House Committee on Business Affairs and Labor (02/23/2010)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Date:	02/23/2010	ATTENDANCE

Time:	10:05 AM to 01:01 PM	Balmer	X
		Bradford	X
Place:	HCR 0112	Casso	X
		Kerr A.	X
This Meeting was called to order by		Liston	*
	Representative Rice	Middleton	X
		Priola	X
This Report was prepared by		Soper	X
	Christie Lee	Stephens	X
		Gagliardi	X
		Rice	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB10-1227 HB10-1230 HB10-1236 HB10-1222		Amended, Referred to the Committee of the Whole Postponed Indefinitely Amended, Referred to the Committee of the Whole Amended, Referred to the Committee of the Whole

10:05 AM -- House Bill 10-1227

Representative DelGrosso, prime sponsor, presented House Bill 10-1227 concerning compliance with financial responsibility requirements of the "Health Care Availability Act" by maintaining insurance through approved nonadmitted insurers authorized by law to insure in Colorado. This bill allows approved nonadmitted (not licensed in Colorado) insurers to sell professional liability insurance coverage to physicians, dentists, and health care institutions who are unable to secure coverage from admitted (licensed) insurers. This coverage must meet the minimum financial responsibility requirements for an individual or institution to be licensed or authorized to practice health and dental care in Colorado. Representative Soper asked the sponsor whether these companies are American companies. Representative DelGrosso responded.

10:10 AM -- Robert Ferm, representing the American Insurance Association and the Surplus Lines Association, testified in support of the bill. He explained the meaning of surplus lines of insurance.

10:14 AM -- Richard Thomas, representing Adco General Corporation, testified in support of the bill. He talked about the surplus lines market and said the bill clarifies what is currently happening. Representative Soper asked whether these companies are American companies. Mr. Thomas stated that a majority of these companies are American. Representative Rice asked for clarification on why the bill is necessary. Mr. Ferm explained the problem the bill is attempting to address.


BILL:	HB10-1227
TIME:	10:20:28 AM
MOVED:	Balmer
MOTION:	Moved amendment L.005 (Attachment A). The motion passed without objection.
SECONDED:	Middleton
		VOTE
	Balmer
	Bradford
	Casso
	Kerr A.
	Liston	Excused
	Middleton
	Priola
	Soper
	Stephens
	Gagliardi
	Rice
Not Final YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection

10:22 AM

Representative DelGrosso gave some closing comments on the bill.


BILL:	HB10-1227
TIME:	10:22:58 AM
MOVED:	Balmer
MOTION:	Moved to refer House Bill 10-1227, as amended, to the Committee of the Whole. The motion passed 10-0.
SECONDED:	Priola
		VOTE
	Balmer	Yes
	Bradford	Yes
	Casso	Yes
	Kerr A.	Yes
	Liston	Excused
	Middleton	Yes
	Priola	Yes
	Soper	Yes
	Stephens	Yes
	Gagliardi	Yes
	Rice	Yes
Final YES: 10 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

10:23 AM -- House Bill 10-1230

Representative B. Gardner, prime sponsor, presented House Bill 10-1230 concerning the Uniform Debt-management Services Act. He explained the changes the bill makes to the settlement fees and the addition of an up-front set up fee. Representative B. Gardner talked about the trust account provided in the bill and its purpose. He added that the bill repeals unnecessary provisions.

10:31 AM

Representative Soper asked about the provisions that are repealed in the bill. Representative B. Gardner responded. Representative Rice asked about the language on page six of the bill, lines 12 through 16, concerning not-for-profit providers providing a statement of the amount of compensation for its employees and how consumers would be protected if it is removed under the bill.

10:37 AM -- Wesley Young, the Legislative Director for TASC, the Association of Settlement Companies, testified against the bill and explained that none of his companies are not-for-profit. He talked about other states that have passed similar debt-management services acts to Colorado. Mr. Young explained that licensing is the best form of consumer protection and talked about the current licensing requirements for debt settlement companies and the regulations they are required to follow. He also talked about the disciplinary actions that can be taken against debt settlement companies under current law. He talked about the current fee structure. Mr. Young talked about the differences between a credit counseling program and a debt settlement program. He said the bill proposes that the fee be tied to the settlement of a debt, and he said the problem with that is it is that it is outside the company's control whether the consumer is successful or not. Additionally, the consumer can reject offers. Mr. Young also talked about the trust accounts.

10:53 AM

Representative Soper asked about the number of calls per consumer the company makes and what the average length of those calls are.

10:54 AM -- Elizabeth Dailey, representing herself, testified on the bill. She talked about her positive experience using debt settlement services. Representative Middleton asked whether the debt settlement service was able to lower the amount she would have owed on her own. Ms. Dailey said she paid about $17,000 on her $30,000 debt.

10:58 AM -- Amy Thompson, representing Prestige Financial Solutions, testified against the bill. She talked about her program and the fees involved. Ms. Thompson also talked about the follow-up calls she makes to clients after the program. Representative Stephens asked whether the bill would harm her business and how the fee would affect her business. Ms. Thompson explained that if the fee structure goes in to place, she would go out of business. Representative Rice explained that regulation is meant to protect consumers and talked about the bill that passed a few years ago and asked whether Ms. Thompson feels those regulations addressed the bad companies in the industry. Ms. Thompson responded. Representative Soper asked what happens to the consumers that do not want to comply with the program. Ms. Thompson said there is nothing that can be done with those consumers and talked about the welcome packet that is sent to her consumers. Representative Middleton clarified Ms. Thompson's comments on the laws that were passed a few years ago on the industry.

11:09 AM -- Doug Williams, representing the US Organization for Bankruptcy Alternatives (USOBA), testified against the bill. He talked about USOBA and their efforts to weed out the bad companies. Mr. Williams said the bill will kill USOBA and other good companies and leave the bad actors.

11:26 AM

Representative B. Garnder discussed Amendment L.001 (Attachment B) and a handout was distributed about the amendment (Attachment C).

11:15 AM -- Attorney General Suthers testified in support of the bill and distributed a handout (Attachment D). Representative Balmer and Representative Stephens asked Attorney General Suthers questions about the bill.

11:24 AM -- Laura Udis, representing the Attorney General's Office, testified in support of the bill. Her office is in charge of enforcing the Uniform Debt-management Services Act. She said the bill does not ban all advanced fees. Ms. Udis explained that many of these companies are on-line. She talked about the current fee structure which is 18 percent of the original amount of debt, paid in advance, whether or not any debt is settled. She explained that the bill would set the fee to be 30 percent of the savings at the time the debts are settled and be more based on performance. Ms. Udis said there are also debt settlement companies that support the fee recommendation. She also talked about the provision in the bill that addresses when a consumer drops out of the program and said the bill ensures consumers will receive a refund upon termination. Ms. Udis addressed the trust account provision in the bill as well. She talked about the repeals throughout the bill that she believes are not needed for consumer protection, including the disclosure of compensation.

11:38 AM

Ms. Udis stated that they met with TASC about a week ago regarding their opposition to the bill. She talked about Amendment L.001 and said it would be harmful to consumers and said the amendment provides a fee increase and would increase fees higher than in current law. Representative Balmer asked about the support from the industry Ms. Udis talked about in her testimony. She explained it was a trade association called ACCORD based out of Arizona. Representative Rice asked some questions regarding the bill and the amendment. He commented on the bill and talked about the not-for-profit companies.

11:47 AM -- Renee Beauregard, representing Consumers United Association, testified in support of the bill and distributed a handout of her testimony (Attachment E).


BILL:	HB10-1230
TIME:	12:04:38 AM
MOVED:	Middleton
MOTION:	Moved to postpone House Bill 10-1230 indefinitely (please see following vote sheet for the failed substitute motion to the Committee of the Whole). The motion passed 6-4.
SECONDED:	Casso
		VOTE
	Balmer	No
	Bradford	No
	Casso	Yes
	Kerr A.	Yes
	Liston	No
	Middleton	Yes
	Priola	No
	Soper	Yes
	Stephens	Absent
	Gagliardi	Yes
	Rice	Yes
Final YES: 6 NO: 4 EXC: 0 ABS: 1 FINAL ACTION: PASS

Representatives Stephens, Balmer, Liston, Middleton, and Rice commented on the substitute motion to the motion to postpone indefinitely.


BILL:	HB10-1230
TIME:	12:07:17 PM
MOVED:	Stephens
MOTION:	Moved a substitute motion to refer House Bill 10-1230 to the Committee of the Whole. The motion failed 4-7.
SECONDED:	Liston
		VOTE
	Balmer	No
	Bradford	Yes
	Casso	No
	Kerr A.	No
	Liston	Yes
	Middleton	No
	Priola	Yes
	Soper	No
	Stephens	Yes
	Gagliardi	No
	Rice	No
Not Final YES: 4 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL

12:18 PM -- House Bill 10-1236

Representative A. Kerr, prime sponsor, presented House Bill 10-1236 concerning the continuation of the regulation of certified public accountants by the State Board of Accountancy. This bill implements the recommendations of the Department of Regulatory Agencies (DORA) in its sunset review of the State Board of Accountancy. The bill continues the functions of the board until July 1, 2019.

Under current law, an applicant for certified public accountant (CPA) must have an undergraduate degree, pass the CPA exam, and have one year of professional experience before obtaining a license. Applicants may substitute additional education for the required year of professional experience. Beginning July 1, 2015, applicants will be required to have 150 credit hours of education, 30 credits more than a typical bachelors' degree, in addition to passing the CPA exam and having one year of professional experience. Applicants will not be permitted to substitute education in lieu of experience; however, the bill expands the scope of what the board may consider by rule to be acceptable professional experience.

The bill authorizes the board to consider disciplinary action against a CPA on the basis of disciplinary action taken in any other legal jurisdiction, as well as on the basis of action taken by the Public Accounting Oversight Board, a separate regulatory authority established by federal law.

Representative A. Kerr distributed Amendment L.002 (Attachment F).

12:21 PM -- Brian Tobias, representing the Colorado Department of Regulatory Agencies, testified in support of the bill. He explained Amendment L.002 and stated that sunset reviews allow an opportunity to clean up related statutes which is what the amendment does. Representative Rice asked about the peer review provision in the bill that was brought up at the last hearing.

12:24 PM -- Mary Medley, representing the Colorado Society of Certified Public Accountants, testified in support of the bill and distributed a handout (Attachment G).


BILL:	HB10-1236
TIME:	12:26:37 PM
MOVED:	Kerr A.
MOTION:	Moved amendment L.001 (Attachment H). The motion passed without objection.
SECONDED:	Gagliardi
		VOTE
	Balmer
	Bradford
	Casso
	Kerr A.
	Liston
	Middleton
	Priola
	Soper
	Stephens
	Gagliardi
	Rice
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB10-1236
TIME:	12:30:30 PM
MOVED:	Kerr A.
MOTION:	Moved amendment L.002 (Attachment F). The motion passed without objection.
SECONDED:	Gagliardi
		VOTE
	Balmer
	Bradford
	Casso
	Kerr A.
	Liston
	Middleton
	Priola
	Soper
	Stephens
	Gagliardi
	Rice
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB10-1236
TIME:	12:31:40 PM
MOVED:	Kerr A.
MOTION:	Moved to refer House Bill 10-1236, as amended, to the Committee of the Whole. The motion passed 10-0.
SECONDED:	Gagliardi
		VOTE
	Balmer	Yes
	Bradford	Yes
	Casso	Yes
	Kerr A.	Yes
	Liston	Yes
	Middleton	Yes
	Priola	Yes
	Soper	Yes
	Stephens	Excused
	Gagliardi	Yes
	Rice	Yes
Final YES: 10 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

12:32 PM -- House Bill 10-1222

Representative Middleton, prime sponsor, presented House Bill 10-1222 concerning continuation of the requirement that a collection agency maintain an office in Colorado. Under current law, the requirement that a collection agency doing business in the state must maintain an office in Colorado is repealed, effective July 1, 2010. This bill makes that requirement permanent, as recommended in the Department of Regulatory Agency's 2009 Sunset Review. The bill also requires that the collection agency office accept payments made physically at the office and notify consumers of the address of the local office.

12:33 PM -- Laura Udis, representing the Attorney General's Office, testified that the Attorney General's Office opposes the in-state office requirement. Ms. Udis explained that this should be a business decision and not a requirement whether a business decides to provide an in-state office. She talked about Amendment L.002 that would address the question of when notice is required under the bill.

12:36 PM -- Irv Borenstein, an attorney representing collection agencies, Allen Stokes, a collection agency attorney in Denver, and Jacques Machol, Jr., representing a law firm that represents 50 out-of-state agencies, came up to testify together and distributed a handout (Attachment I). Representative Liston commented on the bill and Representative Soper asked why there is a safety clause.

12:43 PM -- Brian Tobias, representing DORA, testified in support of the bill. He explained the bill. He responded to the safety clause question, stating that sunset bills typically have a safety clause because the program would end before the bill went into effect if there was not one. Representative Rice talked about the changes the amendments will attempt to address.

12:46 PM -- Gary Merenstein, who runs a local office for 13 different collection agencies and speaking on behalf of consumer debtors, testified in support of the in-state office requirement. He talked about the consumers who regularly deal with collection agencies, including immigrants who do not speak English very well. Mr. Merenstein talked about companies that outsource to other countries and the language barriers and problems it can create for consumers. Representative Liston asked whether the consumer can get a better deal if they go into a local office. Mr. Merenstein said going into the office can connect the consumer with a higher level employee such as a manager. Mr. Merenstein addressed the danger of consumers coming into these offices. He stated that he does not see why that is a concern, since that is part of the business.

12:52 PM -- Beverly Hill, who runs an in-state office in her home, testified in support of the in-state office requirement for collection agencies. She talked about her experiences running an in-state office. She explained that people need someone to contact and a place to go to speak with a person rather than talk to numerous people over the phone. Ms. Hill also addressed the concerns over security.


BILL:	HB10-1222
TIME:	12:57:20 PM
MOVED:	Middleton
MOTION:	Moved amendment L.002 (Attachment J). The motion passed without objection.
SECONDED:	Gagliardi
		VOTE
	Balmer
	Bradford
	Casso
	Kerr A.
	Liston
	Middleton
	Priola
	Soper
	Stephens
	Gagliardi
	Rice
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB10-1222
TIME:	12:59:48 PM
MOVED:	Middleton
MOTION:	Moved to refer House Bill 10-1222, as amended, to the Committee of the Whole. The motion passed 10-0.
SECONDED:	Kerr A.
		VOTE
	Balmer	Yes
	Bradford	Yes
	Casso	Yes
	Kerr A.	Yes
	Liston	Yes
	Middleton	Yes
	Priola	Yes
	Soper	Yes
	Stephens	Excused
	Gagliardi	Yes
	Rice	Yes
Final YES: 10 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

01:01 PM

The committee adjourned.