Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Date:02/15/2006
ATTENDANCE
Time:10:49 AM to 01:30 AM
Balmer
*
Borodkin
*
Place:HCR 0107
Butcher
X
Carroll M.
X
This Meeting was called to order by
Coleman
X
Representative Marshall
Knoedler
X
Liston
X
This Report was prepared by
McCluskey
*
Christie Lee
Paccione
X
Penry
*
Welker
X
Cerbo
X
Marshall
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
HB06-1161
HB06-1264
HB06-1199
HB06-1178		Amended, Referred to Finance
Amended, Referred to the Committee of the Whole
Referred to the Committee of the Whole
Amended, Referred to Appropriations


10:49 AM -- House Bill 06-1161

Representatives Vigil and Massey, prime sponsors, explained that House Bill 1161 would establish regulatory requirements for mortgage brokers. The bill would define the responsibilities and requirements of both the Department of Regulatory Agencies (DORA), Division of Real Estate, and mortgage brokers. Additionally, the bill creates the Mortgage Broker Registration Cash Fund to collect fee revenue. Representatives Vigil and Massey responded to questions from the committee.

10:57 AM -- Chris Holbert, representing the Colorado Mortgage Lenders Association, testified in opposition to the bill. He stated that regulation of mortgage brokers would cause customer service issues and mortgage fraud committed by loan originators. Mr. Holbert added that some fraud harms consumers, but all fraud hurts mortgage lenders. He feels the bill does not address the customer service or fraud issues.

11:04 AM -- Brian Tobias, representing DORA, testified in support of the bill. He talked about the sunrise review that was completed on mortgage brokers last year. A copy of the 2005 sunrise review that can be found at: http://www.dora.state.co.us/opr/archive/2005MortgageBrokersReport.pdf. Mr. Tobias went through the recommendations in the sunrise review and mentioned that the review did recommend the regulation of mortgage brokers. Mr. Tobias responded to questions pertaining to out of state lenders. Mr. Tobias stated that mortgage brokers, not mortgage lenders, were looked at in the sunrise review. Mr. Tobias was asked if there are currently any legal barriers to entry into the mortgage broker profession. Mr. Tobias stated there are none. The committee asked how many complaints are filed are against mortgage brokers compared to the number of mortgage brokers there are in the state. Representative Vigil stated that there is no data on how many mortgage brokers there are in Colorado.



11:21 AM -- Bart Bartholomew, representing the Colorado Association of Mortgage Brokers, testified in support of the bill. He stated that in Colorado, complaints against mortgage brokers have tripled. Mr. Bartholomew responded to an earlier question about what other states have done. He stated that Utah was ranked in the top five for mortgage fraud when they passed legislation including background checks. Following the passage of the legislation, Utah dropped in rank to 16.

11:25 AM -- Gary Broaddus, Colorado Association of Mortgage Brokers, testified in support of the bill. He stated that the problem is that there is no law in Colorado that prohibits a convicted criminal from working as a mortgage broker. He gave some examples of mortgage brokers who immediately returned to their job after being convicted of crimes.

11:29 AM -- Sunny Banka, representing the Colorado Association of Realtors, testified in support of the bill. She stated that the lack of regulation of mortgage brokers has been a problem for a long time. Ms. Banka discussed the personal information a person must give a mortgage broker, and the problems that can occur if that broker is a convicted criminal. She stated that if mortgage brokers are not regulated, it will remain an open door for identification theft.

11:34 AM

Ms. Banka and Representative Vigil responded to a question from the committee about why the transaction moves forward even though there is a bad feeling about the mortgage broker.

11:38 AM -- Jim Spray, mortgage broker and banker in Colorado, representing the Colorado Association of Mortgage Borkers, testified in support of the bill. He stated the backbone of the bill is the fingerprint check.



11:39 AM -- Terry Jones, representing a group of Real Estate Lenders in Colorado, testified on the bill. He stated a concern the group has is there is already financial responsibility in their industry under the Federal Housing Administration. Therefore, he supports the exemption in amendment L.004 that exempts FHA approved lenders (Attachment A). There was committee discussion about the $62,500 bond being too high. Mr. Jones agreed. Representatives Vigil and Massey clarified where the number came from and stated it could be lowered to $25,000.
BILL:HB06-1161
TIME: 11:53:22 AM
MOVED:Paccione
MOTION:Moved amendment L.004. [An amendment to L.004 was offered and passed- see following vote sheet.] (Attachment A). The motion passed without objection.
SECONDED:Coleman
VOTE
Balmer
Borodkin
Butcher
Carroll M.
Coleman
Knoedler
Liston
McCluskey
Paccione
Penry
Welker
Cerbo
Marshall
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

BILL:HB06-1161
TIME: 11:55:08 AM
MOVED:McCluskey
MOTION:Move to strike the words "sixty-two thousand" and substitute the words "twenty-five thousand" on page 3, line 2, of amendment L.004. The motion passed on a 9-4 vote.
SECONDED:Coleman
VOTE
Balmer
Yes
Borodkin
Yes
Butcher
No
Carroll M.
No
Coleman
Yes
Knoedler
Yes
Liston
No
McCluskey
Yes
Paccione
Yes
Penry
Yes
Welker
Yes
Cerbo
Yes
Marshall
No
Not Final YES: 9 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS


11:59 AM

Representative M. Carroll discussed a possible amendment to page 3, lines 18 to 22, of amendment L.004. The amendment would add the tracking of referrals that are made to other complaint agencies. There was committee discussion on the implementation and cost of the proposed amendment. Representatives Vigil, Massey, and M. Carroll decided to work on the amendment together at a later time. Representative M. Carroll withdrew her amendment.
BILL:HB06-1161
TIME: 12:02:17 PM
MOVED:Coleman
MOTION:Moved to refer House Bill 06-1161, as amended, to the Committee on Finance. The motion passed 12-1.
SECONDED:Paccione
VOTE
Balmer
No
Borodkin
Yes
Butcher
Yes
Carroll M.
Yes
Coleman
Yes
Knoedler
Yes
Liston
Yes
McCluskey
Yes
Paccione
Yes
Penry
Yes
Welker
Yes
Cerbo
Yes
Marshall
Yes
Final YES: 12 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS

12:07 PM -- House Bill 06-1264

Representative Hefley, prime sponsor, presented House Bill 1264 that would make changes to professions and occupations currently regulated by the Department of Regulatory Agencies (DORA), Division of Registrations. She distributed two amendments, L.002 (Attachment B) and L.003 (Attachment C).

12:15 PM -- Rose McCool, representing the Division of Registrations, DORA, testified in support of the bill. She distributed a handout (Attachment D). She addressed the portion of the bill that removes the requirement that the executive administrator of the Board of Nursing be a professional nurse. She stated the change would open the position up to a fair and competitive process.

12:20 PM

Greg Romberg, representing the Colorado Press and Broadcasters Association, spoke about the bill and amendment L.003. He stated that the association is reluctant about the statute as it is, but the language in House Bill 1264 related to the confidentiality of letters of concern, but that it is better than what is in other sections of statute. Mr. Romberg discussed amendment L.003, and encouraged the committee to adopt it.



12:27 PM -- Paula Sterns, Executive Director of the Colorado Nurses Association, testified against the provision in the bill that would remove the requirement that the executive administrator of the Board of Nursing be a professional nurse. She stated only 3 states do not have a professional nurse as the executive administrator of their nursing board. Representative Hefley clarified that while 3 states have an executive administrator who is not a nurse, 17 states allow the option to hire an executive administrator who is not a nurse, which is what HB 1264 seeks to do.

12:34 PM -- Susan Miller, the Program Director of the Colorado State Board of Medical Examiners, DORA, testified in support of the provision in the bill that would remove the requirement that the executive administrator of the Board of Nursing be a professional nurse. She stated that the position of this person is not to know medicine or set policy, but to manage the program. She responded to Ms. Sterns' previous comments and responded to committee questions.
BILL:HB06-1264
TIME: 12:41:23 PM
MOVED:Marshall
MOTION:Moved amendment L.002 (Attachment B). The amendment was at the request of the Secretary of State. It would remove the communication by e-mail provision in the bill because the system is not technically set up to do so at this time. The motion passed without objection.
SECONDED:McCluskey
VOTE
Balmer
Borodkin
Butcher
Carroll M.
Coleman
Knoedler
Liston
McCluskey
Paccione
Penry
Welker
Cerbo
Marshall
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:HB06-1264
TIME: 12:42:01 PM
MOVED:Paccione
MOTION:Moved amendment L.003 (Attachment C). The motion passed without objection.
SECONDED:Coleman
VOTE
Balmer
Borodkin
Butcher
Carroll M.
Coleman
Knoedler
Liston
McCluskey
Paccione
Penry
Welker
Cerbo
Marshall
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection
BILL:HB06-1264
TIME: 12:42:18 PM
MOVED:Coleman
MOTION:Moved amendment L.001 (Attachment E). The amendment would remove the provision in the bill that would remove the requirement that the executive administrator of the Board of Nursing be a professional nurse. The motion failed on a 6-7 vote.
SECONDED:Paccione
VOTE
Balmer
Yes
Borodkin
Yes
Butcher
No
Carroll M.
Yes
Coleman
Yes
Knoedler
No
Liston
No
McCluskey
No
Paccione
Yes
Penry
Yes
Welker
No
Cerbo
No
Marshall
No
Not Final YES: 6 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL



BILL:HB06-1264
TIME: 12:49:43 PM
MOVED:Coleman
MOTION:Moved to refer House Bill 06-1264, as amended, to the Committee of the Whole. The motion passed 12-1.
SECONDED:Butcher
VOTE
Balmer
Yes
Borodkin
Yes
Butcher
Yes
Carroll M.
No
Coleman
Yes
Knoedler
Yes
Liston
Yes
McCluskey
Yes
Paccione
Yes
Penry
Yes
Welker
Yes
Cerbo
Yes
Marshall
Yes
Final YES: 12 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS


12:50 PM -- House Bill 06-1199

Representative Liston, presented House Bill 1199. He stated that the bill would allow a new state employee to start at a higher level within the appropriate pay grade, in accordance with procedures adopted by the state personnel director. Under current law, the initial hiring must be made at the minimum rate in the pay grade, unless recruiting difficulty or other unusual conditions are shown.
BILL:HB06-1199
TIME: 12:54:36 PM
MOVED:Liston
MOTION:Moved to refer House Bill 06-1199 to the Committee of the Whole. The motion passed 11-0.
SECONDED: Marshall
VOTE
Balmer
Yes
Borodkin
Yes
Butcher
Excused
Carroll M.
Yes
Coleman
Excused
Knoedler
Yes
Liston
Yes
McCluskey
Yes
Paccione
Yes
Penry
Yes
Welker
Yes
Cerbo
Yes
Marshall
Yes
Final YES: 11 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: PASS

12:55 PM -- House Bill 06-1178

Representative Butcher, prime sponsor, presented House Bill 1178. The bill would extend the Motorist Insurance Identification Database (MIIDB) Program until July 1, 2007, and moves it from a private contractor to the Department of Revenue (DOR). It would require the DOR to conduct a statistical analysis to determine the correlation between the database and the number of uninsured drivers in the state. She distributed amendment L.002 (Attachment F).

01:00 PM -- Joan Vecchi, representing the Department of Revenue, testified in favor of the bill. She stated that the intent is to replicate the database as it stands now within DOR. The department would like to eventually share the data with law enforcement and county clerks. Representative Penry brought up the findings and recommendations in the Department of Regulatory Agencies sunset report.



01:07 PM

Ms. Vecchi responded to some questions from the committee regarding the accuracy and usefulness of the program. Representative Carroll asked what enforcement mechanisms the department would have against insurance companies that are non-compliant. The committee asked what the bill would do to respond to the numerous complaints that have been received about the program.
BILL:HB06-1178
TIME: 01:13:25 PM
MOVED:Butcher
MOTION:Moved amendment L.002 (Attachment F). [A substitute amendment was offered and passed- see next vote sheet.]
SECONDED:Marshall
VOTE
Balmer
Borodkin
Butcher
Carroll M.
Coleman
Knoedler
Liston
McCluskey
Paccione
Penry
Welker
Cerbo
Marshall
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: TIE


BILL:HB06-1178
TIME: 01:14:58 PM
MOVED:Penry
MOTION:Representative Penry made a substitute amendment to repeal the program as of July 1, 2006, when the program's contract expires, rather than sunsetting the program and waiting out the year wrap-up period provided in statute. Bruce Harrelson, Department of Regulatory Agencies, responded to the committee's question of whether the year wrap up period is necessary in this case, or if the program could simply terminate on July 1, 2006. The substitute motion passed on a 7-6 vote.
SECONDED:Knoedler
VOTE
Balmer
Yes
Borodkin
No
Butcher
Yes
Carroll M.
No
Coleman
No
Knoedler
Yes
Liston
No
McCluskey
Yes
Paccione
Yes
Penry
Yes
Welker
Yes
Cerbo
No
Marshall
No
Not Final YES: 7 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: PASS
BILL:HB06-1178
TIME: 01:28:01 PM
MOVED:Penry
MOTION:Moved to refer House Bill 06-1178, as amended, to the Committee on Appropriations. The motion passed 11-2.
SECONDED:Paccione
VOTE
Balmer
Yes
Borodkin
Yes
Butcher
Yes
Carroll M.
Yes
Coleman
No
Knoedler
Yes
Liston
Yes
McCluskey
Yes
Paccione
Yes
Penry
Yes
Welker
Yes
Cerbo
Yes
Marshall
No
Final YES: 11 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS

01:30 AM

The committee adjourned.