House Committee on Business Affairs and Labor (03/10/2009)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Date:	03/10/2009	ATTENDANCE

Time:	09:52 AM to 12:04 PM	Balmer	X
		Bradford	X
Place:	HCR 0112	Gagliardi	X
		Liston	X
This Meeting was called to order by		Priola	X
	Representative Rice	Ryden	*
		Scanlan	*
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:
SB09-150 HB09-1170 SB09-076		Amended, Referred to the Committee of the Whole Laid Over Referred to Finance

09:53 AM -- Senate Bill 09-150

Representative Levy, prime sponsor, presented Senate Bill 09-150 concerning the priority of a purchase-money lien for a motor vehicle. When a party is providing financing to sell a motor vehicle, that party is said to have a purchase-money security interest in the vehicle. Currently, if the borrower defaults on the motor vehicle loan, lien holders are entitled to the value of the vehicle based on the order in which the lien was filed.

Under this bill, the priority of repayment is changed such that the party that made the original loan, the party with a purchase-money security interest, receives first priority for repayment. This is conditioned upon the vehicle loan being perfected (filed with the County Clerk) within 20 days of possession of the motor vehicle. This new arrangement aligns motor vehicle purchases with the Uniform Commercial Code.

09:55 AM

Representative Balmer asked whether other states have this type of law. Representative Levy said she was not sure, but her witness might be able to answer his question.

09:56 AM -- Mark Robey, representing the Credit Union Association of Colorado, testified in support of the bill.

09:59 AM

Representative Levy explained that amendment L.002 (Attachment A) strikes section three of the bill and adds a safety clause.


BILL:	SB09-150
TIME:	10:00:10 AM
MOVED:	Balmer
MOTION:	Moved amendment L.002 (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:	SB09-150
TIME:	10:00:39 AM
MOVED:	Balmer
MOTION:	Moved to refer Senate Bill 09-150, as amended, to the Committee of the Whole. The motion passed 11-0.
SECONDED:	Soper
		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

10:01 AM

The committee took a recess.

10:06 AM -- House Bill 09-1170

The committee was called back to order by Chairman Rice who advised the committee that Representative Court is in a meeting and that they will be hearing House Bill 09-1170 in the meantime. Representative Casso, prime sponsor, presented House Bill 09-1170 concerning unemployment insurance benefits for locked-out employees. The bill was previously heard by the committee on March 4. This bill allows an employee who is subject to an employer-initiated lock-out to receive unemployment benefits.

10:08 AM

Representative Rice distributed and explained amendment L.005 (Attachment B). He noted that the amendment does not have any line numbers and said he would allow witnesses to testify on the amendment.

10:10 AM -- Patrick Scully, an attorney from Sherman and Howard, testified against the bill on behalf of the Colorado Retail Council and the Rocky Mountain Food Association. He said he has some issues with the amendment. Mr. Scully stated that the law has worked up to this point and feels that the amendment does not improve the bill. Mr. Scully said the amendment would increase litigation. Representative Gagliardi asked Mr. Scully to explain the term "super director" that he used during his testimony. Mr. Scully said the bill retains that the director of the Department of Labor and Employment is going to determine whether the negotiations are a good deal or a bad deal. The state would enter the dispute and determine whether there is a good collective bargaining agreement or not. Representative Gagliardi followed up on her previous question. Mr. Scully said the term refers to the head of the department who makes the decision. Representative Balmer asked whether the amendment brings the law back to the pre-1999, Mr. Scully believed it does not.

10:21 AM

Mr. Scully responded to additional questions from the committee. Representative Scanlan asked about the "some advantage" language included in the bill. Representative Stephens talked about her concern over the department being the arbitrator in these matters. She suggested a possible outside judge instead, similar to insurance company arbitration.

10:46 AM -- Tony Gagliardi, the Colorado State Director of the National Federation of Independent Business, testified against the original bill and the bill with the amendment. He said current law is working, there have not been any interruptions, and federal law provides adequate protections. Mr. Gagliardi stated that the bill will cause uncertainty in the economic climate in Colorado which he says is bad public policy.

10:52 AM -- Tamara Ward, representing the Denver Metro Chamber of Commerce and the Colorado Competitive Council, testified against the amendment and the bill.

10:54 AM -- Chrisantha Duran, representing the United Food and Commercial Workers (UFCW), testified on the amendment and in support of the bill. She said the amendment is a compromise and that under the amendment, the Safeway employees would not have received benefits in 1996. Ms. Duran also felt the amendment would clarify the law. She addressed the other concerns of the prior witnesses. Representative Liston asked whether amendment L.005 would remove the term defensive lockout. Ms. Duran responded to additional questions.

11:05 AM -- Mike Cullen, Director of the Unemployment Insurance Program, responded to questions and stated that the department is neutral on the bill and the amendment. Mr. Cullen was asked to explain the effects of the amendment. He said the outcome of the hearing officer is not as definitive as they would like because under the amendment, the department would be required to look at last best final offer and determine whether the offer is beneficial to the employees or not. Mr. Cullen pointed out that the current law has not been challenged either so it is unclear how current law would play out. He said he cannot recall any lock-outs where employees did not receive benefits since the passage of the 1999 law.

Representative Balmer asked whether the pre-1999 law and House Bill 09-1170 are more concrete than amendment L.005. Mr. Cullen stated that he would not classify it that way because amendment L.005 specifies that the employees who have agreed for their employer to be in a multiemployer bargaining unit, would not receive unemployment benefits. The 1996 law was not that way because the department still had to review the agreements. He explained that under amendment L.005, the department does not have to review the last best and final offer. Mr. Cullen was asked if amendment L.005 would change the fiscal note. Mr. Cullen said it would not because the fiscal note provides the cost of 1,000 employees if they were to strike and receive benefits. Representative Liston asked about the number of strikes and types of strikes there have been in Colorado in the last 10 years. Mr. Cullen said he cannot recall any lock-outs where employees did not receive benefits and said there has not been anything like 1996 either in the last 10 years. Representative Liston talked about the current uncertainty of the unemployment insurance fund.

11:18 AM

Representative Scanlan distributed and explained that amendment L.006 (Attachment C) changes the effective date to July 1, 2010.

11:18 AM -- Earnest Duran, representing the United Food and Commercial Workers, spoke on amendment L.005 and said the economy is stimulated by providing good paying jobs. Mr. Duran stated that he was the attorney for UFCW in 1996 and explained that the employers were trying to remove benefits. He talked about the effects of a lock-out, specifically, if there is a lock-out, individuals cannot cross the picket line. Mr. Duran talked about the hearing following the 1996 strike and said that after the hearing the law was changed on party lines. The court ruled that Safeway should receive benefits because they were locked-out because the employer was attempting to remove benefits. Mr. Duran talked about previous legislation around this issue that was introduced in the last few years. He said in his view, the pre-1999 law was the middle ground. Representative Balmer commented on some of Mr. Duran's remarks. Mr. Duran responded. Representative Stephens responded to Mr. Duran's remarks. Mr. Duran responded.

11:43 AM

Representative Liston talked about the increased competition in Colorado in the grocery market between unionized stores like Safeway and King Soopers versus nonunionized stores like Walmart. He said he is concerned that the bill will put unionized stores at a disadvantage. Mr. Duran responded to Representative Liston's comments. Representative Scanlan said she is trying to create the best policy around this issue and feels that amendment L.005 improves past and current law. Mr. Duran said he feels the pre-1999 law is better.

11:43 AM

Representative Rice laid the bill over to Wednesday, March 11, upon adjournment. A position paper from the Aurora Chamber of Commerce opposing the bill was distributed (Attachment D).

11:45 AM -- Senate Bill 09-076

Representative Court, prime sponsor presented Senate Bill 09-076 concerning the appropriation of employer tax surcharge moneys to the employment and training technology fund for use by the Division of Employment and Training within the Department of Labor and Employment.

This bill creates the Employment and Training Technology Fund for automation initiatives at the Department of Labor and Employment. It diverts 20 percent of employer surcharge taxes to the Technology Fund which reduces to 30 percent the amount of taxes deposited into the Unemployment Compensation Trust Fund. The executive director may transfer money to the Trust Fund from the Technology Fund at any time but if the balance of the Trust Fund falls below $25 million, the executive director is required to transfer money to the Trust Fund from the Technology Fund. Moneys in the Technology Fund are subject to annual appropriation by the General Assembly and do not revert to the General Fund or any other fund at the end of any fiscal year. The moneys in the Technology Fund are not subject to the statutory limit on uncommitted reserve funds.

The Technology Fund is proposed as a savings account for future department technology projects. An audit of the department's existing technology resources determined that the department needs $75 million to pay for the replacement of its aging computer systems. The department will not have the authority to spend the money in the fund until it goes through the normal planning and approval process with the Office of Information Technology and the General Assembly approves the spending.

11:51 AM -- Mike Cullen, Director of the Unemployment Insurance Office within the Colorado Department of Labor and Employment, stated that the intent of the bill was to set aside money so that the office can begin to replace its antiquated computer systems. Mr. Cullen noted that the bill does not provide for maintenance, but that the bill gives the department a method of accumulating the money over time to replace the system. Mr. Cullen indicated that there is not currently adequate money within the Trust Fund to replace the systems. Mr. Cullen discussed the system currently in place, which was installed in 1985 and is very difficult to maintain and to change. Once the new system is in place, the department will go through the normal process of asking for money to maintain it.

11:56 PM

Mr. Cullen responded to a question from Representative Stephens about an on-line system for unemployment insurance benefits. Mr. Cullen talked about the internet self service program that is currently being developed. He also responded to additional questions from the committee about past and future computer systems.

11:58 AM -- Dara Hessee, Legislative Liaison for the Governor's Office of Information Technology (OIT), testified in support of the bill.


BILL:	SB09-076
TIME:	12:02:21 PM
MOVED:	Soper
MOTION:	Moved to refer Senate Bill 09-076 to the Committee on Finance. The motion passed 9-1.
SECONDED:	Stephens
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	No
	Liston	Excused
	Priola	Yes
	Ryden	Yes
	Scanlan	Yes
	Soper	Yes
	Stephens	Yes
	Casso	Yes
	Rice	Yes

Not Final YES: 9 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS

12:04 PM

Adjourned.