Final
STAFF SUMMARY OF MEETING

SENATE COMMITTEE ON FINANCE

Date:01/29/2009
ATTENDANCE
Time:09:45 AM to 12:39 PM
Brophy
X
Heath
*
Place:SCR 354
Isgar
X
King K.
X
This Meeting was called to order by
Scheffel
X
Senator Sandoval
Hudak
X
Sandoval
X
This Report was prepared by
Elizabeth Hanson
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
SB09-066
SB09-108
Amended, Referred to Appropriations
Amended, Referred to Appropriations


09:45 AM


The meeting was called to order. A quorum was present.


09:45 AM -- Senate Bill 09-066

Senator Tochtrop, prime sponsor, explained the provisions of SB 09-066. The bill transfers the administration of two state employee retirement plans from the Colorado Department of Personnel and Administration (DPA) to the Public Employees' Retirement Association (PERA), effective date of July 1, 2009. These plans include the two state defined contribution plans and the state's optional deferred compensation (457) plan. The bill also abolishes the State Deferred Compensation Committee.

Senator Tochtrop provided background about and reasons for the proposed legislation. She stated that the proposal was originally recommended by the Legislative Audit Committee after an audit conducted last summer recommended that all of the defined contribution plans be administered by the PERA. She also discussed the challenges facing the DPA and the agency's ability to fulfill its obligations to administer the current defined contribution plan. She further explained that the DPA has limited staff, which makes it difficult to meet current needs. According to Senator Tochtrop, the Legislative Audit Committee specifically recommended additional full time equivalent (FTE) staff to fulfill the obligations, but she recognizes the fiscal constraints facing Colorado make it difficult to increase DPA staff.











Senator Tochtrop indicated that the witness could answer questions about fees and costs.

The following witnesses testified on the bill:

09:49 AM --
Mr David Kaye, DPA, testified in support of the bill. Mr. Kaye described the current retirement options for state employees. First, he distributed an outline of these options (Attachment A) and a summary of SB 09-066 (Attachment B). He stated that employees currently have a choice between two defined contribution plans administered by the DPA and by the PERA and have access to a deferred compensation 457 plan. Mr. Kaye said that the existing state plan does not meet the current needs of employees, particularly newly hired employees. Mr. Kaye also stated that merging the two plans would allow any defined contribution plans to take better advantage of existing economies of scale, which has the benefit of reducing the costs of administering the plans. The current state defined contribution plan is too small to be cost-effective for the state, said Mr. Kaye.

09SenateFin0129AttachA.pdf 09SenateFin0129AttachB.pdf

09:54 AM --
Mr. Greg Smith, PERA, came to the table and responded to questions from the committee about PERA and the proposed bill. Discussion ensued about whether the bill would limit the amount of fees in the new plan. Mr. Smith stated the bill does not limit the amount because PERA can obtain the best share price for everyone due to the size of its holdings and assets by combining all mutual fund offerings into one plan. He said PERA wants to provide transparency about what costs are being paid by investors. The agency would like to demonstrate that it can lower investment costs rather than simply showing one monthly fee, he said. In response to questions, Mr. Smith noted that employees can still choose between a defined benefit and defined contribution plan and can switch in the first five years of employment.

The committee then discussed the role of the General Assembly, the PERA board, and services available to current employees.


10:06: AM

Senator Tochtrop distributed a copy of Amendment L.001 to the committee (Attachment C). Mr. Smith returned to the table and explained that amendment L.001 makes several technical changes, allows PERA to grandfather any employer into the PERA administered plan, and grants authority to the PERA board to offer 403(b) plans to certain state employees.

09SenateFin0129AttachC.pdf















10:07 AM

Senator Sandoval closed public testimony.
BILL:SB09-066
TIME: 10:08:06 AM
MOVED:Hudak
MOTION:Refer SB 09-066 as amended to the Committee on Appropriations. The motion passed 7-0.
SECONDED:
VOTE
Brophy
Yes
Heath
Yes
Isgar
Yes
King K.
Yes
Scheffel
Yes
Hudak
Yes
Sandoval
Yes
Final YES: 7 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS
BILL:SB09-066
TIME: 10:08:26 AM
MOVED:Hudak
MOTION:Adopt Amendment L.001 (Attachment C). The motion passed without objection.
SECONDED:
VOTE
Brophy
Heath
Isgar
King K.
Scheffel
Hudak
Sandoval
Not Final YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection
















10:12 AM -- Senate Bill 09-108

Senator Gibbs, prime sponsor of SB 09-108, provided a general overview of the bill's goals and objectives, which include: creating jobs and stimulating Colorado's economy, addressing structurally deficient bridges, initiating mileage-based pilot programs, pursing more opportunities for projects like the Transportation Expansion project (or T-REX), and committing to departmental finance and efficiency improvements. He stated that SB 09-108 has four major components, including a bridge and road safety program, a high performance transportation enterprise, mileage-based revenue commission and pilot project, and a Departmental Efficiency Committee. According to Senator Gibbs, the bill dedicates about $200 million annually towards transportation objectives, which would create jobs in Colorado.

Senator Gibbs explained that the bill would primarily finance these objectives through an increase in driver registration fees. The average driver, he stated, would pay about $31.00 more per year, or about $2.50 per month. The bill increases car rental fees by $2.00 per day. The bill would also increase the penalty for late registration fees. He further explained that the bill would authorize the use of Certificates of Participation (COPs) and revenue bonds that would be paid for by user fees. This would provide about $100 million per year for bridge safety projects and $150 million per year for road safety projects.

Senator Gibbs responded to questions about mass transit, road safety, deficient bridges, available revenue for transportation in the General Fund, and the proposed fees. He also distributed Amendment L.008 to the committee (Attachment D). Senator Gibbs said that finding General Fund revenue to dedicate towards transportation is a difficult task in the current fiscal climate.

09SenateFin0129AttachD.pdf

He stated that public testimony would answer many of the committee's questions.

The following witnesses testified:

10:21 AM --
Mr. Henry Sobanet, Colorado Department of Transportation (CDOT), testified in support of the bill. He stated that the current revenue streams are not sufficient to maintain a quality transportation system, and without additional funding, citizens can expect a gradual decline in the quality and safety of roads and bridges in Colorado.


10:34 AM


Committee discussion ensued about many issues affecting transportation policy in Colorado, including voluntary payments, fees, tolling authorities, and local governments. Committee members expressed concerns about additional fees. The committee also discussed the gas tax and whether the voters should simply approve an additional tax for transportation needs.












10:39 AM

Discussion also ensued about the impact of federal stimulus dollars for transportation needs in Colorado. Mr. Sobanet stated that the stimulus dollars come with strings attached to them and may not address immediate challenges.


The following witnesses also testified:

10:50 AM --
Ms. Jane Hylen, Enterprise Rent-A-Car, testified in opposition to the bill. She stated her concerns about rental car customers facing an increase in their cost while other stakeholders do not. She argued that good policy should spread the burden of the cost, and the bill places too large of a burden on a small number of people. Ms. Hylen distributed a document urging opposition to the bill (Attachment E) and a generic example of car rental taxes (Attachment F). Ms. Hylen responded to questions from the committee about taxes, fees and who should pay. She further explained that she would be more likely to support a proposal that was broad based and spread out the increase among all highway users.

09SenateFin0129AttachE.pdf 09SenateFin0129AttachF.pdf

11:00 AM --
Mr. Paul Sheldon, Hertz Rent-A-Car, testified in opposition to the bill. He said he is concerned that local businesses will be negatively impacted if the rental car fee is implemented. He is also concerned about the impacts on local residents that use rental cars.

11:02 AM --
Mr. Greg Fulton, on behalf of Colorado Motor Carriers, testified about the bill. Mr. Fulton stated he recognizes that there are transportation needs and supports paying a fair share, but is concerned about the tolling provision in the bill and the speed with which the bill is moving through the process. Mr. Fulton stated that tolls on existing highways will exert significant burden on small businesses and motorists. He distributed a multi-state comparison of taxes and fees on tractors (Attachment G) and information about lack of uniformity in truck registration fees (Attachment H).

09SenateFin0129AttachG.pdf 09SenateFin0129AttachH.pdf

11:18 AM -- Mr. Dan Coleman, DG Coleman Inc., testified about the bill. He said that current trucking fees have resulted in a loss of jobs over the past eight years.

Senator King distributed four amendments, including: Amendment L.007 (Attachment I), Amendment L.010 (Attachment J), Amendment L.011 ( Attachment K), and Amendment L.012 (Attachment L).

09SenateFin0129AttachI.pdf 09SenateFin0129AttachJ.pdf

09SenateFin0129AttachK.pdf 09SenateFin0129AttachL.pdf






11:27 AM --
Mr. Bradley High, Alamo Rent-A-Car, testified in opposition to SB 09-108 and expressed concern about the impacts of increasing rental car fees that motorist would pay.

11:30 AM --
Mr. Greg McKnight, Rocky Mountain Minority Contractors Association (RMMCA), testified in support of the bill. He said that the General Assembly must act quickly to assist transportation in Colorado because minority and women businesses are on the edge of economic success.

11:33 AM --
Mr. Erik Jensen, representing the Colorado Contractors Association (CCA), testified in support of SB 09-108. He stated that small businesses have invested what they can to be successful, and without additional funding, more contractors will become unemployed.

The following additional witnesses testified:

11:44 AM --
Ms. Tamara Ward, Denver Metro Chamber of Commerce, testified in support of the bill. She distributed a brochure on business leadership in Colorado (Attachment M). She said the proposed bill provides a stable source of funding for a much-needed sector of Colorado's economy.

09SenateFin0129AttachM.pdf

11:49 AM -- Mr. Joe Kiely, representing Ports-to-Plains, testified about the bill. He said it is important to increase transportation funding to rural Colorado.

11:53 AM --
Mr. Mark Mehalko, representing Move Colorado, testified in support of the bill. His comments addressed the importance of mileage-based programs to provide a source of revenue.

11:59 AM --
Mr. Chris Meza, representing Meza Construction company, testified in support of the SB 09-108. He stated that transportation funding is critical to the success of small minority-owned businesses

12:02 PM -- Mr. Antonio Ledezma, representing Jalisco International Inc., testified in support of the bill. He said that increased vehicle fees will provide jobs to repair declining infrastructure. He stated that in the past few months, his company has been forced to layoff 8 percent of its workforce. Mr. Ledezma is concerned about individuals who will have difficulty supporting their families due to the lack of available work.

12:06 PM --
Ms. Stephanie Thomas, Colorado Environmental Coalition, testified in support of the bill. She discussed mileage-based revenue increases and the importance of addressing the infrastructure needs of Colorado for public safety.

12:09 PM --
Ms. Gini Pingenot, representing Colorado Counties Inc., testified in favor of SB 09-108. Her comments addressed transportation revenue to local jurisdictions and strengthening the relationship between the state and county governments.

12:11 PM --
Mr. Russell George, CDOT, testified in support of the bill. Mr. George responded to questions about the need for additional commissions. He said that adding outside citizens to commissions helps to provide new perspectives. He also addressed questions related to fees, impacts on motorists, pilot programs, and constitutional issues related to taxes.








12:26 PM

Senator Sandoval closed public testimony on SB 09-108.
BILL:SB09-108
TIME: 12:26:30 PM
MOVED:Hudak
MOTION:Refer SB09-108 as amended to the Committee on Appropriations. The motion passed 4-3.
SECONDED:
VOTE
Brophy
No
Heath
Yes
Isgar
Yes
King K.
No
Scheffel
No
Hudak
Yes
Sandoval
Yes
Final YES: 4 NO: 3 EXC: 0 ABS: 0 FINAL ACTION: PASS

BILL:SB09-108
TIME: 12:26:52 PM
MOVED:Isgar
MOTION:Adopt Amendment L.008 (Attachment D). The motion passed without objection.
SECONDED:
VOTE
Brophy
Heath
Isgar
King K.
Scheffel
Hudak
Sandoval
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection














BILL:SB09-108
TIME: 12:30:26 PM
MOVED:King K.
MOTION:Adopt Amendment L.007 (Attachment I). The motion failed 3-4.
SECONDED:
VOTE
Brophy
Yes
Heath
No
Isgar
No
King K.
Yes
Scheffel
Yes
Hudak
No
Sandoval
No
Not Final YES: 3 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: FAIL

BILL:SB09-108
TIME: 12:32:17 PM
MOVED:King K.
MOTION:Adopt Amendment L.010 (Attachment J). The motion failed 3-4.
SECONDED:
VOTE
Brophy
Yes
Heath
No
Isgar
No
King K.
Yes
Scheffel
Yes
Hudak
No
Sandoval
No
Not Final YES: 3 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: FAIL


















BILL:SB09-108
TIME: 12:33:47 PM
MOVED:King K.
MOTION:Adopt Amendment L.011 (Attachment K). The motion failed 3-4.
SECONDED:
VOTE
Brophy
Yes
Heath
No
Isgar
No
King K.
Yes
Scheffel
Yes
Hudak
No
Sandoval
No
Not Final YES: 3 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: FAIL
BILL:SB09-108
TIME: 12:35:15 PM
MOVED:King K.
MOTION:Adopt Amendment L.012 (Attachment L). The motion failed 3-4.
SECONDED:
VOTE
Brophy
Yes
Heath
No
Isgar
No
King K.
Yes
Scheffel
Yes
Hudak
No
Sandoval
No
Not Final YES: 3 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: FAIL


12:39 PM

The committee adjourned.