By

Dan Pilcher

CACI Senior Vice President

& Chief Operating Officer

Phone: 303.866-9600

E-Mail: dpilcher@COchamber.com

Friday, June 6, 2008

It’s a Wrap: Governor Signs 2008 Session Bills

Yesterday was the final day for Governor Bill Ritter to take action on bills passed during the 2008 session of the Colorado General Assembly.  Here are the bills that were passed at the end of the session that CACI lobbied or tracked closely:

HB-1407, Speaker Andrew Romanoff’s “Bad Faith” Bill, Targets Insurance Companies

The Governor on Wednesday signed HB-1407, which was introduced late in the session, leaving little time for thoughtful debate on the bill.  CACI had asked the Governor to veto the bill, which is aimed at insurance companies when they make decisions on claims for benefits by policyholders.  The bill increases fines and penalties, creates a private-cause-of-action for violations and authorizes recovery of attorneys’ fees and up to twice the actual damages.  Although life insurance and workers’ compensation insurance companies were removed from the bill, health insurance companies, auto insurance companies and homeowners’ insurance companies remained in the legislation.  The bill’s chief proponent was House Speaker Andrew Romanoff (D-Denver).

HB-1389, Which Will Force Insurance Companies to Justify Rate Increases

The Governor yesterday signed HB-1389, which will require health insurance companies to justify rate increases before the Colorado Division of Insurance before they can go into effect.  The Division can deny rate increase requests based on such factors as insurance companies’ profitability, reserves, denied-claims record and administrative costs.  The bill was amended to remove some provisions--such as allowing the Insurance Commissioner to use the “loss ratio,” the amount paid out in claims as a standard by which to deny a rate increase—to which the health-insurance companies had objected.  Nonetheless, CACI remains concerned that the new law will increase both costs to insurance companies to comply with the bill and to the state to implement and carry out the law’s provisions.  Another CACI concern is that the new law may have a negative effect on the insurance market.  Finally, it remains to be seen whether or not consumers will benefit from the new law in any meaningful way.

SB-135, Health Insurance Standardized-Benefits Card

On Tuesday, the Governor signed into law SB-135, which was supported by CACI and requires health insurers to issue a standardized-benefits card.  The bill was sponsored by Senator Shawn Mitchell (R-Broomfield).  The Steering Committee of the CACI HealthCare Council and the CACI Board of Directors supported the bill.  At the March meeting of the CACI Board of Directors, Senator Mitchell said the bill would reduce administrative overhead costs of health-insurance companies and medical-service providers.  He also said that the concept of a standardized card was a recommendation of the Blue Ribbon Commission on Health Care Reform.

SB-117, the “Centennial Care Choices” Bill

On Tuesday, the Governor signed SB-217, the "Centennial Care Choices Program" bill, which asks health-care insurers to tell the legislature what a so-called “value-benefit plan” would look like and cost if the state mandated that everyone have health insurance.

The Steering Committee of the CACI HealthCare Council did not take a position on the bill.  The bill generated considerable interest about its concepts.  Although supporting provisions of the bill calling for the development of value-benefit plans by health insurers, the CACI Board of Directors will not support provisions that mandate every Coloradan to obtain health insurance or that call for a tax increase in 2010 to fund such a plan.

HB-1227, the PUC Sunset Review Bill

On Monday, the Governor inked HB-1227 which CACI initially opposed but then moved to a neutral position after a number of amendments were added that addressed CACI’s concerns.

As originally introduced in the House, the bill, in addition to reauthorization of the PUC, would have expanded the authority of the PUC to allow amicus curiae briefs to be filed by numerous state departments, required “net metering” and solar rebates from non-PUC-regulated rural-electric cooperatives and municipal utilities and imposed direct fining authority for violations with no criteria for imposition of the fines.

In addition, the introduced version would have shifted the burden of proof to existing taxi cabs to show that new cab services would be “detrimental to the public interest,” which would likely cause excess supply, reduced driver income and potential loss of service in areas of marginal demand (i.e., rural and mountain communities).

Finally, the bill as introduced would have allowed the Office of Consumer Counsel (OCC), whose role is to protect consumers’ rates, to intervene on environmental concerns in adjudicatory matters affecting gas or electric utilities.   

CACI opposed portions of the bill that exceeded reauthorization of the PUC and worked to secure the following amendments:

• Penalties can only be imposed after proof that the violation occurred “intentionally” and are capped at a specific dollar amount or a percentage of revenue, whichever is less;

• The expanded authority of the OCC was eliminated; and

• Additional requirements on the rural-electric cooperatives and municipal utilities were removed.

Meanwhile, cab companies secured an amendment that placed the burden of complying with requirements for a Certificate of Public Convenience and Necessity (CPCN) on the applicant rather than on existing cab companies in counties with a population of more than 70,000.

HB-1225, the Business Personal Property Tax Bill

On May 20th, the Governor approved HB-1225, which was part of his economic development package announced in late September last year.  The bill will increase incrementally the ceiling for a tax exemption for business personal property from the current $2,500 to $4,000 for tax year 2008, $5,000 for tax years 2009 and 2010, and finally $7,000 for tax years 2011 and 2012.  After that, the exemption would be increased on a biennial basis for inflation.

CACI took a neutral position on the bill because of several concerns.  Most importantly, the exemption will not apply to any businesses whose business personal property is valued at any amount above the exemption.  The bill will have no effect on most businesses, especially the larger ones that pay the bulk of the tax.

HB-1380, Single-Sales Factor Bill

Also on May 20th, the Governor signed HB-1380, the single-sales factor bill.  At its March meeting, the CACI Board of Directors adopted a neutral position on the single-sales factor bill based on the recommendation of the Single-Sales Factor Subcommittee of the CACI Tax Council because some members of the Subcommittee oppose the bill, some support and others remain neutral.  The Subcommittee worked for several months with the Governor’s Office and the bill’s House and Senate sponsors to improve certain technical aspects of the bill.

For More Information on Legislation . . .

CACI members with questions about legislation that CACI opposed or supported 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.