Date: 03/21/2012

Final
BILL SUMMARY for HB12-1211

HOUSE COMMITTEE ON STATE, VETERANS, & MILITARY AFFAIRS

Votes: View--> Action Taken:
Moved prepared amendment L.001 (Attachment B). The
Moved prepared amendment L.002 (Attachment C). The
Moved to postpone indefinitely House Bill 12-1211.
Moved to refer House Bill 12-1211, as amended, to 		Pass Without Objection
Pass Without Objection
PASS
FAIL



01:32 PM -- House Bill 12-1211

The committee was called to order. A quorum was present. Representative Jones, prime sponsor, presented House Bill 12-1211, concerning the requirement that a title insurance agent doing business in this state maintain an office within this state that is staffed by the designated responsible producer. Representative Jones provided background on the title insurance business, and explained the effect of the bill. The following persons testified regarding House Bill 12-1211:

01:34 PM -- Mr. Robert Howe, representing the Land Title Association of Colorado, testified in support of the bill. Mr. Howe provided an example of a real property transaction that included extra fees assessed by an out-of-state title company; the transaction included other deficiencies such as improper disclosures. He explained how the bill will help to address such issues by creating avenues of communication between local parties to real estate transactions and out-of-state companies. Mr. Howe responded to questions regarding how requiring a local representative for an out-of-state title company would affect fees charged by the company. He responded to further questions regarding how the physical size of Colorado may alter knowledge of local real estate markets.


01:44 PM

Mr. Howe responded to questions regarding the reasons an out-of-state title company was selected for the real estate transaction he discussed at the beginning of his testimony, and the responsibilities of the realtor in the transaction. Discussion ensued regarding how a title company is selected in a real estate transaction, and the party held liable when a title deficiency is revealed. Mr. Howe responded to questions regarding the physical scope of a responsible title business, and the reasons an out-of-state title company would be selected for a Colorado real estate transaction. Mr. Howe responded to additional questions about the ability of his title company to do business in states other than Colorado, and the licensing required to do business in multiple states.

01:58 PM -- Mr. Richard Evans, representing Stewart Title Company, testified in support of House Bill 12-1211. Mr. Evans explained how the bill would help consumers address concerns with title insurance during real estate transactions. Mr. Evans explained how title companies enter into interstate agreements for title insurance during transactions across state lines, and explained some of the problems associated with using out-of-state companies during transactions. Mr. Evans addressed concerns about the potentially protectionist nature of the bill for existing in-state title companies, and responded to questions about title company requirements in other states similar to those required by the bill. Discussion ensued regarding the number of complaints about title companies filed with the Division of Insurance. Mr. Evans responded to questions regarding how a title company is selected in a real estate transaction.

02:07 PM -- Mr. George Sutherland, representing the Land Title Association of Colorado, testified in support of the bill. Mr. Sutherland discussed the requirements that title companies must adhere to in real estate transactions, and explained how out-of-state title companies are not equipped to navigate Colorado law on these matters. Mr. Sutherland also explained how the bill will ensure that out-of-state companies comply with Colorado's title requirements, leading to more efficient real estate transactions. Mr. Sutherland responded to questions regarding the number of out-of-state and in-state title companies licensed to do business in Colorado, and the differences in title insurance practices among the states. Mr. Sutherland responded to further questions about the number of complaints filed with the Division of Insurance against out-of-state title companies.


02:18 PM

Mr. Sutherland responded to questions about the function of the Division of Insurance in enforcing title insurance requirements. Discussion ensued regarding the preventative nature of the bill, and the benefits of this approach to the consumer.

02:21 PM -- Mr. Jack Pretti, representing the Colorado Association of Realtors, testified in support of House Bill 12-1211. Mr. Pretti discussed the increased number of problems experienced in Colorado based on out-of-state title companies participating in Colorado real estate transactions, and explained the reasons for the increase in problems. Mr. Pretti discussed the increase in complaints about title insurance companies filed with the Division of Insurance, and detailed some of the issues associated with out-of-state title companies doing business in Colorado. Discussion ensued regarding how a title company is selected during a real estate transaction. Mr Pretti explained the definition of "REO" or real estate-owned.

02:32 PM -- Ms. Cindy Compton, representing the Land Title Association of Colorado, testified in support of the bill. Committee members received copies of comments forwarded by Mr. Bob Reece (Attachment A). Ms. Compton read the comments.

HseState0321AttachA.pdf

02:37 PM -- Ms. Jennifer Waller, representing the Colorado Bankers Association, testified in opposition to House Bill 12-1211. Ms. Waller discussed the anti-competitive nature of the bill, and explained how the market corrects problems associated with title insurance. Ms. Waller responded to questions regarding how a bank would address a complaint brought by a party in a real estate transaction based on the title company being an out-of-state entity. Discussion ensued regarding the number of complaints about out-of-state title companies that are filed with the Division of Insurance, and the number of annual foreclosures in Colorado.

02:41 PM -- Mr. Tim Killcoyne, representing the Real Estate Services Providers Council, testified in opposition to the bill. Mr. Killcoyne explained how existing title insurance regulations provide adequate consumer protections, and detailed the requirements in these regulations. He provided an overview of recent discussions about physical office requirements engaged in by the Colorado Land Title Association, and discussed the protectionist nature of the bill. Mr. Killcoyne discussed potential unintended consequences of passing the legislation. Mr. Killcoyne provided an anecdote about flawed title work produced by a company based in Colorado. Mr. Killcoyne clarified who he represents.

02:52 PM -- Ms. Meghan Pfanstiel, representing the Land Title Association of Colorado, testified in support of House Bill 12-1211. Ms. Pfanstiel explained how title companies are selected in real estate transactions, and discussed the need for consumer protections in these matters. Ms. Pfanstiel addressed issues raised during previous testimony, and provided anecdotes about local title companies correcting deficiencies in title work produced by out-of-state title companies. She discussed the consumer protections that would be created by requiring local representatives for title companies. Discussion ensued regarding the anecdotes cited by Ms. Pfanstiel.

03:05 PM -- Mr. Greg Wolff, representing the Land Title Association of Colorado, testified in support of the bill. Mr. Wolff explained the process for hiring a title insurance company in a real estate transaction, and discussed the anecdote provided by Ms. Pfanstiel.


03:09 PM

Representative Jones explained the effect of prepared amendment L.001 (Attachment B).

HseState0321AttachB.pdf
BILL:HB12-1211
TIME: 03:10:24 PM
MOVED:Todd
MOTION:Moved prepared amendment L.001 (Attachment B). The motion passed without objection.
SECONDED:Court
VOTE
Baumgardner
Casso
Court
Duran
Joshi
Liston
Todd
Coram
Kerr J.
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


03:10 PM

Representative Jones explained the effect of prepared amendment L.002 (Attachment C).

HseState0321AttachC.pdf
BILL:HB12-1211
TIME: 03:10:43 PM
MOVED:Todd
MOTION:Moved prepared amendment L.002 (Attachment C). The motion passed without objection.
SECONDED:Court
VOTE
Baumgardner
Casso
Court
Duran
Joshi
Liston
Todd
Coram
Kerr J.
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


03:11 PM

Representative Jones provided closing remarks in support of House Bill 12-1211. Representative Jones responded to questions about the potential for amending the bill to allow part-time, in-state title company representation. Committee members explained their positions on the bill.
BILL:HB12-1211
TIME: 03:21:17 PM
MOVED:Todd
MOTION:Moved to refer House Bill 12-1211, as amended, to the Committee of the whole with a favorable recommendation. The motion failed on a vote of 4-5.
SECONDED:Court
VOTE
Baumgardner
No
Casso
Yes
Court
Yes
Duran
Yes
Joshi
No
Liston
No
Todd
Yes
Coram
No
Kerr J.
No
YES: 4 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:HB12-1211
TIME: 03:21:54 PM
MOVED:Liston
MOTION:Moved to postpone indefinitely House Bill 12-1211. The motion passed on a vote of 5-4.
SECONDED:Joshi
VOTE
Baumgardner
Yes
Casso
No
Court
No
Duran
No
Joshi
Yes
Liston
Yes
Todd
No
Coram
Yes
Kerr J.
Yes
Final YES: 5 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS



03:22 PM

The committee recessed.