House Committee on Business Affairs and Labor (03/03/2010)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Date:	03/03/2010	ATTENDANCE

Time:	11:21 AM to 04:09 PM	Balmer	X
		Bradford	*
Place:	HCR 0112	Casso	X
		Kerr A.	*
This Meeting was called to order by		Liston	X
	Representative Rice	Middleton	X
		Priola	X
This Report was prepared by		Soper	X
	Christie Lee	Stephens	*
		Gagliardi	X
		Rice	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB10-1266 SB10-083 HB10-1278 HB10-1166 HB10-1278 HB10-1166 HB10-1162		Amended, Referred to Appropriations Amended, Referred to the Committee of the Whole Amended, Referred to Appropriations Witness Testimony and/or Committee Discussion Only Amended, Referred to Appropriations Witness Testimony and/or Committee Discussion Only Amended, Referred to Appropriations

11:21 AM -- House Bill 10-1266

Representative Frangas, prime sponsor, presented House Bill 10-1266 concerning the inclusion of employees of specified employers in certain aspects of state group benefit plans at the option of the employer. Beginning on January 1, 2011, certain local governments, small businesses with less than 100 employees, and nonprofit organizations may offer participation in state fully-funded medical and dental plans. By electing to extend state group benefits to its employees, an employer agrees to exclusively offer state plans and participate in them for at least 3 years. The state personnel director is authorized to set minimum employer contributions towards its employees' premiums and charge an administrative fee to cover the state's costs. The bill was heard in committee previously on February 24, 2010 and March 3, 2010.


BILL:	HB10-1266
TIME:	11:24:17 AM
MOVED:	Soper
MOTION:	Moved to refer House Bill 10-1266, as amended, to the Committee on Appropriations. The motion passed 6-4.
SECONDED:	Middleton
		VOTE
	Balmer	No
	Bradford	Excused
	Casso	Yes
	Kerr A.	Yes
	Liston	No
	Middleton	Yes
	Priola	No
	Soper	Yes
	Stephens	No
	Gagliardi	Yes
	Rice	Yes
Final YES: 6 NO: 4 EXC: 1 ABS: 0 FINAL ACTION: PASS

11:29 AM -- Senate Bill 10-083

Representative Middleton, sponsor of Senate Bill 10-083, presented the bill. The bill defines the term "licensee" to mean a person in business as a distiller, brewer, rectifier, blender, or other producer; an importer or wholesaler of alcohol beverages; or a bottler or warehouseman and bottler of spiritous liquors. The Department of Revenue is required by the bill to enforce the federal prohibition against licensees extending credit to a retailer for more than 30 days. The department is authorized to adopt rules consistent with applicable federal regulations.

11:31 AM -- Pete Meersman, representing the Colorado Restaurant Association, testified in opposition to the bill. He said they are unsure what problem the bill is attempting to solve. Mr. Meersman talked about current law and distributed a copy of federal law (Attachment A). He explained it is already illegal under state and federal law for wholesalers and distributors to sell product to a retailer who has not paid their bill within 30 days of the delivery. He said the proponents are trying to give rule-making authority to the Department of Revenue, and his organization is asking why it makes sense to shift authority from the General Assembly to the Liquor Enforcement Division. Mr. Meersman also talked about what other states are doing and directed the committee to the back of the handout.

11:42 AM -- Dan Williams and Cory Tipton, representing the Colorado Beer Distributors Association, testified in support of the bill. Mr. Williams gave some background on the issue and talked about an amendment that was added in the Senate. Mr. Williams explained the rule-making process and clarified that input would be taken from the industry in that process. Representative Soper asked whether there is a certain industry that violates this provision. Mr. Williams responded and stated that any retailer and wholesaler that is in compliance today, should still be in compliance under the bill. Representative Rice asked what the harm would be in adopting the amendment that was talked about earlier. Cory Tipton responded and said the amendment would make the bill nonsensical.

11:53 AM -- Diane Roth, representing the Colorado Licensed Beverage Association, testified in support of the bill.


BILL:	SB10-083
TIME:	11:54:59 AM
MOVED:	Middleton
MOTION:	Moved amendment L.004 (Attachment B). The motion passed 7-4.
SECONDED:	Rice
		VOTE
	Balmer	Yes
	Bradford	No
	Casso	No
	Kerr A.	Yes
	Liston	Yes
	Middleton	Yes
	Priola	No
	Soper	Yes
	Stephens	Yes
	Gagliardi	No
	Rice	Yes
Not Final YES: 7 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	SB10-083
TIME:	12:00:11 PM
MOVED:	Middleton
MOTION:	Moved to refer Senate Bill 10-083, as amended, to the Committee of the Whole. The motion passed 11-0.
SECONDED:	Kerr A.
		VOTE
	Balmer	Yes
	Bradford	Yes
	Casso	Yes
	Kerr A.	Yes
	Liston	Yes
	Middleton	Yes
	Priola	Yes
	Soper	Yes
	Stephens	Yes
	Gagliardi	Yes
	Rice	Yes
Final YES: 11 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

12:01 PM -- House Bill 10-1278

Representative Ryden, prime sponsor, presented House Bill 10-1278 concerning the creation of an ombudsman for matters arising under the "Colorado Common Interest Ownership Act" (CCIOA). Current law authorizes the creation of common interest communities to be governed by unit owners' or homeowners' associations (HOAs). The bill creates the office of the HOA ombudsman in the Division of Real Estate, Department of Regulatory Agencies. The ombudsman is required to advocate for the rights of unit owners in the governance of unit owners' associations, offer to mediate disputes, act as a clearinghouse for information, and report suspected violations of rules to the division.

The Secretary of State is required to collect a surcharge on filing fees paid by unit owners' associations to cover the direct and indirect costs of the ombudsman office. A sunset review is required by September 1, 2010. The bill was heard previously on February 24, 2010. She talked about and distributed Amendments L.002 and L.003 (Attachments C and D, respectively). Representative Priola asked whether Representative Ryden had a new fiscal note. She said she does not. Representative Stephens asked whether the bill changes the title of the bill and talked about the fiscal note.

12:11 PM -- Bob Haworth, representing 6th Avenue West HOA, said he would like to clarify testimony that was given last week from his community. He said he is concerned with the funding of the bill and said it would inadvertently place them under CCIOA.

12:14 PM -- Molly Foley-Healy, representing the Community Associations Institute, testified in support of the bill and the amendments.

12:18 PM -- Jeani Frickey Saito, Colorado Association of Home Builders, testified in opposition to the bill. She said the amendment turns the bill in a whole different direction and explained that they do not have a position on the amendments yet. Representative Liston asked Ms. Frickey Saito about the amendments and asked if she would like more time to figure out their position. Ms. Frickey Saito said they do not have a position.

12:22 PM -- Donna Jack, representing herself, testified for the concept of helping homeowners with HOAs. She recommends that the board meetings be recorded.

12:26 PM -- Erin Toll, representing the Colorado Division of Real Estate, testified in support of the bill. Representative Stephens expressed her concern about the fiscal note.

12:29 PM

Representative Rice pulled the bill off the table until after lunch at 1:30 p.m.

12:31 PM -- Recess

01:36 PM

Representative Rice called the committee back to order.


BILL:	HB10-1278
TIME:	01:38:31 PM
MOVED:	Rice
MOTION:	Moved amendment L.002 (Attachment C), as amended [see following vote sheet for the amendment]. The motion passed without objection.
SECONDED:	Kerr A.
		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:	HB10-1278
TIME:	01:38:40 PM
MOVED:	Rice
MOTION:	Move to amend Amendment L.002 to strike lines 22-25. The motion passed without objection.
SECONDED:	Kerr A.
		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:	HB10-1278
TIME:	01:42:19 PM
MOVED:	Rice
MOTION:	Moved amendment L.003 (Attachment D), as amended [see following vote sheet for the amendment]. The motion passed without objection.
SECONDED:	Kerr A.
		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:	HB10-1278
TIME:	01:42:56 PM
MOVED:	Rice
MOTION:	Move to amend Amendment L.003 to strike line 7. The motion passed without objection.
SECONDED:	Liston
		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:	HB10-1278
TIME:	01:47:11 PM
MOVED:	Rice
MOTION:	Move a conceptual amendment to authorize the division to have rule-making authority to implement the provisions of the bill. The motion passed without objection.
SECONDED:	Middleton
		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

01:51 PM

Representative Priola and Representative Liston commented on the bill. Representative Stephens and Representative Bradford also commented on the bill and talked about the fiscal note. Representative Rice pulled the bill off the table.

02:08 PM -- House Bill 10-1278

Representative Ryden, prime sponsor, returned to the committee to vote on House Bill 10-1278 concerning the creation of an ombudsman for matters arising under the "Colorado Common Interest Ownership Act" (CCIOA).


BILL:	HB10-1278
TIME:	02:09:03 PM
MOVED:	Gagliardi
MOTION:	Moved to refer House Bill 10-1278, as amended, to the Committee on Appropriations. The motion passed 6-5.
SECONDED:	Casso
		VOTE
	Balmer	No
	Bradford	No
	Casso	Yes
	Kerr A.	Yes
	Liston	No
	Middleton	Yes
	Priola	No
	Soper	Yes
	Stephens	No
	Gagliardi	Yes
	Rice	Yes
Final YES: 6 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS

01:55 PM -- House Bill 10-1166

Representative Kefalas, prime sponsor, presented House Bill 10-1166 concerning the use of plain language in insurance policies. This bill requires that insurance policies and plans issued or renewed on or after July 1, 2011, be written at or below a 10th grade reading level. For policies and plans longer than 3 pages or 3,000 words, the text must be written in 12 point or larger type and contain an index or table of contents. Insurance companies are required to report readability scores as part of their annual filings with the Division of Insurance in the Department of Regulatory Agencies. An insurance company that violates these requirements commits an unfair or deceptive act or practice in the business of insurance and is subject to fines and penalties by the Commissioner of Insurance. The applicable policies and plans include:

automobile insurance;
health benefit plans;
limited benefit health insurance;
dental plans; and
long-term care plans.

02:02 PM

Representative Kefalas distributed a number of amendments and Representative Rice and Representative Liston each distributed an amendment. Representative Rice took the bill off the table so the committee could vote on House Bill 10-1278.

02:10 PM -- House Bill 10-1166

The committee returned to House Bill 10-1166 and Representative Kefalas continued explaining the bill concerning the use of plain language in insurance policies. Representative Kefalas distributed a handout (Attachment E).

02:13 PM -- Stephanie Paswaters, Dayle Axman, Bobbie Baca, representing the Department of Regulatory Agencies, Division of Insurance, testified in support of the bill and distributed a handout (Attachment F). Representative Rice asked about scoring. Ms. Axman responded and directed the committee to the green sheet in the handout and gave some examples. Ms. Baca talked about auto insurance and the fact that young people are buying their own policies and the difficulty they have reading the policy.

02:27 PM -- Ken Gordon, representing himself, testified in support of the bill and talked about his experience practicing law and the benefits of plain language. He talked about a plain language bill he passed while in the state legislature. Mr. Gordon said the bill will reduce costs and cut legal fees.

02:29 PM -- Ben Price, representing the Colorado Association of Health Plans, testified on the bill. He talked about providing updated policies via e-mail. Representative Liston asked if he supports the bill with the amendments. Mr. Price said they would be neutral.

02:34 PM -- Kelly Shanahan, representing the Colorado Consumer Health Initiative, testified in support of the bill.

02:36 PM -- Les Burkowitz, representing himself, testified in support of the bill. He said he also represents small businesses and is testifying from that point of view. Mr. Burkowitz said most businesses do not have people who review policies and talked about the benefits of readability. He read an example from a policy.

02:42 PM -- Sharon Stevenson, representing the Colorado Center on Law and Policy, testified in support of the bill . She shared a story about a father who purchased health insurance for his child who had ear infections and ended up buying insurance that excluded coverage for ear infections because of the complex language used in the policy.

02:45 PM -- Lynn Leader, a small business owner, representing herself, testified in support of the bill. She talked about similar bills that were passed in previous legislative sessions that have benefited her. She also said she would like to have an on-line version of her policy so she can easily search for terms.

02:47 PM -- Edie Sonn, representing the Colorado Medical Society, testified in support of the bill.

02:51 PM

Due to the number of amendments, Representative Rice laid the bill over until a pre-amended version can be drafted that includes all the amendments.

02:52 PM -- House Bill 10-1162

Representative Soper, prime sponsor, presented House Bill 10-1162 concerning payment of amounts due under a construction contract. This bill sets payment standards for construction contracts between contractors and public entities with contracts exceeding $150,000, or private property owners. Among other things, the bill reduces the amount that may be withheld from a contractor to ensure that work is satisfactorily completed and requires this retainage be deposited in an escrow account. Retainage deposits and contract balances for completed work must be paid within 30 days, and a contractor is required to forward payments received for a subcontractor within 7 days. Unpaid balances are subject to interest of 15 percent per year, plus applicable penalties of 15 percent per year. Failure to pay interest may subject the property to a mechanic's lien. Representative Soper explained the concept of retainage. The bill was previously heard on February 24, 2010. Representative Soper talked about a strike below, Amendment L.008 (Attachment G). Representative Balmer asked for clarification on the amendments from the drafter.

03:01 PM -- Jery Payne, Office of Legislative Legal Services, explained the strike below. Representative Balmer asked a question about a potential amendment that would be offered. Representative Middleton responded. A discussion ensued regarding the amendment.

03:14 PM -- Rick Stucy, representing ICSC, testified against the bill. He talked about the lien law and trust fund violation law that exists.

03:19 PM -- Jeannie Bernard, representing the Colorado Building Owners and Managers Association, testified against the bill.

03:22 PM -- Bob Moody, Vice President of the National Association of Industrial and Office Properties, testified against the bill. Representative Balmer talked about the strike below amendment and asked who brought the concerns in the amendment forward. Representative Soper responded.

03:28 PM -- Paul Hindman, the Executive Director of Urban Drainage and Flood Control District, testified against the bill. He said he wanted to bring two points to the committee's attention that he did not provide in his testimony last week. Mr. Hindman said that on a $150,000 project, the interest would be $4.68 and on a million dollar project over 9 months, the interest in the end would be $93.74. He also talked about the current requirement for retainage for public entities. Representative Balmer commented on the low amount of interest he mentioned.

03:32 PM -- Chris Piper, representing the Denver Water Department, testified against the bill and the strike below. He addressed two points on the strike below, the smaller retainage amount and the line of credit and how it would work. Representative Gagliardi asked if he brought these concerns to the sponsor. He said he did talk to him, but was unable to determine where and when the meeting on the bill took place. Representative Soper asked if projects are paid before the engineer has approved it, to which Mr. Piper responded no.

03:38 PM -- Rob Wilson, representing the Rocky Mountain Steel Construction Association, testified in support of the bill. He talked about the concerns that were brought up at the last meeting and resolved in the strike below. He addressed Mr. Stucy's concerns and pointed out the provisions in the strike below that address them. Mr. Wilson talked about the changes the strike below makes to the bill. He addressed the concerns brought up by the previous witnesses. Representative Balmer commented on the bill.


BILL:	HB10-1162
TIME:	03:55:47 PM
MOVED:	Soper
MOTION:	Moved amendment L.008 (Attachment G), as amended. The motion passed without objection.
SECONDED:	Casso
		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:	HB10-1162
TIME:	04:05:43 PM
MOVED:	Rice
MOTION:	Moved amendment L.011 (Attachment H) which amends Amendment L.008. The motion passed 9-1.
SECONDED:	Kerr A.
		VOTE
	Balmer	Yes
	Bradford	Yes
	Casso	Yes
	Kerr A.	Yes
	Liston	Yes
	Middleton	Yes
	Priola	Yes
	Soper	Yes
	Stephens	Excused
	Gagliardi	No
	Rice	Yes

Not Final YES: 9 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS


BILL:	HB10-1162
TIME:	04:08:03 PM
MOVED:	Soper
MOTION:	Moved to refer House Bill 10-1162, as amended, to the Committee on Appropriations. The motion passed 6-4.
SECONDED:	Gagliardi
		VOTE
	Balmer	No
	Bradford	No
	Casso	Yes
	Kerr A.	Yes
	Liston	No
	Middleton	Yes
	Priola	No
	Soper	Yes
	Stephens	Excused
	Gagliardi	Yes
	Rice	Yes
Final YES: 6 NO: 4 EXC: 1 ABS: 0 FINAL ACTION: PASS

04:09 PM

The committee adjourned.