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By
Dan Pilcher
CACI Senior Vice President
& Chief Operating Officer
Phone: 303.866-9600
E-Mail:
dpilcher@COchamber.com
Friday, April 25, 2008
Nearing the End of a
Busy Legislative Session...
In the last two weeks of the legislative
session, there has been a last-minute flurry of
bill introductions.
CACI Opposes
So-Called “Bad Faith” Bill
One bill being carried by House Speaker Andrew
Romanoff (D-Denver), dubbed the “bad faith”
bill, attempts to address cases where insurance
companies make coverage decisions related to
claims for insurance benefits. HB08-1407
increases fines and penalties, creates a private
cause of action for violations and authorizes
recovery of attorneys fees and up to two times
actual damages. CACI opposes the bill for a
number of reasons:
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Health plans already have independent
appeals processes in place that are reviewed
regularly to ensure that the process is
independent, impartial and fair.
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HB-1407 prohibits use of binding arbitration
agreements used by health plans that offer
members a less costly, more timely
resolution of disputes.
Of primary concern to employers is a provision
in the bill that includes workers’ compensation
insurance and creates a “safe workplace” cause
of action for injured workers. We would argue
that because workers comp is a no-fault system,
paid for by the employer to insure the worker in
the event of an on-the-job accident, it is
different from an auto, health or similar policy
that a person buys to cover him/her self and
family and property. This provision is a clear
attempt to undo the workers’ compensation
reforms of 1992 that have contained workers’
compensation costs.
The bill passed out of the House Business
Affairs & Labor Committee yesterday on a 6 - 4
vote.
Bills Aimed at
Business Personal Property Tax
Two bills are moving through the process and
attempt to address business personal property
tax. HB08-1225 incrementally increases the
threshold for exemptions from business personal
property taxes up to $7,000 beginning January 1,
2011 and adjusts the amount of the threshold for
exemption for inflation after that. CACI took a
neutral position on the bill because the benefit
is only likely to county assessors who will no
longer have to collect the tax on property
valued below $7,000, with no benefit to CACI
members. CACI’s concern is that legislators
will mistakenly believe this is a true exemption
and the issue of business personal property tax
has been resolved. That bill passed the Senate
Finance committee yesterday on a 4 - 0 vote.
Another bill addressing the business personal
property tax was introduced on Wednesday and was
heard in the House Finance Committee this
afternoon. HB08-1413 Rep. Kent Lambert
(R-Colorado Springs), Rep. Joe Rice
(D-Littleton), Sen. Chris Romer (D-Denver) and
Sen. Nancy Spence (R-Centennial) proposes to
gradually eliminate fully-depreciated property
from the tax liability. Donnah Moody testified
on this bill in Finance Committee today. The
following are excerpts from her testimony:
We believe that the
bill’s sponsors recognize the need to eventually
eliminate this onerous tax that discourages
investment in technology and equipment –
investment that is vital to grow any business –
and a tax that makes Colorado less competitive
with other states that do not tax business
personal property.
One of the reasons
this tax is so regressive is the requirement by
state law that fully depreciated property
continue to be reported for tax purposes.
As you’ve heard, HB-1413
proposes to gradually eliminate
fully-depreciated property – a concept that CACI
has long advocated as one of several incremental
steps that can – and should – be taken to
eventually eliminate the tax.
Over the years, CACI
has pursued a “fix” for this onerous tax and the
solutions all come down to how to compensate for
the loss of tax revenue: to local governments –
to some counties whose primary tax base is
business
personal property
tax - and to the state to backfill the lost tax
revenue to schools – those are hurdles that have
historically been impossible to overcome.
In the case of this
very minor and gradual elimination of property
that is ALREADY FULLY depreciated – the lost
revenue appears to be insurmountable.
When the business
community united to support Referendum C (TABOR
time-out) we voluntarily gave up a state tax
credit from the TABOR surplus of 16 percent on
the business
personal property
tax that companies had paid locally. That 16
percent credit totaled $100 million a year and
may be lost forever unless the General Assembly
somehow works with the business community to
find a way to eliminate the business
personal property
tax and keep local communities whole by finding
replacement revenue.
Home Foreclosures
Bill Amended Following Strong Opposition
A bill that, as introduced, created a stir of
opposition is HB08-1402 which dealt with the
emotional issue of home foreclosures. CACI
joined others in the financial services industry
in opposing HB-1402 by Rep. Ferrandino
(D-Denver) and Rep. Gagliardi (D-Arvada)
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In its introduced form, the bill would have
added a 90-day extension to the current
230-day minimum foreclosure process,
delaying the property sale and increasing
expenses to the homeowner if the lender
isn’t made whole by attorneys’ fees,
property maintenance, etc. It further
damages the homeowner’s credit.
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The bill makes Colorado loans undesirable to
the secondary market, which now will buy
only the safest loans from customers with
the best credit scores and creates an
economy-damaging Colorado credit crunch.
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Affordable housing and lower income
customers will be hit hard when credit
tightens. Loans will be made to the safest
borrowers. It even hurts reverse mortgages
for the elderly.
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Judicial involvement in foreclosures will
increase mortgage loan rates ¼% to ½%.
Under recently revised Colorado law, direct
costs of a foreclosure are approximately
$5,000. Judicial foreclosure will be
roughly $10,000.
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The bill encourages delinquency by raising
the prospect of negotiating a better deal
without even a single past due payment.
Opponents of the measure argued that Colorado’s
laws already provide a fair and equitable
mechanism for addressing the issue. Jim Tatten
testified on behalf of CACI in opposition to the
bill.
Following strong opposition to the bill, a
strike-below amendment established an outreach
program with funding of $100,000 to support the
program and a requirement that lenders provide
the direct phone number for the housing hotline
to borrowers as well as the phone number for the
loss prevention departments. The bill passed
out of the House Business Affairs and Labor
Committee on a 6 - 3 vote. CACI is neutral on
the bill in its amended form.
Single Sales Factor
Bill Receives Unanimous Committee Approval
The Senate Appropriations Committee gave
unanimous approval to the Single Sales Factor
Bill. CACI has worked on technical aspects of
HB08-1380 by Rep. Jahn (D-Wheat Ridge) and Sen.
Brandon Shaffer (D-Longmont). CACI worked with
the proponents of the bill to get a clarifying
amendment adopted in Senate Finance. Our thanks
to the House and Senate sponsors and the
Governor’s office for their support in
clarifying some aspects of the bill.
CACI Members Invited to Attend World Trade Day
May 1st
The World Trade Center Denver will host its 2008
World Trade Day May 1st at the Grand Hyatt
Denver. Featured speakers include Governor Bill
Ritter and Crocs Vice President Michael
Margolis. The agenda will focus on such key
industries as agriculture and food, information
technology, bio-science and bio-health, aviation
and aerospace, energy, beverages and outdoor
products. For more information, visit:
www.wtcdenver.com
For More Information
on Legislation . . .
CACI members with questions about legislation
that CACI opposes or supports should contact
Chuck Berry, CACI President, at 303.866.9652
or e-mail him at:
cberry@COchamber.com.
Questions pertaining to health-care bills should
be directed to Ralph Pollock, Chair of
the CACI HealthCare Council, at 303.866.9657 or
via e-mail at:
ralph@apaccess.com.
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