Date: 04/25/2012

Final
BILL SUMMARY for SB12-001

HOUSE COMMITTEE ON STATE, VETERANS, & MILITARY AFFAIRS

Votes: View--> Action Taken:
Moved to postpone indefinitely Senate Bill 12-001.
Moved to refer Senate Bill 12-001 to the Committee
Moved to refer Senate Bill 12-001 to the Committee		PASS
FAIL


02:47 PM -- Senate Bill 12-001

Representatives Duran and Ryden, prime sponsors, presented Senate Bill 12-001, concerning contracting preferences for persons who employ at least a specified percentage of Colorado residents to perform the requirements of a government contract. Committee members received a fact sheet in support of the bill (Attachment A). Representative Duran explained the effect of the bill, and Representative Ryden discussed its merits. The following persons testified regarding Senate Bill 12-001:
HseState0425AttachA.pdf

02:51 PM -- Mr. Tom Norton, representing the city of Greeley and the Northern Colorado Legislative Alliance, testified in opposition to the bill. Mr. Norton expressed concerns about potential confusion that would be created by the bill in the area of federal funding for state initiatives, and discussed increased costs associated with state contracting preferences. He discussed the benefits of allowing market conditions to sort the state bidding process. Mr. Norton responded to questions regarding how large state construction contracts are awarded through the procurement process. Mr. Norton responded to further questions regarding his opinion about hiring state residents to work on state-funded projects.

03:02 PM -- Mr. R.J. Hicks, representing the Jefferson County Business Lobby, the Metro North Chamber of Commerce, the Independent Electrical Contractors of Colorado, and the Hispanic Contractors of Colorado, testified in opposition to Senate Bill 12-001. Mr. Hicks discussed the state's procurement process, and explained how the procurement benefit provided by the bill to those companies that provide health care and retirement benefits to their employees disadvantages small businesses. Mr. Hicks discussed the raw dollar figures that may be involved if the full preference is claimed in bidding under the bill. Mr. Hicks responded to questions about how the bill may drive higher costs for large state contracts. Discussion ensued regarding the dollar total for procurement contracts over the past five years. Mr. Hicks responded to questions about the organizations he is representing.

03:11 PM -- Mr. Mark Latimer, representing the Associated Builders and Contractors rocky Mountain and Building Jobs for Colorado, testified in opposition to the bill. Mr. Latimer questioned whether work on large state construction projects is currently being performed by out-of-state workers, and discussed difficulties that may be encountered in determining whether a particular company is eligible for the bidding preferences provided by the bill. Mr. Latimer discussed the costs that would accrue to the state if the bill were to pass. Mr. Latimer responded to questions regarding the vagaries of determining eligibility for the preferences provided by the bill, and the proper authority for making these determinations. Discussion ensued regarding the potential impact of the bill on situations involving businesses located close to a state border that hire employees on the other side of the border.


03:22 PM

Mr. Latimer responded to questions regarding the potential effect of the bill on contracting with large multinational companies.

03:23 PM -- Ms. Loren Furman, representing the Colorado Association of Commerce and Industry, the National Federation of Independent Businesses, and Colorado Concern, and Mr. Bob Moody, representing the Denver Chamber of Commerce and the Colorado Competitive Council, testified in opposition to Senate Bill 12-001. Ms. Furman provided background on recent legislative changes to the state procurement system, and costs to the state associated with these changes. Ms. Furman suggested that the bill seeks to correct a problem that does not exist. Mr. Moody discussed the potential for preference legislation to lead to other governments passing preference legislation, to the detriment of the businesses he represents. He spoke in favor of relying on the free market in the bidding process. Ms. Furman responded to questions regarding current law that requires the work force of companies awarded state bids to be comprised of 80 percent Coloradans. Discussion ensued regarding procurement legislation passed in recent years, and the costs associated with this legislation.


03:33 PM

Discussion ensued regarding state money spent on contracts with out-of-state entities in recent years.

03:34 PM -- Ms. Margaret Gomez, representing 9 to 5 National Association of Working Women, testified in support Senate Bill 12-001. Ms. Gomez discussed the benefits of awarding contracts to companies that hire Colorado workers, particularly those companies that provide benefits. Ms. Gomez responded to questions regarding the need of the members of her organization to travel to other states for employment. Ms. Gomez responded to further questions regarding the choice between employment with no benefits and no employment at all. Ms. Gomez responded to questions regarding her employment arrangement with 9 to 5.

03:38 PM -- Ms. Kandice McKeon, representing the Colorado Building and Construction Trades Council, testified in support of the bill. Ms. McKeon discussed the membership of her organization, and discussed the merits of the provisions in the bill granting up to a 5 percent preference to bidders for state construction contracts based on employing Coloradans and offering benefits. She discussed the outlook for the construction sector in Colorado, and expressed concern about the lack of enforcement mechanisms in the bill. Ms. McKeon spoke in support of jobs that provide benefits, including apprenticeship opportunities. Ms. McKeon responded to questions regarding the number of jobs created by one million dollars of construction spending, and the jobs that may be lost as a result of the procurement preference created by Senate Bill 12-001.


03:50 PM

Discussion ensued regarding the increased costs that the state may incur as a result of granting the procurement preference created by Senate Bill 12-001, and the potential for other states to adopt procurement preferences in detriment to Colorado businesses.

03:54 PM -- Mr. Jody Reuler, representing the Rocky Mountain Health Care Coalition, testified in support of the bill from a health care perspective. He discussed the benefits to the health care system of providing health care benefits to employees. Mr. Reuler responded to questions regarding the organizations opposed to the bill.

03:58 PM -- Ms. Kay Holderness, representing herself, testified in support of Senate Bill 12-001. Ms. Holderness explained how her affiliation with a union has allowed her to provide for her family.

04:00 PM -- Mr. Kevin Abels, representing FRESC, testified in support of the bill. Mr. Abels discussed the benefits to Coloradans of passing the bill, and provided background on the effect of local employment procurement preferences in effect in other parts of the nation. He discussed projects that have been built locally using a local employee procurement preference. Mr. Abels discussed other procurement preferences that would be beneficial, and explained the threshold for granting the health care benefit procurement preference under the bill. Mr. Abels addressed reservations about the bill raised during earlier testimony. Discussion ensued regarding a situation cited by Mr. Abels regarding the use of a local employment procurement preference in Los Angeles. Discussion followed regarding the effect of a slow economy on state procurement, the potential effect of the bill on the jobs base, and the benefits of apprenticeship programs.


04:12 PM

Discussion ensued regarding the economy in Los Angeles, and California in general in comparison to Colorado.

04:13 PM -- Mr. Ben Felson, representing the Colorado Fiscal Policy Institute, testified in support of Senate Bill 12-001. Mr. Felson discussed the benefits to the state of employing Coloradans, and the use of local employment procurement preferences in other states. Mr. Felson discussed state spending on contracts with out-of-state companies in recent years, and the effect of recent economic downturns on the employment rate. Mr. Felson responded to questions regarding the source of funding to support the bid preference created by the bill.

04:19 PM -- Mr. Larry Friedberg, State Architect, and Mr. Judson Byrn, State Purchasing Director, Department of Personnel and Administration, made themselves available to answer questions about the state procurement process. Mr. Friedberg responded to questions about awarding bids for state capital construction projects, the costs associated with the bill, and the burdens that may be placed on his office if the bill passes. Mr. Friedberg responded to further questions regarding an existing state law requiring that capital construction contracts be awarded to firms with 80 percent in-state employees. Mr. Friedberg responded to questions regarding the potential impact of the bill on the state's capital construction budget, and the impact of bid costs on awarding capital construction contracts.


04:30 PM

Mr. Byrn responded to questions regarding the effect of procurement legislation passed in recent years.


04:31 PM

No amendments were offered to the bill. Representative Ryden provided closing remarks in support of Senate Bill 12-001, and addressed concerns raised during testimony.
BILL:SB12-001
TIME: 04:41:27 PM
MOVED:Court
MOTION:Moved to refer Senate Bill 12-001 to the Committee on Appropriations with a favorable recommendation. The motion was withdrawn.
SECONDED:Todd
VOTE
Baumgardner
Casso
Court
Duran
Joshi
Liston
Todd
Coram
Kerr J.
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION:


BILL:SB12-001
TIME: 04:56:53 PM
MOVED:Duran
MOTION:Moved to refer Senate Bill 12-001 to the Committee on Appropriations 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:SB12-001
TIME: 04:57:31 PM
MOVED:Joshi
MOTION:Moved to postpone indefinitely Senate Bill 12-001. The motion passed on a vote of 5-4.
SECONDED:Coram
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



04:58 PM

The committee adjourned.