Date: 02/19/2009

BILL SUMMARY for HB09-1193


Votes: View--> Action Taken:

03:14 PM -- House Bill 09-1193

Representative McFadyen, prime sponsor, presented House Bill 09-1193 concerning a prohibition against the shifting of financial responsibility for negligence in motor carrier transportation agreements. The bill prevents a party to a motor carrier transportation agreement from transferring financial responsibility for its own negligence to another party. A provision in a motor carrier transportation agreement that holds a person or the person's surety or insurer responsible for the negligence of another party is void as against public policy and unenforceable. Further, the bill states that a motor carrier transportation agreement can hold a negligent party responsible for indemnifying other parties, but only to the extent of the indemnifying party's negligence. The bill also excludes agreements relating to intermodal transportation equipment or injuries or death suffered by a railroad employee.

The bill clarifies that the following are not affected:

03:24 PM --
Constance Volz, Democratic Business Coalition, spoke in opposition to the bill. Ms. Volz expressed opposition for the following reasons. First, it is not the place of the government to be involved in private contracts. Also, the bill will eliminate the ability of parties to negotiate the terms of a contract. Finally, government intervention limits the rights of property owners. Ms. Volz stated that the free market society allows property owners and vendors to negotiate according to their own needs. She responded to questions from the committee about whether the bill makes it difficult for a particular industry to get by.

03:31 PM --
Stan Dempsey and Jason Dunn, Colorado Petroleum Association, spoke in opposition to the bill. Mr. Dempsey discussed attempts in Wyoming to pass similar legislation. Mr. Dunn indicated that the bill is a difficult issue to understand, but it asks the legislature to step in the middle of a private contract and shift the cost of insurance from one party to another. He stated that the bill gives one private business an advantage over another. He spoke generally and at length about indemnification. Mr. Dunn talked about when a court will void a contract as a matter of public policy and about contract negotiations, responding to questions from the committee.

03:59 PM --
Lauren Furman, Colorado Association of Commerce and Industry, spoke in opposition to the bill. Ms. Furman discussed the companies affected by the bill and blanket indemnification clauses.

04:03 PM --
Virginia Morrison Love, Colorado Competitiveness Council, spoke in opposition to the bill. Ms. Love stated that the bill interferes with private entities' ability to contract freely. She is concerned that every situation is different and it is extremely difficult to write a statute that covers every variable.

04:08 PM --
Merle and Justin Manweiler, Manweiler Transports, spoke in support of the bill. Manweiler Transport is a family-owned business that operates in Colorado. Mr. Manweiler shared terminology in various access agreements to which his company is a party. He believes he has no negotiating power as a result of such agreements. He stated that he cannot get insurance coverage if he signs this type of agreement and the deadline to sign some of his access agreements is quickly approaching. The committee discussed the procurement of insurance with motor carrier agreements. The committee discussed the assumption of risk in business agreements.

04:26 PM --
Greg Fulton, Colorado Motor Carriers Association, spoke in support of the bill. Mr. Fulton stated that some of the largest companies in the world are trying to transfer some of their liability onto some of the smallest companies. Mr. Fulton talked about other states that have changed or in the process of changing to the policy proposed by the bill. He stated that the bill allows both parties to come to the table with equal power and authority. These small companies' entire business depends on access to certain sites and if they cannot gain access, their business will fail.

04:39 PM --
Dan Coleman, D.G. Coleman, Inc., spoke in support of the bill. Mr. Coleman runs a reasonably small Colorado business. He discussed difficulties he faces in obtaining adequate insurance and stated that it is not right to ask him to indemnify an unrelated third party to a business transaction. He responded to questions from the committee about his business.

04:50 PM --
Robert Ingram, Great West Casualty Company, spoke in support of the bill. Mr. Ingram's company insures shipping companies. He began by discussing unequal bargaining positions in contracts. He distributed a status sheet regarding anti-indemnification legislation in other states (Attachment E) and a written statement to the committee (Attachment F). He read from his prepared remarks. Mr. Ingram responded to questions from the committee about the effect of this legislation.

09HouseJud0219AttachE.pdf 09HouseJud0219AttachF.pdf

05:03 PM

Representative Levy took the bill off the table until March 2, 2009.