Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON LOCAL GOVERNMENT

Date:03/16/2010
ATTENDANCE
Time:01:30 PM to 03:45 PM
Acree
X
Apuan
X
Place:HCR 0111
Bradford
X
Liston
X
This Meeting was called to order by
Massey
X
Representative Peniston
McKinley
*
Priola
X
This Report was prepared by
Schafer S.
X
Raegan Robb
Vigil
X
Soper
X
Peniston
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
SB10-097
SB10-093
Postponed Indefinitely
Postponed Indefinitely


01:30 PM

The committee chair, Representative Peniston, called the meeting to order.


01:30 PM -- Senate Bill 10-097

Representative Gagliardi, prime sponsor, presented Senate Bill 10-097, concerning the method by which a county home rule charter commission is created for the purpose of proposing a home rule charter. Representative Gagliardi explained that the reengrossed bill modifies the method of appointing members to a home rule charter commission and removes the authority of a county to establish a mill levy to pay for the expenses of the commission. Currently, counties must hold a special election to decide if a home rule charter commission will be established and to elect its members. Representative Gagliardi explained that, in place of a special election, the bill would require that county commissioners appoint charter commission members following a public hearing where the board determines whether a commission should be formed. The bill also sets requirements for the appointments by the board and for the development of a proposed charter by the commission. Representative Gagliardi addressed questions from the committee and explained that all qualified electors of the county are eligible to serve on the commission and are nominated by filing an application with the board of county commissioners.













01:34 PM

Ben Frei, representing the Colorado Stone, Sand, and Gravel Association (CSSGA), testified against the bill and talked about the negative impacts of home rule authority for counties. Mr. Frei explained that home rule authority could allow home rule counties to broaden tax authority and incur initial debt beyond the requirements in Section 20 of Article X of the state constitution (TABOR). Mr. Frei addressed questions from the committee concerning the increased authority of home rule counties and talked about additional bonding requirements for mining activities in Weld County, which is a home rule county.


01:43 PM

Kevin McCasky, County Commissioner, representing the Jefferson County Board of County Commissioners, testified in support of the bill, discussed the current process of appointing members to a charter commission, and explained how the bill would change the process. Commissioner McCasky discussed the benefits of becoming a home rule county and addressed questions concerning current problems with counties appointing a home rule charter commission. Committee discussion ensued concerning the current process for a county home rule charter commission compared to changes made by the bill.


02:03 PM

Andy Karsian, representing Colorado Counties Inc., testified in support of the bill and explained that the bill primarily eliminates the first special election for voters to decide whether a home rule charter commission should be formed. Mr. Karsian talked about the benefits and flexibility of home rule counties and discussed the need for changes to the process of appointing members to a charter commission. He addressed questions from the committee and explained that home rule counties do not have the authority to place additional requirements on mining operations or interfere with neighboring municipalities. Committee discussion ensued concerning the history of home rule county charters in the state.


























02:14 PM

Committee members made closing comments on the bill.
BILL:SB10-097
TIME: 02:15:40 PM
MOVED:Schafer S.
MOTION:Moved to refer Senate Bill 10-097 to the Committee of the Whole. The motion failed on a 5-6 roll call vote.
SECONDED:Apuan
VOTE
Acree
No
Apuan
Yes
Bradford
No
Liston
No
Massey
Yes
McKinley
No
Priola
No
Schafer S.
Yes
Vigil
No
Soper
Yes
Peniston
Yes
Not Final YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL

























BILL:SB10-097
TIME: 02:16:33 PM
MOVED:Priola
MOTION:Moved to postpone Senate Bill 10-097 indefinitely. The motion passed on a 7-4 roll call vote.
SECONDED:Liston
VOTE
Acree
Yes
Apuan
No
Bradford
Yes
Liston
Yes
Massey
Yes
McKinley
Yes
Priola
Yes
Schafer S.
No
Vigil
Yes
Soper
No
Peniston
No
Final YES: 7 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS


02:18 PM -- Senate Bill 10-093

Representative DelGrosso, prime sponsor, presented Senate Bill 10-093, concerning the orderly resolution of claims in foreclosures involving junior liens. Representative DelGrosso explained that the reengrossed bill clarifies the rights, requirements, and priority of lien redemption on foreclosed homes. According to the bill, the holder of a certificate of purchase (COP) of property at a public trustee's sale or sheriff's sale is entitled to pay off junior lien holders during the redemption period for the amount of the lien plus allowable fees and costs. Representative DelGrosso addressed questions from the committee members and explained that the bill requires a junior lien holder to accept payment from a COP holder and to release the lien. Under the bill, junior lien holders would be required to accompany their notice of intent to redeem with a true statement of the amount due on their lien. The holder of the COP is allowed to avoid redemption by a junior lien holder by recording the lien release. Further, the bill clarifies the right of litigants to claim damages for misstatements of the amount due on a lien or of the lien holder's entitlement to use the redemption process.


















02:27 PM

Representative DelGrosso explained that under current law, the successful bidder at a foreclosure sale receives a COP, which entitles a confirmation deed upon the expiration of all redemption periods unless the property is redeemed by a junior lien holder. However, in some situations, a junior lien is purchased by someone who refuses to accept payment from the COP holder and then exercises the statutory right to redemption afforded to lien holders who have not been paid. He indicated that if potential bidders are aware of the lien purchase, they may be discouraged from bidding on the COP, which could depress the sale prices of foreclosed homes.


02:30 PM

Molly Foley-Healy and Jonah Hunt, Hindman Sanchez, P.C., representing the Community Associations Institute, testified against the bill and talked about the process of foreclosure within a homeowners association (HOA) according to the provisions of the Colorado Common Interest Ownership Act (CCIOA). Ms. Foley-Healy described a number of issues with the reengrossed version of the bill, discussed how an HOA would become a junior lien holder when a foreclosed property is sold, and explained why HOAs assign their lien rights to investors in order to collect a larger portion of the lien rights.


02:44 PM

Jonah Hunt, Hindman Sanchez, P.C., testified against the reengrossed bill, explained that the bill would not protect homeowners and the lien rights of an HOA, and may not result in more junior liens being paid off.


02:48 PM

Mr. Hunt and Ms. Foley-Healey responded to questions from the committee about junior lien holders and COPs. Conversation ensued concerning the lien redemption process.


02:50 PM

Carol Snyder, public trustee, representing the Colorado Public Trustees Association, testified against the bill, discussed the increasing interest in the redemption rights of HOA liens, and explained current provisions in law concerning lien sales and COPs processed by public trustees. Trustee Snyder addressed questions from the committee concerning provisions in the reengrossed version of the bill that would allow litigation between public trustees, COP holders, and junior lien holders. Committee discussion ensued.

















03:08 PM

Bob Hothem, representing himself, testified in support of the bill and explained that the reengrossed bill provides needed clarification regarding COP holders and HOA liens. Mr. Hothem discussed the current lien auction process and explained that allowing liens to be paid out by the COP holder would be more cost effective. Mr. Hothem addressed questions from the committee concerning how junior liens are paid by investors.


03:18 PM

Christopher Conant and Robert Hatch, representing Hatch Jacobs, LLC, testified in support of the bill and discussed problems in the lien process since legislative changes in 2008. Mr. Hatch explained the current problems of multiple auctions with third-party investors who are acquiring junior liens. He explained that the bill would provide needed protection for COP holders from junior lien holders who refuse payment for the junior lien in an attempt to acquire the foreclosed property.


03:28 PM

Christopher Conant, representing Hatch Jacobs, LLC, testified in support of the bill, explained that the bill clarifies that lien holders must accept a payment of debt, and distributed a handout to the committee concerning resent court cases between COP holders and junior lien holders (Attachment A). Mr. Conant explained that the bill will prevent the private auctions for junior liens and require all investors to participate in an open public trustee auction. Mr. Conant addressed questions from the committee concerning the requirement in the bill that junior lien holders accept payment from COP holders.


10HseLocal0316AttachA.pdf

03:34 PM

Representative DelGrosso discussed prepared amendment L.006 (Attachment B) and entered closing comments on the bill.

10HseLocal0316AttachB.pdf















BILL:SB10-093
TIME: 03:38:06 PM
MOVED:Liston
MOTION:Moved amendment L.006 (Attachment B). The motion failed on a 5-6 roll call vote.
SECONDED:Bradford
VOTE
Acree
Yes
Apuan
Yes
Bradford
Yes
Liston
Yes
Massey
No
McKinley
No
Priola
Yes
Schafer S.
No
Vigil
No
Soper
No
Peniston
No
Not Final YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL
BILL:SB10-093
TIME: 03:39:24 PM
MOVED:Liston
MOTION:Moved to refer Senate Bill 10-093 to the Committee of the Whole. The motion failed on a 2-9 roll call vote.
SECONDED:Bradford
VOTE
Acree
No
Apuan
No
Bradford
Yes
Liston
Yes
Massey
No
McKinley
No
Priola
No
Schafer S.
No
Vigil
No
Soper
No
Peniston
No
Not Final YES: 2 NO: 9 EXC: 0 ABS: 0 FINAL ACTION: FAIL





BILL:SB10-093
TIME: 03:44:05 PM
MOVED:Schafer S.
MOTION:Moved to postpone Senate Bill 10-093 indefinitely. The motion passed on a 10-1 roll call vote.
SECONDED:Bradford
VOTE
Acree
No
Apuan
Yes
Bradford
Yes
Liston
Yes
Massey
Yes
McKinley
Yes
Priola
Yes
Schafer S.
Yes
Vigil
Yes
Soper
Yes
Peniston
Yes
Final YES: 10 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS


03:45 PM

The committee adjourned.