Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON BUSINESS, LABOR, ECONOMIC, & WORKFORCE DEVELOPMENT

Date:04/29/2014
ATTENDANCE
Time:11:05 AM to 04:03 PM
Exum
X
Hamner
X
Place:LSB A
Holbert
X
Navarro
X
This Meeting was called to order by
Nordberg
X
Representative Williams
Rosenthal
*
Ryden
X
This Report was prepared by
Szabo
X
Erin Vanderberg
Wright
X
Kraft-Tharp
X
Williams
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
SB14-005
HB14-1389
HB14-1392		Amended, Referred to Appropriations
Amended, Referred to Finance
Amended, Referred to the Committee of the Whole

11:05 AM -- SB 14-005

The committee came to order. A quorum was present. Representative Singer presented Senate Bill 14-005, concerning alternative administrative remedies for the processing of certain wage claims. The bill authorizes the Division of Labor (division) in the Colorado Department of Labor and Employment (CDLE) to establish an administrative process to handle wage claim cases received and requires the division to investigate and adjudicate all wage claim cases up to $7,500 per employee—which represents the maximum sum in nearly all wage claim cases—after January 1, 2015. The bill outlines a series of required notices the division must send in writing and response deadlines for those notices. Upon a determination of a wage violation, the division is required to issue a citation and notice of assessment to the employer. An employer’s failure to respond within 14 days creates a rebuttable presumption of willful intent and makes the employer subject to increased penalties, payable to the employee.

The bill creates a fine of up to $50 per day of a wage violation, to be deposited into the newly created Wage Theft Enforcement Fund, which offsets the division's costs. In addition, employers are required to maintain employee wage records for three years, or be assessed a fine of up to $250 per employee per month. These fines can be waived by the division to encourage employer compliance, and are capped at $7,500. If an employer reimburses its employee for the full amount claimed, and the employee accepts the payment, the employee must dismiss any further action against the employer.

The bill includes an appeals process to be conducted by a hearings officer in the division. An employer’s failure to obey a subpoena issued by a hearings officer is a new misdemeanor offense punishable by a $200 fine, imprisonment in a county jail for up to 60 days, or both. A civil action can be filed in district court to dispute a hearings officer’s decision. The bill requires employers to mail a check to an employee’s last known address within 60 days after the check was due if the employee has not received his or her compensation. Finally, the bill allows for the recovery of reasonable attorney’s fees in actions to recover the minimum wage.




The sponsor responded to questions and commendations from the committee.

The following individuals testified on the bill:

11:13 AM -- Tony Gagliardi, representing the National Federation of Independent Businesses (NFIB), testified in opposition to the bill. He discussed his organization's concern that the bill would penalize employers for minor mistakes and make employers susceptible to unjust fines and penalties. He stated that there are already avenues in place for wage theft claims, including small claims court which requires no attorney. He stated his concern that when a fund is supported by fines, a higher levying of fines is common. He discussed the issue of employment brokers who "lease" employees to agricultural organizations. Mr. Gagliardi stated that he was authorized to testify against this bill on behalf of the Associated Builders and Contractors. The witness responded to questions from the committee.

11:23 AM

The witness continued to respond to questions from the committee about the stakeholder process on the bill, how this bill would affect small business, and the prevalence of the issue among his membership.

11:33 AM

The witness continued to respond to questions from the committee.

11:35 AM -- Susan Schaecher, representing the Colorado Restaurant Association (CRA), testified in opposition to the bill. She discussed the issues the restaurant industry, in particular, faces with its high rate of first-time employees who are more likely than seasoned employees to misunderstand payroll procedures and make wage theft claims. As an attorney, she said she had concerns about the processes under the bill and stated that the bill had inconsistencies. She responded to questions from the committee.

11:45 AM

Ms. Schaecher continued to respond to questions from the committee about CRA membership, current regulations on record keeping, and the potential for class-action lawsuits.

11:55 AM

The witness continued to respond to questions from the committee.

11:56 AM -- Dennis Coombs, representing the City of Longmont as Mayor and himself as a member of the CRA and owner of the Pumphouse Brewery, testified in support of the bill. Mr. Coombs stated that Longmont's city council supported the bill. He discussed the simplicity of the payroll process with automated Point-of-Sale systems. He stated that he had no fear of wage claims because of the ease of electronic payroll records. Mr. Coombs responded to questions from the committee.

12:02 PM -- Dave Lichtenstein, representing Plantiff Employment Lawyers Association (PELA), testified in support of the bill. Mr. Lichtenstein discussed the current system in place for wage theft claims. He said the bill would level the playing field. He explained the proposed administrative process under the bill. He stated that there is nothing in the bill that shifts the burden of proof from the employee to an employer in a wage theft claim. He addressed points made by the opposition.

12:08 PM -- Chelsea Blocklin, representing herself, testified in support of the bill. Ms. Blocklin discussed her personal experience with wage theft at a restaurant in Boulder County.




12:12 PM

Representative Singer distributed and discussed Amendment L.013 (Attachment A).

140429 AttachA.pdf140429 AttachA.pdf
BILL:SB14-005
TIME: 12:13:23 PM
MOVED:Kraft-Tharp
MOTION:Adopt amendment L.013. The motion passed without objection.
SECONDED:Rosenthal
VOTE
Exum
Hamner
Holbert
Navarro
Nordberg
Rosenthal
Ryden
Szabo
Wright
Kraft-Tharp
Williams
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection



12:13 PM

The sponsor made closing remarks.
BILL:SB14-005
TIME: 12:13:50 PM
MOVED:Kraft-Tharp
MOTION:Refer Senate Bill 14-005, as amended, to the Committee on Appropriations. The motion passed on a vote of 6-5.
SECONDED:Hamner
VOTE
Exum
Yes
Hamner
Yes
Holbert
No
Navarro
No
Nordberg
No
Rosenthal
Yes
Ryden
Yes
Szabo
No
Wright
No
Kraft-Tharp
Yes
Williams
Yes
Final YES: 6 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS

12:16 PM

The committee recessed for lunch.

01:39 PM -- HB 14-1389

Representative DelGrosso and Representative Pabon presented House Bill 14-1389, concerning a sales and use tax exemption for information technology equipment that is used in certain data centers. The proposed strike-below amendment to the bill, Amendment L.001 (Attachment B), creates a sales and use tax exemption for information technology equipment used in qualified data centers. The sales tax exemption will be available starting July 1, 2015, and would apply to computers, data storage equipment, cooling systems, power infrastructure, and racking systems. Qualified data centers must be used primarily to house information technology equipment and be at least 25,000 square feet in size. To qualify for the exemption, new data centers must invest at least $30 million over five years and refurbished data centers must invest at least $15 million over two years. The investment amounts are for the total construction costs of the data center, including the building and structure, cooling equipment, and information technology equipment. Data centers must be certified by the Colorado Office of Economic Development and International Trade (OEDIT) before they can receive the exemption. Existing data centers may qualify for the exemption from investments made between June 30, 2010, and July 1, 2015, and refurbished data centers would qualify because of investments made between June 30, 2013, and July 1, 2015. The OEDIT may certify these existing facilities, which would exempt the purchase of information technology equipment after July 1, 2015, from sales and use taxes. However, these facilities would not qualify for a refund for taxes paid prior to July 1, 2015.

140429 AttachB.pdf140429 AttachB.pdf


The sponsors discussed similar incentives in 17 other states, how the strike-below amendment narrows the scope of the original bill, and responded to questions from the committee. The sponsors continued to respond to questions about alternative energy requirements, state versus local benefits, and return on investment under the bill.

The following individuals testified on the bill:

02:01 PM -- Bill Mueldener, representing the Colorado Technology Association (CTA), testified in support of the bill. Mr. Mueldener distributed a handout to committee members (Attachment C). He stated that Colorado had an ideal climate from a data center perspective, but needed tax incentives to be competitive with other states. He stated that data centers are a driver of the technology industry. Mr. Mueldener responded to questions from the committee.

140429 AttachC.pdf140429 AttachC.pdf

02:12 PM -- Erik Mitisek, representing CTA, testified in support of the bill. Mr. Mitisek discussed the technology developments in the state and explained how the bill would help the state continue to grow its technology industry. He responded to questions from the committee.

02:20 PM -- Tammy Fields, representing the Colorado Springs Regional Business Alliance, testified in support of the bill. She discussed how the state's low risk of natural disasters, semi-arid climate, and favorable utility rates make it a prime candidate for data centers; however, Colorado is not winning contracts because it cannot compete with better tax incentives in other states. She stated that this bill would drive investment dollars to the state's economy.

02:26 PM -- Bill Cherrier, representing Colorado Springs Utilities, testified in support of the bill. Mr. Cherrier stated that data centers can be located anywhere; development sites are selected based on costs. He stated that Colorado's energy rates are affordable and data centers represent a stable load factor for utility companies.

02:33 PM -- Ali Mickelson, representing the Colorado Fiscal Institute, testified in opposition to the bill. She discussed the number of tax credits the General Assembly has passed in 2014. She stated that the bill represents a limited special-interest tax credit. Ms. Mickelson responded to questions from the committee.


02:39 PM

The sponsors discussed the strike-below amendment and Amendment L.002 (Attachment D).

140429 AttachD.pdf140429 AttachD.pdf
BILL:HB14-1389
TIME: 02:39:58 PM
MOVED:Kraft-Tharp
MOTION:Adopt amendment L.002. The motion passed without objection.
SECONDED:Holbert
VOTE
Exum
Hamner
Holbert
Navarro
Nordberg
Rosenthal
Ryden
Szabo
Wright
Kraft-Tharp
Williams
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection
BILL:HB14-1389
TIME: 02:41:55 PM
MOVED:Kraft-Tharp
MOTION:Adopt amendment L.001. The motion passed without objection.
SECONDED:Holbert
VOTE
Exum
Hamner
Holbert
Navarro
Nordberg
Rosenthal
Ryden
Szabo
Wright
Kraft-Tharp
Williams
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:HB14-1389
TIME: 02:42:43 PM
MOVED:Kraft-Tharp
MOTION:Refer House Bill 14-1389, as amended, to the Committee on Finance. The motion passed on a vote of 9-2.
SECONDED:Williams
VOTE
Exum
Yes
Hamner
No
Holbert
Yes
Navarro
Yes
Nordberg
Yes
Rosenthal
No
Ryden
Yes
Szabo
Yes
Wright
Yes
Kraft-Tharp
Yes
Williams
Yes
Final YES: 9 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS

02:49 PM -- HB 14-1392

Representative Lawrence and Representative Becker presented House Bill 14-1392, concerning a prohibition on the use of simulated gambling devices. An internet sweepstakes café is an electronic machine, computer terminal, or similar device that simulates gambling conditions or gambling results through any one of a number of commercial pretexts identified in this bill. The bill prohibits the operation of internet sweepstakes cafés, and creates the new class 3 misdemeanor crime of unlawful offering of a simulated gambling device.

Unlawful offering of a simulated gaming device occurs when a person offers, facilitates, contracts for, or otherwise makes available any simulated gambling device for money or other consideration, in which use of the device, admission to a café, or a related purchase creates the expectation of a prize. District attorneys and the Attorney General's Office are empowered to prosecute cases and obtain injunctive relief and treble damages. In addition, for one year after a violation, the bill provides a private right of action if the property interest of a gaming licensee has been injured as a result of unlawful offering of a simulated gambling device. The bill does not apply to: gaming activities specifically authorized by Colorado law; the purchase of recognized financial instruments; existing legal requirements for sweepstakes; or the operations of telecommunications providers in the normal course of business. The following individuals testified on the bill:

02:59 PM -- Dan Corsentino, representing Cyber GT Systems, testified in opposition to the bill. Mr. Corsentino stated that the bill represents an express prohibition on sweepstakes without outside validation that sweepstakes represent gambling. He stated that this issue needs to be studied before it is rushed through the legislative process. Mr. Corsentino responded to questions from the committee. Representative Becker discussed the state of the industry and the funding beneficiaries of the state's Limited Gaming Fund.

03:13 PM -- Nick Gonzales, representing You Bux, testified in opposition to the bill. Mr. Gonzales discussed how sweepstakes do not include two of the three definitions of gambling: chance, because these are games of skill with predetermined winners; nor consideration, because you can play for free. Mr. Gonzales responded to questions from the committee about his business model.

03:23 PM

The committee continued to ask the witness about how the games in internet sweepstakes cafes work.

03:33 PM

Questions from the committee continued about sweepstakes rules. Mr. Gonzales stated that 80 percent of these sweepstakes games are web-based and will be continued to be played with or without his internet cafe because people enjoy sweepstakes games. Representative Becker offered an explanation of the three elements of gambling and discussed the grey areas in statute around these internet sweepstakes cafes.

03:42 PM -- Ron Kammerzell, Department of Revenue, testified in support of the bill. Mr. Kammerzell stated that the bill would clarify the ambiguities in the gaming law. He discussed the negative impact internet sweepstakes cafes have on the state. He stated his concern that the passage of this bill would encourage proliferation of these internet sweepstakes cafe.

03:49 PM -- Matthew Durkin, representing the Attorney General's Office and the Colorado District Attorney's Council, testified in support of the bill.

03:49 PM -- Peg Ackerman, representing the County Sheriffs of Colorado, testified in support of the bill. She stated that her association had voted unanimously to support the bill.

03:50 PM -- Mark Grueskin, representing the Colorado Gaming Association, testified in support of the bill. He distributed a handout to the committee (Attachment E). Mr. Grueskin responded to questions from the committee.

140429 AttachE.pdf140429 AttachE.pdf

03:55 PM

The sponsors distributed and discussed Amendments L.002 and L.003 (Attachments F and G, respectively).
140429 AttachF.pdf140429 AttachF.pdf140429 AttachG.pdf140429 AttachG.pdf




03:56 PM -- Duane Gall, Office of Legislative Legal Services, came to the table to answer questions from the committee about the amendments.
BILL:HB14-1392
TIME: 03:58:52 PM
MOVED:Holbert
MOTION:Adopt amendment L.002. The motion passed without objection.
SECONDED:Szabo
VOTE
Exum
Hamner
Holbert
Navarro
Nordberg
Rosenthal
Ryden
Szabo
Wright
Kraft-Tharp
Williams
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION:
BILL:HB14-1392
TIME: 03:59:50 PM
MOVED:Kraft-Tharp
MOTION:Adopt amendment L.003. The motion passed on a vote of 9-2.
SECONDED:Holbert
VOTE
Exum
Yes
Hamner
Yes
Holbert
No
Navarro
No
Nordberg
Yes
Rosenthal
Yes
Ryden
Yes
Szabo
Yes
Wright
Yes
Kraft-Tharp
Yes
Williams
Yes
YES: 9 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS



04:01 PM

The sponsors made closing remarks. Representative Becker stated that internet sweepstakes cafes are unregulated, untaxed, and erode the legal gaming system in the state.
BILL:HB14-1392
TIME: 04:01:31 PM
MOVED:Kraft-Tharp
MOTION:Refer House Bill 14-1392, as amended, to the Committee of the Whole. The motion passed on a vote of 10-1.
SECONDED:Hamner
VOTE
Exum
Yes
Hamner
Yes
Holbert
Yes
Navarro
No
Nordberg
Yes
Rosenthal
Yes
Ryden
Yes
Szabo
Yes
Wright
Yes
Kraft-Tharp
Yes
Williams
Yes
Final YES: 10 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS

04:03 PM

The committee adjourned.