House Committee on Business Affairs and Labor (02/04/2009)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Date:	02/04/2009	ATTENDANCE

Time:	09:45 AM to 05:15 PM	Balmer	*
		Bradford	X
Place:	HCR 0112	Gagliardi	X
		Liston	X
This Meeting was called to order by		Priola	X
	Representative Rice	Ryden	X
		Scanlan	X
This Report was prepared by		Soper	X
	Christie Lee	Stephens	X
		Casso	X
		Rice	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB09-1141 HB09-1109 HB09-1077 HB09-1143 HB09-1166		Refer as amended to the Committee of the Whole Refer as amended to the Committee of the Whole Postponed Indefinitely Refer as amended to the Committee of the Whole Postponed Indefinitely

09:46 AM -- House Bill 09-1141

Representative Ferrandino, prime sponsor, presented House Bill 09-1141 concerning laws enforced by the administrator of the "Uniform Consumer Credit Code". This bill modifies several provisions related to the Uniform Consumer Credit Code (UCCC) and the fees charged by the UCCC administrator, as follows:

makes consumer leases subject to the same fee caps and procedural requirements that apply

to the sale of credit insurance and other products;

eliminates certain statutory fees and allows the UCCC administrator to set the fees;
allows the UCCC Cash Fund to retain a fund balance equal to 1/3 of the previous fiscal

year's expenditures, instead of 16.5% of the prior year's expenditures;

includes nonprofit organizations within the definition of a "credit services organization";
updates a disclosure regarding the availability of free credit reports; and
exempts providers of debt-management services that are subject to the "Colorado

Foreclosure Protection Act" from the "Uniform Debt-Management Services Act".

Background. The Colorado UCCC regulates the terms and conditions of certain consumer credit. It sets maximum rates and charges for some fees, requires disclosure of the cost of credit so consumers may shop for the best rates, and provides remedies for consumers in default. The UCCC administrator in the Department of Law monitors and investigates complaints filed against lenders and creditors.

09:50 AM

Representative Ferrandino responded to questions from the committee about nonprofits being removed in the bill. Representative Liston asked about the fees on the bottom of page five.

09:57 AM -- Laura Udis, representing the Colorado Attorney General's Office, testified in support of the bill. She said the bill would modernizes and simplifies the law. Ms. Udis said for consumer leases there are no limits for late fees and bounced checks, and the bill would provide caps on them. She walked the committee through the rest of the changes in the bill. There was a discussion about why nonprofits are being removed on page six.

10:15 AM -- Peter Minahan, representing the Colorado Financial Services Association, testified in support of the bill.

10:18 AM -- Recess

The committee took a recess while waiting for the drafter to draft a conceptual amendment that would include any nonprofit organization in the definition of "credit services organization."


BILL:	HB09-1141
TIME:	10:28:17 AM
MOVED:	Stephens
MOTION:	Moved amendment L.001 (Attachment A). The motion passed without objection.
SECONDED:	Gagliardi
		VOTE
	Balmer
	Bradford
	Gagliardi
	Liston
	Priola
	Ryden
	Scanlan
	Soper
	Stephens
	Casso
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1141
TIME:	10:28:40 AM
MOVED:	Balmer
MOTION:	Moved amendment L.002 (Attachment B). The motion passed without objection.
SECONDED:	Stephens
		VOTE
	Balmer
	Bradford
	Gagliardi
	Liston
	Priola
	Ryden
	Scanlan
	Soper
	Stephens
	Casso
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1141
TIME:	10:29:14 AM
MOVED:	Balmer
MOTION:	Moved to refer House Bill 09-1141, as amended, to the Committee of the Whole. The motion passed 11-0.
SECONDED:	Priola
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	Yes
	Liston	Yes
	Priola	Yes
	Ryden	Yes
	Scanlan	Yes
	Soper	Yes
	Stephens	Yes
	Casso	Yes
	Rice	Yes

Final YES: 11 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

10:30 AM -- House Bill 09-1109

Representative Priola, prime sponsor, presented House Bill 09-1109 concerning the extension of foreclosure protection to purchasers of residential properties as to which formal foreclosure proceedings have not yet been commenced. For purposes of the Colorado Foreclosure Protection Act, current law defines a "residence in foreclosure" to mean a residence or dwelling that is occupied as the home owner's principal place of residence and against which any type of foreclosure action has been commenced. HB09-1109 amends the definition to include a dwelling that is encumbered by a residential mortgage loan that is delinquent or in default. In addition to properties for which a foreclosure action has commenced, a "residence in foreclosure" can include a residence upon which a foreclosure action is authorized under the terms of the loan.

The bill becomes effective August 4, 2009, assuming the General Assembly adjourns sine die as scheduled on May 6, 2009, unless a referendum petition is filed.

10:34 AM -- Jan Zavislan, representing the Colorado Attorney General's Office, testified in support of the bill. He said the bill came out of a task force that met this last summer following a number of complaints from consumers in foreclosure. Mr. Zavislan responded to questions from the committee about who the bill protects. Mr. Zavislan explained that the bill expands the protections under the act to more homeowners.

10:46 AM -- Caren Castle, representing Castle, Meinhold, and Stawiarski, testified in support of the bill. She said her firm handles many foreclosures and deals with many distressed homeowners. Ms. Castle feels the definition should be expanded to those homeowners that are delinquent. In response to a question, she stated that Colorado's foreclosure rates are flat.


BILL:	HB09-1109
TIME:	10:51:13 AM
MOVED:	Priola
MOTION:	Moved amendment L.002 (Attachment C). The motion passed without objection.
SECONDED:	Balmer
		VOTE
	Balmer
	Bradford
	Gagliardi
	Liston
	Priola
	Ryden
	Scanlan
	Soper
	Stephens
	Casso
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1109
TIME:	10:52:52 AM
MOVED:	Priola
MOTION:	Moved to refer House Bill 09-1109, as amended, to the Committee of the Whole. The motion passed 9-2.
SECONDED:	Balmer
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	Excused
	Liston	Yes
	Priola	Yes
	Ryden	Yes
	Scanlan	Yes
	Soper	Yes
	Stephens	Yes
	Casso	Yes
	Rice	Excused

Final YES: 9 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: PASS

10:53 AM -- House Bill 09-1077

Representative Schaffer, prime sponsor, presented House Bill 09-1077 concerning a prohibition on the retail sale of products containing tobacco by use of a self-service display. HB09-1077 prohibits the retail sale of cigarettes or tobacco products by use of a self-service display, except in tobacco specialty stores and in other situations where the self-service display is a legally authorized vending machine. The bill authorizes a fine structure for violations of this prohibition regulating the sale of tobacco to minors within a 24 month period as follows:

a written warning for a first violation committed;
$50 for a second violation;
$100 for a third violation;
$250 for a fourth violation; and
between $250 and $1,000 for a fifth or subsequent violation.

11:01 AM -- Wendy Morrison, representing the American Lung Association, testified in support of the bill. She said they would like to see a more comprehensive plan that would hold adults that sell to minors more accountable. Ms. Morrison said she would like to see retail licensure of places that sell tobacco and a prohibition on the distribution of free samples of tobacco. She talked about other ways to curb teenage tobacco use. Representative Bradford asked about cigar bars. Representative Liston asked about who would be enforcing the bill if it passes.

11:16 AM -- Bob Doyle, representing the Colorado Tobacco Education and Prevention Alliance, testified against the bill and said he agrees with the previous witness that there needs to be a comprehensive plan. He talked about a ban that was passed in Arvada that does not allow minors to enter tobacco only stores. Representative Soper asked why Mr. Doyle is against the bill simply because it does not go far enough. Representative Scanlan asked a similar question and Mr .Doyle responded and talked about the lack of licensure of tobacco retailers. Representative Liston pointed out that a person is required to show an identification and prove that they are over 18 in order to purchase tobacco.

11:21 AM -- Mary Lou Chapman, representing the Rocky Mountain Food Industry Association, testified against the bill. She said she did not understand the need for the bill and explained that all her stores already comply with the requirements in the bill. Ms. Chapman talked about the "We Card" program. Representative Rice asked why she does not want the requirement codified if her stores already meet the requirements. Ms. Chapman brought up the issue of the state law preempting local ordinances that are more stringent.

11:25 AM -- Dick Soash, representing the Cigar Association of America, testified against the bill. He responded to a question from Representative Balmer about who the bill applies to and who it does not. Mr. Soash talked about the tobacco industry versus the cigar industry and the fact that the bill would increase the tobacco product visibility at the expense of cigars. Representative Balmer stated that Phillip Morris owns 65 percent of the market and said that those with a higher market share get a majority of shelf space. Mr. Soash talked about the effect that would have on other products if they were moved behind the counter. Representative Gagliardi said she did not see market share in the bill and that she does not understand Mr. Soash's concern. Mr. Soash explained that the bill would not require that, but it would be the result. Representative Ryden talked about the 2,354 tobacco compliance checks and asked how many companies this bill would affect.

11:36 AM -- Mark Larson, representing the Colorado Wyoming Petroleum Marketers Association, testified in support of the bill. He said they support any requirement that places tobacco out of the reach of children and talked about the "We Card" program. Mr. Larson asked the committee to support amendment L.003 that would exempt tobacco stores that derive at least 75 percent of their revenue from the sale of tobacco products (excluding the sale of fuel). Representative Liston asked Mr. Larson to talk about statistics relating to the number of violations there have been of people selling tobacco to minors. Mr. Larson said he did not have the statistics, but that most of the association members use the card under 30 rule. Representative Rice asked Mr. Larson to give an example of a tobacco only store that sells gas.

11:48 AM -- Ruben Valdez, representing Phillip Morris USA, testified in support of the bill. He gave some background on youth prevention programs. Mr. Valdez said the bill is an attempt to prevent tobacco use by youth. Representative Scanlan asked about the market share of Phillip Morris and whether it would increase if this bill passes. Mr. Valdez said it is not the intent of the bill to increase market share, but he does not know whether it will or not. Representative Balmer asked a similar question, if the bill would give Phillip Morris a stronger position in the placement of their product. Mr. Valdez talked about the incentives the tobacco industry pays to place their product behind the counter.

12:02 PM


BILL:	HB09-1077
TIME:	12:02:39 PM
MOVED:	Balmer
MOTION:	Moved amendment L.003 (Attachment D). The motion passed without objection.
SECONDED:	Priola
		VOTE
	Balmer
	Bradford
	Gagliardi
	Liston
	Priola
	Ryden
	Scanlan
	Soper
	Stephens
	Casso
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1077
TIME:	12:04:47 PM
MOVED:	Soper
MOTION:	Moved to refer House Bill 09-1077, as amended, to the Committee of the Whole. The motion failed 6-5.
SECONDED:	Gagliardi
		VOTE
	Balmer	No
	Bradford	No
	Gagliardi	Yes
	Liston	No
	Priola	Yes
	Ryden	No
	Scanlan	Yes
	Soper	Yes
	Stephens	No
	Casso	No
	Rice	Yes

Not Final YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1077
TIME:	12:06:41 PM
MOVED:	Balmer
MOTION:	Moved to postpone House Bill 09-1077 indefinitely. The motion passed 8-3.
SECONDED:	Stephens
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	No
	Liston	Yes
	Priola	Yes
	Ryden	Yes
	Scanlan	Yes
	Soper	No
	Stephens	Yes
	Casso	No
	Rice	Yes

Final YES: 8 NO: 3 EXC: 0 ABS: 0 FINAL ACTION: PASS

01:33 PM -- House Bill 09-1143

Representative Swalm, prime sponsor, presented House Bill 09-1143 concerning the authority of a health maintenance organization to offer basic health services through a limited benefit plan. He distributed a handout entitled Transforming Colorado's Behavioral Health System (Attachment E). This bill allows health maintenance organizations (HMO) the option to offer basic health care services to enrollees through limited benefit plans. Basic health care services are services an HMO policyholder might require to maintain good health such as doctor and hospital visits, laboratory, and x-ray services. Limited benefit plans are not defined, but generally such plans are offered at low cost and limit the amount of payments on particular services and total coverage per person.

(Attachment E can be viewed at Archives)

HB09-1143 is effective August 4, 2009, if adjournment is on May 6, 2009, unless a referendum petition is filed.

Representative Swalm said the opposition is concerned with limited benefit plans and wants comprehensive coverage. He feels that is like saying, if you cannot afford a Cadillac you must walk, and he feels there is room for a Chevy plan.

01:46 PM -- Ed Kahn, representing the Colorado Center on Law and Policy, testified against the bill. He said the bill is another version of a bill that was attempted in previous years. Mr. Kahn talked about Senate Bill 08-217 that passed last year that created a study to see if people were interested in limited benefit plans and offer recommendations. Mr. Kahn said this bill should wait until the study is finished. There was a discussion about the cost of HMOs.

01:59 PM -- George Del Grosso, representing Colorado Behavioral Council, testified against the bill. He talked about HMOs and the elderly and the limited mental health benefits that are provided by a HMOs. Mr. Del Grosso said they are concerned that there is no mental health benefit. Representative Bradford asked whether the witness knew that the plans would have no mental health benefits. Mr. Del Grosso responded that he has not heard that none of them will have mental health benefits, but assumes they will not. Mr. Del Grosso responded to additional questions from the committee.

02:14 PM -- A.W. Schnellbacher, representing the AARP, testified against the bill. The AARP feels the intentions of the bill are good, but the bill may have opposite effects than what are intended. He said premiums may go up as a result of this bill. Representative Balmer commented on the statistics Mr. Schnellbacher discussed. Mr. Schnellbacher stated that since these plans are so limited, people will not buy them. He listed services that are not covered in limited benefit plans. There was a discussion about AARP plans. Representative Priola asked Mr. Schnellbacher the number of people who are uninsured. Mr. Schnellbacher stated there are 2.1 million Coloradoans uninsured or underinsured. Representative Priola stated that he feels that the plans would be good for young people who are just entering the market.

02:38 PM -- Steven Kopanes, representing Health America of Colorado, testified against the bill. Mr. Kopanes said limited benefit plans are unlikely to save money. He talked about cost shifting that would result if the bill passes.

02:42 PM -- Dede de Percin, representing the Colorado Consumer Health Initiative, testified against the bill. She talked about the discussion of a little coverage versus no coverage at all. She said it depends on whether you can get what you need with a little coverage. Ms. de Percin mentioned that the report from the Senate Bill 09-217 study is due March 1. Representative Stephens stated that limited benefit plans already exist in Colorado and said that this bill is just allowing HMOs to sell them as well. Representative Ryden asked whether it is the employer or the employees that make the decision of purchasing an HMO. Ms. De Percin said the employer is the one who decides in the smaller market. Representative Bradford listed a number of illnesses plans may not cover, including colonoscopies and hip replacements and stated that young adults do not want to purchase coverage for all of those illnesses.

02:53 PM -- Lawrence Krausz, representing himself, testified against the bill and stated that no matter how you look at it, we are playing Russian roulette. He talked about his experience of having schizophrenia at the age of 19 and that coverage for schizophrenia is not available. Mr. Krausz discussed the number of persons with mental illness in the prison system. He said without mental health coverage, you end up in prison most of the time.

02:58 PM -- Vanesa Haneman, representing the Colorado Association of Health Plans, testified in support of the bill and distributed a handout (Attachment F). Representative Swalm asked Ms. Haneman to talk about current limited benefit plans. She said PPOs can offer limited benefit plans as allowed in statute.

03:04 PM -- Cindy Sovine Miller, representing the Colorado State Association of Health Underwriters, testified in support of the bill and said they have been working with the sponsor for over a year on this bill. Ms. Sovine Miller stated that the limited benefit plans do not fit for everyone. Representative Stephens asked about current limited benefit plans and whether they currently exist. Ms. Sovine Miller said they do exist and this bill would allow HMOs to offer them as well. Representative Liston asked for the average cost of a premium for a limited benefit plan. Representative Soper stated that it is unclear how these plans will look if the bill passes. Ms. Sovine Miller agreed and said the bill only allows HMOs to provide these plans, it does not lay out the plans themselves.

03:14 PM -- Jerry McElroy, representing Kaiser Permanente, an HMO, testified in support of the bill. He said the bill would be another option for employers. Mr. McElroy talked about his Kaiser Permanente plan and the use of his health insurance. Representative Liston asked if this bill would be different than the one passed in Tennessee. Mr. McElroy said yes.

03:21 PM -- Cindy Palmer, San Louis Valley HMO, testified in support of the bill and distributed a handout (Attachment G). She talked about a McDonald's in her area that wanted to offer limited benefit plans and she said she couldn't help them because she has an HMO license. Ms. Palmer stated that United and other insurance companies that hold an insurance license and an HMO license can already offer limited benefit plans, but those that do not have both, and only have an HMO license, including Kaiser Permanente and San Louis Valley HMO, cannot. Ms. Palmer stated that if the bill passed and they could offer limited benefit plans, they would still need to meet all the minimum coverages under statute, but it allows them to offer minimum coverage in a limited benefit way. Ms. Palmer responded to the question about the difference between underinsured and a limited benefit plan.

03:41 PM

She talked about her support of the amendment that would be presented. Ms. Palmer responded to questions from the committee. She said the HMOs would be more constrained then those who currently offer these plans under an insurance license.

04:04 PM -- Travis Berry, representing the Colorado Competitive Council, testified in support of the bill and stated that the debate has been productive. Mr. Berry stated that employers are not required to offer health insurance, it is a mutually beneficial relationship. This bill creates an additional opportunity for access to health insurance.


BILL:	HB09-1143
TIME:	04:08:13 PM
MOVED:	Liston
MOTION:	Moved amendment L.001 (Attachment H). The motion passed 10-1.
SECONDED:	Balmer
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	No
	Liston	Yes
	Priola	Yes
	Ryden	Yes
	Scanlan	Yes
	Soper	Yes
	Stephens	Yes
	Casso	Yes
	Rice	Yes

Not Final YES: 10 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS

04:10 PM


BILL:	HB09-1143
TIME:	04:11:59 PM
MOVED:	Balmer
MOTION:	Moved to refer House Bill 09-1143, as amended, to the Committee of the Whole. The motion passed 6-5.
SECONDED:	Priola
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	No
	Liston	Yes
	Priola	Yes
	Ryden	No
	Scanlan	Yes
	Soper	No
	Stephens	Yes
	Casso	No
	Rice	No

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

04:15 PM -- House Bill 09-1166

Representative Levy, prime sponsor, presented House Bill 09-1166, concerning the use of a pay-as-you-drive rate structure for determining premium rates for automobile insurance policies. This bill requires the Commissioner of Insurance to adopt rules for auto insurance rate plans based on the number of miles a policyholder drives. The rules will allow insurance companies to offer "pay-as-you-drive" (PAYD) policies as an option to consumers. Companies are eligible for a premium tax credit of $100 per vehicle covered by a PAYD policy with a limit of $1 million per calendar year for all companies combined. Within one year of adopting the rules and annually thereafter, the commissioner will report on the utilization and effectiveness of the PAYD plans to the General Assembly. Representative Levy spoke to amendments L.001 and L.002 (Attachments I and J). Representative Levy stated that amendment L.001 is a strike below. She noted that amendment L.002 strikes the term "pay-as-you-drive" and replaces it with "miles driven." She explained that the phrase the pay-as-you-drive is under trademark by Progressive Insurance. Representative Levy responded to committee questions about the difference between her bill, a type of insurance product, versus a program that requires people to pay according to the mileage driven on their car.

04:33 PM

There was a discussion about city drivers versus rural drivers and the differences in cost between them under the bill. Representative Soper asked how the bill would affect drivers that drive outside of Colorado. Representative Levy stated that it does not matter where you accrue miles under the bill. Representative Gagliardi asked why insurance companies do not already use miles driven when calculating premiums. Representative Levy said they do use miles driven currently to an extent. Representative Stephens asked how the miles would be counted. Representative Levy said a transponder could be used, but it is still undecided.

04:58 PM -- Julie Hoerner, representing State Farm, testified in support of the bill. She said the bill allows another choice for consumers. Ms. Hoerner responded to earlier questions and stated that you only need insurance in Colorado if you drive on a public highway. She discussed how miles driven would be handled. Representative Gagliardi asked whether insurance companies can currently implement this type of policy. Ms. Hoerner said the product can currently be offered.


BILL:	HB09-1166
TIME:	05:07:14 PM
MOVED:	Rice
MOTION:	Moved amendment L.001 (Attachment I), as amended by amendment L.002 (Attachment J). The motion passed without objection.
SECONDED:	Scanlan
		VOTE
	Balmer
	Bradford
	Gagliardi
	Liston
	Priola
	Ryden
	Scanlan
	Soper
	Stephens
	Casso
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1166
TIME:	05:07:58 PM
MOVED:	Rice
MOTION:	Moved amendment L.002 (Attachment J) to amendment L.001 (Attachment I). The motion passed without objection.
SECONDED:	Scanlan
		VOTE
	Balmer
	Bradford
	Gagliardi
	Liston
	Priola
	Ryden
	Scanlan
	Soper
	Stephens
	Casso
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1166
TIME:	05:10:39 PM
MOVED:	Ryden
MOTION:	Moved to refer House Bill 09-1166, as amended, to the Committee on Appropriations. The motion failed 6-5.
SECONDED:	Soper
		VOTE
	Balmer	No
	Bradford	No
	Gagliardi	No
	Liston	No
	Priola	No
	Ryden	Yes
	Scanlan	Yes
	Soper	Yes
	Stephens	No
	Casso	Yes
	Rice	Yes

Not Final YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1166
TIME:	05:13:29 PM
MOVED:	Liston
MOTION:	Moved to postpone House Bill 09-1166 indefinitely. The motion passed 7-4.
SECONDED:	Balmer
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	Yes
	Liston	Yes
	Priola	Yes
	Ryden	No
	Scanlan	No
	Soper	No
	Stephens	Yes
	Casso	No
	Rice	Yes

Final YES: 7 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS

05:15 PM

The committee adjourned.