Bill Summary for Bill Number SB12-003

Date: 03/19/2012

Final
BILL SUMMARY for SB12-003

HOUSE COMMITTEE ON LOCAL GOVERNMENT

Votes: View-->	Action Taken:
Moved to postpone Senate Bill 12-003 indefinitely. Moved to refer Senate Bill 12-003 to the Committee	PASS FAIL

01:47 PM -- Senate Bill 12-003

Representative Bradford, committee chair, called the meeting to order and laid over Senate Bill 12-118.

01:47 PM -- Senate Bill 12-003

Representative Fischer, prime sponsor, presented Senate Bill 12-003, concerning the use of consumer credit information by employers. Representative Fischer explained that the bill creates the "Employment Opportunity Act," which specifies the purposes for which consumer credit information such as consumer credit reports and credit scores, can be used by an employer or potential employer. Representative Fischer, explained that the bill prohibits an employer's use of consumer credit information to evaluate prospective or current employees, unless the employment position being evaluated involves a defense or security contract. Representative Fischer responded to questions from the committee concerning the need for the bill and whether the bill would burden businesses in Colorado.

The following persons testified against the bill:

02:00 PM -- Tony Gagliardi, representing the National Federation of Independent Business (NFIB), explained that the bill infringes on the rights of small business owners to use information in credit reports to make hiring decisions. He explained that employers cannot access an applicant's credit score and a credit report can only be viewed with the approval of an applicant. Mr. Gagliardi addressed questions from the committee and explained how credit information can help businesses find the best applicant. Committee discussion ensued between Mr. Gagliardi and the committee concerning the cost for an employer to access credit reports of potential employees and current employees being considered for promotions. According to the bill, an employer using consumer credit information to evaluate a prospective or current employee must offer the employee an opportunity to explain adverse credit information.

02:13 PM -- Bruce Jordan, representing the Colorado Mortgage Lenders' Association, explained how the bill is bad for employers and discussed the need for employers in the mortgage lending industry to use the credit reports of potential employees. Mr Jordan responded to questions from the committee concerning the benefits for employers to use an applicants credit report.

02:22 PM -- Mr. Chris Ottele, representing Husch Blackwell, LLP, and the Colorado Civil Justice League, discussed protections for applicants and current employees under the federal Fair Credit Reporting Act (FCRA). Mr. Ottele talked about the need for employers to protect themselves against fraud from a potential employee through the use of credit information and responded to questions from the committee concerning the protections under the FCRA and the relationship between an applicant's credit report and employee fraud.

02:34 PM -- Patrick Boyle, representing the Colorado Competitive Council (C3), explained why the bill was not necessary and discussed the current rights that job applicants have to protect their credit information.

02:37 PM -- Heather Joyce, representing the Consumer Data Industry Association (CDIA), talked about the differences between an employer using a credit report and credit score, which cannot be accessed by an employer. However, an exemption in the reengrossed bill allows employers to use information in a credit report when hiring applicants for defense and security contracts.

02:40 PM -- Caitlin Quander, representing the Colorado Defense Lawyers' Association, discussed problems with the bill and explained that a credit report check by a potential employer must be allowed by a job applicant.

02:42 PM -- Joe Schneckenburger, representing Business Futures, Inc., explained the importance of allowing employers to use credit information for hiring employees and discussed a personal case where an employee with negative credit information stole funds from his company.

02:48 PM -- Marc Milligan, representing Background Information Services, Inc., talked about the benefit for employers to use credit information for selecting job applicants.

The following persons testified in support of the bill:

02:56 PM -- Mr. Daniel Katz, representing the Colorado Public Interest Research Group (CoPIRG), talked about the need for the bill and responded to questions from the committee concerning the FCRA and the relationship between using credit information and hiring better employees.

03:10 PM -- Rich Jones, Director of Policy and Research of the Bell Policy Center, talked about the formulas and data that are used to calculate credit reports and credit scores and explained common problems that result in inaccurate credit reports. Mr. Jones talked about the problems of using the credit reports of potential employees and responded to questions from the committee concerning the number of employers who use credit information for hiring decisions. Mr Jones submitted his testimony to the committee (Attachment A).

03:20 PM -- Phil Hayes, representing the Colorado American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), talked about the negative effects of the recent economic recession on the credit of workers in Colorado. Mr. Hayes explained that there is not a relationship between poor credit information and the performance of a potential employee and responded to questions from the committee concerning the restrictions that would placed on employers by the bill.

03:30 PM -- Packard Brown, representing himself, talked about his consulting businesses which helps companies with growth and hiring decisions. Mr. Brown discussed problems with businesses using the credit information of potential employers.

03:37 PM -- Professor Scott Moss, representing himself, explained that federal law allows employers to use credit information to deny employment or promotion. Mr. Moss discussed the process for a job applicant to correct inaccuracies in a credit report and the rights of potential employees. He spoke about errors in credit reports and addressed questions from members of the committee concerning the hiring rights and practices of employers and the prohibition of employment discrimination on the basis of one's race, religion, sex, national origin and color, under Title VII of the Civil Rights Act of 1964.

03:53 PM -- Margarite Gomez, representing 9 to 5 National Association of Working Women, talked about her personal problems with her credit information and discussed the need to protect working women who may have past financial problems.

03:57 PM -- Deanna Jimenez, representing herself, testified in support of the bill and shared her personal problems of getting a job due to past financial problems. Ms. Jimenez discussed the importance of protecting the working women from being denied a job due to credit information and responded to questions from the committee.

04:01 PM -- Tracey Stewart, representing the Colorado Center on Law and Policy, talked about cases where employers denied employment to applicants due to negative credit information. Ms. Stewart discussed the need to protect individuals applying for jobs in the service industry from being denied a job due to negative credit information and distributed a letter to the committee (Attachment B).

04:06 PM -- Mohamed Zenati, representing himself, talked about the relationship between employee fraud and negative credit information and discussed problems with employment discrimination on the basis of race, religion, sex, national origin and color.

04:13 PM -- Amy Miller, representing the Colorado Coalition Against Domestic Violence, discussed the need to protect women in abusive relationships through fair employment practices. Ms. Miller talked about the relationship between poverty and domestic abuse and explained the need for women in abusive relationships to have fair access to employment in order to become self-sufficient and independent from abusive relationships.

04:20 PM -- Mr. Johnny Kroll, representing the Colorado Cross-Disability Coalition, talked about the need to protect access to jobs for individuals with disabilities, despite negative credit scores.

04:22 PM

Representative Fischer entered closing comments on the bill. Committee discussion ensued concerning the need for the bill.


BILL:	SB12-003
TIME:	04:24:19 PM
MOVED:	Soper
MOTION:	Moved to refer Senate Bill 12-003 to the Committee of the Whole. The motion failed on a vote of 5-6.
SECONDED:	Fields
		VOTE
	Balmer	No
	Conti	No
	Fields	Yes
	Gardner B.	No
	Labuda	Yes
	Lee	Yes
	Pace	Yes
	Soper	Yes
	Swerdfeger	No
	Szabo	No
	Bradford	No

YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	SB12-003
TIME:	04:29:09 PM
MOVED:	Balmer
MOTION:	Moved to postpone Senate Bill 12-003 indefinitely. The motion passed on a vote of 6-5.
SECONDED:	Conti
		VOTE
	Balmer	Yes
	Conti	Yes
	Fields	No
	Gardner B.	Yes
	Labuda	No
	Lee	No
	Pace	No
	Soper	No
	Swerdfeger	Yes
	Szabo	Yes
	Bradford	Yes

Final YES: 6 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS

04:30 PM

The committee adjourned.