House Committee on Business Affairs and Labor (02/24/2010)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Date:	02/24/2010	ATTENDANCE

Time:	10:47 AM to 05:51 PM	Balmer	*
		Bradford	X
Place:	HCR 0112	Casso	X
		Kerr A.	X
This Meeting was called to order by		Liston	*
	Representative Rice	Middleton	X
		Priola	*
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:
HB10-1333 HB10-1266 HB10-1278 HB10-1241 HB10-1162		Amended, Referred to the Committee of the Whole Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Amended, Referred to Appropriations Witness Testimony and/or Committee Discussion Only

10:47 AM -- House Bill 10-1333

Representative Vigil, prime sponsor, presented House Bill 10-1333 concerning the creation of the Green Jobs Colorado Training Program in the Office of the Governor, and, in connection therewith, creating the Green Jobs Colorado Advisory Council and the Green Jobs Colorado Training Fund. The bill creates the Green Jobs Colorado Training Program. The program is a 2-year pilot program that offers grants to entities to provide job training for the wind, solar, renewable energy, and energy efficiency industries. Various entities can apply for grants, such as workforce development organizations, employers, educational institutions, apprenticeship programs, and economic development organizations.

A 9-member Green Jobs Colorado Advisory Council will administer the program, review grant applications, award grants, and establish reporting requirements for grantees. In awarding grants, the council is required to give priority to programs that demonstrate a high likelihood of resulting in job offers for participating individuals and to those programs that target low-income individuals, entry-level or incumbent workers, and dislocated workers from industries in decline. Applicants must fund at least 20 percent of the costs of their training program.

The Colorado Department of Labor and Employment (CDLE) is required to evaluate the program and report its findings to the Governor and Business Affairs Committees in both the House and Senate.

10:51 AM -- Christine Shepard, representing the Colorado Cleantech Industry Association, testified in support of the bill. She talked about the organization and talked about the factors that make Colorado a clean tech state. Ms. Shepard talked about what constitutes a clean tech industry in their organization. Representative Rice asked how the industry and the community colleges have worked together to provide workforce readiness for the high demand in this arena. Ms. Shepard responded.

10:58 AM -- Kandice McKeon, the Political Director of the Colorado Building and Construction Trades Council, testified in support of the bill.

10:59 AM -- Jeff Lyng, representing the Governor's Energy Office, testified in support of the bill. He talked about how the funding would work under the bill using federal American Recovery and Reinvestment Act (ARRA) funds. Mr. Lyng gave examples of the types of programs that could apply for the grants provided in the bill. Representative Liston asked a question regarding the make up of the Green Jobs Colorado Advisory Council created in the bill. Mr. Lyng responded. Representative Liston also asked some questions regarding how the bill would be funded and the 20 percent match that is paid by the applicant and what would happen if that was not paid. Representative Stephens asked how the expenditures were reduced in the revised fiscal note. She also asked Mr. Lyng about a bill that was passed last session regarding ARRA funds. Representative Priola commented on training and why it is necessary if there is such a high demand in the industry. Mr. Lyng responded. Representative Rice also commented on Representative Priola's comments regarding training. Representative Priola said if there is a true demand, the private business should take care of the supply. A discussion ensued.

11:24 AM -- Jason Schrock, Fiscal Analyst, Legislative Council Staff, responded to questions regarding the fiscal note. He explained that after he had drafted the original fiscal note, the department clarified that it would not be receiving an ongoing amount of $500,000, but rather that money was just a one time lump sum. Mr. Schrock responded to additional questions from the committee regarding federal funds.

11:30 AM -- Bill Cleary, representing the Mile High Youth Core, testified in support of the bill. He talked about the Mile High Youth Core program.


BILL:	HB10-1333
TIME:	11:34:17 AM
MOVED:	Casso
MOTION:	Moved amendment L.003 (Attachment A). 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:	HB10-1333
TIME:	11:36:33 AM
MOVED:	Middleton
MOTION:	Moved amendment L.004 (Attachment B). 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

11:37 AM

Representative Vigil gave some closing comments on the bill. Representative Priola commented on the bill and stated he disagrees with the methods in the bill.


BILL:	HB10-1333
TIME:	11:40:54 AM
MOVED:	Middleton
MOTION:	Moved to refer House Bill 10-1333, as amended, to the Committee of the Whole. 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

11:43 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.

11:59 AM -- Jerry McElroy, representing Kaiser Permanente, testified against the bill and stated the bill would lead to higher premiums. A discussion ensued regarding premiums.

12:03 PM -- Tony Gagliardi, representing the National Federation of Independent Businesses, testified against the bill. He explained that the bill would create a whole new bureaucracy in the Department of Personnel and Administration. Representative Rice asked whether Mr. Gagliardi supports the concept, but is just not sure how to get there. Mr. Gagliardi agreed. Representative Frangas said he would like to work with Mr. Gagliardi on a solution to his concerns.

12:13 PM -- Dave Bean, representing himself as a small business owner, testified in support of the bill and distributed a handout (Attachment C). He talked about his experience buying health insurance in the individual insurance market. Mr. Bean talked about how much of his time is taken up dealing with buying health insurance.

12:15 PM

Representative Rice laid the bill over to March 2.

12:22 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". 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.

12:26 PM -- Linda Sasenick, representing herself, testified in support of the bill. She talked about the problems with the current law regarding HOAs. Ms. Sasenick talked about the benefits an ombudsman would provide homeowners.

12:31 PM -- Frank Kettlewell, representing homeowners, testified in support of the bill and distributed a handout of his testimony and a list of liens (Attachment D and E, respectively). He talked about issues he and other homeowners have had with various HOAs. Representative Stephens asked Mr. Kettlewell to explain how an ombudsman would address his issues with an HOA if they do not have any rule-making authority. Mr. Kettlewell responded. He responded to additional questions from the committee.

12:59 PM -- Donna Jack, representing herself, testified in support of the concept of the bill. She raised some concerns and questions about the ombudsman.

01:04 PM -- Kirk McDonald, representing himself, testified in support of the bill. He talked about his experience with the Colorado Common Interest Ownership Act and distributed a handout (Attachment F). He stated that there is currently no enforcement of the act.

01:15 PM

Representative Ryden responded to questions from Representative Balmer regarding HOA's enforcement actions.

01:18 PM -- Jeff Sacco, representing himself, testified in support of the bill. He stated that the bill will support homeowners. He spoke to his experiences interacting with his HOA and distributed a handout (Attachment G). He responded to questions from the committee.

01:30 PM -- Amy Redfern, Community Associations Institute, testified in opposition to the bill as currently written. She stated that discussions need to continue on how to best structure the bill to address the concerns of citizens.

01:32 PM -- Jeani Frickey Saito, Colorado Association of Home Builders, testified in opposition to the bill, stating that the mechanics of the bill do not work. She described the variety of HOAs in the state, and stated her belief that an ombudsman's office wouldn't have the expertise necessary to deal with the HOAs.

01:35 PM -- Erin Toll, Director of the Division of Real Estate, testified against the bill. She said the bill has no teeth and said it needs to be more specific. Representative Soper asked what the division does with complaints and she said currently they do the same thing an ombudsman would do since they have no jurisdiction; they tell people to either go to court, or to the board of directors. Representative Balmer commented that he would not like to see a punitive bill come forward if the sponsor does try to put teeth in the bill.

01:41 PM -- Jim Burneson, representing himself, testified and said he would like to see the HOAs licensed with the Real Estate Commission. He talked about the problems with taking these cases to court. Representative Bradford asked Mr. Burneson to talk about a website he mentioned in his earlier testimony. Representative Bradford asked whether Mr. Burneson himself has had an issue with an HOA.

01:53 PM

The chair laid the bill over until March 2.

01:54 PM -- House Bill 10-1241

Representative Casso, prime sponsor, presented House Bill 10-1241 concerning required registration for persons who work on fire suppression systems. This bill creates a registration program for sprinkler fitters in the Division of Fire Safety, Colorado Department of Public Safety. A sprinkler fitter is a person authorized to work on fire suppression systems. Beginning July 1, 2011, sprinkler fitters are required to register with the division, or with a municipality that has an approved certification program. Registered persons are extended title protection. In order to register with the state, a person must pay a fee, provide evidence of successful completion of a sprinkler fitter apprenticeship program, and pass an examination. Other competency criteria may be determined by the department by rule. Sprinkler fitters may apply for state registration by reciprocity. Registrations must be renewed annually.

02:04 PM -- Nathaniel Klatt and his father Paul Klatt, representing Quality Fire Protection, testified against the bill. Nathaniel Klatt talked about a couple of issues he has with the bill. Representative Stephens asked a question about the definition of sprinkler fitter apprenticeship. Mr. Klatt talked about the definition of sprinkler fitter apprenticeship. Representative Stephens asked whether an amendment would address his concerns over the definition and clarify union and nonunion. He said an amendment would address those concerns. Representative Soper asked why their program does not qualify as an approved program. Mr. Klatt explained his program and why they have not been approved by the department.

02:11 PM -- Kevin Klein, representing the Colorado Department of Public Safety, said he was neutral on the bill and addressed some amendments. He also talked about the union and nonunion issue. Representative Rice asked him to state which amendments he specifically supports. Mr. Klein replied that the department supports both Amendment L.002 and L.003. Representative Soper asked what sets off sprinklers, heat or smoke. Mr. Klein explained that they are set off by heat.

02:22 PM -- Chris Lines, representing the Department of Regulatory Agencies, testified on the sunrise process in Colorado that is used before an industry becomes regulated and talked about preparing a sunrise report for sprinkler fitters. Representative Rice commented on the bill. Representative Balmer asked how soon a sunrise process could take place. Mr. Lines explained it takes about 120 days to conduct a sunrise review. A discussion ensued regarding the sunrise review process.

02:29 PM -- Chief Joseph Gonzales, representing Denver Fire Department, testified in support of the bill. He talked about the benefits the bill would have and gave some examples of problems with sprinklers he has observed when conducting fire inspections.

02:33 PM -- Clint Janssen, representing the Vail Valley Fire Sprinkler Corporation, testified in support of the bill. He talked about the need for regulation as sprinklers become used more often. Representative Soper asked whether he knows about education programs in his area. Mr. Janssen responded.

02:38 PM -- Tom Coakley, representing Western States Fire Protection, testified in support of the bill. He talked about a similar law that Denver passed a few years ago. He said Boulder also has a similar program. Mr. Coakley expressed some concerns with conducting a sunrise review and having to wait another year to carry legislation on this issue. Representative Balmer commented on Mr. Coakley's example of glue that was found in the sprinkler heads he observed once on an inspection.

02:43 PM -- Tim Trostel, Jr., representing American Sprinker and the Colorado Fire Protection Association, testified in support of the bill and said he is an open shop. He said he believes registration is a great idea for fitters. Mr. Trostel stressed the need for high standards and competency in the industry. Representative Balmer asked a question regarding the union and nonunion companies. Representative Balmer asked whether a nonunion contractor is able to receive the training that is required in the bill. Mr. Sprinkler responded.

02:49 PM -- Rich Gessner, a union representative, testified in support of the bill. He said the bill is not a union issue, but rather a safety issue. He discussed the training that is available to open shops.

02:50 PM -- Terry Phillips, representing the National Fire Sprinkler Association, testified in support of the bill. He addressed the earlier discussion regarding sprinklers in homes and stated it will only apply to new construction. He addressed the union issue. Representative Balmer asked a number of questions.

03:00 PM -- Marvin Heath, representing Central Fire Protection Contractors, testified in support of the bill. He talked about the benefits of an apprenticeship and having a qualified competent sprinkler installer.

03:04 PM -- Rita Neiderheiser, representing Local 669, a fire sprinkler installer, testified in support of the bill.

03:06 PM -- Greg Wheeler, representing the Colorado Chapter of the International Code Council (CCICC), testified in support of the bill and spoke about the amendments. Representative Balmer asked whether the training requirements will be able to be met under the bill from nonunion contractors.

03:09 PM -- Rob Geislinger, the South Metro Fire Marshall, testified in support of the bill. He discussed his support for Amendment L.002. Representative Balmer asked whether Mr. Geislinger supports the bill. He said he does.


BILL:	HB10-1241
TIME:	03:13:52 PM
MOVED:	Casso
MOTION:	Moved amendment L.002 (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:	HB10-1241
TIME:	03:14:22 PM
MOVED:	Casso
MOTION:	Moved amendment L.003 (Attachment I). 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:	HB10-1241
TIME:	03:21:02 PM
MOVED:	Casso
MOTION:	Moved to refer House Bill 10-1241, as amended, to the Committee on Appropriations. The motion passed 6-4.
SECONDED:	Soper
		VOTE
	Balmer	No
	Bradford	No
	Casso	Yes
	Kerr A.	Yes
	Liston	Excused
	Middleton	Yes
	Priola	No
	Soper	Yes
	Stephens	No
	Gagliardi	Yes
	Rice	Yes
Final YES: 6 NO: 4 EXC: 1 ABS: 0 FINAL ACTION: PASS

03:24 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.

03:30 PM -- Paul Hindman, the Executive Director of Urban Drainage and Flood Control District, testified against the bill. He talked about retainage, explaining that it is withheld to make sure the project is completed or used if subcontractors are not paid for a project. Mr. Hindman stated that if you reduce the retainage, it will not be sufficient enough to have the contractor come back and finish the project. Mr. Hindman talked about the problems with the provision in the bill that talks about paying when the job is substantially completed. He also discussed the provision in the bill that requires the retainage to be held in an interest-bearing escrow account. He explained he would need to have 98 separate escrow accounts under the bill. Representative Gagliardi asked whether Mr. Hindman currently holds all his accounts in one account rather than 98. He said he holds them between three financial institutions. Representative Rice commented on the bill. He urged Mr. Hindman to suggest an alternate solution to the bill. Mr. Hindman responded. Representative Soper asked what the average length of the CDs are that he currently invests his money in. Mr. Hindman said they average about 90-120 days.

03:44 PM -- Gary Meggison, Senior Vice President of the Weitz Company, testified against the bill. He explained that the company has about 75 projects a year and over 600 subcontracts. Mr. Meggison said it seems the bill was written without input from general contractors and owners. Representative Gagliardi asked when Mr. Meggison pays contractors on a project that lasts years. Mr. Meggison explained how payments are made. Representative Rice clarified one of Mr. Meggison's concerns stating that the time frame for when the contractor pays the subcontractor differs from when corrections must be made. Representative Soper asked a question regarding time frames.

03:52 PM -- Tony Milo, representing the Colorado Contractors Association (CCA), testified against the bill. He explained that CCA represents 400 private firms statewide. Mr. Milo stated that a majority of their members do not see a problem with current practice. Mr. Milo talked about an amendment. Representative Soper asked a question.

03:56 PM -- Kelly McMullen, representing Colorado Springs Utilities, as member of the Colorado Water Congress, testified against the bill. She talked about costs the bill will produce.

04:02 PM -- Bud O'Hara, representing Pueblo Water Works, testified against the bill. Mr. O'Hara gave an example of a current job he has that only has a small amount of work left in order to be finished and they are having troubles getting the contractor to finish even though they retained $10,000.

04:05 PM -- Andy Karsian, representing Colorado Counties Incorporated, testified against the bill. Representative Gagliardi asked him to explain why the bill would decrease the opportunity for counties to receive grants.

04:08 PM -- Fred Joseph, the acting Colorado Banking Commissioner, testified against the bill. He talked about how the bill would affect banks in the state due to the escrow requirement.

04:11 PM -- Judy Anderson, representing herself as a property manager, testified against the bill. She talked about effects the bill could have on routine operational contracts as it is written and gave some examples.

04:19 PM -- John Logan, an attorney from Denver representing the National Commercial Real Estate Development Association, testified against the bill and talked about some unintended consequences the bill may produce. He said the bill, as it is written, covers every contract, including residential contracts. Homeowners would have to open an escrow account for a contract in their homes and it would have to be paid upon a percentage of completion. Mr. Logan talked about the fact that home owners would not know at what point a job is completed enough to be paid under the bill. Mr. Logan also explained maintenance contacts would be included as well. He talked about what other states have done regarding retainage.

04:28 PM

Representative Balmer asked Mr. Logan to talk about the costs associated with the bill. Mr. Logan directed the committee to page 5, Section 38-15-103 of the bill regarding the trust accounts and responded. Representative Balmer asked Mr. Logan to discuss the possibility that the bill may cause job loss. Mr. Logan responded. Representative Balmer talked about building owner and tenant situations and the owners passing on costs to the tenants.

04:37 PM -- Evan Goulding, representing the Special District Association of Colorado, testified against the bill. He echoed the comments on contractors returning to finish the work. Mr. Goulding talked about mechanic's liens being placed on public facilities under the bill and the problems associated with doing so. Representative Rice talked about past efforts relating to this issue and finding a compromise. Representative Stephens talked about the opposition to the bill. A discussion ensued relating to a compromise.

04:48 PM -- Jim O'Neill, Director for Purchasing, City of Fort Collins and representing the Colorado Municipal League, testified against the bill. He gave some examples of problems the bill will create.

04:53 PM -- Jennifer Waller, representing the Colorado Bankers Association, testified against the bill. She talked about her concerns regarding the escrow account and the mechanics lien. Representative Balmer asked her to expand on some of her testimony.

04:57 PM -- Richard Forseberg, representing the American Subcontractors Association, testified in support of the bill. He said they the bill is attempting to control retainage. He said 26 states have issued statutes limiting the amount of allowable retainage on any billing for construction work to 5 percent or less and distributed a handout illustrating this (Attachment J). Mr. Forseberg talked about the fiscal note.

05:05 PM -- Diane Hills, representing Diamond Excavating, Inc., testified in support of the bill and distributed a handout (Attachment K). She said they have to wait until the end to get paid their money on contracts.

05:11 PM -- Rob Wilson, representing the Rocky Mountain Steel Construction Association, testified in support of the bill. He talked about the time frames for defects and incomplete work. Mr. Wilson addressed some of the prior witness' arguments against the bill regarding the mechanic's lien and the escrow accounts. He talked about how escrow accounts work in other states. Mr. Wilson talked about the argument that the bill will hinder lending. Representative Soper asked whether he has heard of any bond companies that have closed to which Mr. Wilson said no. Representative Rice asked about the escrow account and whether it would be required for every project. Mr. Wilson stated that there is an amendment that addresses the confusion that every project needs an escrow account.

05:26 PM -- Toni Gagliardi, representing the National Federation of Independent Businesses, testified in support of the bill. Representative Soper talked about additional support for the bill. Representative Rice commented on the bill and the amendments. Representative Soper suggested returning with a strike below that includes all the amendments. Mr. Forsberg discussed the amendments, one addresses holding a surety bond and another addresses the fiscal note by delaying the action of the bill until 2015. Representative Soper also clarified that the bill excludes residential contracts.

05:51 PM

The bill was laid over until March 2.

05:51 PM

The committee adjourned.