Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON EDUCATION
Date:01/25/2005
ATTENDANCE
Time:10:14 AM to 11:33 AM
Balmer
X
Benefield
X
Place:HCR 0107
King
X
Larson
X
This Meeting was called to order by
McKinley
X
Representative Merrifield
Penry
X
Pommer
X
This Report was prepared by
Rose
*
Cathy Eslinger
Solano
X
Todd
X
White
X
Paccione
X
Merrifield
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
HB05-1096Amended and Referred to the Committee of the Whole

10:15 AM -- Call to Order

The committee was called to order by the chairman, Representative Merrifield.


10:15 AM -- House Bill 05-1096

Representative Penry reviewed the provisions House Bill 05-1096, concerning Mesa State College. The bill allows the secretary and treasurer of Mesa State College to be members of the board of trustees and establishes an investment advisory committee. The board would have expanded investment authority under the bill. Representative Penry explained the reasons that Mesa State College was seeking the new provisions, and noted the recent investment history of the University of Colorado. He said that the University of Colorado's investment strategy has succeeded because of the tailoring the school has done to suit its needs.


10:25 AM

Representative Penry responded to questions from Representative King about the potential Taxpayer's Bill of Rights (TABOR) impact and discussed the prospects for Mesa State College to become an enterprise. Representative King asked additional questions about reporting requirements in the bill and the level of return of investments. There was additional committee discussion about the autonomy of institutions of higher education. Some committee members requested discussion of the broad bill title.




10:33 AM

The following persons testified:

10:33 AM -- Ben Stein, Deputy State Treasurer representing the Office of the State Treasurer, testified in opposition to the bill and distributed a letter from the Office of the State Treasurer to Tim Foster, President of Mesa State College (Attachment A). Mr. Stein expressed concern with the expanded investment authority contemplated in the bill. He noted that the moneys that would be invested are public moneys and need to be carefully considered as such. Mr. Stein discussed rates of return for lower and higher-risk investments.


10:38 AM

Mr. Stein continued his testimony by discussing the specifics of the University of Colorado's investment authority. He also noted the philosophy and authority around investment strategies for public funds. Mr. Stein responded to questions from committee members. Mr. Stein noted that the University of Colorado is the only higher education institution with the type of investment authority granted to Mesa State College under the bill.


10:44 AM

There was discussion of dividends on equities and the current interest and returns on Mesa State College funds. Representative Larson asked additional questions about the current authority granted to the University of Colorado. Mr. Stein discussed the fact that Pinnacol Assurance and CollegeInvest are other entities that utilize equity investments. Representative Penry made additional comments about the bill and about the returns of the University of Colorado. He also spoke to the issue of smaller institutions having the authority relative to larger institutions such as the University of Colorado.



10:52 AM

Mr. Stein responded to additional questions about investments and borrowing in the Office of the State Treasurer. Representative Pommer discussed the bill in the broader context of what additional institutions may seek in regard to investment authority. Mr. Stein also noted that the state manages state funds for yield, for accessible funds, not for rate of return.


10:57 AM -- Celeste Colgan, representing Mesa State College as a member of the board of trustees, testified in support of the bill. She discussed what she sees as effective and sufficient safeguards for prudent action by the board. Ms. Colgan provided information on her background in corporate affairs and investment.




11:01 AM

Ms. Colgan responded to questions from committee members about board experience. She discussed investments in capital markets relative to other markets. There was discussion of the board's expectations for state responsibilities if investments made by Mesa State College did not go well or as expected. Representative Penry made additional comments about the equities market.

11:07 AM -- Patrick Doyle, representing Mesa State College as the Vice-President for Finance, testified in support of the bill. Mr. Doyle discussed his background and expertise and the advantages of a diversified investment portfolio.
BILL:HB05-1096
TIME: 11:11:43 AM
MOVED:Paccione
MOTION:Moved amendment .003 (Attachment B). The motion passed on an 11-2 roll call vote.
SECONDED:Solano
VOTE
Balmer
Yes
Benefield
Yes
King
No
Larson
Yes
McKinley
Yes
Penry
No
Pommer
Yes
Rose
Yes
Solano
Yes
Todd
Yes
White
Yes
Paccione
Yes
Merrifield
Yes
Not Final YES: 11 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS




11:15 AM

There was committee discussion about the provisions of the bill and the potential for other institutions to seek additional, similar investment authority.
BILL:HB05-1096
TIME: 11:17:31 AM
MOVED:White
MOTION:Moved amendment .004 (Attachment C). Representative King offered an amendment to .004. (See vote box on amendment to .004. below.) The motion on the amended .004 passed without objection.
SECONDED:Merrifield
VOTE
Balmer
Benefield
King
Larson
McKinley
Penry
Pommer
Rose
Solano
Todd
White
Paccione
Merrifield
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection
11:18 AM
Michele Hanigsberg, Office of Legislative Legal Services, came to the table to discuss a potential amendment to amendment .004.
BILL:HB05-1096
TIME: 11:19:29 AM
MOVED:King
MOTION:Moved to amend amendment .004 (Attachment C), line 6, after "THE", insert "TOTAL RATE OF". Line 7, after the first "THE", insert "TOTAL RATE OF". Line 10, after the first "THE", insert "TOTAL RATE OF". The amendment to .004 passed without objection.
SECONDED:White
VOTE
Balmer
Benefield
King
Larson
McKinley
Penry
Pommer
Rose
Solano
Todd
White
Paccione
Merrifield
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

















11:21 AM

Representative King discussed the possibility of additional floor amendments.
BILL:HB05-1096
TIME: 11:22:09 AM
MOVED:King
MOTION:Moved amendment .001 (Attachment D). The motion passed without objection.
SECONDED:Larson
VOTE
Balmer
Benefield
King
Larson
McKinley
Penry
Pommer
Rose
Solano
Todd
White
Paccione
Merrifield
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection
BILL:HB05-1096
TIME: 11:23:35 AM
MOVED:Penry
MOTION:Refer to the Committee of the Whole, as amended. The motion passed on a 7-6 roll call vote.
SECONDED:King
VOTE
Balmer
Yes
Benefield
No
King
Yes
Larson
Yes
McKinley
No
Penry
Yes
Pommer
No
Rose
Yes
Solano
No
Todd
Yes
White
Yes
Paccione
No
Merrifield
No
Final YES: 7 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: PASS


11:33 AM

The committee adjourned.