Legislature(2003 - 2004)
04/10/2003 01:35 PM Senate L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 111-PUBLIC CONSTRUCTION PROJECT REQUIREMENTS CHAIR BUNDE announced SB 111 to be up for consideration and that the Department of Labor had worked on a committee substitute (CS). SENATOR SEEKINS moved to adopt the CS. There were no objections and it was so ordered. COMMISSIONER GREG O'CLARAY, Department Of Labor And Workforce Development, said the department was looking for revenue that would offset general funds that are now being spent to operate the Labor Standards and Safety Division. CHAIR BUNDE asked him to explain the changes in sections 4 - 8. COMMISSIONER O'CLARAY explained that there is a new section under AS 36.05.045 - Notice of Work and Completion and Withholding of Payment. In concept, they tried to figure out a way to withhold payment for those subcontractors that might be in violation of the prevailing wage rate without having an adverse impact on the general contractor. CHAIR BUNDE asked if this would take care of the concern that someone might do a half-day of work, make $500 and have to pay the state $200. The Commissioner answered that is true. He added a new section attempts to resolve the problem of the department withholding the final payment on a project to the general contractor because of one employee. It says that the department can only withhold the amount it estimates is necessary to compensate employees under a Title 36 investigation. It also sets a timeline for the notice and filing of fees no later than 14 days after work has commenced. Section 3 is identical to the original bill. Another change was about a concern over tenant improvements in public buildings. SENATOR FRENCH asked if the records will be retained within the Department of Labor. COMMISSIONER O'CLARAY said they would be and the department would start using on-line filing by July 1, 2004 and instead of every week, require a filing every second week. SENATOR STEVENS said municipalities were concerned that they would have to keep records and request an exemption. He asked if that had been dealt with. MS. PAULA SCAVERA, Program Assistant, answered that in Section 1 of the CS, recordkeeping is retained in the Department of Labor. SENATOR STEVENS asked if the municipalities are required now to keep records. MS. SCAVERA said they are not. She added that municipalities were also concerned about emergency response work, such as the recent windstorm in Anchorage. The notice of filing fee may be filed after work has begun if the public construction contract is for work undertaken in immediate response to an emergency and the noticing fees are not filed later than 14 days after the work has begun. MR. DICK CATTANACH, Association of General Contractors (AGC), said the AGC understands the department needs to raise revenue and AGC has consented to the first portion, which allows the department to capture up to $5,000, but the AGC still has problems with the rest of the bill - the reporting requirements in section (2)(c) and withholding payment because a [subcontractor] didn't comply with what they legally agreed to do. He thought there were already remedies in law to deal with that so he didn't see the need to add more paperwork to what the contractors have to do. MR. CATTANACH said he had just seen this new CS and hadn't had a chance to talk to the commissioner about it. CHAIR BUNDE said Legislative Legal and Research had not reviewed this version yet and he was going to keep it until the next meeting. That would give him the opportunity to have conversations with the department and the commissioner.