04/13/2011 05:00 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB155 | |
| HB87 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 155 | TELECONFERENCED | |
| += | HB 87 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
April 13, 2011
5:01 p.m.
MEMBERS PRESENT
Senator Dennis Egan, Chair
Senator Joe Paskvan, Vice Chair
Senator Linda Menard
Senator Bettye Davis
Senator Cathy Giessel
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 155(L&C)
"An Act relating to the applicability of prevailing wage rates
to public construction contracts; and, with regard to public
construction contracts, relating to notifications, bonding
notifications, filings, notices, primary contractors, final
payments, penalties, advertised specifications, required
contract provisions, terminations, lists of violating
contractors, and remedies."
- MOVED CSHB 155 (L&C) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 87(L&C)
"An Act relating to civil and criminal penalties for antitrust
violations."
- MOVED CSHB 87 (L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 155
SHORT TITLE: PUBLIC CONSTRUCTION CONTRACTS
SPONSOR(s): LABOR & COMMERCE
02/11/11 (H) READ THE FIRST TIME - REFERRALS
02/11/11 (H) L&C
02/25/11 (H) L&C AT 3:15 PM BARNES 124
02/25/11 (H) Heard & Held
02/25/11 (H) MINUTE(L&C)
02/28/11 (H) L&C AT 3:15 PM BARNES 124
02/28/11 (H) Heard & Held
02/28/11 (H) MINUTE(L&C)
03/07/11 (H) L&C AT 3:15 PM BARNES 124
03/07/11 (H) Heard & Held
03/07/11 (H) MINUTE(L&C)
03/09/11 (H) L&C AT 3:15 PM BARNES 124
03/09/11 (H) Heard & Held
03/09/11 (H) MINUTE(L&C)
03/11/11 (H) L&C AT 3:15 PM BARNES 124
03/11/11 (H) Heard & Held
03/11/11 (H) MINUTE(L&C)
03/14/11 (H) L&C AT 3:15 PM BARNES 124
03/14/11 (H) Scheduled But Not Heard
03/16/11 (H) L&C AT 3:15 PM BARNES 124
03/16/11 (H) <Bill Hearing Canceled>
03/18/11 (H) L&C AT 3:15 PM BARNES 124
03/18/11 (H) Moved CSHB 155(L&C) Out of Committee
03/18/11 (H) MINUTE(L&C)
03/23/11 (H) L&C RPT CS(L&C) NT 1DP 5NR
03/23/11 (H) DP: OLSON
03/23/11 (H) NR: CHENAULT, THOMPSON, SADDLER,
HOLMES, MILLER
03/29/11 (H) TRANSMITTED TO (S)
03/29/11 (H) VERSION: CSHB 155(L&C)
03/30/11 (S) READ THE FIRST TIME - REFERRALS
03/30/11 (S) L&C
04/12/11 (S) FIN REFERRAL ADDED AFTER L&C
04/12/11 (S) L&C AT 2:00 PM BELTZ 105 (TSBldg)
04/12/11 (S) Scheduled But Not Heard
04/13/11 (S) L&C AT 5:00 PM BELTZ 105 (TSBldg)
BILL: HB 87
SHORT TITLE: ANTITRUST VIOLATION PENALTIES
SPONSOR(s): OLSON, HOLMES
01/18/11 (H) PREFILE RELEASED 1/14/11
01/18/11 (H) READ THE FIRST TIME - REFERRALS
01/18/11 (H) L&C, JUD
02/28/11 (H) L&C AT 3:15 PM BARNES 124
02/28/11 (H) Scheduled But Not Heard
03/07/11 (H) L&C AT 3:15 PM BARNES 124
03/07/11 (H) Moved CSHB 87(L&C) Out of Committee
03/07/11 (H) MINUTE(L&C)
03/09/11 (H) L&C RPT CS(L&C) NT 4DP 2NR
03/09/11 (H) DP: THOMPSON, HOLMES, MILLER, OLSON
03/09/11 (H) NR: CHENAULT, JOHNSON
03/23/11 (H) JUD AT 1:00 PM CAPITOL 120
03/23/11 (H) Moved CSHB 87(L&C) Out of Committee
03/23/11 (H) MINUTE(JUD)
03/25/11 (H) JUD RPT CS(L&C) NT 3DP 3NR
03/25/11 (H) DP: HOLMES, THOMPSON, GRUENBERG
03/25/11 (H) NR: PRUITT, LYNN, GATTO
04/04/11 (H) TRANSMITTED TO (S)
04/04/11 (H) VERSION: CSHB 87(L&C)
04/06/11 (S) READ THE FIRST TIME - REFERRALS
04/06/11 (S) L&C, JUD
04/12/11 (S) L&C AT 2:00 PM BELTZ 105 (TSBldg)
04/12/11 (S) Scheduled But Not Heard
04/13/11 (S) L&C AT 5:00 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
JENNIFER SENETTE
Staff to Representative Olson
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Presented HB 155.
REPRESENTATIVE OLSON, Chair
House Labor and Commerce Committee
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Commented on HB 155 as chair of the House
Labor and Commerce Committee, sponsor.
KATHY WASSERMAN, Executive Director
Alaska Municipal League (AML)
POSITION STATEMENT: Supported HB 155.
BARBARA HUFF-TUCKNESS, Director
Governmental and Legislative Affairs
Teamsters Local 959
POSITION STATEMENT: Supported HB 155.
DON ETHERIDGE
Alaska AFL-CIO
POSITION STATEMENT: Supported HB 155.
REPRESENTATIVE HOLMES,
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Co-sponsor of HB 87.
ED SNIFFEN, Assistant Attorney General
Department of Law (DOL)
Anchorage, AK
POSITION STATEMENT: Supported HB 87.
ACTION NARRATIVE
5:01:55 PM
CHAIR DENNIS EGAN called the Senate Labor and Commerce Standing
Committee meeting to order at 5:01 p.m. Present at the call to
order were Senators Davis, Giessel, Menard, and Chair Egan.
HB 155-PUBLIC CONSTRUCTION CONTRACTS
5:03:08 PM
CHAIR EGAN announced the first order of business to be HB 155,
sponsored by the House Labor and Commerce Committee.
SENATOR PASKVAN joined the committee.
5:04:05 PM
JENNIFER SENETTE, staff to Representative Olson, chair of the
House Labor and Commerce Committee, briefed the committee that
during the Great Depression, Congress enacted a federal statute,
the Davis Bacon Act, which prescribed that minimum wages must be
paid to construction workers when they worked on federal public
construction contracts. Subsequently state legislatures enacted
similar laws, which came to be known as little Davis Bacon Acts
(LDB). Alaska's LDB is found in Title 36 and it applies to
public construction contracts under $2,000. This limit was
modeled after the limit of the federal Davis Bacon Act that was
set in 1935. Currently, if a public construction contract is
over $2,000, workers must be paid at the prevailing wages for
that job. A project under $2000 would not be subject to LDB
requirements.
She said the reason there is a threshold at all for LDB projects
is due to the recognition that some projects are simply too
small to justify the substantial administrative burden that is
associated with LDB compliance. Right now, if a project is under
$2,000 it can be completed without jumping through the hoops
like certified payroll, reporting requirements and filing with
the Department of Labor. The problem is that in Alaska,
especially rural Alaska, it's hard to find a public construction
project that is under $2,000. The federal $2,000 limit was based
on a workforce that was highly mobile and on communities that
are easily accessible. In Alaska, transporting materials and
mobilizing a workforce is costly and logistically challenging.
So, even if you have what everyone else would consider a small
project, like filling pot holes or repairing a guard rail, it
would probably cost more than $2,000 in rural Alaska - making it
the equivalent of not having a threshold at all.
Raising the threshold can also be seen as an economic
development issue, because the rigidity of LDB compliance often
discourages smaller local firms from even submitting bids. In
rural areas, this often means that workers have to be imported
from around the states to do a job that could have been done
locally. Raising the threshold will open opportunities to
smaller contractors who otherwise might not have the experience
or the wherewithal to deal with LDB compliance. Inflationary
pressures would also justify a significant increase, she added.
5:07:56 PM
MS. SENETTE said 19 other states have thresholds that are much
higher than $2,000 and of these states the average is about
$108,000.
She said this bill has been in the works for two years and this
$25,000 trigger was the result of a collaborative effort between
several unions, the state and the Alaska Municipal League (AML).
This is the amount the affected parties have indicated that they
can all live with. The sponsor has never believed this to be an
anti-union issue, but rather an antiquated statute issue and
raising the threshold to $25,000 largely addresses that.
5:09:18 PM
MS. SENETTE said that section 1 has the $25,000 limit and the
remaining sections can be described as slightly more technical
and making everything consistent with the title.
5:10:28 PM
SENATOR MENARD remarked that if $108,000 is the average, what
can you get done for $25,000! And said she is tired of doing
legislation that doesn't make the difference it needs to make.
MS. SENETTE responded that they started out hearing at the
beginning of session from municipalities throughout the state,
and they came up with a large number of $300,000 that probably
would have topped all of the other threshold amounts.
Representative Olson knew such a large jump may not get the
support it needs to move forward. That's how they arrived at the
original number which was $75,000. Subsequently, the affected
parties came to this compromise. Although no one is especially
pleased with this number, they have heard that some people have
said the $25,000 will help. Fairbanks, for instance, can do
projects for under $25,000.
5:13:13 PM
REPRESENTATIVE OLSON clarified that the $108,000 was skewed by
one state that was at $500,000 and he could make a valid
argument on everything from $25,000 up to $108,000, but
basically, AML wanted $50,000. A couple of weeks after the bill
came out he was approached by the AML and two union
representatives who wanted to work on a compromise and this is
what they thought everyone could live with. This figure meets
and exceeds inflation. There is also less involvement with the
Department of Labor and Workforce Development (DOLWD) that has a
trigger for projects above $25,000.
SENATOR PASKVAN asked on page 3, line 1, the change from "shall"
to "must", is that a different standard?
MS. SENETTE responded that a drafter said this change was
necessary, but it doesn't change the standard.
SENATOR PASKVAN said that was interesting - as long as it
doesn't change the standard.
SENATOR GIESSEL asked if he heard from any non-profits that also
do projects about the $25,000 limit.
REPRESENTATIVE OLSON responded that the bill will only apply to
governmental subdivisions - boroughs and the State of Alaska.
SENATOR GIESSEL asked if this would not apply to non-profits at
Eaglecrest or building a playground at a municipal park with
volunteers.
REPRESENTATIVE OLSON replied the only volunteer situations like
that would have been that a couple of municipalities that have
built playgrounds with volunteers, which is not paid labor, so
it wouldn't be accounted into the limit.
SENATOR GIESSEL said that is true, but a non-profit might be
raising funds to do something. Is he saying that a non-profit
would not be affected?
REPRESENTATIVE OLSON replied that non-profits are not affected.
SENATOR PASKVAN said he always understood LDB applied to the
state and the political subdivisions created by the state,
meaning the municipalities.
REPRESENTATIVE OLSON added that Fairbanks is perfect example
where they have 108 road service areas down from 140. They have
small jobs that are over $2,000 and under $25,000. This can work
in other parts of the state, but Fairbanks has notable volume.
5:19:50 PM
KATHY WASSERMAN, Executive Director, Alaska Municipal League,
agreed that they started with a goal of $50,000, but got a lot
of push back from the unions, and it didn't seem to be going
anywhere. The two union representatives approached her and they
discussed what they could all live with. They all walked out of
the room at the end equally unhappy, so they felt they had come
up with something that would work.
5:21:26 PM
BARBARA HUFF-TUCKNESS, Director, Governmental and Legislative
Affairs, Teamsters Local 959, said they supported HB 155. She
said she is one of the two union representatives who discussed
this issue. She added, however, some comments on the impacts to
workers who were worried about where the money for these
construction projects will come from. Theoretically, it is
coming out of the workers pockets and that was part of the
discussion. The inflation issue became the important factor in
actually establishing the new figure. They will continue to
monitor the effects to see if it does anything different with
respect to the economy. It was a tough round of negotiations,
she said.
SENATOR MENARD asked how long the $2,000 has been in place.
MS. HUFF-TUCKNESS replied since 1935.
5:24:09 PM
DON ETHERIDGE, Alaska AFL-CIO, said they had a lot of
negotiations over this, but supported HB 155. He was curious
about the "shall" and the "must" and contacted their attorneys
who were "happy with it." He talked to the Department of Labor
and Workforce Development (DOLWD) and they said it didn't change
anything, too. He said they have all taken a "pretty good
whipping" from their constituents along the way.
5:25:32 PM
SENATOR PASKVAN moved to report HB 155 [CSHB 155(L&C)], version
D, from committee with individual recommendations and attached
fiscal note(s). There were no objections and it was so ordered.
5:26:11 PM
At ease from 5:26:11 PM to 5:28:22 PM.
HB 87-ANTITRUST VIOLATION PENALTIES
5:28:22 PM
CHAIR EGAN announced the next order of business would be HB 87
[CSHB 87(L&C) was before the committee].
5:28:48 PM
REPRESENTATIVE HOLMES, co-sponsor of HB 87, said this measure
simply raises the penalties that can be imposed for anti-trust
violations in this state (price fixing and monopoly behavior) up
to a maximum of $50 million. The current penalties are capped at
$50,000 for a corporation. It also increases the penalty to a
Class C felony and allows the department to collect civil
penalties. These are mostly found in multi-state actions such as
price fixing among drug companies or computer chip manufacturers
where a $50,000 penalty is not even a slap on the wrist for
some.
She explained that the Alaska Department of Law goes into these
actions, but it doesn't have the ability to impose higher fines
and that gives them very little bargaining power. This was
developed with the chair of the House Labor and Commerce
Committee and the Department of Law as a collaborative effort.
CHAIR EGAN objected to take questions.
5:30:05 PM
SENATOR MENARD asked the effective date.
REPRESENTATIVE HOLMES replied that is has no actual effective
date and so it would go into effect 90 days after being signed
by the governor.
5:30:34 PM
ED SNIFFEN, Assistant Attorney General, Department of Law (DOL),
said he supported HB 87 as this measure would give the
department another enforcement tool to recover more money for
the state in some of the anti-trust cases they get involved in.
They have been in multiple cases in the recent past where if
Alaska had stronger penalty provisions, they would have likely
recovered more money for the state. This will help them in that
regard.
SENATOR MENARD asked how many cases of anti-trust violations
occur over the period of one year in the State of Alaska.
5:31:42 PM
MR. SNIFFEN replied that not too many companies are actually in
the State of Alaska, but the department gets involved in about
two or three a year, mostly in connection with multi-state cases
to pursue, for instance, pharmaceutical manufacturers or
computer hardware manufacturers or other entities that sell
products in Alaska. In the 10 years he has been in this position
with the department, they have had at least a couple dozen anti-
trust cases where this kind of penalty provision would have
applied and would have made a difference in some of them.
He said the department is also contemplating some other cases
going forward where this kind of provision would help with
enforcement efforts.
SENATOR MENARD asked in those two or three cases are they ever
repeat offenders.
MR. SNIFFEN replied generally not. Most of the cases he has
dealt with are first time offenders. The conduct itself has been
repeated it seems, but with different defendants. An example
might be price fixing in the pharmaceutical arena where he has
seen abuses between generic drug manufacturers and branded drug
manufacturers colluding to keep generic drugs off the market.
That is a pattern that has been around for several years, but
they usually catch different defendants doing it.
SENATOR PASKVAN thanked Representative Holmes and Representative
Olson for this measure. It's good for Alaskans.
CHAIR EGAN closed public testimony.
SENATOR PASKVAN moved to report CSHB 87(L&C) from committee with
individual recommendations and attached fiscal note. There were
no objections and it was so ordered.
5:34:52 PM
Finding no further business to come before the committee, Chair
Egan adjourned the meeting at 5:35 p.m.
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