BILL REQ. #:  H-1035.2 

Read first time 02/14/2007.   Referred to Committee on Commerce & Labor.

     AN ACT Relating to forestry resources and rural development, establishing a compensation system for 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 workforce of skilled, experienced log haulers available to transport wood from Washington's forests.
     (3) Stability of this workforce is endangered when inadequate wage compensation rates for log haulers induce haulers to shortchange safety through inadequate equipment maintenance, inadequate investment in new equipment, and violation of hours of service limitations in order to take home a living wage.
     (4) The safety of citizens using the public highways is endangered when log haulers are induced to compromise safety in order to take home a living wage.
     (5) Many log haulers serving Washington's forest industry own and operate a single vehicle, such that their wage compensation from forest landowners compensates for both their personal services and the costs to maintain and operate their log-hauling equipment.
     (6) The costs of maintaining log-hauling equipment in safe operating condition are increased by the necessity of operating such equipment on nonpaved roadways in forest areas.
     (7) Based on patterns and configurations of forest landownership, the hauling of forest products is performed by numerous truckers who are economically dependent on a small group of large commercial forest landowners.
     (8) 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.
     (9) The inequity of power in determining compensation and the lack of opportunity to join together in bargaining over compensation prevents the log-hauling labor market from operating in a manner suitable for the public interest of Washington citizens and results in inadequate compensation for log haulers.
     (10) It is in the public interest to ensure a reasonable minimum rate of compensation for log haulers to ensure that log haulers earn a reasonable living wage without compromising the safety of their vehicles or the safety of their operation.
     (11) The legislature therefore enacts this chapter to create a process whereby the department of labor and industries is to oversee a system to ensure adequate wage rates of compensation for log haulers in order to ensure that the public welfare of the state of Washington is protected.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Cooperative association" includes a nonprofit membership-based entity, such as a cooperative, association, or union, whose purpose is to promote the interests of those engaged in the agricultural activities of hauling logs through participation in the compensation- setting process and is registered as such with the state of Washington and represents at least fifty haulers in a labor market area.
     (2) "Department" means the department of labor and industries.
     (3) "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.
     (4) "Forest land" means agricultural forest land used primarily for the growth of trees to be harvested for commercial use.
     (5) "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 of forest land 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 haulers.
     (6) "Forest products hauler" means a person having a place of business in this state who is engaged in the agricultural activity of hauling harvested trees from forest land in the state to a point of delivery within the state under a contract or subcontract, directly or indirectly, for a forest landowner.
     (7) "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) The department will establish compensation rates for log haulers from forest lands in the state of Washington to a point of delivery within the state of Washington when petitioned to do so by either landowners or qualified cooperative associations or labor unions.
     (2) In approving compensation rates with respect to any given commercial forest landowner, the department must consider the following criteria:
     (a) Prevailing wage rates for log truck drivers in the same labor market area;
     (b) Prevailing wages for similar types of hauling in the same labor market area;
     (c) The log hauler's costs, including but not limited to, overhead, fuel, health insurance, other insurance, pensions, or other retirement costs;
     (d) Environmental and highway laws and rules;
     (e) The impact of the award on the competitive position of the landowner in the labor market area or competing market areas;
     (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;
     (g) The cost to comply with all applicable safety regulations including, but not limited to, regulations for safety equipment and regulations for maintenance of vehicles;
     (h) The number of hours normally worked each day and each week by log-hauling drivers; and
     (i) Limitations imposed by statute or rule on the number of hours per day and per week that a log hauler may drive or work.
     (3)(a) Request for compensation rates may be submitted to the department for review and approval in one of the two following ways:
     (i) Joint petitions may be submitted by corporate forest landowners and cooperative associations who may meet and agree on a common rate of compensation request; or
     (ii) Individual petitions may be submitted by forest landowners or cooperative associations. In order to reduce costs, the department shall adopt a compensation rate from among the petitioners which best reflect the criteria set forth in this subsection. If, in the opinion of the department, none of the petition-proposed compensation rates is in the best interest of the state of Washington, the department may set a different compensation rate based on the criteria in subsection (2) of this section.
     (b) State agency commercial forest landowners may use a compensation rate that is the average of: (i) Joint petitions for the past twelve months; or (ii) file its own joint petition with a hauling cooperative.
     (4) All submissions to the department for review and approval of compensation rates shall be accompanied by the following information:
     (a) The identity of the corporate forest landowner, agent, or contractor who owns or possesses economic control over the land on which the wage compensation rates are to apply and the geographic area in which the rates are to apply;
     (b) The submissions may take into consideration alternative pay systems such as pay per mile, pay per weight, percentage of truck revenue, and pay per hour;
     (c) A summary of relevant meetings and minutes;
     (d) Information required to be considered by the department as set forth in subsection (2) of this section; and
     (e) Other information relevant to the factors needed for the department to make its decision, and as otherwise requested by the commission.
     (5) When the department receives a compensation rate petition, it must notify all persons who have requested to be notified of any submissions. These persons have thirty days to comment on the submission, and the department must review these comments in approving compensation rates. The department must reject any submission that resulted from a negotiation or arbitration that was not conducted at arm's length.
     (6) The department shall approve a petition only upon finding that the compensation rates requested are adequate to assure the vehicle driver a living wage without compromising the safe maintenance and operation of the vehicle on the public highways of the state of Washington.
     (7) Once rates of compensation have been approved by the department, the rates shall remain in effect for that corporate landowner for one calendar year.

NEW SECTION.  Sec. 4   A forest landowner violates this chapter if that forest landowner:
     (1) Pays rates for hauling services that result in wage levels below those established by the department; or
     (2) Discriminates against any person or organization for initiating or participating in a compensation 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 forest products hauler that provides for the payment of compensation rates higher than those determined under this chapter, as long as no commission's 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 to ensure the safety and stability of this industry and the safety of the general public. 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 compensation rate determination process under this chapter. A contract or agreement entered into under negotiations between a forest landowner and a cooperative group of forest products 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 compensation rate is approved by the department.

NEW SECTION.  Sec. 7   The legislature finds that the practices covered by this chapter are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW. A violation of this chapter is not reasonable in relation to the development and preservation of business and is an unfair or deceptive act in trade or commerce and an unfair method of competition for the purpose of applying the consumer protection act, chapter 19.86 RCW.

NEW SECTION.  Sec. 8   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 9   Sections 1 through 8 of this act constitute a new chapter in Title 19 RCW.