04/10/2003 01:35 PM Senate L&C

        SB 111-PUBLIC CONSTRUCTION PROJECT REQUIREMENTS                                                                     
                                                                                                                                
CHAIR BUNDE announced SB 111 to  be up for consideration and that                                                               
the  Department of  Labor had  worked on  a committee  substitute                                                               
(CS).                                                                                                                           
                                                                                                                                
SENATOR SEEKINS moved  to adopt the CS. There  were no objections                                                               
and it was so ordered.                                                                                                          
                                                                                                                                
COMMISSIONER  GREG O'CLARAY,  Department Of  Labor And  Workforce                                                               
Development,  said the  department was  looking for  revenue that                                                               
would offset  general funds that  are now being spent  to operate                                                               
the Labor Standards and Safety Division.                                                                                        
                                                                                                                                
CHAIR BUNDE asked him to explain the changes in sections 4 - 8.                                                                 
                                                                                                                                
COMMISSIONER  O'CLARAY  explained that  there  is  a new  section                                                               
under  AS  36.05.045   -  Notice  of  Work   and  Completion  and                                                               
Withholding of  Payment. In concept,  they tried to figure  out a                                                               
way to  withhold payment for  those subcontractors that  might be                                                               
in  violation  of the  prevailing  wage  rate without  having  an                                                               
adverse impact on the general contractor.                                                                                       
                                                                                                                                
CHAIR BUNDE  asked if this  would take  care of the  concern that                                                               
someone might  do a half-day of  work, make $500 and  have to pay                                                               
the state $200.                                                                                                                 
                                                                                                                                
The Commissioner  answered that is  true. He added a  new section                                                               
attempts  to resolve  the problem  of the  department withholding                                                               
the final payment on a  project to the general contractor because                                                               
of one  employee. It says  that the department can  only withhold                                                               
the  amount it  estimates  is necessary  to compensate  employees                                                               
under a Title  36 investigation. It also sets a  timeline for the                                                               
notice and  filing of fees no  later than 14 days  after work has                                                               
commenced. Section 3  is identical to the  original bill. Another                                                               
change was  about a  concern over  tenant improvements  in public                                                               
buildings.                                                                                                                      
                                                                                                                                
SENATOR FRENCH asked  if the records will be  retained within the                                                               
Department of Labor.                                                                                                            
                                                                                                                                
COMMISSIONER  O'CLARAY  said they  would  be  and the  department                                                               
would start using  on-line filing by July 1, 2004  and instead of                                                               
every week, require a filing every second week.                                                                                 
                                                                                                                                
SENATOR  STEVENS said  municipalities  were  concerned that  they                                                               
would have to keep records and  request an exemption. He asked if                                                               
that had been dealt with.                                                                                                       
                                                                                                                                
MS. PAULA SCAVERA, Program Assistant,  answered that in Section 1                                                               
of the CS, recordkeeping is retained in the Department of Labor.                                                                
                                                                                                                                
SENATOR STEVENS asked  if the municipalities are  required now to                                                               
keep records.                                                                                                                   
                                                                                                                                
MS.  SCAVERA said  they are  not. She  added that  municipalities                                                               
were also  concerned about emergency  response work, such  as the                                                               
recent windstorm  in Anchorage. The  notice of filing fee  may be                                                               
filed after  work has begun  if the public  construction contract                                                               
is for work undertaken in  immediate response to an emergency and                                                               
the noticing  fees are  not filed  later than  14 days  after the                                                               
work has begun.                                                                                                                 
                                                                                                                                
MR.  DICK CATTANACH,  Association of  General Contractors  (AGC),                                                               
said the  AGC understands the  department needs to  raise revenue                                                               
and  AGC has  consented to  the first  portion, which  allows the                                                               
department  to  capture up  to  $5,000,  but  the AGC  still  has                                                               
problems with the  rest of the bill -  the reporting requirements                                                               
in   section   (2)(c)   and   withholding   payment   because   a                                                               
[subcontractor] didn't  comply with  what they legally  agreed to                                                               
do. He  thought there were already  remedies in law to  deal with                                                               
that so he didn't see the need  to add more paperwork to what the                                                               
contractors have to do.                                                                                                         
                                                                                                                                
MR. CATTANACH said he had just seen  this new CS and hadn't had a                                                               
chance to talk to the commissioner about it.                                                                                    
                                                                                                                                
CHAIR BUNDE said Legislative Legal  and Research had not reviewed                                                               
this  version yet  and he  was going  to keep  it until  the next                                                               
meeting.   That  would   give   him  the   opportunity  to   have                                                               
conversations with the department and the commissioner.