Date: 01/19/2006

Final
BILL SUMMARY for HB06-1077

HOUSE COMMITTEE ON JUDICIARY

Votes: View--> Action Taken:
Move Amendment L.001 (Attachment P). The chair ru
Move Amendment L.001 (Attachment P). The chair ru		PASS
TIE


04:34 PM -- House Bill 06-1077

The committee recessed.


04:41 PM

The committee reconvened. Representative Garcia, prime sponsor, presented HB 06-1077 to the committee. He discussed some talking points for two sides of the debate about broad form indemnification, and indicated that the bill is good middle ground. Under the bill's provisions, broad form indemnification would be banned (i.e., any clause in a private construction contract that holds a person harmless for acts caused by his or her sole negligence cannot be enforced), although the bill expressly allows for broad form indemnification in certain private contracts. He clarified that the issue before the committee is about allowing broad form indemnification in the state of Colorado, not the merits of pro-rata liability. Committee members were provided with information from The Kyle Group about indemnification and the bill (Attachment M).

The following people testified on the bill:

04:46 PM -- Mr. Michael Williams, representing Denver Metro Building Owners and Managers Association (BOMA), spoke in favor of the bill, saying it is important for the construction industry. He indicated that a number of groups worked together on the bill to forge a compromise on the issue of broad form indemnification. He noted that there is already insurance to address a situation where a general contractor was solely negligent, and in these cases, the general contractor will likely be sued by a number of parties. He responded to questions from the committee.

05:04 PM -- Mr. Randy Sewald, representing the Independent Electrical Contractors Association of Colorado, spoke in opposition to the bill as a compromise, because the burden of responsibility for indemnification would still rest on a subcontractor under its provisions. He answered questions from the committee.

05:11 PM -- Mr. Dave Harper, representing the Association of Builders and Contractors in Colorado, spoke in opposition to the bill and answered questions from the committee. He distributed a position paper on the bill (Attachment N).

05:15 PM -- Mr. R.J. Hicks, representing the Green Companies in Colorado, stated his opposition to the bill for many of the same reasons discussed by other witnesses.

05:16 PM -- Ms. Diane Hills, representing Diamond Excavating, spoke in opposition to the bill. She described a situation involving a subcontractor and broad form indemnification and responded to questions from the committee.

05:26 PM -- Mr. Mark Hamonz, representing ACEC, spoke in opposition to the bill. He distributed a fact sheet on the bill (Attachment O) and indicated that the bill does not go far enough to address problems associated with indemnification in construction contracts. He answered questions from the committee.

05:39 PM -- Ms. Theresa Wernimont, representing Colorado Construction Reform Coalition (CCRC), Colorado Sash and Door, and the American Subcontractors Association of Colorado (ASAC), spoke against the bill. She offered to respond to earlier questions from the committee. She clarified that broad form indemnification is not in law in Colorado but said the concept has been upheld by the courts. She said the bill will continue to allow for broad form indemnification while taking away the rights of subcontractors. Mr. Richard Forsberg from CCRC joined her at the table to respond to questions from the committee.

05:51 PM -- Ms. Jean Toro, representing the American Subcontractors Association, responded to questions from the committee regarding how the bill will make it worse for subcontractors, citing page 2, line 21 through page 3, line 15 of the bill. Ms. Wernimont spoke to other points, as addressed in Attachment M.

05:59 PM -- Mr. Rob Cooney, representing Preferred Painting, spoke in favor of the bill and responded to questions from the committee. He indicated that his insurance rates are minimally affected by broad form indemnification.

06:02 PM -- Mr. Bob Thompson, representing Lowe Enterprises and the National Association of Industrial Office and Parks (NAIOP), spoke in favor of the bill. He explained that the bill will protect his pension clients from exposure to liability.

06:05 PM -- Mr. Jeff D'Agosta, representing the Association of General Contractors in Colorado, spoke in favor of the bill and responded to questions from the committee.

06:10 PM -- Mr. Rick Richter, representing Western Pacific Insurance Network and the Colorado Association of Home Builders, spoke in favor of the bill. He cited construction defect litigation as the primary reason for the rise in insurance rates, not broad form indemnification. He described ways in which risk can be shifted in insurance contracts.

06:18 PM -- Mr. Williams returned to the table to answer questions regarding whether the bill actually bans broad form indemnification and why certain contracts are exempted from the ban.


06:25 PM

The chairman closed the public testimony portion of the hearing, and the committee began considering amendments. Committee members were provide with Amendment L.001 (Attachment P).
BILL:HB06-1077
TIME: 06:26:32 PM
MOVED:Clapp
MOTION:Refer HB 06-1077 to the Committee of the Whole. The motion carried on a vote of 7-4.
SECONDED:Gardner
VOTE
Boyd
Yes
Clapp
Yes
Decker
No
Gardner
Yes
Hefley
No
Jahn
Yes
Judd
No
McGihon
No
Witwer
Yes
Carroll M.
Yes
Carroll T.
Yes
Final YES: 7 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS
BILL:HB06-1077
TIME: 06:26:32 PM
MOVED:Carroll M.
MOTION:Move Amendment L.001 (Attachment P). The chair ruled that the amendment did not fit under the title and pulled the amendment off the table.
SECONDED:Carroll T.
VOTE
Boyd
Clapp
Decker
Gardner
Hefley
Jahn
Judd
McGihon
Witwer
Carroll M.
Carroll T.
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: TIE



06:30 PM

The meeting adjourned.