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