House Committee on Transportation & Energy (03/22/2006)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON TRANSPORTATION & ENERGY

Date:	03/22/2006	ATTENDANCE

Time:	01:36 PM to 03:04 PM	Borodkin	E*
		Green	X
Place:	HCR 0112	Hefley	E*
		Knoedler	E*
This Meeting was called to order by		Larson	X
	Representative Pommer	Lindstrom	X
		Ragsdale	X
This Report was prepared by		Sullivan	X
	Jamila Rockette	Welker	X
		McFadyen	X
		Pommer	E*
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
SB06-163 SB06-083 SB06-013 SB06-021		Amended, Referred to the Committee of the Whole Amended, Referred to the Committee of the Whole Referred to the Committee of the Whole Amended, Referred to the Committee of the Whole

01:36 PM -- Senate Bill 06-163

Representative Jahn, prime sponsor, presented Senate Bill 06-163 which sets the date on which a lien on a motor vehicle is perfected to be the date on which it is filed with the county clerk and recorder.

01:39 PM

Tim Jackson, representing the Colorado Auto Dealers Association (CADA), spoke in support of the bill. Mr. Jackson explained that the bill is changing current law by perfecting a lien when a county clerk office receives the title application instead of when the office processes the title application. He stated that auto dealers and lenders have lost millions of dollars by what he calls a "lien perfecting loophole." Mr. Jackson stated that the "loophole" allows an individual to purchase a vehicle or accrue debt before filing bankruptcy. He explained that under federal bankruptcy law, an auto dealer has 30 days to have a lien perfected, and that while county clerks process most title applications within 48 hours, the process can sometimes take up to 6 weeks. Mr. Jackson explained that auto dealers have an agreement with lenders to have liens perfected in a timely manner, and if the lien is not perfected in a timely manner the lender has full recourse against the dealer. In some cases, if the lien is not perfected in due time, the customer is able to keep the vehicle, the bankruptcy trustee has recourse against the lender, and the lender has recourse against the dealer.

01:52 PM

Lee Payne, representing Planet Honda and Planet Hyundai, spoke in support of the bill. Mr. Payne stated that the two dealerships currently have five cases where the dealerships must pay the lenders approximately $125,000 because the liens were not perfected in a timely manner. He explained that in some cases, due to errors in the paperwork, it is the dealer who is at fault for not having the lien perfected in a timely manner, but in other cases the lien is not perfected for circumstances out of the dealer's control.

01:57 PM

Matt Tynan, representing Tynan's Nissan, Inc., Tynan's Fort Collins, Inc., and Tynan's Volkswagen, Inc., spoke in support of the bill. Mr. Tynan discussed a case at one of his dealerships where an individual purchased a car and filed for bankruptcy before the lien was perfected. Mr. Tynan stated that it is the bankruptcy trustees who utilize the "lien perfecting loophole." He explained that the trustees will try to marshal assets out of the bankruptcy estate by selling the vehicle and making the lender an unsecured creditor in the bankruptcy proceedings. The lender will then seek retribution from the dealer for not having the lien perfected. He stated that most people do not understand that in those circumstances it is the dealership that is out the car and the money.

02:01 PM

Pete Kirchhof, representing the Colorado Credit Union League (CCUL), spoke in support of the bill. Mr. Kirchhof stated that current law already allows liens to be perfected for personal and real property at the time of application. He added that other states have laws allowing motor vehicle liens to be perfected at the time of the title application. He stated that over the past year, credit unions in the CCUL have lost over $500,000, not including legal fees, to liens not being perfected in a timely manner.

02:03 PM

Jennifer Salzsman, representing the Colorado Bankers Association, spoke in support of the bill. Ms. Salzsman stated that the bill provides consistency in perfecting the security interest in a motor vehicle in the same way security interest is perfected in other personal property.

02:03 PM

Barbara Walker, Independent Bankers of Colorado (IBC), stated IBC's support of the bill.

02:04 PM

Mike Feeley, an attorney and representing CADA, spoke in support of the bill. Mr. Feeley clarified the term "perfection" for the committee, stating that the term means the time at which the security interest attaches and is noticed to the rest of the world that a party has a security interest in that specific item of property.


BILL:	SB06-163
TIME:	02:11:06 PM
MOVED:	Ragsdale
MOTION:	Moved amendment L.003 (Attachment A). The motion passed without objection.
SECONDED:	Sullivan
		VOTE
	Borodkin	Excused
	Green
	Hefley	Excused
	Knoedler
	Larson
	Lindstrom
	Ragsdale
	Sullivan
	Welker
	McFadyen
	Pommer
Not Final YES: 0 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	SB06-163
TIME:	02:12:17 PM
MOVED:	Ragsdale
MOTION:	Moved to refer Senate Bill 06-163, as amended, to the Committee of the Whole. The motion passed 9-0.
SECONDED:	Knoedler
		VOTE
	Borodkin	Yes
	Green	Yes
	Hefley	Excused
	Knoedler	Yes
	Larson	Yes
	Lindstrom	Yes
	Ragsdale	Yes
	Sullivan	Yes
	Welker	Yes
	McFadyen	Excused
	Pommer	Yes
Final YES: 9 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: PASS

02:13 PM -- Senate Bill 06-083

Representative Ragsdale, prime sponsor, presented Senate Bill 06-083 which authorizes a parent, stepparent, grandparent, guardian, or foster parent who signs a minor's instruction permit, but does not have a driver's license, to appoint an alternate permit supervisor. The bill requires the alternate permit supervisor to be at least 21 years of age and a licensed driver.

Representative Ragsdale requested the amendments be moved before the public testimony.


BILL:	SB06-083
TIME:	02:15:18 PM
MOVED:	Ragsdale
MOTION:	Moved amendment L.002 (Attachment B). The motion passed without objection.
SECONDED:	Pommer
		VOTE
	Borodkin	Excused
	Green
	Hefley	Excused
	Knoedler
	Larson
	Lindstrom
	Ragsdale
	Sullivan
	Welker
	McFadyen
	Pommer
Not Final YES: 0 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	SB06-083
TIME:	02:16:00 PM
MOVED:	Ragsdale
MOTION:	Moved amendment L.003 (Attachment C). The motion passed without objection.
SECONDED:	Sullivan
		VOTE
	Borodkin	Excused
	Green
	Hefley	Excused
	Knoedler
	Larson
	Lindstrom
	Ragsdale
	Sullivan
	Welker
	McFadyen
	Pommer
Not Final YES: 0 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: Pass Without Objection

02:16 PM

Roni White, Director of Operations for the Department of Revenue (DOR), provided information for the committee. Ms. White explained amendments L.003 and L.004.


BILL:	SB06-083
TIME:	02:17:10 PM
MOVED:	Ragsdale
MOTION:	Moved amendment L.004 (Attachment D). The motion passed without objection.
SECONDED:	Pommer
		VOTE
	Borodkin	Excused
	Green
	Hefley	Excused
	Knoedler
	Larson
	Lindstrom
	Ragsdale
	Sullivan
	Welker
	McFadyen
	Pommer
Not Final YES: 0 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: Pass Without Objection

02:18 PM

Michael Williams, representing Bikepac of Colorado, spoke in support of the bill. Mr. Williams stated that under current law, an individual can take a motorcycle operator safety training program as soon as they receive a driving instruction permit, but until they are 16 years of age they must be supervised by a licensed instructor, they may not be supervised by a parent or legal guardian. Mr. Williams explained that amendment L.004 will allow parents to supervise their children who are learning to operate a motorcycle under an instruction permit.


BILL:	SB06-083
TIME:	02:20:45 PM
MOVED:	Ragsdale
MOTION:	Moved to refer Senate Bill 06-083, as amended, to the Committee of the Whole. The motion passed 9-0.
SECONDED:	Knoedler
		VOTE
	Borodkin	Yes
	Green	Excused
	Hefley	Yes
	Knoedler	Yes
	Larson	Yes
	Lindstrom	Yes
	Ragsdale	Yes
	Sullivan	Yes
	Welker	Yes
	McFadyen	Excused
	Pommer	Yes
Final YES: 9 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: PASS

02:21 PM

The committee took a recess.

02:26 PM

The committee came back to order.

02:27 PM -- Senate Bill 06-013

Representative Benefield, prime sponsor, presented Senate Bill 06-013 which extends the $0.60 surcharge on driver's licenses that covers the cost of security features. Responding to questions from members, Representative Benefield explained that part of the reason the Division of Motor Vehicles (DMV) would like to continue the $0.60 surcharge is to cover the costs of the mandates in the federal Real ID Act which was signed into law May of 2005 and goes into effect May of 2008. The Real ID Act requires states to have specific safety features on their state issued driver's licenses and identification cards.

02:30 PM

Kirstie Nixon, Chief of Investigations for the DMV of the Department of Revenue (DOR), spoke in support of the bill. Ms. Nixon discussed how the $0.60 surcharge supported the Identity Fraud Working Group that was created in 2000 to address issues of identity theft and examine security features on driver's licenses and identification cards. She said the working group was composed of individuals from law enforcement, the banking and retail industry, and motor vehicle members. The group made recommendations to have security features such as requiring proof of lawful presence in Colorado, ultraviolet features, microprinting, and biometrics such as digital fingerprints and image retrieval imprinted on or embedded in the cards. The group also made plans to enter into agreements with the Immigration and Naturalization Services and the Social Security Administration to electronically verify lawful presence in the U.S. and social security numbers.

Responding to questions from members, Ms. Nixon stated that the $0.60 surcharge is enough to cover the security costs and features.

02:34 PM

Cindy Stetson, Deputy State Auditor for the Office of the State Auditor (OSA), answered questions for the committee and discussed the Real ID Act. Ms. Stetson explained that the OSA was asked to look at the effectiveness of the safety features of Colorado's driver's licenses and identification cards. Ms. Stetson stated that the OSA will conduct the audit once federal rules and regulations based on the Real ID Act are developed.


BILL:	SB06-013
TIME:	02:37:00 PM
MOVED:	Larson
MOTION:	Moved to refer Senate Bill 06-013 to the Committee of the Whole. The motion passed 10-0.
SECONDED:	Lindstrom
		VOTE
	Borodkin	Yes
	Green	Yes
	Hefley	Yes
	Knoedler	Yes
	Larson	Yes
	Lindstrom	Yes
	Ragsdale	Yes
	Sullivan	Yes
	Welker	Yes
	McFadyen	Excused
	Pommer	Yes
Final YES: 10 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

02:38 PM -- Senate Bill 06-021

Representative Marshall, prime sponsor, presented Senate Bill 06-021 which allows an individual who meets certain age requirements to renew his or her identification card by mail. The bill requires the person renewing the identification card by mail to attest under penalty of the law that he or she is lawfully present in the United States and is a resident of Colorado. It allows the Department of Revenue to promulgate rules and extends the renewal period of identification cards for such persons to 5 years.

Responding to questions from members, Representative Marshall clarified that the bill pertains to identification cards only and not to driver's licenses.

02:50 PM

Roni White, representing the Division of Motor of Vehicles of the Department of Revenue, answered questions for the committee on the types of individuals that are eligible to renew identification cards and driver's licenses by mail.

02:55 PM

The committee discussed amending the bill so that individuals with disabilities may renew their identification cards by mail as well.


BILL:	SB06-021
TIME:	03:01:28 PM
MOVED:	Lindstrom
MOTION:	Moved to amend page 2, strike lines 8 and 9 and substitute the following: "(I) Renewal by mail shall be available to qualifying individuals determined by the department of revenue including but not limited to individuals with disabilities and seniors.". The motion passed without objection.
SECONDED:	Green
		VOTE
	Borodkin	Excused
	Green
	Hefley	Excused
	Knoedler
	Larson
	Lindstrom
	Ragsdale
	Sullivan
	Welker
	McFadyen
	Pommer
Not Final YES: 0 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	SB06-021
TIME:	03:03:41 PM
MOVED:	Green
MOTION:	Moved to refer Senate Bill 06-021, as amended, to the Committee of the Whole. The motion passed 10-0.
SECONDED:	Sullivan
		VOTE
	Borodkin	Yes
	Green	Yes
	Hefley	Yes
	Knoedler	Yes
	Larson	Yes
	Lindstrom	Yes
	Ragsdale	Yes
	Sullivan	Yes
	Welker	Yes
	McFadyen	Excused
	Pommer	Yes
Final YES: 10 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

03:04 PM

The committee adjourned.