Senate Committee on Business, Labor and Technology (02/09/2009)

Final
STAFF SUMMARY OF MEETING

SENATE COMMITTEE ON BUSINESS, LABOR AND TECHNOLOGY

Date:	02/09/2009	ATTENDANCE

Time:	01:30 PM to 05:26 PM	Foster	X
		Harvey	*
Place:	SCR 354	Mitchell	*
		Scheffel	*
This Meeting was called to order by		Tochtrop	X
	Senator Veiga	Heath	X
		Veiga	X
This Report was prepared by
	Hillary Smith
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB09-1014 SB09-091 SB09-077 SB09-081 SB09-085		Referred to the Committee of the Whole Witness Testimony and/or Committee Discussion Only Postponed Indefinitely Referred to Appropriations Referred to Finance

01:30 PM -- House Bill 09-1014

Senator Veiga discussed the order of bills to be heard. Senator Isgar presented House Bill 09-1014. The bill concerns the maximum fee that may be imposed by the Division of Real Estate upon an appraiser in connection with submitting a conservation easement appraisal and the maximum fee that may be imposed on an applicant for a qualified conservation easement certificate. The bill eliminates the cap on both fees and allows for an annual fee to be set by the division. The bill also authorizes the division to accept and expend gifts, grants, and donations to cover costs related to conservation easement. Senator Isgar discussed previous legislation concerning conservation easement and described changes made by the bill. He stated that Erin Toll, the Director of the Division of Real Estate, would provide further information.

The following individual testified:

01:33 PM -- Erin Toll, Director of the Division of Real Estate in the Department of Regulatory Agencies (DORA), testified in support of the bill. She distributed a document from DORA that summarized the bill and the reasons to support it (Attachment A). She described the changes made by the bill and noted that the division is not seeking additional funding. Although further witnesses were available to testify in support of the bill, the committee agreed that no further testimony was needed.


BILL:	HB09-1014
TIME:	01:36:56 PM
MOVED:	Foster
MOTION:	Moved to refer House Bill 09-1014 to the Committee of the Whole. The motion passed on a 5-1 roll call vote, with one member excused.
SECONDED:
		VOTE
	Foster	Yes
	Harvey	No
	Mitchell	Excused
	Scheffel	Yes
	Tochtrop	Yes
	Heath	Yes
	Veiga	Yes

Final YES: 5 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS

01:41 PM -- Senate Bill 09-091

Senator Romer presented Senate Bill 09-091. The bill makes several changes to the relationship between motor vehicle manufacturers, distributors, or manufacturer representatives and motor vehicle dealers. Senator Romer explained the issues addressed by the bill and stated that he would explain the amendments after testimony. He spoke about his family's business relationships, and Senator Heath added additional comments.

The following individuals testified:

01:48 PM -- Amy Brink, representing the Alliance of Automobile Manufacturers, spoke about the bill. She described the nationwide problems facing car dealers and manufacturers and discussed negotiations on the bill. She explained which portions of the bill the alliance has concerns about, and discussed laws in other states.

01:54 PM

Senator Romer added that it would be helpful for the committee to dialogue about each of the major issues Ms. Brink had addressed. He described negotiations on the bill. Responding to a question from Senator Heath, Ms. Brink described compromises that the manufacturers had made during negotiations.

01:58 PM

Senator Harvey asked whether it was possible to leave the issue up to the Department of Revenue, and Senator Romer indicated that representatives of the Colorado Automobile Dealers Association (CADA) would address Senator Harvey's question. He described the unequal power relationship between car dealers and car manufacturers. Senator Foster asked if it was in the consumer's best interest for a dealer to offer more than one type of car. Ms. Brink responded that in certain instances it is best for the consumer, but that the manufacturer has an investment in the integrity and history of the car and would like a say in the question of whether or not dealers should be permitted to "duel,"or carry lines from different manufacturers. Senator Foster asked follow-up questions concerning a consumer's desire to compare different cars, and Ms. Brink stated that manufacturers are not trying to extinguish the right to duel, but that they are not comfortable with having no say in the matter.

02:07 PM

Responding to a question from Senator Heath, Ms. Brink discussed whether or not manufacturers would be able to sell their own cars themselves in the current system. Senator Veiga asked for clarification of what the manufacturers' role would be in the decision to duel, and Ms. Brink addressed specific language in the bill that the alliance would like removed. Discussion continued between Ms. Brink and members of the committee, and Senator Romer indicated that he wanted the committee to hear witnesses from both sides.

02:16 PM

Ms. Brink continued her testimony. She spoke about language in the bill that pertains to incentives and sales programs offered to dealers in other states. She stated that the bill's language was a gross invasion on interstate commerce. She responded to questions from Senator Veiga and Senator Heath on the issue. Ms. Brink discussed portions of the bill in which agreement between dealers and manufactures was possible.

02:22 PM -- Tim Jackson, representing CADA and the Colorado Auto Retailers, testified in support of the bill. He described the importance of the car dealer industry to Colorado and discussed the issue of dueling. He spoke about negotiations between proponents and opponents of the bill.

02:31 PM

Senator Mitchell stated his concern that the bill protects car dealers from manufacturers rather than protecting the consumer. Mr. Jackson responded that the bill does not affect consumers, and described smaller communities that are not often well-served by dealerships. He said that the bill would help dealers be more viable. Mr. Jackson responded to follow-up questions from Senator Mitchell regarding the current turmoil in the car industry.

02:38 PM

Mr. Jackson responded to questions from Senator Harvey concerning requests to duel. He stated that current law puts the obligation on the dealer to justify a request to duel. He responded to further questions from Senator Harvey.

02:41 PM

Senator Heath spoke about his experience as a businessman. Senator Heath suggested that the issue could be solved with more time, and requested that the proponents and opponents return with language that sorted out some of the points of disagreement. Senator Veiga noted that deadlines required the bill to be heard that week. Senator Romer asked for further witnesses to be allowed to testify, and discussion continued concerning whether or not the bill could be laid over.

02:46 PM -- John Medved, representing Medved Autoplex and CADA, testified in support of the bill. He distributed two documents to members of the committee that provided information about and reasons to support the bill (Attachments B and C). Mr. Medved discussed the current relationship between dealers and manufacturers and described the effect of the economy on his business.

02:56 PM

Senator Romer added that it is necessary to shift the contract negotiations away from a reliance on litigation. Senator Harvey said that no one wants to see more people lose their jobs, but it is difficult to say that public policy makers should get involved in contracts between private businesses. Mr. Medved stated that attitudes are changing and that it is necessary to address the problems of today. He added that dealers want manufacturers to stay in business, but said that the manufacturers have too much power in the current system.

03:02 PM

Senator Mitchell expressed his admiration for Mr. Medved and for his company and described the difficulties presented by the bill. He indicated that he did not believe the legislature could prevent economic upheavals. Senator Foster made additional comments.

03:07 PM

Senator Scheffel described the difficulties presented by the bill and the problem of interfering in private contracts. Senator Scheffel expressed his concern that the bill would not fix the problem, but would instead further conflict between dealers and manufacturers. Senator Romer noted that the two groups are close to agreements on certain issues. Mr. Medved added that no one is asking for manufacturers to give up their protections, but that proponents are seeking a more balanced relationship.

03:13 PM -- Hank Held, representing the Burt Automotive Group, testified in support of the bill. Mr. Held described his business and past negotiations with manufacturers. Senator Harvey and Senator Mitchell asked follow-up questions.

03:20 PM -- Don Hicks, representing CADA, testified in support of the bill with Lee Payne, a representative of Planet Honda/Planet Hyundai and CADA. Mr. Hicks discussed nationwide incentives and stated that CADA is seeking to stop manufacturers from offering incentives in other parts of the country that are not available in Colorado. Mr. Hicks described the effect of the internet and discussed other business practices of manufacturers.

03:26 PM

Mr. Hicks responded to a question from Senator Heath regarding how the economic downturn had affected the business practices of manufacturers. Discussion continued between Senator Heath, Senator Harvey, and Mr. Hicks concerning how the internet had impacted the car industry.

03:28 PM

Mr. Payne said that the bill concerns the balance of power between dealers and manufacturers. Mr. Payne described his business and the problems he faces due to the current balance of power between dealers and manufacturers. Senator Heath stated that dealers knew how the contracts worked when they went into business, so it is difficult to ask the legislature to rewrite the contracts now. Mr. Payne discussed how the contracts have changed over time and noted that dealers were asking for an opportunity to negotiate the contracts.

03:34 PM -- Jerry Abboud, representing the Colorado Powersports Dealers Association, testified in support of the bill. Mr. Abboud provided background information and discussed the changes made by the bill. He stated that the legislature has already created a structure for the contracts, and it would not be fair for the legislature to decide now that the issue is not worth its action. Senator Mitchell stated that the legislature may decide its jurisdiction is not appropriate to the issue, but that such a decision is not an indication that the issue is not "worthy." Discussion continued between Senator Mitchell and Mr. Abboud.

03:41 PM -- Bill Vickery, representing the Colorado Powersports Dealers Association, testified in support of the bill. He described his business and discussed how its contracts had changed over time. He added that his company does not have the lawyer power or the money to go against the manufacturers.

03:44 PM -- Donavon Facey, representing the Colorado Powersports Dealers Association, testified in support of the bill. He spoke about his business and past legislation. He discussed the balance of power between manufacturers and dealers.

03:48 PM -- Richard Sox, representing CADA, stated that he was available to answer questions if needed.

03:48 PM -- Randall Biles, representing Pikes Peak Travel Land and the Colorado Recreational Vehicle (RV) Dealers Association, testified in support of the bill. He stated that because RV dealers operate under the same laws as car dealers, the bill would help them as well. Senator Romer noted that it is the rule rather than the exception for RV dealers to duel. Mr. Biles described the dueling process for RV dealers and responded to questions from Senator Mitchell.

03:52 PM

Senator Heath asked if there was anything in the legislation that RV dealers needed. Mr. Biles responded that the important portion of the bill was that it leveled the playing field. He added that RV dealers may eventually be exposed to the same issues as car dealers.

03:53 PM -- George Eidsness and Carl Larson, representing Transwest Trucks, testified in support of the bill. Mr. Eidsness described his business and discussed the problems that can occur without protective laws in place. He addressed the effect of international businesses and asked the committee to consider whether it would be fair to grandfather people into the bill. Mr. Larson provided background information on the bill and discussed past legislation.

03:58 PM -- Lynn Fanning, representing Navistar and International Truck and Engine Corporation, testified in support of the bill. He spoke about specific sections of the bill that he would prefer remain unamended.

03:59 PM -- Micki Hackenberger, representing Navistar and International Truck and Engine Corporation, testified in support of the bill. She stated that the bill would be a codification of a Colorado Court of Appeals Decision.

04:01 PM

Senator Romer provided closing remarks on the bill.

04:06 PM

Jery Payne, Senior Staff Attorney for the Office of Legislative Legal Services, came to the table to discuss prepared amendments.

04:08 PM

Senator Tochtrop moved to refer Senate Bill 09-091 to the Committee of the Whole. After discussion, the bill was laid over to allow Senator Romer to continue to work on amendments. No vote was taken, and Senator Tochtrop withdrew her motion. The committee recessed briefly.

04:15 PM -- Senate Bill 09-077

The committee reconvened. Senator Kopp presented Senate Bill 09-077. The bill places limitations on the purchase of cyanide. Senator Kopp distributed an incident report from the National Terror Alert Response Center (Attachment D). He explained his reasons for sponsoring the bill and asked that it be laid over until a day past sine die because the title is too restrictive for his purposes.


BILL:	SB09-077
TIME:	04:19:04 PM
MOVED:	Foster
MOTION:	Lay over Senate Bill 09-077 until May 27, 2009. The effect of the motion is to postpone indefinitely Senate Bill 09-077. The motion passed on a 6-0 roll call vote, with one member excused.
SECONDED:
		VOTE
	Foster	Yes
	Harvey	Excused
	Mitchell	Yes
	Scheffel	Yes
	Tochtrop	Yes
	Heath	Yes
	Veiga	Yes

Final YES: 6 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

04:21 PM -- Senate Bill 09-081

Senator Shaffer presented Senate Bill 09-081. The bill phases in, over a three-year period beginning on July 1, 2010, a sales and use tax exemption for machinery and machine tools in excess of $500 to be used in the state directly and predominantly for providing telephone and telegraph sales for sale or profit. He described the bill and possible changes that might be made to it. He asked that the bill be moved to the Committee on Appropriations.

04:25 PM

Responding to a question from Senator Foster concerning the bill's impact on local governments, Senator Shaffer discussed the fiscal note for the bill. Senator Shaffer responded to questions from Senator Mitchell about implications of the bill for the competitiveness of the marketplace, and discussed the possible impact of federal stimulus funds.

The following individuals testified:

04:28 PM -- Scott Mackey, an economist at the firm of Kimbell Sherman Ellis LLP in Montpelier, Vermont, testified in support of the bill on behalf of wireless carriers. He stated that the bill would eliminate a tax on investment and discussed studies that indicated that the bill would increase direct investment. He added that the bill would be both a short-term and long-term stimulus. He responded to a question from Senator Veiga concerning whether the bill would increase investment in rural areas of Colorado.

04:37 PM -- Andrew Kaser, representing the Qwest Corporation, testified in support of the bill. He distributed a handout and map to the committee (Attachments E and F). He discussed the benefits of the bill. Responding to a question from Senator Mitchell, Mr. Kaser discussed vertical and horizontal services. Senator Harvey asked why cable companies were not included in the bill, and Senator Shaffer stated that he had been communicating with cable companies and had drafted an amendment addressing the issue, but needed more time to work on the amendment. Discussion continued.

04:44 PM

Mr. Kaser responded to questions from Senator Foster regarding the materials he had distributed.

04:51 PM -- Stacy Sprinkle, Vice President of State Tax Policy for the Midwest Area for Verizon, testified in support of the bill. She addressed how the bill would increase investment in rural areas, and discussed potential federal stimulus funding. She stated that access to advanced communications networks is critical to all businesses and non-profits. She provided some background on the bill and noted that home rule cities such as Denver are free to adopt the measure or not.

04:56 PM -- Russell Sarazen, Senior Manager at T-Mobile USA, testified in support of the bill. He said that the telecommunications industry is a bright spot in today's economy.

04:57 PM

Senator Shaffer made closing remarks about the bill.


BILL:	SB09-081
TIME:	04:58:07 PM
MOVED:	Tochtrop
MOTION:	Moved to refer Senate Bill 09-081 to the Committee on Appropriations. The motion passed on a 7-0 roll call vote.
SECONDED:
		VOTE
	Foster	Yes
	Harvey	Yes
	Mitchell	Yes
	Scheffel	Yes
	Tochtrop	Yes
	Heath	Yes
	Veiga	Yes

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

05:00 PM -- Senate Bill 09-085

Senator Scheffel presented Senate Bill 09-085. The bill exempts a percentage of business personal property, excluding state-assessed property, from property taxation. The bill increases the amount of the exemption every two years until all business personal property is exempt. Senator Scheffel described his reasons for sponsoring the bill and discussed the fiscal impact it would have on local governments. He stated that the exemption is phased in with enough time to give governments a chance to develop an alternative or to wean themselves from the revenue from the business personal property tax. He described negotiations with opponents of the bill and discussed changes that had been made or would need to be made to the bill.

05:09 PM

Senator Harvey stated that it is currently cost-prohibitive for businesses to come to Colorado, and that the bill may increase tax revenue due to an increase in businesses locating in the state. Senator Foster expressed her concerns about the bill and stated that she could not support it unless the impact on revenue for local governments was addressed. Senator Scheffel addressed her concerns and discussed the possibility of delaying the exemptions. He added that the slow phasing-in of the exemptions would help local governments.

05:16 PM

Senator Heath described his experiences as a business owner and stated that the bill was a start in a conversation that needed to be had. Senator Tochtrop thanked Senator Scheffel for bringing the bill and addressed Senator Foster's comments about sales tax. Discussion continued between Senator Tochtrop and Senator Foster.

The following individual testified:

05:19 PM -- Mark Radtke, representing Colorado Municipal League (CML) and Colorado Counties Incorporated (CCI), testified in opposition to the bill. He stated that the business personal property tax is an important revenue source for local governments. He indicated that CML and CCI would support changes to the business personal property tax if there is a backfill source for the loss of revenue to local governments, and added that CML had supported increasing the exemption amount last year. Mr. Radtke responded to questions from Senator Mitchell concerning the possibility of a tax increase proposed by local governments to replace the lost revenue.

05:22 PM

Senator Heath made comments about the bill. Senator Scheffel made closing remarks.


BILL:	SB09-085
TIME:	05:24:09 PM
MOVED:	Scheffel
MOTION:	Moved to refer Senate Bill 09-085 to the Committee on Finance. The motion passed on a 6-1 roll call vote.
SECONDED:
		VOTE
	Foster	No
	Harvey	Yes
	Mitchell	Yes
	Scheffel	Yes
	Tochtrop	Yes
	Heath	Yes
	Veiga	Yes

Final YES: 6 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS

05:26 PM

The committee adjourned.