Bill Summary for Bill Number SB06-040

Date: 03/20/2006

Final
BILL SUMMARY for SB06-040

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes: View-->	Action Taken:
Moved amendment L.007 (Attachment A). The motion Moved amendment L.008 (Attachment B). The motion Moved to refer Senate Bill 06-040, as amended, to	PASS PASS TIE

01:41 PM -- Senate Bill 06-040

Representative Buescher, prime sponsor, returned to the committee to continue presenting Senate Bill 06-040, concerning annual renewal contracts. The bill was previously heard on Wednesday, March 15. The bill requires contracts that automatically renew and bill to a credit card to clearly and conspicuously disclose:

the material terms of the offer;
the automatic renewal provisions; and
how to cancel the contract.

A violation of the bill would be a class 2 petty offense, punishable by a fine up to $250. Representative Buescher added that a violation of the bill would also constitute a deceptive trade practice under the Colorado Consumer Protection Act, punishable by a civil penalty of up to $2,000 per violation.

Representative Buescher discussed amendment L.007 that would exempt insurance companies that sell or offer insurance contracts from the requirements in the bill (Attachment A).

01:49 PM -- David Emerick, representing the Colorado Financial Services Association (CFSA), testified in opposition to the bill. He listed a number of concerns with the bill including:

The legislation is unnecessary. He stated that he could not find any complaints with the Better Business Bureau or the Attorney General's Office about automatic renewal contracts;
No other state has passed any similar legislation;
There are already a number of ways to address consumer problems with automatic renewal contracts; and
When a financial institution is found guilty of a criminal offense, it must disclose that it has been found guilty of a criminal offense to every state's regulatory agency. He added that this can put new licenses in jeopardy for companies.

Mr. Emerick spoke about the full exemption for insurance companies in amendment L.007. He stated that he would like a full exemption for financial institutions so they can have an even playing field with the insurance companies. Mr. Emerick responded to questions from the committee about the types of products that financial institutions sell that would be in conflict with insurance companies.

01:55 PM

There was committee discussion about whether the bill was duplicative of existing laws. Representative Buescher explained that currently there is a cancellation process in statute, but many consumers do not know it exists and are unaware they can cancel the contract. The bill would give those consumers notice that they have the right to cancel. Mr. Emerick concluded his testimony stating that he feels the bill is duplicative, unnecessary, and burdensome.


BILL:	SB06-040
TIME:	02:04:36 PM
MOVED:	Marshall
MOTION:	Moved amendment L.007 (Attachment A). The motion passed 8-4.
SECONDED:	Coleman
		VOTE
	Balmer	Yes
	Borodkin	Yes
	Butcher	Yes
	Carroll M.	Yes
	Coleman	Yes
	Knoedler	No
	Liston	No
	McCluskey	No
	Paccione	Yes
	Penry	Excused
	Welker	No
	Cerbo	Yes
	Marshall	Yes
Not Final YES: 8 NO: 4 EXC: 1 ABS: 0 FINAL ACTION: PASS


BILL:	SB06-040
TIME:	02:10:17 PM
MOVED:	Marshall
MOTION:	Moved amendment L.008 (Attachment B). The motion passed 7-5.
SECONDED:	Paccione
		VOTE
	Balmer	No
	Borodkin	Yes
	Butcher	Yes
	Carroll M.	Yes
	Coleman	Yes
	Knoedler	No
	Liston	No
	McCluskey	No
	Paccione	Yes
	Penry	Excused
	Welker	No
	Cerbo	Yes
	Marshall	Yes
Not Final YES: 7 NO: 5 EXC: 1 ABS: 0 FINAL ACTION: PASS


BILL:	SB06-040
TIME:	02:25:19 PM
MOVED:	Paccione
MOTION:	Moved to refer Senate Bill 06-040, as amended, to the Committee of the Whole. The motion failed on a tie vote. Representative Marshall took Senate Bill 06-040 off the table.
SECONDED:	Carroll M.
		VOTE
	Balmer	No
	Borodkin	Yes
	Butcher	Yes
	Carroll M.	Yes
	Coleman	No
	Knoedler	No
	Liston	No
	McCluskey	No
	Paccione	Yes
	Penry	Excused
	Welker	No
	Cerbo	Yes
	Marshall	Yes
Not Final YES: 6 NO: 6 EXC: 1 ABS: 0 FINAL ACTION: TIE