Date: 03/13/2006

Final
BILL SUMMARY for SB06-014

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes: View--> Action Taken:
Moved to refer Senate Bill 06-014 to the Committee
Representative Butcher offered an amendment to str
Representative Penry offered an amendment to inser		PASS
FAIL
TIE



02:29 PM -- Senate Bill 06-014

Representative White, prime sponsor, presented Senate Bill 06-014. He stated that the bill was recommended by the Legislative Audit Committee after a performance audit of the Department of Regulatory Agencies, Division of Real Estate. He explained that under current law, the Real Estate Commission is required to seek out and make available to brokers a group errors and omissions policy. The bill would remove the exception that if the Real Estate Commission is unable to find a policy at a reasonable rate, brokers are not required to carry errors and omissions insurance for that year. There was committee discussion on the cost of errors and omissions insurance.

02:37 PM -- Becky Richardson, representing the State Auditor's Office responded to questions. She stated that the current concern is, if the commission is unable to obtain a group policy, consumers would be not be protected by the errors and omissions insurance.

02:40 PM -- Jon Goodman, representing Metro Brokers Inc., testified against the bill in part. He explained four problems with the bill: there would be no gain in efficiency; the bill only covers brokers who are licensed, therefore creating a disincentive to become licensed; under the bill there would be no incentive to report claims for fear that rates will increase; and there will be brokers who cannot get coverage and it could drive small brokers out of business.

02:49 PM

There was committee discussion about what recourse the consumer would have if a broker does not have errors and omissions insurance. Mr. Goodman stated that the consumer would have to sue the broker.

03:03 PM -- Sonny Banka, representing the Colorado Association of Realtors, testified in opposition to section one of the bill that deals with the duties of the Real Estate Commission.

03:08 PM -- Debbie Campagnola, representing the Division of Real Estate, testified in support of the bill. At the committee's request, Ms. Campagnola explained the history of mandatory errors and omissions insurance in Colorado and the contracts and carriers that have been and are being used. There was committee discussion about why the bill is necessary. Representative White stated that the bill provides a safety net for consumers if the Real Estate Commission cannot negotiate an insurance plan. The committee discussed whether companies voluntarily cover themselves and how brokers are notified of changes in coverage or law by the Real Estate Commission. Ms. Campagnola explained the various methods the division uses to notify brokers of these changes such as through their quarterly newsletter, and license renewal notices.

03:16 PM

There was committee discussion about who the bill would affect.
BILL:SB06-014
TIME: 03:20:21 PM
MOVED:Penry
MOTION:Representative Penry offered an amendment to insert, "after a thorough, good faith effort," after the word "if" on page 2, line 6, of the bill. Following committee discussion, Representative Penry decided to withdraw his amendment and work with the sponsor on a second reading amendment.
SECONDED:
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: WITHDRAWN


BILL:SB06-014
TIME: 03:26:53 PM
MOVED:Butcher
MOTION:Representative Butcher offered an amendment to strike lines 21-27 on page 3, and strike lines 1-6 on page 4 of the bill. The amendment failed on a 5-8 roll call vote.
SECONDED:Knoedler
VOTE
Balmer
Yes
Borodkin
No
Butcher
Yes
Carroll M.
No
Coleman
No
Knoedler
Yes
Liston
No
McCluskey
No
Paccione
No
Penry
Yes
Welker
Yes
Cerbo
No
Marshall
No
Not Final YES: 5 NO: 8 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:SB06-014
TIME: 03:30:00 PM
MOVED:McCluskey
MOTION:Moved to refer Senate Bill 06-014 to the Committee of the Whole. The motion passed 8-5.
SECONDED:Coleman
VOTE
Balmer
No
Borodkin
Yes
Butcher
No
Carroll M.
Yes
Coleman
Yes
Knoedler
No
Liston
Yes
McCluskey
Yes
Paccione
Yes
Penry
No
Welker
No
Cerbo
Yes
Marshall
Yes
Final YES: 8 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS