Legislature(1995 - 1996)

04/26/1995 01:37 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 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                     
 CHAIRMAN DAVIS announced there were a number of people on                     
 teleconference and asked for testimony from Robert Eakman from                
 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                 
 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                
 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               
 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                  
 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             
 Number 566                                                                    
 CHAIRMAN DAVIS said he would now take testimony from Anchorage                
 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            
 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               
 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.                    

Document Name Date/Time Subjects