This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. ง 480A.08, subd. 3 (2006).

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-638

In the Matter of the Truck Rental Rate Effective December 20, 2004

Filed January 30, 2007

Affirmed

Worke, Judge

Department of Labor and Industry

File No. 12-1900-16601-2

Gregg J. Cavanagh, 13277 94th Avenue North, Maple Grove, MN 55369 (for relators Dahl Trucking, Inc., et al.)

Paul W. Iversen, Williams & Iversen, P.A., 1611 West County Road B, Suite 208, Roseville, MN 55113 (for respondent Minnesota Construction Conference of Teamsters)

Lori Swanson, Attorney General, Michael A. Sindt, Assistant Attorney General, 1800 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101 (for respondent Minnesota Department of Labor and Industry)

Considered and decided by Lansing, Presiding Judge; Dietzen, Judge; and Worke, Judge.

U N P U B L I S H E D O P I N I O N

WORKE, Judge

Relators are more than one dozen trucking firms. They appeal from an order of respondent Minnesota Department of Labor and Industry (DOLI) upholding the certification of truck rental rates, operating costs, and broker fees. Relators argue that the Commissioner of Labor and Industry violated Minn. R. 5200.1105 (2005) by basing truck rental rates, operating costs, and broker fees on a survey of over 10,000 firms and individuals rather than data obtained from “at least five trucking firms of various size and five independent truck owner operators, all selected by the commissioner as representative of the industry” and then averaging their itemized costs. In the alternative, relators argue that the commissioner erred by refusing to disclose the names of the prime contractors who submitted the surveys upon which the truck rental rates, operating costs, and broker fees were based. Relators also argue that the commissioner exceeded the scope of Minn. Stat. ง 177.41 (2004) and Minn. R. 5200.1000 (2005) by determining rental rates, operating costs, and broker fees for trailers and tractor-trailers; failing to determine or certify truck rental rates, operating costs, and broker fees that are representative of the industry; and determining rates, costs, and fees statewide rather than area-wide. Additionally, relators argue that the commissioner violated Minn. Stat. ง 177.44, subd. 3 (2004), by determining rental rates, operating costs, and broker fees for trucks and trailers without considering the “nature of the equipment furnished[,]” and erred by not resolving relators’ claim that the commissioner failed to consider the nature of the equipment furnished with respect to trucks. Finally, relators argue that the commissioner violated the United States and Minnesota Constitutions by certifying rates, costs, and fees that impair existing contracts. We affirm.

FACTS

The Minnesota Prevailing Wage Law is codified at Minn. Stat. งง 177.41-.44 (2004). The accompanying administrative rules are found at Minn. R. 5200.1000-.1120 (2005). Together, the statutes and rules govern the determination, certification, and payment of prevailing wages on construction projects, including highway projects, financed in whole or part by state funds. The Minnesota Department of Transportation is responsible for awarding state highway construction contracts, and for including the minimum rates determined by respondent Minnesota Department of Labor and Industry (DOLI) in bid specifications for public contracts. See Minn. Stat. ง 177.44.

In 1988 and 1989, the DOLI conducted a survey to determine operating costs to certify truck rental rates. In November 1989, the DOLI established the Labor Standards Advisory Committee to assist in the rule-making process for prevailing wages on highway construction contracts. The committee discussed the use of surveys to obtain data regarding operating costs. In March 1990, the committee submitted recommendations to the DOLI, including proposed definitions for terms used to establish the truck rental rates.

In late 2003, a survey was drafted as a mechanism to determine the 2004 operating costs to be used in determining the truck rental rates. In June 2004, a redrafted version of the survey was presented at a meeting with industry representatives and the Minnesota Trucking Association. The survey was based on the research and analysis of Theresa Van Hoomissen, Director of Research and Statistics for the DOLI. The meeting attendees recommended adding a check box to the survey to indicate if the equipment was used in highway construction. This change was incorporated into the survey. In July 2004, the DOLI sent out 10,105 surveys to potential respondents. The list of potential survey respondents consisted of 1,200 names from a list maintained by the DOLI, and a list from the state of Minnesota consisting of 8,800 truck owners. The 8,800 were selected randomly using statistical methods, but were rated slightly more toward persons owning a small number of trucks because the DOLI believed it would be more difficult to get responses from those truck owners, and therefore more initial surveys would be sent to those truck owners. The survey requested data regarding four types of trucks used in highway construction projects: semi-tractor with trailer, two-axle straight body trucks, three-axle trucks, and four-or-more-axle trucks. The DOLI considered these general classifications to be sufficiently broad to cover all possible trucks engaged in highway construction in Minnesota.

By the September 2004 deadline, the DOLI received 139 responses. Surveys received after the deadline and surveys that were improperly completed or had outlier data were excluded from consideration. Because Minn. R. 5200.1105 requires the DOLI to average the costs of the survey respondents to determine operating costs, surveys that did not indicate that equipment was used in road construction and surveys that reported costs that were far lower or higher than the other reported costs for a particular type of truck were eliminated. Minn. R. 5200.1105 also requires that at least five trucking firms of varying sizes and five independent truck owner/operators must be included in calculating operating costs in order to form a representative sample. The DOLI relied on 32 survey responses for tractor only, 21 for trailer only, 16 for three axles, and 26 for four-or-more axles. In the “tractor-only” category, the DOLI selected survey responses from 13 trucking firms (number of units varied from 1 to 68) and 19 independent truck owner/operators. In the “trailer-only” category, the DOLI selected 13 trucking firms (number of units varied from 1 to 71) and 7 independent truck owner/operators. The DOLI selected five trucking firms (number of units varied from 2 to 25) and 10 independent truck owner/operators for the “three-axle” category. Finally, in the “four-axle” category, the DOLI selected 9 trucking firms (number of units varied from 1 to 46) and 19 independent truck owner/operators.

On November 8, 2004, the DOLI published a notice of determination of the truck rental rates and a notice of an informal conference schedule. On November 30, 2004, data about the rates, costs, and fees were presented at an informal conference. The DOLI formally certified the operating costs on December 20, 2004, for the following categories: tractor only, tractor trailer, three axle, and four-or-more axle. The operating costs were then combined with the appropriate regional prevailing wage rates for drivers in these categories, and the results were then published as the certified truck rental rates.

On January 18, 2005, relators requested reconsideration of the truck rental rates, operating costs, and broker fees. Another informal conference with the commissioner was held on February 3, 2005, and relators presented oral and written arguments. On February 14, 2005, the commissioner issued a decision upholding the truck rental rates, costs, and fees. A public hearing was requested, and then held from August 8-19, 2005. On November 28, 2005, the administrative law judge (ALJ) recommended that the petition challenging the commissioner’s decision to uphold the certified truck rental rates be denied. On March 7, 2006, the commissioner adopted the ALJ’s recommendations with two minor modifications. This appeal follows.

D E C I S I O N

Judicial review of a final decision in a contested case is governed by Minn. Stat. ง 14.69 (2004).

In a judicial review under sections 14.63 to 14.68, the court may affirm the decision of the agency or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the petitioners may have been prejudiced because the administrative finding, inferences, conclusion, or decisions are:

(a) in violation of constitutional provisions; or

(b) in excess of the statutory authority or jurisdiction of the agency; or

(d) affected by other error of law; or

(e) unsupported by substantial evidence in view of the entire record as submitted; or

(f) arbitrary or capricious.

Minn. Stat. ง 14.69. “When a decision turns on the meaning of words in a statute or regulation, a legal question is presented. In considering such questions of law, reviewing courts are not bound by the decision of the agency and need not defer to agency expertise.” St. Otto’s Home v. Minn. Dep’t of Human Servs., 437 N.W.2d 35, 39-40 (Minn. 1989) (citations omitted). Considerable deference is given to the agency’s interpretation of its own regulation, “especially when the relevant language is unclear or susceptible to different interpretations.” Id. at 40. An agency’s interpretation of an ambiguous regulation will generally be upheld if it is reasonable. Id. If the language of the regulation is clear and capable of understanding, this court need not give deference to the agency’s interpretation and may substitute its own judgment. Id.

Commissioner’s decision to conduct a survey to determine operating costs was a reasonable interpretation of Minn. R. 5200.1105 (2005)

Relators argue that the commissioner violated Minn. R. 5200.1105 (2005) by conducting a survey of the industry to determine truck rental rates. Specifically, relators argue that the rule provides that labor costs can be determined by a survey, but it does not permit a survey to determine operating costs. Respondents, the DOLI, and the Minnesota Construction Conference of Teamsters, argue that although the language of the rule does not explicitly require the use of surveys, the new broker language clearly implies that it is reasonable to conclude that surveys can be used to determine operating costs. The ALJ concluded that “the Minnesota Prevailing Wage Law (MPWL) directs the [commissioner] to ‘determine’ prevailing wage rates and operating costs. The statute is silent on precise details of how the [commissioner] should obtain operating costs used to set the [truck rental rates].” The ALJ further concluded that “[i]t is a reasonable interpretation of the statute and the rule that the [commissioner] may survey the relevant industry to determine operating costs.”

Minn. Stat. ง 177.42, subd. 6 (2004), defines “[p]revailing wage rate” as

the hourly basic rate of pay plus the contribution for health and welfare benefits, vacation benefits, pension benefits, and any other economic benefit paid to the largest number of workers engaged in the same class of labor within the area and includes, for the purposes of section 177.44, rental rates for truck hire paid to those who own and operate the truck. The prevailing wage rate may not be less than a reasonable and living wage.

Minn. Stat. ง 177.44, subd. 3 (2004) requires the DOLI to “determine the nature of the equipment furnished by truck drivers who own and operate trucks on contract work to determine minimum rates for the equipment, and shall establish by rule minimum rates to be computed into the prevailing wage rate.” Further, Minn. R. 5200.1105 provides:

Drivers who own and operate trucks on contract work shall be compensated for their equipment according to the following formula: Truck Rental Rates Equals Labor Cost Plus Operating Cost.

Labor cost shall be the appropriate rate determined to be prevailing by the [DOLI] using existing survey methods under parts 5200.1000 to 5200.1120 and certified under part 5200.1100, subpart 4, truck drivers.

Operating cost shall be determined by averaging the itemized costs of operating a vehicle as submitted by at least five trucking firms of various size and five independent truck owner operators, all selected by the commissioner as representative of the industry.

The following items shall be considered as operating costs of a vehicle: the average cost of the vehicle depreciated over seven years, insurance, fuel, oil, tires, taxes, licenses, maintenance, repair, and any administrative expense associated with the vehicle’s operation including truck brokers’ fees. The truck broker fee is a portion of the minimum truck rental rate and shall be determined by annual survey.

Because the rule is susceptible to different interpretations, the DOLI is afforded considerable deference in interpreting its own regulation. See St. Otto’s Home, 437 N.W.2d at 40. The interpretation will be upheld if it is reasonable. Id. While the rule clearly states that operating costs should be determined by averaging the costs of at least five trucking firms of various size and five independent truck owner/operators, it does not provide a mechanism for how those operating costs should be gathered. Relators argue that if the commissioner intended surveys to be used to gather operating costs, the DOLI would have stated that in the rule, especially considering that the rule clearly states that labor costs are to be determined by using “existing survey methods.” While we agree that the rule could be clearer, because the rule is silent on how operating costs are to be gathered and the commissioner has historically used surveys to determine operating costs, it is a reasonable interpretation to conduct a survey of the relevant industry to determine operating costs at the same time as surveying for labor costs and broker fees.

Commissioner’s conclusion that the survey responses were representative of the industry was reasonable

Relators argue that the commissioner’s conclusion that the survey data were obtained from a group of respondents that was “representative of the industry” is erroneous as a matter of law. Relators contend that it is clear that the commissioner did not make any effort to ensure that the survey respondents were in any way “typical” of the industry. Respondents argue that the language of the statute and rule requires that the truck rental rates be established and certified by averaging the “costs of operating a vehicle” obtained from at least five trucking firms and five independent truck owner/operators. Further, respondents argue that relators failed to show how the survey respondents were not representative of the industry. The ALJ found that “[t]he entities selected by the [commissioner] for the [truck rental rates] survey were broadly representative of the highway construction industry in Minnesota.” Further, the ALJ found that “[t]he rule provides no criteria upon which to determine whether a particular individual or entity is representative of the industry[,]” and “[a]s long as the trucking firms used for calculating average operating costs are of varying sizes, and there are at least five of them, and there are also at least five [independent truck owner/operators] used, the sample is considered sufficiently representative under the rule.”

The language from Minn. R. 5200.1105 provides:

Operating cost shall be determined by averaging the itemized costs of operating a vehicle as submitted by at least five trucking firms of various size and five independent truck owner operators, all selected by the commissioner as representative of the industry.

(Emphasis added.) Again, considerable deference should be afforded the DOLI as it is interpreting its own regulation, which is arguably unclear or susceptible to different interpretations. See St. Otto’s Home, 437 N.W.2d at 40. The interpretation of the DOLI will be upheld if it is reasonable. Id.

The DOLI received 139 survey responses by the deadline. Surveys received after the deadline, and surveys that were improperly completed or had outlier data were eliminated. Surveys that did not indicate that equipment was used in road construction and surveys that reported costs that were far lower or higher than the other reported costs for a particular type of truck were eliminated. Minn. R. 5200.1105 requires the DOLI to average the costs of the survey respondents to determine operating costs. The rule also requires that there must be at least five trucking firms of various size and five independent truck owner/operators included in calculating operating costs in order to form a representative sample. Minn. R. 5200.1105.

The evidence shows that the commissioner used at least five trucking firms of various size and at least five independent truck owner/operators in determining and certifying the truck rental rates. Further, the commissioner eliminated the survey responses to those that fit the categories required, and the commissioner indicated in his February 2005 determination that he believed the surveys used to calculate the truck rental rates were representative of the industry. The evidence also shows that the survey responses were representative when compared to the actual cost on various highway construction projects in 2004. The actual rates paid show that the certified rates are within the range of reasonable operating costs. Because it was reasonable to conduct a survey to gather the information used to determine and certify the truck rental rates, and because the evidence shows that the commissioner eliminated the survey responses to those that fit the categories to be certified, it was reasonable to conclude that the survey responses used by the commissioner were representative of the industry.

Commissioner’s interpretation that the definition of trucking firms includes prime contractors was reasonable

Relators argue that the commissioner’s conclusion that the survey data were obtained from trucking firms and independent truck owner/operators is erroneous as a matter of law. Relators contend that the evidence shows that many of the survey respondents were prime contractors, not trucking firms. Respondents argue that relators’ argument is based on a narrow and self-serving interpretation of “trucking firm.” The ALJ found that the survey was sent to many participants in the highway-construction industry, including entities that may be described as “prime contractors.” Further, the ALJ concluded that the definition of “trucking firm” is so broad and general as to include “prime contractors.”

Minn. R. 5200.1106, subp. 7B (2005) defines “[t]rucking firm” as “any legal business entity that owns more than one vehicle and hires the vehicles out for services to brokers or contractors on public works projects.” Minn. R. 5200.1106, subp. 2 (2005) defines “prime contractor” and “contractor”:

C. “Prime contractor” means an individual or business entity that enters into a contract as defined in item B with the contracting agency.

D. “Contractor” means an individual or business entity that is engaged in construction or construction service-related activities including trucking activities either directly or indirectly through a contract as defined by item B, or by subcontract with the prime contractor, or by a further subcontract with any other person or business entity performing work under the contract.

This rule is susceptible to different interpretations; therefore, considerable deference is to be afforded to the DOLI’s interpretation, which will be upheld if reasonable. See St. Otto’s Home, 437 N.W.2d at 40. Based on the plain language of the rule, the definition of trucking firm is broad and general. In order to be defined as a trucking firm, the business entity must own more than one vehicle and it must hire out on road-construction projects. This definition could include contractors and prime contractors. The commissioner’s interpretation that the definition of trucking firm includes prime contractors is reasonable.

Commissioner did not err in refusing to disclose the names of the survey respondents

Relators argue, in the alternative, that the commissioner erred by refusing to disclose the names of the survey respondents. Respondents argue that the data was nonpublic and the interests of the survey respondents outweigh the need of relators. In a prehearing order, the ALJ denied relators’ motion to compel disclosure of the survey respondents’ names. The ALJ concluded that “[r]elease of such data is prohibited by statute. [Relators’] need for the data does not outweigh the privacy interest of the subjects of the data.” Respondents further argue that the data would have constituted “trade secret information” under Minn. Stat. ง 13.37, subd. 1(b) (2004). This fact was also recognized by the ALJ, who stated that the data was nonpublic under the Minnesota Government Data Practices Act.

Minn. Stat. งง 175.24-.27 (2004) regulate the records obtained by the DOLI. Minn. Stat. ง 175.24 provides that “[t]he names of persons or concerns supplying [information to make a certified report to the department]shall not be disclosed.” Further, Minn. Stat. ง 175.27 states that “[a]ny employee of the [DOLI] who shall disclose the names of any persons supplying information at the request of such department shall be guilty of a misdemeanor.” Relators argue that for years the DOLI has routinely disclosed the names of entities providing information to those who have requested them and that only in connection with this case has the DOLI refused to disclose such information. Even if the DOLI has released such information in the past, it did not do so here. The language of the statute prohibiting the DOLI from releasing such information is clear and unambiguous. The commissioner did not err by not disclosing the names of the survey respondents.

Commissioner’s conclusion that the four general categories were broad enough to cover all possible trucks used in state construction projects was reasonable

Relators argue that the commissioner’s conclusion that the determination and certification of rates, costs, and fees for trailer and tractor-trailers was authorized by the statutes and rules was erroneous as a matter of law. Relators argue that the statutes relate to trucks only. Respondents argue that this argument is based on another narrow and self-serving definition by relators. The ALJ concluded that “[t]he law only requires the [c]ommissioner to consider the ‘nature of the equipment furnished.’ It does not require the [c]ommissioner to set a rate for each type or make and model of truck or trailer.”

Minn. Stat. ง 177.44, subd. 3 requires the DOLI to “determine the nature of the equipment furnished by truck drivers who own and operate trucks on contract work to determine minimum rates for the equipment, and shall establish by rule minimum rates to be computed into the prevailing wage rate.” (Emphasis added.) “When a decision turns on the meaning of words in a statute or regulation, a legal question is presented. In considering such questions of law, reviewing courts are not bound by the decision of the agency and need not defer to agency expertise.” St. Otto’s Home, 437 N.W.2d at 39-40 (citations omitted). Neither the statute nor the rules require the commissioner to set a rate for each type or make and model of truck or trailer. The evidence shows that there are four general types of trucks on a highway construction project: semi-tractor with trailer, two-axle straight body trucks, three-axle trucks, and four-or-more axle trucks. The commissioner’s conclusion that the use of four general categories in the survey was broad enough to cover all possible trucks on state construction projects was reasonable. Further, there is no evidence that the DOLI certified rates, costs, and fees for trailers only.

Commissioner’s use of four general classifications to cover the scope of all trucks and trailers used in highway construction was reasonable

Relators argue that the commissioner failed to address their argument that the DOLI failed to “determine the nature of the equipment furnished” with respect to trucks. The ALJ found that:

There are different types of trucks used in highway construction in Minnesota. The difference in operating costs between a four-axle truck and a five-axle truck is roughly equal to the difference in operating costs between a three-axle truck and a four-axle truck. There are similar differences in the operating cost between a five-axle truck and a six-axle truck, and a six-axle truck and a seven-axle truck.

The [DOLI] requested data about four types of trucks used in highway construction projects: semi-tractor with a trailer, two-axle straight body trucks, three-axle trucks and four or more axle trucks. It considered these general classifications are sufficiently broad to cover all possible truck engaged in highway construction in Minnesota.

Relators argue that while the ALJ made this finding, he failed to draw any conclusion as to whether the commissioner failed to “determine the nature of the equipment furnished” by grouping four distinct classifications of trucks into the four-or-more-axle category. Relators contend that the four-or-more category contains four distinct classifications of trucks: four axles, five axles, six axles and seven axles; all of which are regularly used in road construction in Minnesota. Relators contend that the failure of the commissioner to meet his statutory mandate to “determine the nature of the equipment furnished” has resulted in the inadequate classification of both trucks and trailers.

Minn. Stat. ง 177.44, subd. 3, directs that the DOLI “shall determine the nature of the equipment furnished by truck drivers who own and operate trucks on contract work to determine minimum rates for the equipment, and shall establish by rule minimum rates to be computed into the prevailing wage rate.” (Emphasis added.) “When a decision turns on the meaning of words in a statute or regulation, a legal question is presented. In considering such questions of law, reviewing courts are not bound by the decision of the agency and need not defer to agency expertise.” St. Otto’s Home, 437 N.W.2d at 39-40 (citations omitted). The survey requested data regarding four types of trucks used in highway-construction projects: semi-tractor with trailer, two-axle straight body trucks, three-axle trucks, and four-or-more axle trucks. A significant amount of testimony was taken regarding how the commissioner reached the conclusion that these general classifications were sufficiently broad to cover all trucks used in highway construction. Further, a sufficient number of survey responses, as required by the rule, were used to compute the prevailing wage rate. There is nothing in the statute that requires the DOLI to determine every single classification of truck or trailer in order to compute the prevailing wage rate. The commissioner’s use of four classifications to cover the scope of all trucks and trailers used in highway construction was reasonable. It can be inferred from the ALJ’s findings and conclusions that the commissioner’s four general classifications were sufficient to “determine the nature of the equipment furnished.” Further, it can also be inferred that the commissioner also believed that the four general classifications were sufficient by adopting the ALJ’s findings without modification on this issue.

Commissioner’s decision to survey for broker fees at the same time as surveying for operating costs was reasonable

Relators argue that the commissioner’s conclusion that truck-broker fees were properly determined under Minn. R. 5200.1105 was erroneous as a matter of law because the commissioner did not separately survey for broker fees, and reliance on such data is inherently flawed.

Minn. R. 5200.1105 provides:

The following items shall be considered as operating costs of a vehicle: the average cost of the vehicle depreciated over seven years, insurance, fuel, oil, tires, taxes, licenses, maintenance, repair, and any administrative expense associated with the vehicle’s operation including truck brokers’ fees. The truck broker fee is a portion of the minimum truck rental rate and shall be determined by annual survey.

(Emphasis added.) Again, considerable deference should be afforded the DOLI in interpreting its own regulation, which is unclear or susceptible to different interpretations. See St. Otto’s Home, 437 N.W.2d at 40. The interpretation of the DOLI will be upheld if it is reasonable. Id. The language of the rule does not require the commissioner to survey for broker fees separately. Further, because the rule states that broker fees are to be considered in the operating costs of a vehicle, it is reasonable to include broker fees be included in an operating-cost survey; which is exactly what the commissioner did in this case. It is also important to note that the commissioner did not certify broker fees.

Commissioner’s conclusion that the certified truck rental rates were representative of the industry was reasonable

Relators argue that the commissioner’s conclusion that the DOLI was not obligated to determine rates, costs or fees that were representative of the industry was erroneous as a matter of law. Relators contend that the commissioner’s methodology for determining and certifying truck rental rates was statistically unreliable and invalid, and that the conclusion that there was no response bias is erroneous. While respondents do not dispute that the survey did not yield statistically valid results, they argue that a statistically valid survey was not required under the rule. Further, respondents argue that there was no evidence of voluntary bias.

Minn. R. 5200.1105 provides:

(Emphasis added.) Considerable deference should be afforded the DOLI in interpreting its own regulation, which is unclear or susceptible to different interpretations. See St. Otto’s Home, 437 N.W.2d at 40. The interpretation of the DOLI will be upheld if it is reasonable. Id. The evidence here shows that the survey responses were representative when compared to the actual cost of various highway-construction projects in 2004. The certified rates were within the range of reasonable operating costs when compared to the actual rates paid. While the survey may not have produced statistically valid results, the ALJ correctly concluded that a “[c]omparison of the certified rates to the actual rates reported in monthly trucking reports shows that the certified rates are reasonably close to the reported costs.” Because the requisite number of survey respondents was used, varying sizes of trucking firms were included, and the certified rates were comparable to the actual rates reported, the conclusion that the certified truck rental rates were representative of the industry was reasonable.

Commissioner’s decision to certify truck rental rates on a statewide basis was reasonable

Relators argue that the commissioner’s conclusion that the determination and certification of statewide rates, costs, and fees was permissible under the statute and rules was erroneous as a matter of law. Respondents argue that relators demonstrated no requirement for a regional survey.

Relators point to specific language from the statutes and rules to support their argument. See Minn. Stat. งง 177.42, subd. 6 (defining prevailing wage rate as an amount paid “to the largest number of workers engaged in the same class of labor within the area” (emphasis added)); .44, subd. 1 (2004) (requiring laborers and mechanics to be paid “at least the prevailing wage rate in the same or most similar trade or occupation in the area” (emphasis added)); see also Minn. R. 5200.1030, subp. 1 (2005) (stating prevailing wage rates for highway projects “must be based on work performed within [ten] distinct areas” (emphasis added)); id., subp. 2 (2005) (stating prevailing wage rates “must be determined on an area basis” (emphasis added)); id., subp. 2a (2005) (stating determinations must be made from projects located in the area” (emphasis added)). Minn. Stat. ง 177.42, subd. 3 (2004) defines “[a]rea” as “the county or other locality from which labor for any project is normally secured.” “When a decision turns on the meaning of words in a statute or regulation, a legal question is presented. In considering such questions of law, reviewing courts are not bound by the decision of the agency and need not defer to agency expertise.” St. Otto’s Home, 437 N.W.2d at 39-40 (citations omitted). Considerable deference should be afforded the DOLI in interpreting its own regulation, which is unclear or susceptible to different interpretations. See id. at 40. The interpretation of the DOLI will be upheld if it is reasonable. Id.

The ALJ found that the “operating cost component of the truck rental rate was certified on a statewide basis, not on a district-wide basis. While the rules require that the labor cost portion must be made on a district-wide basis, nothing in the rules requires that operating costs be determined on a district-wide basis.” Further, the ALJ concluded that “[t]he statute and the rule permit the [c]ommissioner to determine the various components of operating costs on a state-wide basis rather than by specific areas.” The certified truck rental rates here deal with highway-construction projects for all of Minnesota. Neither the statutes nor the rules expressly require regional operational cost surveys. Further, the statutes and rules do not require certification of rates on a regional basis and do not include a prohibition against certifying truck rental rates on a statewide basis. It is reasonable to conclude that truck rental rates for Minnesota state highway-construction projects be certified on a statewide basis.

Commissioner did not unconstitutionally impair existing contracts

Relators argue that the commissioner’s conclusion that the certified truck rental rates did not unconstitutionally impair existing contracts was unsupported by substantial evidence. Several relators have claimed that their long-term fixed subcontracts have been adversely affected by the certified truck rental rates.

The United States and Minnesota Constitutions prohibit state laws “impairing the [o]bligation of [c]ontracts.” U.S. Const. art. I, ง 10, cl. 1; Minn. Const. art. I, ง 11. State laws that “substantially impair[] a contractual obligation” will be invalidated, unless “the state has a significant and legitimate public purpose behind the legislation[,]” and “the legislation [is] reasonably and appropriately tailored to accomplish the asserted public purpose.” Midwest Family Mut. Ins. Co. v. Bleick, 486 N.W.2d 435, 439 (Minn. App. 1992), modified in part, review denied in part (Minn. July 27, 1990) (order directing that amount of judgment be reduced, but otherwise denying review). “Every statute is presumed to be constitutional, and the party challenging a statute must demonstrate beyond a reasonable doubt that a statute violates a constitutional provision.” Midwest Sports Mktg., Inc. v. Hillerich & Bradsby of Canada, Ltd., 552 N.W.2d 254, 264 (Minn. App. 1996), review denied (Minn. Sept. 20, 1996).

Respondents assert that this argument is meritless based on the language of Minn. R. 5200.1106, subp. 11 (2005), which states:

Parts 5200.1105 and 5200.1106 are effective June 25, 2001. Part 5200.1106 is effective for all projects as described in part 5200.1106, subpart 2, item B, that are advertised for bid on and after June 25, 2001. The new truck rental rates to be issued under part 5200.1105 are effective for all projects as described in part 5200.1106, subpart 2, item B, that are advertised on and after the publication in the State Register of the notice of certification of the truck rental rates.

The ALJ concluded that relators failed to demonstrate “that the [truck rental rates] determined by the [commissioner] unconstitutionally impairs existing contracts. There was no retroactive application of the [truck rental rates] and brokers had it within their power to negotiate future rates they knew would likely be affected by the future [truck rental rates].” The plain language of the statute provides that the rate applies only to contracts advertised and signed after the publication of the notice of certification. The commissioner maintains that this language was added to specifically foreclose a constitutional attack of this type. Further, relators have acknowledged that they were aware of the pending certification of truck rental rates when their long-term subcontracts were signed; however, they proceeded with the contracts without prescribing a method to resolve any conflict that might result by certification. Because the certified rates are not retroactive, and relators acknowledged that they knew the truck rental rates were going to be certified and they could have negotiated terms in their contracts to resolve any conflict with the future certified truck rental rates, relators’ argument is meritless.

Affirmed.