Approved: 4-3-07
Date
MINUTES OF THE SENATE COMMERCE COMMITTEE
The meeting was called to order by Chairperson Karin Brownlee at 8:30 A.M. on February 19, 2007 in Room 123-S of the Capitol.
All members were present except:
Jean Shodorf- excused
Susan Wagle- excused
Committee staff present:
Amy Deckard, Kansas Legislative Research Department
Kathie Sparks, Kansas Legislative Research Department
Norm Furse, Revisor of Statutes
Jackie Lunn, Committee Assistant
Conferees appearing before the committee:
Bill Miler, American Subcontractors Association
Ken Keller, Western Extralite Company
Beth Houser, Board of Directors, Credit Professionals Alliance, Johnson County
Bob Totten, Kansas Contractors Association
Eric Stafford, AGC of Kansas
Dan Morgan, Builders Association, KC Chapter
Trudy Aaron, AIA
Kim Winn, League of Kansas Municipalities
Scott Parker, City of Lenexa
Joe Waters, Board of Johnson County Commissioners
Erik Sartorius, City of Overland Park
Bob Vancrum, Blue Valley School District
Others attending:
See attached list.
SB 333-Fairness in public building construction contract act
Chairperson Brownlee introduced Kathie Sparks, Legislative Research, to explain SB 333. Ms. Sparks presented written copy. (Attachment 1) Ms. Sparks explained the bill.
Discussion followed with the Committee and Ms. Sparks.
Chairperson Brownlee introduced Bill Miller representing the American Subcontractors Association to give his testimony as a proponent of SB 333. Mr. Miller presented written copy. (Attachment 2) Mr. Miller stated SB 333 will provide the same protections for contractors, subcontractors, and suppliers doing public work that legislation has provided for those doing private work. He is in support of the bill.
Chairperson Brownlee introduced Ken Keller, Western Extralite Company, to give his testimony as a proponent of SB 333. Mr. Keller presented written copy. (Attachment 3) He urged the Committee to support SB 333 and give the same protection to public construction as private construction received with legislation passed out of the Committee.
Chairperson Brownlee introduced Beth Houser, Board of Directors for Credit Professionals Alliance, to give her testimony as a proponent of SB 333. Ms. Houser presented written copy. (Attachment 4) She stated she had worked in the construction industry for 25 years. When a bid is put together for a public construction job, many times the bid has to be increased to cover the cost of cash flow problems created by slow, late payments during the course of the job. With the passage of this bill that would not have to happen. In closing, she stated the construction industry deserves fair laws for all and urged the Committee to support SB 333.
Chairperson Brownlee introduced Bob Totten representing the Kansas Contractors Association to give his testimony as a proponent of SB 333. Mr. Totten presented written copy. (Attachment 5) Mr. Totten stated
they are in support of the bill with one change. In section 8 on page 4, there is reference to KDOT and its spec book. They know KDOT is updating the spec book this year and they would like to change the language to read “or any subsequent editions”.
Chairperson Brownlee introduced Eric Stafford representing the Associated General Contractors of Kansas, Inc. (AGC) to give his testimony as a proponent of SB 333. Mr. Stafford presented written copy. (Attachment 6) Mr. Stafford stated that AGC fully supports the concept of a“fairness in construction bill for the public sector”. Timely payment from public owners is a major concern for all levels of their industry. AGC feels that public entities should be asked to meet the same standards the legislature set for the private sector. Mr. Stafford urged the Committee to support SB 333.
Chairperson Brownlee introduced Dan Morgan representing the Builders Association, KC Chapter, to give his testimony as a proponent of SB 333. Mr. Morgan presented written copy. (Attachment 7) Mr. Morgan stated that they strongly support the timely payment provisions set forth in this bill for all parties to public building contracts. He urged the Committee to support SB 333.
Chairperson Brownlee introduced Trudy Aaron representing AIA to give her testimony as a proponent of SB 333. Ms. Aaron presented written copy. (Attachment 8) Ms. Aaron offered an amendment stating that on page 3, New Section 4, they would like to strike the last sentence on lines 22-24 that reads, “No more than 150% of the value of work that is not completed due to no fault of the subcontractor may be withheld pending completion.” She stated they would support the bill with this change.
Chairperson Brownlee introduced Joseph Privitera, Mark One Electric Company, to give his testimony as a proponent of SB 333. Mr. Privitera presented written copy. (Attachment 9) Mr. Privitera stated he feels that this is a fair bill that will help Mark One Electric Company collect their money in a reasonable but fair amount of time. They are in support of SB 333.
Chairperson Brownlee called the Committee’s attention to the written only testimony of David Shriver, Kansas Association of School Boards, as a proponent of SB 333. (Attachment 10)
Chairperson Brownlee opened the floor for questions for the proponents of SB 333. Questions and answers followed.
Chairperson Brownlee introduced Kim Winn, League of Kansas Municipalities, to give her testimony as an opponent of SB 333. Ms. Winn presented written copy (Attachment 11) Ms. Winn stated this bill would interfere with the contracts made between cities and contractors and they are in opposition of the bill. She listed several other concerns they have with the bill.
Chairperson Brownlee introduced Scott Parker representing the City of Lenexa to give his testimony as an opponent of SB 333. Mr. Parker presented written copy. (Attachment 12) Mr. Parker stated the City of Lenexa is opposed to the bill because there are times when they must use the retainage to make sure to get the final completion of a job done.
Chairperson Brownlee introduced Joe Waters representing the Board of Johnson County Commissioners, to give his testimony as an opponent of SB 333. Mr. Waters presented written copy. (Attachment 13) He stated it is in the best interest of the taxpayers and local governments to establish and maintain strong and mutually beneficial relationships with the construction industry in their community. Johnson County feels that the current statutory and contract law provide an adequate structure for fair and equitable construction contracts and successful construction projects for the public. He stated they do not support the bill.
Chairperson Brownlee introduced Erik Sartorius representing the City of Overland Park to give his testimony as an opponent of SB 333. Mr. Sartorius presented written copy. (Attachment 14) Mr. Sartorius stated they support retaining their current practices for paying contractors. If the Committee decides to support this bill they would like to see some changes which he listed in his testimony.
Chairperson Brownlee introduced Bob Vancrum representing the Blue Valley School District to give his testimony as an opponent of SB 333. Mr. Vancrum presented written copy. (Attachment 15) He gave a quick review of his testimony stating Blue Valley School District did not support the bill. They operate upon an agreed payment schedule in their contracts.
Chairperson Brownlee called the Committee’s attention to the written only testimony of Darci Meese, Water One, Johnson County and an opponent of SB 333, (Attachment 16) and opened the floor for questions for the opponents of SB 333.
Questions and discussion followed.
Chairperson Brownlee announced she would like to see both sides get together and work out the differences in SB 333 before the Committee takes action on the bill.
Chairperson Brownlee adjourned the meeting at 9:30 a.m. with the next scheduled meeting Tuesday, February 22, at 8:30 a.m. in room 123 S.