Date: 03/09/2009

Final
BILL SUMMARY for HB09-1254

SENATE COMMITTEE ON JUDICIARY

Votes: View--> Action Taken:
Adopt prepared Amendment L.004 (Attachment B). T
Adopt a conceptual amendment to allow people to op
Adopt prepared Amendment L.005 (Attachment C). Th
Refer House Bill 09-1254, as amended, to the Commi		Pass Without Objection
TIE
Pass Without Objection
PASS



01:43 PM -- House Bill 09-1254

Senator Harvey, bill sponsor, explained that House Bill 09-1254 concerns IRS 1031 exchanges. He explained that these transactions are not regulated and there are a number of entities that handle the money in these exchanges. In some cases, Senator Harvey stated that the money has been mishandled. He noted that this bill concerns who can handle these exchanges and what they can and cannot do with the funds. He distributed Amendments L.004 and L.005 (Attachments B and C).

09SenateJud0309AttachB.pdf 09SenateJud0309AttachC.pdf

01:47 PM -- Scott Saunders, representing Asset Preservation, and Jason Hopfer, representing the Federation of Exchange Accommodators, spoke in support of the bill. Mr. Saunders explained that the bill has to do with safeguarding the money while it is being held by an intermediary and not the rules concerning 1031 exchanges themselves. Mr. Hopfer discussed the impetus for the bill. He also discussed Amendment L.004. Senator Harvey explained that 1031 exchanges apply to all types of property and not just real estate.


01:52 PM

Senator King asked about fees and how they are structured. Mr. Saunders noted that the average fee is approximately $700 and is paid by the individual using the service. Senator Renfroe asked about an option for the individual initiating the 1031 to be able to opt out of the requirements of the bill. Senator Harvey discussed Amendment L.005. In reference to Senator Renfroe's possible amendment concerning opting out of the bill, Senator Harvey noted that he believes that there should be language concerning sophisticated investors. Senator Carroll discussed previous discussion on this issue from the House in the last legislative session. She stated that perhaps there could be a narrow opt-out on the fees or bonding provision, but not from the deceptive trade practice portion of the bill.

Tom Morris, representing the Office of Legislative Legal Services, stated that it would be possible to craft some exemptions. Senator King asked if there is currently a loophole concerning 1031 exchanges. Senator Carroll asked for more specifics on Senator Renfroe's amendment. Senator Renfroe stated that the opt out would be for where the money would be placed and not for the entire bill. Mr. Saunders discussed the possible fees under the bill. Mr. Morris indicated that an alternative to avoid the fees already exists in the bill.
BILL:HB09-1254
TIME: 01:57:10 PM
MOVED:Carroll M.
MOTION: Adopt prepared Amendment L.004 (Attachment B). The motion passed without objection.
SECONDED:
VOTE
Hudak
King K.
Lundberg
Newell
Renfroe
Carroll M.
Morse
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection
BILL:HB09-1254
TIME: 01:57:27 PM
MOVED:Carroll M.
MOTION:Adopt prepared Amendment L.005 (Attachment C). The motion passed without objection.
SECONDED:
VOTE
Hudak
King K.
Lundberg
Newell
Renfroe
Carroll M.
Morse
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

BILL:HB09-1254
TIME: 01:57:36 PM
MOVED:Renfroe
MOTION:Adopt a conceptual amendment to allow people to opt out of the trust or the bond provision if they have a provider with whom they are comfortable. The motion was withdrawn.
SECONDED:
VOTE
Hudak
King K.
Lundberg
Newell
Renfroe
Carroll M.
Morse
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: TIE

BILL:HB09-1254
TIME: 02:11:37 PM
MOVED:Carroll M.
MOTION:Refer House Bill 09-1254, as amended, to the Committee of the Whole. The motion passed on a 7-0 roll call vote.
SECONDED:
VOTE
Hudak
Yes
King K.
Yes
Lundberg
Yes
Newell
Yes
Renfroe
Yes
Carroll M.
Yes
Morse
Yes
Final YES: 7 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS