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North Carolina Worker's Compensation Bill Complete; Industry Assistance Needed

It was recently reported that language was added on the North Carolina Workers' Compensation Bill to amend the current provision that requires independent contractors to be covered by workers' compensation insurance.  The Bill is Senate Bill 1036, and the sponsor is Senator Clark Jenkins.  The Truckload Carriers Association (TCA), and in particular our Committee on Operating Practices (COOP), have addressed this important issue on a number of occasions over the past couple of years. James Hardman, of the Law Offices of James C. Hardman, has spearheaded this effort and has been providing the Committee with status updates and information on the importance of this issue to our industry.  He has noted that in the past TCA, the American Trucking Associations (ATA) and the North Carolina Trucking Associations have all joined forces to fight this case.

The short explanation of the bill that follows has been provided to us by Mr. Hardman and will be helpful to you in writing letters of support to your Senator, which will assist Senator Clark Jenkins in pushing through this legislation.  A timely and strong push to get legislators to act favorably on this bill is critical.  

Senate Bill 1036 – Explanation:  

• The first paragraph will be amended by the underlined words which attempt to emphasize that only individuals found to be employees shall be subject to worker's compensation coverage;

• Reference to G.S. 97-93 in the provision governing coverage of employees;

• Reference to "unless otherwise exempt" is to assure that truck operators exempt under other provisions such as family business, agricultural exemptions, etc. are still eligible for such exemptions;

• The second paragraph is an attempt to conform "terminology" to that used in regulating other industries.  G.S. 97.19 covers the independent contractor issue in other industries and essentially adopts terminology used in the construction industry, i.e., general contractors and subcontractors rather than carrier and independent contractor;

• The second paragraph states that the motor carrier will be considered the "contractor" and the independent contractor the "subcontractor" and that the provision of G.S. 97-19 provision will apply to the relationship.

• Reference to G.S. 97-19 was made to strengthen the argument that motor carriers should not be treated any different than "general contractors."

• The provision provides that you as a motor carrier may agree, in writing, to allow the independent contractor to cover themselves under the workers' compensation policy and to charge the independent contractor such coverage costs.  

Some other possible talking points compiled by Mr. Hardman on the importance of Senate Bill 1036 include:  

• It is needed to put motor carriers in the same position as other industries.  No valid reasons exist to require motor carriers to provide and pay for the workers' compensation coverage of independent contractors;

• Any rights of the independent contractors' employees are not affected by the bill and their coverage would be the obligation of the independent contractor;

• North Carolina is the only state that requires independent contractors and their employees to be covered at the cost of the motor carrier;

• The additional cost to motor carriers will have the following effect: it increases the costs of operations as workers compensation frequently adds 5% increase to the cost of operations.  

For further information on this important issue, including a list of North Carolina Senators to contact, a copy of Senate Bill 1036, or a copy of G.S. 97-19, please contact Mr. Hardman at (651) 483-5560 or their local lobbyist, Mr. George Teague at (919) 877-3811.

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Hawley Nominated as Next Chief of Transportation Security Administration (TSA)

President George Bush recently nominated Edmund "Kip" Hawley to be the fourth head of the Transportation Security Administration (TSA) in as many years as the Association has been established.  Mr. Hawley's nomination now requires approval by the Senate.  You will recall that the agency's current chief, Admiral David Stone, announced last month that he would be leaving the job in June.

Mr. Hawley is a supply chain technology consultant and was one of the private businesspeople that assisted the Bush administration start up the TSA after Congress created the agency after the attacks on 9/11. Hawley is a member of the Federal Aviation Administration's (FAAs) Air Traffic Services Committee and was previously the Vice President of Transportation Services for the Union Pacific Railroad.  In addition, although much of Hawley's experience comes from the private sector, he previously served as the deputy assistant secretary and executive director of government affairs for the DOT.  He earned his Bachelor's Degree from Brown University .  

It should be noted, that this change comes as the new Department of Homeland Security (DHS) secretary, Michael Chertoff, is considering restructuring the entire department, which includes the TSA.  Of recent note, on May 31, the TSA began conducting fingerprint–based assessments of drivers' criminal histories when they renew or transfer the hazardous materials (HM) endorsement on their Commercial Driver's Licenses (CDLs).  The agency has estimated that 400,000 drivers each year would undergo these tougher background checks.

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Bureau of Customs and Border Protection (CBP) Issues Notice of Changes in Deployment Schedule for National Customs Automation Program (NCAP)

The Department of Homeland Security, Bureau of Customs and Border Protection (CBP) announced in a May 31, 2005 Federal Register notice the modification of the deployment schedule for their National Customs Automation Program (NCAP) test concerning the transmission of automated truck manifest data.  The CBP is working on this program in conjunction with the DOT, and the Federal Motor Carrier Safety Administration (FMCSA).  The test program commenced in Blaine , Washington in December of 2004, but not at Buffalo , New York as was next scheduled.  The CBP stated that in light of the experience with the implementation of the test in Blaine , they have decided to change the implementation schedule for the next test site.  Instead, the next deployment sites will be brought up as a "cluster," with one site identified as the "model site."  The ports identified belonging to the first "cluster" include the original port of implementation – Blaine , Washington .  However, Sumas , Washington will now be the model port. Other ports of deployment in the "cluster" include the following (all in the State of Washington ): Point Roberts; Oroville; Boundary; Danville ; Ferry; Frontier; Laurier; Metaline Falls ; Nighthawk; and Lynden.

By way of background, the NCAP test concerning the transmission of automated truck manifest data for truck carrier accounts was formally announced in a General Notice published in the Federal Register on September 13, 2004.  In that Notice, the agency stated that the test of the Automated Truck Manifest would be conducted in a "phased approach," with primary deployment scheduled for no earlier than November 29, 2004.  That document identified the ports of Blaine , Washington , and Buffalo , New York as the original deployment sites, with subsequent deployment test sites located at Champlain , New York ; Detroit , Michigan ; Laredo , Texas ; Otay Mesa , California ; and Port Huron, Michigan .  

As specified in the May 31, Register notice, the new test deployment schedule will be operational as of June 1, 2005, at each port identified in the notice as part of the first "cluster."  CBP also says that comments concerning this notice and all aspects of the announced test may be submitted at any time during the test period. If you have any further questions or comments on this issue, please call Rich Clemente at (703) 838-8847 or email: rclemente@truckload.org.

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DOT Announces Termination of Negotiated Advisory Rulemaking Committee on Minimum Standards for Drivers Licenses and Personal Identification Cards

The Department of Transportation (DOT), Office of the Secretary (OST) formally announced in the May 26, Federal Register , their intent to terminate the Negotiated Rulemaking Advisory Committee on Minimum Standards for Driver's Licenses and Personal Identification Cards. The reason for this termination is that the recently enacted “REAL ID Act” – that was signed into law by President Bush – repeals Section 7212 of the Intelligence Reform and Terrorism Prevention Act of 2004, which had provided the DOT the authority for this Negotiated Rulemaking effort.

This Negotiated Rulemaking Committee consisted of persons who represent the interests affected by the proposed rule, i.e. , State offices that issue driver's licenses or personal identification cards, elected State officials, the Departments of Transportation and Homeland Security, and other interested parties. The DOT formed such an advisory committee that met only once, on April 19-21, 2005. All future meetings of this group have been cancelled.

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FDA Issues Notice of Public Meetings on Section 306 (Establishment and Maintenance of Records for Foods) of Bioterrorism Act of 2002 Rule

In the May 13, Federal Register , the Food and Drug Administration (FDA) issued a notice announcing a series of public meetings to discuss the final regulation implementing Section 306-Maintenance and Inspection of Records for Foods of the Bioterrorism Act of 2002 (Bioterrorism Act). The agency will hold this series of public meetings to discuss the final regulation implementing the Section 306 Recordkeeping rules, in order to provide the public with an opportunity to ask questions regarding the rule. The dates and locations of these public meetings are: June 7, 2005 – Kansas City , MO ; June 8, 2005 – Los Angeles , CA ; June 9, 2005 – College Park , MD ; June 14, 2005 – Bloomington , MN ; and June 15, 2005 – Atlanta , GA.

The FDA issued a final rule in the December 9, 2004 Register on Section 306. This final rule implemented the fourth and final section of the Bioterrorism Act, which directed the agency to issue regulations requiring persons who manufacture, process, pack, transport, distribute, receive, hold, or import food to establish and maintain records. These required records would be used to identify the immediate previous source of all food received, as well as, the immediate subsequent recipient of all food released. The effective date was February 7, 2005, however, the agency specified that all businesses covered by it must comply within 12 months from the date it was published in the Register [December 9, 2005], except small and very small businesses. Small businesses (11-499 full-time equivalent employees) must comply within 18 months from this date [June 9, 2006], and businesses with 10 or fewer full-time equivalent employees the compliance date is December 11, 2006.

The rule specified that for food transporters the maximum record retention period for all types of food is one year, and companies may keep the required information in any format, paper or electronic. These records have to include names of the transporter's immediate previous source and the transporter's immediate subsequent receipt, origin and destination points, date shipment received and date released, number of packages, description of the freight, route of movement during the time food was transported, and transfer point through which the shipment was moved. Regarding our industry, the FDA specified that trucking companies do have alternative methods of meeting the rule's requirements. This method for motor carriers is establishing and maintaining specified information that is in records required by the FMCSA in 49 CFR §373.101 and §373.103 – meaning that motor carrier bills of lading and expense bills are acceptable alternative methods for meeting the requirements.

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