BILL REQ. #:  H-4578.1 

Read first time .   Referred to .

     AN ACT Relating to forestry resources and rural development, establishing a system of collective bargaining for loggers and haulers of logs; and adding a new chapter to Title 19 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that:
     (1) Washington's agricultural forest products industry is a vital component of Washington's economy and has a direct relationship to the economic health and welfare of workers, rural communities, and businesses.
     (2) Central to the viability of the forest products industry is a stable work force of loggers and log haulers available to harvest and transport wood from Washington's forests. This stability is endangered, threatening the viability of rural communities and the employment of those in the forests products sector.
     (3) Based on patterns and configurations of forest landownership, the harvesting and hauling of forest products are performed by numerous loggers and truckers who, in many cases, despite being labeled "independent contractors" are economically dependent and thus effectively employees of forest landowners. The compensation and bargaining position of those individuals are adversely affected unless they are able to join together voluntarily in cooperative associations.
     (4) An imbalance of market power exists when one forest landowner owns, possesses, or acquires economic control over more than one hundred thousand acres of forest in a labor market area.
     (5) The inequity of power in determining compensation and the lack of opportunity to join together in bargaining over compensation results in unfair contract rates for the services of loggers and log haulers. This imbalance prevents the labor market from operating in a manner suitable for the public interest of Washington citizens.
     (6) Membership in such an association is meaningful only if a landowner contracting for harvesting and hauling of forest products is required to bargain in good faith with the association as the representative of its members.
     (7) It is in the public interest to ensure a reasonable rate of compensation for log harvesting and log hauling services and enacts this chapter to create a process whereby a system of rate setting through collective bargaining is established between large commercial landowners and log harvesters and log haulers.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Cooperative association" includes a cooperative membership-based entity whose purpose is to promote the interests of those engaged in the agricultural activities of harvesting and hauling of logs through rate setting and is registered as such with the state of Washington and represents at least fifty harvesters or haulers or any combination thereof in a labor market area.
     (2) "Economic control" means the legal right, whether through ownership, contract, or otherwise to make or influence decisions regarding the harvest of trees and disposition in general of logs on subject land.
     (3) "Forest land" means agricultural forest land used primarily for the growth of trees to be harvested for commercial use.
     (4) "Forest landowner" means:
     (a) A person, corporation, limited partnership, government, municipality, or any form of business organization registered with the state of Washington that owns directly, or through affiliated persons, or possesses economic control over, more than one hundred thousand acres in a labor market area; or
     (b) An agent or subsidiary of a person described in (a) of this subsection if that agent or subsidiary is involved in contracting or negotiating contracts or other arrangements, written or oral, with forest products harvesters or forest products haulers.
     (5) "Forest products harvester or hauler" means a person having a place of business in this state who is engaged in the agricultural activity of harvesting trees or hauling harvested trees from forest land in the state under a contract or subcontract, directly or indirectly, for a forest landowner.
     (6) "Labor market area" means those counties in one of two forest excise tax hauling areas set forth by the Washington state department of revenue for the purposes of applying the forest excise tax as follows:
     (a) Those counties located in hauling areas 1, 2, 3, 4, 5, and 10 are in one labor market; and
     (b) Those counties located in hauling areas 6 and 7 are in a second labor market area.

NEW SECTION.  Sec. 3   (1) To establish rates of compensation for log harvesting and log hauling services, harvesters and haulers may join together and form cooperative associations to meet, confer, share information, and take other collective action as may be intended to support their participation in the processes contemplated by this chapter leading to the approval of rates by the department of labor and industries.
     (2) In approving rates with respect to any given forest landowner, the department of Labor and industries must consider the following criteria. Rates need not be unitary and may take into account variations in these criteria with respect to different portions of the subject land or operations thereon:
     (a) The harvester's or hauler's costs, including, but not limited to, wages, overhead, fuel, insurance including health insurance, pensions or other retirement costs, and the cost of replacing equipment;
     (b) Environmental and highway laws or rules;
     (c) The impact of the award on the competitive position of the landowner in the market area or competing market areas;
     (d) A fair return on investment for all parties;
     (e) The species of tree, type of machinery, typography of the site to be harvested, and method of tree harvesting involved;
     (f) The amount of hauling conducted on private roads and the amount of hauling conducted on public roads including travel time from the hauling site to the delivery site and the conditions of the road; and
     (g) Safety considerations.
     (3) Rates may be submitted to the department of labor and industries for review and approval in one of the two following ways:
     (a) Cooperative associations may meet and negotiate with forest landowners in order to determine reasonable rates to be paid for harvesting or hauling services in the state of Washington. If these negotiations are successful, the rates may be mutually proposed to the department of labor and industries; or
     (b) If the negotiations under (a) of this subsection are unsuccessful, either party can demand binding arbitration. The arbitrator must use the criteria set out in subsection (2) of this section. The arbitrator must award one of the two proposals offered by the parties, and that award will be forwarded to the department of labor and industries.
     (4) All submissions to the department of labor and industries for the review and approval of rates shall be accompanied by the following information:
     (a) The identity of the forest landowner who owns or possesses economic control over the land on which the rates are to apply and the geographic area in which the rates are to apply;
     (b) The rates as negotiated or arbitrated;
     (c) A summary of relevant negotiations; and
     (d) Other information relevant to the factors needed for the department of labor and industries to make its decision, and as otherwise requested by the department.
     (5) When the department of labor and industries receives the submission of a negotiated or arbitrated rate, it must notify all persons who have requested to be notified of submissions. These persons have thirty days to comment on the submission, and the department must review these comments in approving rates. The department must reject any submission that resulted from a negotiation or arbitration that was not conducted at arm's length.
     (6) Once rates have been approved by the state of Washington they remain in effect for that labor market area for one calendar year.

NEW SECTION.  Sec. 4   A forest landowner violates this chapter if that forest landowner:
     (1) Pays rates for harvesting or hauling services in the state other than the department of labor and industries' approved rates, if any, for that service in that harvesting and hauling area; or
     (2) Discriminates against any person for initiating or participating in a rate determination proceeding under this chapter.

NEW SECTION.  Sec. 5   This chapter does not prohibit the negotiation and execution of a contract between a forest landowner and an individual harvester or hauler that provides for the payment of compensation rates other than those determined under this chapter, as long as no department of labor and industries' approved rates applicable to the service or area being provided exist.

NEW SECTION.  Sec. 6   This chapter is intended to displace existing market forces based on a legislative finding that such forces are insufficient to permit the affected market to function normally. Activities carried out under this chapter do not constitute a conspiracy, or a combination in restraint of trade or an illegal monopoly, nor are they carried out for the purposes of lessening competition or fixing prices arbitrarily, as long as the activities are carried out for the purpose of preparing, initiating, or participating in a rate determination process under this chapter. A contract or agreement entered into under negotiations between a forest landowner and a cooperative group of harvesters or haulers is not an unlawful restraint in trade or part of a conspiracy or combination to accomplish an improper or illegal purpose or act, as long as the resulting price is approved by the department of labor and industries.

NEW SECTION.  Sec. 7   Sections 1 through 6 of this act constitute a new chapter in Title 19 RCW.