they have discussed this issue and are in favor of having people pay promptly for their trucking services in a timely manner. MR. DILLON remarked what has brought this bill forward is, understandable frustration about the length of time that it takes to receive payment. He stated dump trucking in Alaska is not what it used to be; the world has changed and as with any evolution those that can adapt, survive and those that don't, go extinct. Not many construction truck owner-operators are able to survive any more just operating their truck during Alaska's short trucking season. Virtually every owner-operator must have other sources of income such as a working spouse, outside winter work, snow hauling for about half the rate in the winter through the municipalities or some other way to make a full-time living and to be able to provide for a modest family income. Because market forces of supply and demand would have underwritten and changed the way the market takes place, he did not see where any of the proposals that have been brought forward so far are going to change the situation as it exists. MR. DILLON continued to explain what is really hurting the independent truckers in this state are the independent truckers themselves. He said he would illustrate this point by using the analogy that the trucking industry is like bookends. On one end, you have people who do what he refers to as hobby trucking. These are truckers who are basically financially secure, in their late 40s or 50s, have decided they want to go into the trucking business because they have always wanted to give it a try for the sense of freedom or exhilaration of operating a truck. The hard work and just the idea of having to make a living at it are not necessarily considerations because as they have indicated to him they don't really need the income from the trucking business. He then made reference to the other bookend where there is a group of people who are usually younger, 23 to 26, and are not concerned about the big picture and the long term. They have older, used trucks and lend themselves out to work. If they are making what they consider a reasonable rate, this is fine. He said this appears to be more of a temporary employment scheme than a career. MR. DILLON continued that in between these two bookends there are a lot of people who are truly trying to make a living operating a construction truck in the state of Alaska. It is difficult because of an oversupply of trucks and because of the shrinking budget. He then stated the specifics of the bill. First, he understands the need to be paid before services rendered in a timely manner. This is not a problem that exists in only the owner-operator level of the trucking industry. It is unusual for any truck service provider to be paid in less than 45 days. The normal amount of time is about 45 to 50 days. There are existing contracts within this state with major oil companies that provide for trucking payments to be made within 90 days. These are on amounts of money in the millions of dollars and for trucking services provided in the millions of dollars worth of revenue a year. The idea of being promptly paid is not solely a problem for the owner-operator. If someone doesn't pay the trucker for the services, some of the remedies are they are re-billed, send a letter of reminder, turn the issue over to a collection agency or litigate the circumstances to try and recover the money. MR. DILLON said if HB 218 passes, those remedies would still exist for a owner-operator trucker who has not been paid. Even though there is talk about force of law he said what escapes him is, in terms of statutory adjudication of litigation or action going out to collect the money, how HB 218 helps. It only applies on state funded jobs which may be the majority of the aggregate and dirt hauling in the state, but it is not all of it. There is a lot of private sector jobs that this would not address. HB 218 also excludes people who have the Interstate Commerce Commission (ICC) authority from the ability to take advantage, if there is an advantage in this bill. He asked to make a correction on the issue of what has been said regarding ICC carriers already having a prompt pay bill that requires them to be paid in a specific amount of time. He said this statement is not true. The ICC requires that the trucking company that provides the service send the bill to the shipper within seven days of providing that service. It is an obligation that is placed on the trucker to bill. No where is it stated that the shipper has to pay that bill in any specific amount of time. That is a misconception that is widely held with people who have not worked for the ICC. He stated HB 218 uses the language regarding oral contract sales. He stated as far as he was concerned this may be legal, but it is impossible to prove without going to court. He said when it is your word against someone else's, it is rarely arbitrated. He said it has been suggested from the Alaska Trucking Association (ATA) for years that there be hauling agreements to be signed at the time the person goes to work, even if it is just something that has to be carried by the driver of the truck. He indicated this would mean people would have to change their business to a certain degree but it would be a positive change. He reiterated his opposition to CSHB 218 because it does not provide any revenue. He said what they would like to do is get together with all involved players in the interim and figure out if there is a way to improve the situation for the owner-operator independent truckers. Mr. Dillon said he was available for questions. Number 433 REPRESENTATIVE JEANNETTE JAMES said she appreciated Mr. Dillon's offer to work on this through the interim session. KAREN CHASSE stated she supported CSHB 218. Her husband has been a trucker in Alaska for over 23 years and owns and operates a trucking business. She said they have always run their trucks as a business. She stated trucking is their livelihood and is their only source of income, supporting them and their two children. They pay taxes and carry a million dollar insurance policy. They have their own invoices with daily contract terms written on them which are signed everyday by the job foreman. She explained if they have 10 jobs a day, then they would write up 10 separate tickets for each job they are dispatched to. She bills everyone and hand carries the statement along with the ticketed invoices to the contractor's office on the first day of every month. She noted even after doing all this, they do not get paid any faster than the truckers that do not bill. Charging by contract does not work with these contractors and brokers. They still pay when they feel like it and not a moment sooner. MS. CHASSE said they were not present today to ask for any special favors or request any state money or grants. Their only request is that they are paid in a timely manner by the contractors and the truck brokers. She added she did not understand how anyone can be in opposition to this bill. If they are, is it because the contractors don't have any intentions of paying their bills. Or do they need to use the truckers' money to run their own business? She questioned if this is because they have bid too low on one job and have to use other funds until they can bid on another one. She said if anyone opposes this bill, what exactly are they opposing. They seem to be opposing the fact they will be getting paid. Truckers work for different contractors and brokers all the time; sometimes changing job sites two or three times a day. They simply go where they are needed when a contractor or broker calls for more trucks. The contractors have been taking advantage of the owner-operator for years; they have been controlled for so long that most of the truckers are afraid to ask for their money for fear of being blackballed. The truck brokers are too scared to ask for the money for the same reasons. If the broker puts pressure on the prime to get paid, then the prime will just call a different broker. She said she knows how it feels to be blackballed because it happened to her simply because she asked for her money. She said she waited four months to get paid, she called the (indisc.) and went over the broker's head. She was then called into the office the next day and was blackballed by that contractor and was never allowed to work on that job again simply because she asked for her money. She said the system works on fear and intimidation. MS. CHASSE said some of us are tired of living this way. She said she needs a steady cash flow to run their trucks and pay commission, as well as money to pay their insurance, fuel and other personal bills. She said she needs a regular income to care for their children. She indicated three people have died in the last two years due to unsafe equipment. Someone was killed by a truck that had no brakes. A fellow trucker was killed because his truck was literally held together with chains. When the chain broke, his load shifted and came through the back of the cab. She said she can only guess that these truckers just did not have the money to fix their own trucks. MS. CHASSE said it took a lot of courage to testify on this particular issue. Some other people said they would have liked to testify on this issue but they have been threatened by some of the brokers. One guy told her that his broker said even if this bill passes, they still won't pay him any faster and if he doesn't like it, then that's too bad. It is a pretty bad situation when so many owner-operators are scared of being blackballed that they will run unsafe equipment on the road and apply for welfare before running the risk of speaking out on this issue. She asked for the committee's help. All other subcontractors that work for the prime are covered in certain spec books that clearly outlines all aspects of the particular jobs. It also specifies when a prime must pay each one of these people. Independent truckers and owner-operators have never been recognized in the spec books and the only way this loophole can be stopped, is by passage of this bill. She then asked for questions. Number 490 CHAIRMAN DAVIS stated he wanted to take testimony from Soldotna next. CATHERINE THOMAS of Kenai expressed concerns for the fact that a lot of the expense is coming down to the public in the end (indisc.) increase the cost of every project. She said she did not understand why this was such a problem. Her business history is as a long haul trucking company, (indisc.) owner-operator, truck broker and construction company that hires independent operators and truck brokers. She explained state or federal contracts have always been tied to the contract that she has with the government. Those are issued down to the subcontractor. Normal procedures nowadays with that particular contract with the subcontractor is tied back to the state pay schedule and the government contract or prime contract. Once payment is received they are required to pay within five to seven days. If the owner-operator independent truckers negotiate with their brokers to have the same guidelines or same type of subcontract privileges, this scenario is eliminated. They have every right under the Public Information Act or Freedom of Information Act to request to see a copy of the contract indicating when the pay schedule has been issued. She stated normally the subcontractor and the contractor require release of liens for moneys received. This is normally done pay schedule by pay schedule. The only thing that she sees happening with CSHB 218 if it passes is it removes more responsibility from an independent operator to ensure that his contractor is providing him with the same contract requirements that the prime has. If the prime contractor or the broker for the independent trucker borrows money from the bank to pay the independent trucker, that cost of money will be passed on back to the state government and will increase the price of these projects. Most of their contracts are paid within 30 days. She asked if there were any questions. Number 532 REPRESENTATIVE JAMES asked if Ms. Thomas worked mostly as a prime contractor or a subcontractor? MS. THOMAS stated she worked as both. REPRESENTATIVE JAMES asked for confirmation that she hires independent owner-operators, and acts as a broker. In other words, if there is a need for more owner-operators she would call them in for that particular job. MS. THOMAS reiterated her comments in working both areas because of her status as a women in the business, sometimes she has taken the trucking portion of the contract. She said she would consider herself a truck broker. REPRESENTATIVE JAMES asked what type of arrangement does she have with the operator-truckers for payment. MS. THOMAS explained that she requires a copy of the prime contract that her prime contractor has with the state. She ties her terms of condition to that contract, if they process her pay estimate and have a check in her hand within five to seven days after they have received their money. She also can request in that contract that they notify her when they have received that check. Her subcontract to her owner-operators -- and she issues them subcontracts and it's tied right back to that and they have a right to look at any of those contract documents as far as she was concerned. REPRESENTATIVE JAMES stated Ms. Thomas made mention of having to do a lien release when, for example, the prime contractor is paying the subcontractor. Representative James asked if it stated anywhere that the subcontractor has paid their bills. MS. THOMAS said under the certified payroll Davis Bacon Act, the forms that go in on every public project such as the Title 36 project, they are required to furnish the state Department of Labor with a list of anyone that they would have a contract with on that particular project. REPRESENTATIVE JAMES asked if Ms. Thomas includes owner-operators of trucks on that certified payroll. MS. THOMAS said yes, she does. Her prime contractor requires a lien release from each of her independent truckers saying they have been paid for a portion of the project and a copy of the Title 36 certified payroll form, that she is required to provide the state with. Number 566 CHAIRMAN DAVIS said he would now take testimony from Anchorage again. BILL EVANS, Eagle Equipment in Wasilla, stated he has been trucking in Alaska for years. He said it was not just a money issue anymore, but a safety issue as well. He said there have been people that have been killed. He commented that the sad part is who is going to be next. He asked if it would be a load of school bus kids or someone's family member. He said they can't get their money and can't fix their equipment. He stated they have tried to go up the ladder and ask the people they work for where their money is. But they won't even talk with them, because they didn't hire them. He commented that a few weeks ago he just got his money from a person he worked for last July. He said when he has to pay his insurance every month, his fuel bill, his tires every month, and everything else, it is on a 30-day payment schedule and he can't survive on those kinds of conditions. He said something has to be done for the independent operator to get their money so the trucks can be properly maintained. He said it boils down to a life or death situation regardless of the chain of command and they are not getting their money. It is a real safety issue. He noted he has equipment that he is unable to put on the highway because he has not been able to get his money to maintain his truck. He added anyone who opposes this bill does not understand the safety issues involved. Number 596 CHAIRMAN DAVIS asked Mr. Evans if the payment he received was from a contractor or a broker? MR. EVANS said it was from a broker. CHAIRMAN DAVIS took testimony from Ms. Chasse again from Anchorage. MS. CHASSE said she was speaking with Mike Miller before he left and he's a general contractor and he told her the way it works is they bill on the first and the fifteenth of the month. It takes them approximately 6 to 20 days tops to get paid. It then takes seven days before they can issue a check to the broker. The maximum time to receive a check is 27 days. She said she did not understand why they were not getting paid if this is the normal procedure. REPRESENTATIVE JAMES asked if Ms. Thomas was still on line in Soldotna. She stated that Ms. Thomas indicated in her testimony that people who work for a subcontractor or a prime contractor have the privilege of seeing the contract that they are working under. She asked if these independent operator trucks, such as Mr. Evans, would be able to get a copy of the contract of the person he is working for? MS. THOMAS stated the prime contract with the city, state or the federal government will dictate whether it is a 2 week billing or a 30-day billing. When the trucker signs a contract with the truck broker or the prime contractor, that can be a term he negotiates for. The state or the municipality issuing the prime contract is required to provide a copy of the contract. In between the subcontract there may be a term of negotiation, she corrected herself and said the ability to see it may be a term of negotiation, but many prime contracts will require that all the subcontracts become part of the privileged information that the municipality can provide. Number 620 CHAIRMAN DAVIS said he would hold HB 218 through the interim in order to work on several aspects of the bill with the involved parties such as Richard Strahl, Robert Eakman, Frank Dillon and Ms. Thomas. He said he didn't think that people would not be sympathetic to the fact that someone is not receiving payment in a timely manner. He felt everyone agrees that independent truckers or anyone, for that matter, needs as well as should, receive payment in a timely manner. He asked for people in attendance to consider an option or way of getting independent truckers designated or licensed as subcontractors so they would fall under existing statute which might be a possibility with some additional language included in the bill. He also referred to Ms. Chasse's comment of why would anyone not favor this bill. He explained incorporating something into law, specifically to a small group is a pretty big step. If there is opportunity for alternative methods to get a problem taken care of, he would like to approach it from that angle through the interim. TAPE 95-17, SIDE B Number 000 REPRESENTATIVE JAMES said she had been talking with Mr. Dillon on various solutions of truck safety. She felt if we are going to be working on how these people get paid, then we also should address some kind of provision for safe trucks on the roads. She said we are saying now that the safe trucks that are not there because the owner-operators are not getting paid and she wanted to know that they are going to be there even when they do get paid. She agreed with it being a safety issue. She said we could let these people economically go and find another job, if our concerns, as a state, were just to be sure they received payment, but the issue of safety must be addressed as well. CHAIRMAN DAVIS stated HB 218 will be held for the interim. HB 133-TRANSPORTATION PLANNING Number 042 CHAIRMAN DAVIS asked Representative Kay Brown if she would give her testimony on HB 133. REPRESENTATIVE KAY BROWN, Sponsor, stated she has been concerned for a number of years with the transportation planning process. She felt the transportation planning process should fully embrace the positive changes made at the federal level which gives greater flexibility than previously. She indicated we should be striving to have a "bottom up planning process" that involves individuals in the community, rather than having plans dictated from the top and from the Department of Transportation & Public Facilities (DOT/PF). There are a number of specific concerns that have arisen regarding particular projects. She said she would not go into them in detail now and only mentioned them as background information. It was the real life situations and problems in the community of Anchorage that lead her to work with Cheryl Richardson and the statewide group she is affiliated with. This group was designed to help improve the transportation planning process. This legislation would shift some responsibility from the state level to the local level in terms of deciding what projects are completed. It would provide discretionary authority or the potential for appropriation of more of the federal highway funds to local governments for projects in their area. It would also authorize use of some of these moneys for planning. She referred to some posters that were displayed around the committee room and explained one was from a planning project that took place in Soldotna. She felt this was a fresh approach that helps them to look at the opportunity of building a road to actually improve people's quality of life and make a positive change in the community. She asked if there were any questions. Number 110 REPRESENTATIVE BILL WILLIAMS said that within his district they have been submitting what they would like to have done within the transportation system of Ketchikan. Some of the projects have not been looked at for years. He stated there was a project currently underway in Ketchikan that has been on the books for 20 years and is something they would like to see done. He asked if what Representative Brown was talking about was a similar issue. REPRESENTATIVE BROWN said her impression was that this issue varies from area to area. The system may work better in a smaller community than in Anchorage. She felt the system as it applies to Anchorage is seriously broken and there is no clear accountability between the citizens and the group that is responsible -- the Anchorage Metropolitan Area Transportation Study (AMATS), but Anchorage being a larger community has a different status under the federal law. She said she has been trying for a number of years to change the structure of how things are in Anchorage. She felt there was nothing within HB 133 that would harm a small community. It is intended to ensure that the process is responsive to what local communities want, whatever their size. CHAIRMAN DAVIS stated Ms. Mullen was in attendance from Soldotna to present a slide show on some related projects in Soldotna. Number 151 PEGGY MULLEN, Member, City Council; and Soldotna resident, explained that her folks homesteaded in the area in 1948. She said she has started a few small businesses there. She explained there was a project they worked on this past February which involved a great majority of the citizens in the process of some transportation decision making issues. She said they were in support of this legislation. She explained in 1993 there was a sort of "harmonic convergence of happenings" in their area. They worked on the Spurr and Sterling Highways because they were going to be 3-R projects which consist of Rehabilitation, Restoration, and Reconstruction. She explained Soldotna is approximately 150 miles south of Anchorage on the Sterling Highway. She said you can either make a right when you get to Soldotna and go 10 more miles and end up in Kenai or go 80 miles further and this would put you in Homer. She stated there has been growing concern regarding the Kenai River and keeping pollutants out of the river. This was one of the reasons that the DOT/PF became involved in the project of working with the storm drainage system which at this point runs directly into the river at two different points off the highway. MS. MULLEN said the DOT/PF had just completed a project in Sterling which made the front page of the Anchorage Daily News because a number of people were surprised when they saw the final plans for this project contained high lighting and not a very "human scape result" when they were through. It depicted a five lane road which was necessary, but it depicted an inhuman effect in many people's minds when the plans were completed. A young architect who was working with Ms. Mullen's family to decide what to do with part of their homestead and worked on a land use plan, said, "Gee, I didn't even know the river was here." She said they wanted to construct a project that would help to let people know that the river existed because it is one of the key features of Soldotna. She said the city manager and city council were interested in working with the DOT/PF on ideas for the types of projects they could do and to involve more people of Soldotna. In September 1994, the city manager, the Mayor, and herself met in Anchorage with some DOT/PF planners and engineers and decided to come up with some sort of event that would involve the public and let them have as much input as possible. She said she wanted to present some slides that would show various aspects of the projects planned for Soldotna. MS. MULLEN first referred to the projects plans that were done in February. They were visited by an architect from Philadelphia who coauthored a book that interested local architects. Ms. Mullen said they rented an old school bus for $250 and brought down the professionals from Anchorage along with the architect who was going to help them with this project. They donated their time and some money to the projects. They were landscape architects, architects and planners. She then showed a slide depicting a map of Soldotna with a tissue paper overlay with further suggestions on a possible town commons/park area. She referred to a historic photo of Soldotna around 1950 and indicated that the bridge over the Kenai River in Soldotna was not constructed until 1950. She said part of getting the public to show up at this meeting was to have the local anthropologist line up six of the original homesteaders and a couple of people who actually built the highway through Soldotna. She explained this essentially established the town of Soldotna. She said they talked a little bit about the lifestyle as it was between 1948 and 1950. She then presented a slide with a photo of a model that some school kids in the third grade at Soldotna elementary did in preparation for this event. She said in the planning process they had sent out a letter to the local schools asking for involvement in this project. Three school teachers along with their 70 to 80 students constructed a model of Soldotna as it exists today. It also shows all the existing buildings and the improvements they would like to see in the future. She said they included in their model an underground viewing station to watch the fish swimming up the Kenai River and an elevated train to get around Soldotna. She added they had good community involvement. MS. MULLEN continued they decided to meet in the local high school gym, which was a good centralized location for this event. It gave them a "stage" to work with. There were approximately six or eight small groups working all day on the project. She explained they broke themselves up into groups and people discussed what they liked about Soldotna's main street and what improvements could be made as well. They discussed the identity of the town as far as the summer activities in Soldotna. She commented on the recreational vehicles that pass through Soldotna in the summer months. The highway is Soldotna's main street but it also is the main artery that leads to Homer. People in Soldotna have been for a long time conflicted about not having a real center of their town. She said they had the League of Women Voters present to help out and take comments for the record. They also had some "wonderful young architects" construct some visual drawings of what people said. MS. MULLEN said also helping them with this project were people from the DOT/PF. For example, she was in the bridge construction group and they had an engineer present who explained the construction of the bridge and how they planned to include some pedestrian amenities. She said currently the bridge does not provide for any safe crossings for pedestrians. She showed a slide that depicted a poster reading, "Soldotna make yourself at home." This was designed to let people know when they were getting close to Soldotna. She said there were some landscaping funds available for this project, but she was not sure how much. She had conversations regarding how the city could "play off their salmon theme." She said there was a problem with Rvs wandering through town. A suggestion was made to have a large parking lot just before they get into town and provide the people with all the tourist information and then a shuttle bus to take them around town. She said there was a lot of concern of people driving too fast through town because they are just passing through. She said they talked with the DOT/PF early on in the process of constructing a model of the town. She said they did come up with some federal highway planning money that they were able to contribute to the project. She said the entire event was on video and hoped that in a month when it is finished it will be available to other communities that have similar concerns. MS. MULLEN reiterated the importance of the public involvement they had not only from the city, but city residents, Chamber of Commerce, DOT/PF and the local municipality. She showed a slide that depicted the five lane highway running through Soldotna. Also, an idea was presented on how Soldotna could do their snow removal in a more efficient manner using a snow storage facility. Currently, when the snow is not plowed the pedestrians are walking directly on the streets. She said there was a lot of concern regarding safety issues because of this. She said there was a high number of young kids in town who like to ride their bicycles. She said there was concern of the use of public lands in Soldotna in relation to the river and the highway. Another issue that was addressed during this project were things to do in the winter months. She said there was a person who came down from Anchorage as a resource from the Winter Cities group and suggested painting the snow. She presented a slide showing a flower that had been painted onto the snow. She said they talked about that in relation to the bridge which, for not much additional funding could be decorated with some color lighting. Number 369 CHAIRMAN DAVIS stated most of Ms. Mullen's family is still in Soldotna. He added Ms. Mullen and he attended high school together. He said Ms. Mullen has been very active on the city council with related projects such as this one. He then introduced John Isaacs. JOHN ISAACS, Alaska Chapter, American Planning Association, stated he was part of a 130-member group who are municipal planners, state resource managers and private practice individuals. He stated they supported the intent of HB 133 because they feel it improves participation in identifying transportation needs at the community level. He participated in the Main Street program as well as similar projects in Wasilla. He said it is exciting to see what happens to communities when they are given the chance to design the projects. He said in the past, many communities felt that the DOT/PF had commandeered some of the Federal Intermodal System Transportation Efficiency Act (ISTEA) funds and allocated them internally without much local input or adequate participation. He said they support the elements of this bill that emphasize operation maintenance of existing transportation systems. He commented it was really important to keep up what you have. He said they supported the consideration of pedestrian and other types of individual transportation modes. He said they support the increase and direct pass through of planning funds and project funds of the communities. Many of these communities are ready to go; they have the funding and the capability to build and they would like to do so. He said this also strengthens the local review and approval process and builds a partnership in terms of a joint local and state involvement in developing these transportation facilities. Mr. Isaac said he was aware of the fact that this bill needs some work but reiterated his support for the intent, and would be glad to work with the committee and others during the interim. He then asked if there were any questions. Number 410 CHAIRMAN DAVIS then introduced Cheryl Richardson who was in attendance to testify on HB 133. CHERYL RICHARDSON, Member, Alaska Citizens Transportation Coalition, said she is employed by the Alaska Center for the Environment, by the Transportation Project and they have organized the Alaska Citizen Transportation Coalition. The statewide coalition is comprised of three borough governments: The North Slope Borough; Northwest Arctic Borough; and Matanuska/Susitna Borough. Also included are Native nonprofit organizations, Tanana Chiefs Conference and the Association of Village Council Presidents out of the Calista Region, League of Women Voters from around the state, the Winter Cities Association out of Anchorage, and people working on trail issues. She explained several issues brought them together as a coalition. When she started this work in Anchorage, it was a project to get children across a major arterial safely. She said she has found these issues to be statewide concerns. These people have come together under three headings. First is public participation from the grassroots to help prioritize the transportation problems within the communities and how they should be addressed. As a part of involving the public we are asking that good information is delivered to people so they can make judicious decisions. Currently, they feel some of the information is lacking about what the projects cost the community to build and operate and cost in terms of safety and air pollution. Secondly, local control over the projects. It is the section of the bill that allocates potentially 35 percent of the dollars to local governments for them to use on local projects. Third, they are looking at how projects are designed statewide. She said a major concern in most cities is that pedestrians do not feel safe. Another concern is that projects are over built and cost vast sums of money to construct and later maintain. Other concerns are lighting and speed limits on the roads. These are statewide concerns - the scale just varies from community to community. She said they were present today to help the committee come to a consensus on these issues and hopefully work with the committee during the interim to come up with some language that could be incorporated statewide. REPRESENTATIVE JAMES commented that she was pleased when this group got together. She expressed her support for the issue and said we should be pleased with the opportunity to get in on the ground floor with the many transportation corridors in the state, and emphasized the need and importance of ensuring they are done correctly. MS. RICHARDSON thanked Representative James for her support in the project and said they appreciate Representative James's support of rail systems in Alaska. Number 453 KEVIN RITCHIE, Executive Director, Alaska Municipal League, said they work with the Alaska Planners Association. He said this issue is a high priority of the Alaska Municipal League, as you can see the type of interest and creativity on the part of the municipalities within Ms. Mullen's presentation, and added this was true of all municipalities. They would like to take a vital role in transportation planning for the state. He expressed interest in working with the committee and other groups during the interim. Number 465 CHAIRMAN DAVIS said he would keep Mr. Ritchie informed of any meetings in the future regarding this issue. He then announced he would take testimony via teleconference from Anchorage. FRANK DILLON, Executive Director, Alaska Trucking Association stated he was in opposition to SSHB 133. He explained SSHB 133 has been in the thinking at the Center for the Environment for sometime. He said they have studied ways that they can divert highway money from actual timely transportation projects to come up with a variety of very attractive packaging for that purpose. One of them is the presupposition that the local people of the state, "citizens," do not have a role in transportation planning at the present time. Having attended numerous meetings over the past several years with the DOT/PF and community councils on transportation issues, he asked to differ with that analysis. He expressed concern for the way this bill is structured. He said it was placing constraints on construction projects and transportation projects. He felt the real reason this bill was put forth is not so much to improve transportation, but too slow the planning process down so nothing gets accomplished. CHAIRMAN DAVIS asked if Bo Brownfield who was in attendance would like to testify. BO BROWNFIELD, Deputy Commissioner, Department of Transportation & Public Facilities, said their position is that they support some of the concepts of this bill, such as the concept of increased public participation. He commented on the slide presentation and indicated it is a good success story. He said they agree with the concept of alternative modes of transportation where it is feasible and where it makes good sense. He said there are some good features of this bill, but would be less than honest to point out that there are some elements of this bill that need review. The DOT/PF is prepared to work with the sponsor in the interim in an attempt to resolve some of the issues they are concerned with. He then asked if there were any questions. Number 502 CHAIRMAN DAVIS said he would take testimony from Nancy Webb in Fairbanks. NANCY WEBB, Planning Consultant, testified via teleconference from Fairbanks and said she donated time to the League of Women Voters this past year to be part of the transportation coalition in the hopes that this would move the state along into the next century and get them to implement the ISTEA funds a bit more fully and take advantage of all the funds that could be made available to the state. She added the intent of SSHB 133 is a step forward but does need some work. The League of Women Voters is very (indisc.) by this bill. She suggested that Representative James cosponsor this bill because of her background and interest in transportation issues. She said she was disappointed in Mr. Dillon's comments. She feels he does not fully understand what the group and project are all about. She said he might be feeling some paranoia with this environmental group that is involved. She said there was a lot more than just the environmental groups involved in this coalition. He should try and look beyond that fact. GARY MOORE, Director, Planning and Development, Tanana Chiefs Conference (TCC), testified via teleconference from Fairbanks and said TCC is in full support of this bill. He had participated with the Alaska Citizens Transportation Coalition since its formation. He said that Ms. Richardson has done an outstanding job on bringing a lot of the organizations together that otherwise would not, including TCC. He said the reason they support SSHB 133 is because the issue of the local control of transportation dollars is important. He said they would like to see more local control, local governments being able to help the DOT/PF make decision on appropriate modes of transportation for the individual communities. He said he also supported the idea of a certain percentage of state dollars going to the local communities to help with the local projects. He said he did not have a chance to review the bill in- depth. He supported the idea of working on the bill through the interim. He said he appreciated Representative James's position on this bill. He indicated they do need a majority member to sponsor this bill. Number 564 CHAIRMAN DAVIS said he would take testimony via teleconference from Anchorage. WALTER PARKER testified in support of SSHB 133. He said he did not see anything in the bill that as highway commissioner 20 years ago he couldn't have lived with. The 35 percent he did not feel has any great effect on the overall budget. Currently we are spending more than that on the budgets within the boroughs and on local projects. He said in regards to planning, he wished they had more of this in the original DOT/PF bill. Number 576 REPRESENTATIVE JAMES said the success of the Soldotna process, which she was very impressed with, was due to people like Ms. Mullen. REPRESENTATIVE BROWN said she has been working with Mr. Kito and referred to two amendments she had in the packet. She said she is trying to address concerns and possibly other concerns beyond these two amendments. The amendment that refers to Section 2 stresses some of the things that would be calculated. When looking at what projects will cost over a certain period of time, the adoption of the amendment would help reduce the cost of fiscal note involved. She added she did not want to require information that is not relevant or useful. CHAIRMAN DAVIS acknowledged the amendments and said it was clear the amendments are addressing specific concerns that the DOT/PF has. He said SSHB 133 will be carried over and discussed possibly this coming Friday at 1:00 p.m. ADJOURNMENT There being no further business to come before the House Transportation Committee, Chairman Davis adjourned the meeting at 3:05 p.m.