House Committee on State, Veterans, & Military Affairs (03/02/2010)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON STATE, VETERANS, & MILITARY AFFAIRS

Date:	03/02/2010	ATTENDANCE

Time:	01:34 PM to 06:37 PM	Casso	X
		Court	X
Place:	HCR 0112	DelGrosso	X
		Hullinghorst	X
This Meeting was called to order by		McCann	X
	Representative Todd	Miklosi	X
		Murray	X
This Report was prepared by		Nikkel	*
	Bo Pogue	Waller	X
		Labuda	X
		Todd	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB10-1205 HB10-1207 HB10-1328		Amended, Referred to the Committee of the Whole Postponed Indefinitely Witness Testimony and/or Committee Discussion Only

01:34 PM

The committee was called to order. A quorum was present.

01:35 PM -- House Bill 10-1205

Representative Ryden, prime sponsor, presented House Bill 10-1205, concerning land use planning by local governments to address the impacts of land use development upon military installations in close proximity to such governments. The committee heard some testimony on the bill at its February 25th meeting. Testimony continued, as the following persons testified regarding House Bill 10-1205:

01:36 PM -- Mr. Ed Graham, representing K.P. Kauffman Co., testified regarding the bill. Mr. Graham clarified his position on the bill, raising concerns regarding issues pertaining to severance of surface and mineral property rights, and its implications in negotiations between military installations, surface owners, and counties. Mr. Graham suggested that the bill could have unintended consequences for mineral rights owners. Mr. Graham suggested amending the bill to hold harmless mineral rights owners. Mr. Graham responded to questions regarding the particular notification mechanism that raises concerns for him.

01:48 PM -- Mr. James Bobick, representing the Colorado United Veterans Committee, testified in favor of House Bill 10-1205. Mr. Bobick discussed the need for including military installations as an area of state interest for the purpose of statutory provisions governing areas and activities of state interest (so-called "HB 1041 powers"). Mr. Bobick discussed the benefits of including veterans in discussions of land use by military installations. Discussion ensued regarding benefits that accrue to communities through military installation siting, and the potential for changes in land use by these installations to result in the degradation of the full use of adjacent property.

01:58 PM

Discussion continued regarding the need to balance the land use needs of military installations and the use of adjacent properties by land owners.

01:59 PM -- Mr. Ray Pittman, representing the Aurora Economic Development Council, testified in favor of the bill. Mr. Pittman discussed the negotiations on land use and noise contours when Denver International Airport was sited, and the need to balance economic growth and private property rights. Mr. Pittman also discussed the economic benefits that accrue to localities as a result of hosting military installations, and explained how the bill would further those benefits. Discussion ensued regarding removing the HB 1041 powers portion from House Bill 10-1205, and the need for representatives of the military to participate in land use discussions where applicable. Mr. Pittman responded to questions regarding the need to classify military installations as areas of state interest.

02:08 PM -- Mr. Jim Vigil, representing Las Animas County, testified in opposition to House Bill 10-1205. Mr. Vigil discussed the negative impacts of the bill on counties, include of loss of local control and economic development opportunities in some areas as a result of industry positioning near military installations. Mr. Vigil discussed certain military installations in rural areas which are large enough to make it likely for industry to be positioned nearby and thus be affected by changes in land use. Mr. Vigil responded to questions regarding the impact of military installations being granted HB 1041 status on adjacent land use potential. Representative Todd read a letter from Otero County in opposition to the bill (Attachment A).

02:17 PM -- Mr. Larry Fortner, representing the Colorado Springs Chamber of Commerce, testified in favor of the bill as amended. Mr. Fortner explained how the bill will result in Colorado being viewed as a state that is friendly to the presence of military installations, and further explained how passage of the bill will increase ties between the military and host communities.

02:23 PM

Representative Ryden explained the effect of prepared amendment L.004 (Attachment B).


BILL:	HB10-1205
TIME:	02:23:14 PM
MOVED:	Todd
MOTION:	Moved prepared amendment L.004 (Attachment B). The motion passed without objection.
SECONDED:	Labuda
		VOTE
	Casso
	Court
	DelGrosso
	Hullinghorst
	McCann
	Miklosi
	Murray
	Nikkel
	Waller
	Labuda
	Todd

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

02:23 PM

Representative Ryden explained the effect of prepared amendment L.006 (Attachment C). Discussion ensued regarding the omission of certain military facilities from the listed facilities in the amendment. Discussion followed regarding the reasons for excluding the Pinon Canyon maneuver site from the scope of the bill, while retaining other military installations within its scope. Mr. Mickey Hunt, representing the Department of Military and Veterans Affairs, provided clarification regarding the criteria considered for including certain types of military installations within the scope of House Bill 10-1205. Mr. Hunt responded to questions regarding the intent of the legislation, and the type of features contained in the Pinon Canyon site. Discussion ensued regarding discussions that resulted in the drafting of amendment L.006. Discussion followed regarding the opinion of Weld County officials on the amendment.


BILL:	HB10-1205
TIME:	02:23:46 PM
MOVED:	Todd
MOTION:	Moved prepared amendment L.006 (Attachment C). The motion passed on a 7-4 roll call vote.
SECONDED:	Labuda
		VOTE
	Casso	Yes
	Court	Yes
	DelGrosso	No
	Hullinghorst	Yes
	McCann	Yes
	Miklosi	Yes
	Murray	No
	Nikkel	No
	Waller	No
	Labuda	Yes
	Todd	Yes

Not Final YES: 7 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS

02:34 PM

Representative Ryden explained the effect of prepared amendment L.007 (Attachment D).


BILL:	HB10-1205
TIME:	02:34:32 PM
MOVED:	Todd
MOTION:	Moved prepared amendment L.007 (Attachment D). The motion passed without objection.
SECONDED:	Labuda
		VOTE
	Casso
	Court
	DelGrosso
	Hullinghorst
	McCann
	Miklosi
	Murray
	Nikkel
	Waller
	Labuda
	Todd

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

02:35 PM

Representative Ryden explained the effect of prepared amendment L.009 (Attachment E).


BILL:	HB10-1205
TIME:	02:35:13 PM
MOVED:	Todd
MOTION:	Moved prepared amendment L.009 (Attachment E). The motion passed without objection.
SECONDED:	Labuda
		VOTE
	Casso
	Court
	DelGrosso
	Hullinghorst
	McCann
	Miklosi
	Murray
	Nikkel
	Waller
	Labuda
	Todd

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

02:36 PM

Representative Waller explained the effect of prepared amendment L.008 (Attachment F). Discussion ensued regarding the impact of removing HB 1041 powers from the scope of the bill. Mr. Bob Lackner, representing Legislative Legal Services, explained that a portion of L.008 may be a settled question with the passage of amendment L.009. Discussion ensued on this point.


BILL:	HB10-1205
TIME:	02:36:44 PM
MOVED:	Waller
MOTION:	Moved severed section A of prepared amendment L.008 (Attachment F), page 1, lines 1 and 2. The motion failed on a 4-5-2 roll call vote.
SECONDED:	DelGrosso
		VOTE
	Casso	Yes
	Court	No
	DelGrosso	Yes
	Hullinghorst	Excused
	McCann	No
	Miklosi	No
	Murray	Yes
	Nikkel	Excused
	Waller	Yes
	Labuda	No
	Todd	No

Not Final YES: 4 NO: 5 EXC: 2 ABS: 0 FINAL ACTION: FAIL

02:44 PM

Representative Ryden presented closing remarks in favor of House Bill 10-1205. Discussion ensued regarding the benefits that accrue to communities as a result of the siting of military installations, and the benefits of Colorado being viewed as friendly to military installations. Discussion followed regarding the removal of the Pinon Canyon site from the scope of the bill, and the potential impact of the bill on private property rights. Representative Hullinghorst explained her vote on the bill.


BILL:	HB10-1205
TIME:	02:51:19 PM
MOVED:	Todd
MOTION:	Moved to refer House Bill 10-1205, as amended, to the Committee of the Whole with favorable recommendation. The motion passed on a 7-4 roll call vote.
SECONDED:	Labuda
		VOTE
	Casso	Yes
	Court	Yes
	DelGrosso	No
	Hullinghorst	Yes
	McCann	Yes
	Miklosi	Yes
	Murray	No
	Nikkel	No
	Waller	No
	Labuda	Yes
	Todd	Yes

Final YES: 7 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS

02:52 PM -- House Bill 10-1207

Representative Lambert, prime sponsor, presented House Bill 10-1207, concerning modifications to the Public Employees' Retirement Association (PERA). Representative Lambert discussed the effect of the bill and his reasons for sponsoring the legislation. Representative Lambert also discussed the impact of the bill on legislation previously passed during the 2010 session.

02:59 PM

The following persons testified regarding House Bill 10-1207:

02:59 PM -- Mr. Barry Poulson, representing the Independence Institute, testified in favor of the bill. Mr. Poulson discussed a study with which he assisted in his capacity as an economics professor at the University of Colorado pertaining to unfunded liabilities associated with public sector pension plans. Mr. Poulson discussed the unfunded liability associated with PERA, and the rates of return that should be assumed for pension plans. Mr. Poulson suggested that expectations for high rates of return in pension plans results in risky investments by the plans. Mr. Poulson also discussed the increasing pressures on taxpayers associated with funding public employee pension plans, and explained the benefits of switching over from defined benefit plans to defined contribution plans.

03:09 PM

Mr. Poulson discussed the solvency of public pension plans in states that operate defined contribution plans. Mr. Poulson responded to questions regarding the sustainability of pension plans when they switch from defined benefit to defined contribution. Mr. Poulson responded to further questions regarding meeting the obligations of current retirees when switching to a defined contribution plan.

03:14 PM -- Mr. Stephen Smith, representing himself, testified in favor of House Bill 10-1207. Mr. Smith discussed the potential for public employees to seek higher paying jobs in the private sector if retirement benefits are reduced, and the impact of such reductions on the quality of state employees.

03:19 PM -- Mr. Greg Smith and Mr. Tom Cavanaugh, representing Colorado PERA, testified in opposition to the bill. Mr. Smith clarified statements made in previous testimony. Mr. Cavanaugh discussed the impact of the bill on the current unfunded liability facing PERA, and the impact of recently passed Senate Bill 10-001 on the solvency of PERA. Mr. Cavanaugh also discussed the time frames for PERA becoming insolvent under House Bill 10-1207. Mr. Cavanaugh responded to questions regarding specific unfunded liability numbers cited during previous testimony. Representative Lambert discussed his intentions for addressing PERA's unfunded liability under the bill.

03:30 PM -- Mr. Dan Daly, representing the Colorado Education Association and the Colorado Coalition of Retirement Security, testified in opposition to House Bill 10-1207. Mr. Daly discussed the importance of protecting the retirement security of state employees, and explained how the bill would undermine this security. Mr. Daly also explained the differences between defined benefit plans and defined contribution plans. Mr. Daly then discussed the historic rates of return for PERA investments, and addressed objections to the bill raised in previous testimony. Finally, Mr. Daly discussed the experiences of other states when switching from defined benefit plans to defined contribution plans. Discussion ensued regarding the ability of taxpayers to cover the costs of unfunded liabilities, and the sustainability of PERA's current benefit scheme.

03:40 PM

Discussion continued regarding the long-term sustainability of PERA, and differences in retirement benefits between private and public sector employees.

03:41 PM -- Ms. Sandy Green, representing herself, testified in opposition to the bill. Ms. Green explained how 401K retirement plans were designed as a tax shelter for highly paid executives, and discussed the negative consequences of replacing the current PERA benefit plan with a defined contribution plan. Discussion ensued regarding the impact of House Bill 10-1207 on current retirees.

03:44 PM -- Ms. Connie Anderson, representing herself, testified in opposition to House Bill 10-1207. Ms. Anderson discussed her professional career, and expressed concern over the solvency of her retirement benefits.

03:49 PM -- Mr. Don Schaefer, representing Friends of PERA, testified in opposition to the bill. Mr. Schaefer discussed the various benefits provided by PERA, and the loss of certain benefits under House Bill 10-1207, such as disability benefits. Mr. Schaefer discussed Alaska's change from defined benefit plan to defined contribution plan for its public employees. Mr. Schaefer also discussed the contribution rate to PERA for public employees as compared to the private sector, and the experience of the University of Northern Colorado in instituting a defined contribution plan for its nonclassified employees. Finally, Mr. Schaefer discussed Nebraska's change from a defined benefit plan to a defined contribution plan for its employees.

03:56 PM -- Ms. Eileen Bond, representing the Colorado Senior Lobby and herself, testified in opposition to House Bill 10-1207. Ms. Bond discussed the impact of PERA's investments on the economy, and compared benefit levels for public pension plans with private pension plans.

04:00 PM -- Mr. Scott Wasserman, representing Colorado WINS and the American Federation of Teachers, testified in opposition to the bill. Mr. Wasserman laid out three objections to the legislation.

04:02 PM -- Mr. Eric Feder, representing himself, testified in opposition to House Bill 10-1207. Mr. Feder discussed the incentivizing impact of the defined benefit pension plan on working in the public sector, and the contribution levels to pensions for public sector employees as compared to private sector employees. Mr. Feder discussed the impact of Senate Bill 10-001 on public employee benefits, and the need to let that legislation work.

04:06 PM -- Mr. Woody Anderson, representing himself, testified in opposition to the bill. Mr. Anderson discussed the benefits of pooling investments under professional management.

04:09 PM

No amendments were offered to the bill. Representative Lambert provided closing remarks in favor of House Bill 10-1207.


BILL:	HB10-1207
TIME:	04:12:17 PM
MOVED:	DelGrosso
MOTION:	Moved to refer House Bill 10-1207 to the Committee on Appropriations. The motion failed on a 4-7 roll call vote.
SECONDED:	Nikkel
		VOTE
	Casso	No
	Court	No
	DelGrosso	Yes
	Hullinghorst	No
	McCann	No
	Miklosi	No
	Murray	Yes
	Nikkel	Yes
	Waller	Yes
	Labuda	No
	Todd	No

Not Final YES: 4 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB10-1207
TIME:	04:12:58 PM
MOVED:	Labuda
MOTION:	Moved to Postpone Indefinitely House Bill 10-1207. The motion passed on a 7-4 roll call vote.
SECONDED:	Hullinghorst
		VOTE
	Casso	Yes
	Court	Yes
	DelGrosso	No
	Hullinghorst	Yes
	McCann	Yes
	Miklosi	Yes
	Murray	No
	Nikkel	No
	Waller	No
	Labuda	Yes
	Todd	Yes

Final YES: 7 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS

04:13 PM

The committee recessed.

04:26 PM -- House Bill 10-1328

The committee returned to order. Representative Miklosi, prime sponsor, presented House Bill 10-1328, concerning the "New Energy Jobs Creation Act of 2010." Representative Miklosi discussed the economic benefits to be realized by the passage of the bill, and explained the effect of the legislation. Representative Miklosi also discussed the other benefits of the bill, including environmental and energy independence benefits.

04:32 PM

The following persons testified regarding House Bill 10-1328:

04:32 PM -- Mr. Russ Caldwell, representing D.A. Davidson, testified in favor of the bill. Mr. Caldwell discussed the energy improvements funded under programs at the county level similar to the program created by the bill, and the benefits that have accrued to these counties. Mr. Caldwell also discussed the benefits accruing to small businesses from these programs, and the consumer-friendly features of the program.

04:36 PM -- Mr. Jon Goldin-Dubois, representing the Sierra Club, testified in favor of House Bill 10-1328. Mr. Goldin-Dubois discussed the benefits of programs that allow individuals to invest in energy efficiency features for their properties. Mr. Goldin-Dubois discussed the benefits of creating a statewide energy program, and the economic benefits to be realized from the program. Representative Miklosi responded to questions regarding the incentives for property owners to participate in the program created by the bill, and the regulation features in the bill for the loans made under the program. Representative Miklosi responded to further questions regarding the potential for the program created by the bill to draw potential loan customers away from the private sector. Representative Miklosi clarified how the program would operate.

04:47 PM

Representative Miklosi responded to questions regarding the payment structure for those participating in the Colorado New Energy Improvement District, and the interest rates for loans made under House Bill 10-1328. Discussion ensued regarding ensuring the credit worthiness of those participating in the New Energy Improvement Program.

04:53 PM -- Mr. Bob Hullinghorst, representing the Boulder County Treasurer's Office, testified in favor of the bill. Mr. Hullinghorst explained how the energy improvement program operates in Boulder County, and discussed the positive economic benefits that will be realized statewide as a result of House Bill 10-1328. Mr. Hullinghorst responded to questions regarding the differences between loans made under Boulder County's program and home improvement loans typically made in the private sector.

05:04 PM

Discussion continued regarding the loan terms for those participating in the New Energy Improvement Program, and the loans made under Boulder County's program. Representative Miklosi explained the source of seed money for the New Energy Improvement Program. Discussion ensued regarding the payment rates for those participating in the program created by House Bill 10-1328, and how the payments will be processed. Mr. Hullinghorst responded to questions regarding the operation of improvement districts in Boulder County, as compared to the new energy improvement program operated in the county. Discussion followed regarding the operation of improvements districts, and how the loan assessments will be repaid under the New Energy Improvement Program.

05:15 PM

Discussion continued regarding the operation of improvement districts.

05:16 PM -- Mr. Scott Morrissey, representing the City and County of Denver, testified in favor of House Bill 10-1328. Mr. Morrissey discussed the importance of making capital accessible for those seeking to make clean energy improvements, and certain costs associated with creating an energy improvement program at the county level. Mr. Morrissey explained how a statewide program will mitigate certain challenges in operating a new energy program by creating economies of scale.

05:20 PM -- Mr. Joel Serface, representing the Colorado Clean Tech Industry Association, testified in favor of the bill. Mr. Serface discussed the need for financing in the renewable energy industry, and explained how House Bill 10-1328 will leverage capital for renewable energy. Mr. Serface also discussed how the bill will help establish Colorado as a leader in the renewable energy industry, thus creating economic development benefits.

05:24 PM -- Mr. Jason Doedderlein, representing himself as a small business owner, testified in favor of House Bill 10-1328. Mr. Doedderlein discussed the economic benefits experienced by small businesses as a result of the new energy improvement program created in Boulder, and provided examples of improvements made under the program.

05:27 PM -- Ms. Pam Kiely, representing Environment Colorado, testified in favor of the bill. Ms. Kiely discussed renewable energy requirements for utilities, and explained how the bill will enable anyone to participate in the new energy economy. Ms. Kiely also discussed other benefits to be realized under the bill.

05:32 PM -- Mr. Don Childears, representing the Colorado Banker's Association, testified in opposition to House Bill 10-1328. Mr. Childears discussed the impact of the bill on the lending community, and rebutted the idea that loan capital is lacking in the market for making energy improvements. Mr. Childears suggested it is unfair to prioritize liens on mortgages for loans made under the program over other liens associated with earlier loans. Mr. Childears also suggested amending the bill to prevent payment acceleration when property foreclosure is imminent, and to create standards for the program for rating the credit worthiness of borrowers under the program.

05:42 PM

Mr. Childears provided an example where a primary lender could lose money due to the lien prioritization of the loans made under the New Energy Improvement Program. Mr. Childears also suggested that the program created by House Bill 10-1328 should be means-tested, and suggested creating a reporting requirement to the General Assembly on the progress made by the program. Mr. Childears questioned the benefit of publicly financing energy improvement loans, as opposed to privately financing such loans, and discussed increased auxiliary consumer costs under the program in comparison to private sector loans. Mr. Childears then questioned the lack of energy efficiency standards for properties subject to the program, and explained how the bill may impair the ability of the public to access credit. Discussion ensued regarding the number of home improvement loans currently being made by the private sector associated with energy improvements. Mr. Childears responded to questions regarding regulation of the loans made under the program in comparison to normal bank loans.

05:52 PM

Discussion ensued regarding the prioritization of liens associated with loans made under the New Energy Improvement Program. Mr. Childears responded to questions regarding the potential for drafting amendments to accommodate his reservations with the bill, and the impact of Boulder's program on the private lending market. Discussion followed regarding the potential for creating a reporting requirement to the General Assembly in the bill. Mr. Childears responded to questions regarding the prioritization of certain tax and mechanics' liens over home mortgage liens under current law. Discussion followed regarding the public benefit associated with state support of clean energy improvements made to privately owned properties. Discussion returned to the potential for amending the bill to mitigate the issues raised by Mr. Childears.

06:04 PM -- Ms. Barbara Walker, representing the Independent Bankers of Colorado, testified in opposition to House Bill 10-1328. Ms. Walker expressed reservations with the notice process for lien holders under the bill, and the impact of excess debt incurred under the New Energy Improvement Program on the ability of borrowers to refinance mortgages or access additional credit. Ms. Walker suggested amending the bill to require notice to first lien holders of participation in the program.

06:11 PM -- Mr. Brett Johnson, representing the Governor's Energy Office, testified in favor of the bill. Mr. Johnson contrasted House Bill 10-1328 with similar legislation offered during the 2009 legislative session, and discussed the benefits of creating a statewide home energy improvement program, as opposed to leaving this type of program at the county level. Mr. Johnson also addressed concerns brought up in earlier testimony about the acceleration of the lien priority for loans made under the bill over liens based on other loans. Mr. Johnson then discussed the interest rates for loans made under House Bill 10-1328.

06:22 PM

Mr. Johnson discussed the economy-of-scale benefits to be realized by creating a larger energy improvement program at the state level, and the increased debt burdens associated with the program's loans in comparison with utility cost savings associated with the home improvements. Mr. Johnson responded to questions regarding the responsible party in the event of a bond default, and the ability to accelerate bond payments under the bill. Discussion ensued regarding amending the bill to address the lien holder notice requirements raised during earlier testimony. Discussion followed regarding the duties of the Governor's Energy Office with respect to the New Energy Improvement Program.

06:33 PM

Discussion ensued regarding the need to amend House Bill 10-1328 prior to its approval by the committee.

06:37 PM

House Bill 10-1328 was laid over until Thursday, March 4. The committee adjourned.