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Dan Pilcher
CACI Senior Vice President
& Chief Operating Officer
Phone: 303.866.9600
E-Mail:
dpilcher@cochamber.com
Friday, February 19, 2010
JBC Chair Says “Businesses Don’t Care About Colorado” During
House Floor Debate on Business Tax Bills
On Tuesday, Representative Jack Pommer (D-Boulder), who chairs
the influential Joint Budget Committee as well as the House
Appropriations Committee, said during a vigorous debate on the
House Floor that “Businesses don’t care about Colorado. They
care about their own profits. They’ll get as much money as they
can out of Colorado. And then they’ll leave the state.”
Representative Pommer was the House sponsor of the nine bills
suspending or eliminating various business tax provisions that
the House has sent to Governor Bill Ritter for his signatures.
The House was debating the Senate versions of the bills and
eventually approved them.
For the coverage of the debate by The Denver Business Journal,
click on:
http://denver.bizjournals.com/denver/stories/2010/02/15/daily26.html
To listen to Representative Pommer’s comment, visit the CACI Web
site:
http://www.cochamber.com/media/audio/popup_business_is_the_engine.html
And for today’s column about this political battle under the
Gold Dome by Neil Westergaard, Editor of The Denver Business
Journal, click on:
http://denver.bizjournals.com/denver/stories/2010/02/22/editorial1.html
The Irony of It All: Senator Heath Now Proposes Granting Tax
Credits to Companies to Re-Hire Laid-Off Workers
The scene could have been adapted from “Alice in Wonderland” . .
. .
On Tuesday, the Senate Business, Labor and Technology Committee
held a heated debate on SB-133, which would grant income-tax
credits to employers to “incentivize” them to re-hire laid-off
workers sooner rather than later.
The Committee approved the bill on a party-line vote, with the
four Democrats voting in favor of the bill and the three
Republicans voting against sending the bill on to the Senate
Appropriations Committee. No one testified either for or
against the bill, which is highly unusual.
The irony of Republican legislators voting against a
tax-incentive bill for business and Democratic legislators
voting for it was not lost on statehouse observers. The lively
debate between the majority-party Democrats and the
minority-party Republicans over the last two weeks about the
business tax bills set the stage for the first hearing on
SB-133.
The Senate co-sponsors of the bill are Senator Rollie Heath
(D-Boulder) and Senator Chris Romer (D-Denver).
The second irony, of course, is that Senator Heath is
cosponsoring a bill that would grant businesses a projected $11
million in tax credits--only days after he led the Senate charge
on nine bills that will increase business taxes by $231.3
million for the 28 months beginning March 1st.
As introduced, the SB-133 would:
·
Apply only to firms that laid off workers during 2009;
·
Apply only to firms that rehire the works sooner than they would
have without the tax credit;
·
Apply only when the re-hired worker has been employed for at
least one year after the re-hire;
·
Be available to employers for the tax year beginning January 1,
2011;
The credit would be equal to a percentage of the employer’s
costs for paying the employer’s share of FICA taxes, which is
7.65 percent of an employee’s salary. For workers rehired
between January 1st and April 30th of this
year, the credit per worker is equal to 66 percent of the
employer’s FICA taxes. For workers rehired between May 1st and
August 31st of this year, the credit is 33 percent.
An employer who wants to claim the credit would have to submit
an affidavit with his or her tax return saying that:
·
The person rehired during the eligibility period worked for them
a year before being laid off and was laid off during last year;
·
Each person rehired has worked for the company for one year
since the rehire date; and
·
Were it not for the credit, the firm would not have rehired the
individual by the date of re-hire.
If the credit amount exceeds the tax liability of the employer,
it cannot be refunded to the employer but it can be carried
forward and used as a credit on future tax returns for up to
five years.
The bill is projected to cost the state $5.5 million in fiscal
year 2010-2011 beginning July 1st and the same amount
the following fiscal year, according to the fiscal note, for a
total of $11 million over two years.
The fiscal note acknowledges, however, that “the degree to which
rehires of unemployed workers occur sooner than otherwise
expressly due to the bill is unknown . . . “ In other words,
the bill is built on an assumption for which there is no data.
Click here to read a blog posting about the Tuesday hearing by
Ed Sealover, statehouse reporter for The Denver Business
Journal:
http://denver.bizjournals.com/denver/blog/capitol_business/2010/02/
a_biz_tax_credit_that_dems_like_and_republicans_dont.html?t=printable
And here is another story about the committee hearing posted on
the Web site of State Bill Colorado:
http://www.statebillnews.com/2010/02/after-sb10-133-dismantling-tax-breaks-dems-pose-new-one/
HB-1263, Targeting “Excessive Executive Compensation,” Scheduled
for March 3rd Hearing before the House Finance
Committee
The bill, described in detail in last week’s issue of CACI’s
Capitol Report, will be heard after the House adjourns its
morning floor session on Wednesday, March 3rd, in
Room A in the Legislative Services Building, East 14th
Avenue and Sherman Street.
CACI is strongly opposes HB-1263, which would “de-couple” state
business income-tax deductions from Federal deductions, is
sponsored by Representative Jack Pommer (D-Boulder), who chairs
the powerful Joint Budget Committee and the House Appropriations
Committee.
Although the bill’s fiscal note has not yet been made public,
Representative Pommer was quoted today by The Denver Business
Journal as saying that the bill would raise $19 million
annually.
It’s politically noteworthy to point out that this bill was
not part of Governor Bill Ritter’s package of bills that
suspended or terminated various business tax provisions. The
Colorado Fiscal Policy Institute is the conceptual source for
the bill.
The bill limits to $250,000 the amount of a state income-tax
deduction for wages an employee’s compensation package from
being claimed by a corporation or employer as a deduction under
Federal law.
The Federal IRS tax code has certain limits ($1 million) on the
amount of compensation that a corporation can deduct, but it
only applies to publicly-traded corporations for the five most
highly compensated employees and to businesses that have
received Federal bail-out funds. Both of those situations are
very specific in terms of oversight by and accountability to
investors.
This bill as introduced also includes IRS 1099 non-employee
compensation. For example, a business that pays $500,000 for
janitorial services would only be entitled to deduct $250,000.
Because businesses in general purchase “personal services” that
are not considered “salaries & wages,” this bill would place a
huge cost burden on businesses that use such services.
To read The Denver Business Journal article, click on:
http://denver.bizjournals.com/denver/stories/2010/02/22/story2.html
“Disposal of Records” Bill, HB-1056, Set for First Hearing Next
Week
CACI strongly opposes HB-1056, which
is scheduled to be heard next Thursday, February 25th,
by the House Judiciary, which convenes at 1:30 p.m. in Room 107
at the State Capitol.
The bill
prohibits a public or private entity from disposing a document
or electronic record containing personal identifying information
unless it is (a) shredded if on paper or (b) erased or rendered
indecipherable and irretrievable if the record is electronic.
The bill creates a civil penalty of $500 per page or record for
violation and requires enforcement by the Attorney General or
District Attorney. The bill also requires that the entity have
a policy outlining the destruction or proper disposal of paper
or electronic documents and records.
The sponsor in the House is Representative Jerry Frangas
(D-Denver); the Senate sponsor is Senator Morgan Carroll
(D-Aurora), an attorney.
Here are the reasons why CACI opposes this bill:
I. Current law already requires a public or private entity to
have a policy on the destruction of documents;
II. HB-1056 requires a method of destruction by a public or
private entity that is too prescriptive. Such organizations
should have flexibility of disposal based on their assessment of
the risk of the documents or records.
III. Current Federal regulations already effectively address
the disposal of personal information held by public or private
organizations. Such regulations include:
·
The Fair and Accurate Credit Transactions Act (FACTA)
already addresses document destruction. The Act required
federal agencies to promulgate rules regarding “the proper
disposal of consumer report information and records.” Those
rules became effective on June 1, 2005 (16 CFR 682). Subsection
682.3(a) provides that: “Any person who maintains or otherwise
possesses consumer information for a business purpose must
properly dispose of such information by taking reasonable
measures to protect against unauthorized access to or use of the
information in connection with its disposal;”
·
The Gramm-Leach-Bliley Act (1999) requires financial
institutions, including insurance companies and agencies, to
protect all confidential client information;
·
The Payment Card Industry Security Standards Council (PCI)
compliance regulation requires all companies that accept credit
cards to protect and properly dispose of customer’s information.
IV. HB-1056 creates civil penalties of $500 per document or
record that are highly excessive and not commensurate with the
violation.
V. HB-1056 does not address a situation of a “rogue” or
dissatisfied employee who avoids proper disposal of a document
or electronic record to retaliate against an employer.
Once Again, Raiding the Cookie Jar: House Transfers $5 million
from Unemployment Insurance Employment Support Fund
On Wednesday, the House
passed yesterday on Second Reading HB-1327, a bill that
transfers to the General Fund cash balances from various funds.
A provision of the bill takes $5 million from the Unemployment
Insurance (UI) Employment Support Fund, into which employers
pay. The House passed the bill on Third Reading today and sent
it to the Senate, where it has been assigned to the Senate
Appropriations Committee.
As CACI members well know, this is not the first time that
lawmakers have raided employer-paid cash funds. Last year, the
legislature took tens of millions of dollars from
employer-supported funds, including this one as well as three
workers’ compensation funds.
CACI HealthCare Council Takes Action on Bills
Thursday
Representative
John Kefalas addresses the CACI HealthCare Council Thursday
Note: the following section was written by Dan Anglin, CACI
Governmental Affairs Representative
This session, with the amount of health care industry-related
bills that have been introduced in both chambers of the Colorado
General Assembly, the HealthCare Council has been more active
and attended than in years past. The goal of Ralph Pollack, the
HealthCare Council Chair, is to have more employers become
active in the Council: “The issues we are debating this session
are, without a doubt, more important than ever to employers and
their workforce; CACI needs more of a voice in this debate from
those who pay for and provide insurance than we have in the
past.”
The HealthCare Council has been monitoring dozens of health-care
bills since before the start of the legislative session; many of
which have the potential to create significant increases to the
cost of purchasing health insurance. To provide Council members
with the best information available, CACI invites legislators
who have sponsored bills that may have a direct impact on
Colorado’s employers and business owners. This approach
provides a legislator with an opportunity to explain his or her
bill to the business community, and CACI members have the
opportunity to ask questions of the sponsor to better understand
the intent of the bill and the impact it may have on Colorado
business.
For the February meeting, Representative John Kefalas (D-Fort
Collins) was invited to CACI to discuss two bills he has
introduced this session: HB-1330, “All-Payer Health Claims
Database,” and HB-1166, Plain Language in Insurance Policies.
Representative Kefalas was joined by Lorez Meinhold, Health Care
Policy Advisor for the Office of the Governor; and Phil Kalan,
Executive Director for the Center for Improving Value in Health
Care (CIVHC).
Representative Kefalas explained that an All-Payer Health Claims
Database (APD) system is a concept that seven other states are
using to collect data from medical, eligibility, provider,
pharmacy and dental files from private and public payers to
track the costs of health care, and to determine the amount of
dollars paid for typical medical procedures. The Governor’s
Office and the Colorado Department of Health Care Policy and
Financing (HCPF) have been reviewing the APD system in the State
of Maine and believe that Maine’s model is the approach that
Colorado should take to collect data with the purpose of
improving value for Colorado’s health-care dollar. Click here
to learn more about the Maine model:
http://www.healthweb.maine.gov/claims/healthcost/default.aspx
CACI’s HealthCare Council determined that an APD is a concept
that may produce better health-care value in the future, but
there are still many unanswered questions as to how the data
will be collected, stored and used. At this time, CACI is
neutral on HB-1330 but will continue to work with Representative
Kefalas and the Governor’s Office to address these and other
concerns.
Representative Kefalas discussed HB-1166, “Plain Language in
Insurance Policies,” as a necessary component to reduce
complaints received by the Colorado Division of Insurance (DOI)
that center around consumers’ inability to understand their
health or auto insurance policy. HB-1166 would require that all
health and insurance policies be written at a 10th
grade readability level, and that any policy that is longer than
three pages or more than 3,000 words contain a table of
contents.
Representative Kefalas informed the Council that his intent is
to allow more consumers to understand the contents of their
insurance policies, in order to reduce the number of complaints
about insurers. He stated that he had already been informed
that his bill may increase the number of lawsuits based on broad
language in insurance policies or contracts, and that he did not
intend his bill to add to litigation, but that he did not
specify his plans to amend HB-1166 to address that concern.
Based on the anticipated costs to health and auto insurers to
rewrite their current policies to accommodate a 10th
grade reader, the Council believes that this bill will create a
significant increase to insurance premiums. Therefore, CACI
will oppose HB-1166 as it
was drafted but will continue to work with Representative
Kefalas and the DOI to determine if any amendments may change
CACI’s position.
The HealthCare Council took positions on the following
additional bills during the meeting:
HB-1160, Senator Shawn Mitchell (R-Broomfield)/Representative
Joe Rice (D-Littleton), “Wellness Incentives Rewards Outcomes”
SUPPORT
One of only a handful of bills proposing to lower the cost of
health care, HB-1160 would provide incentives for employers and
employees to improve an employee’s health. Wellness program
incentives already exist for large-group and self-insured plans;
HB-1160 would provide small-group and individual plans the
opportunity to receive the same incentives. An example of a
wellness program is smoking cessation: an employer receives a
discounted premium for providing a smoking-cessation program; an
employee would receive a discount for actually quitting
smoking. The HealthCare Council supports the principle of
reducing insurance costs and improving employees’ health. Some
consumer groups oppose HB-1160 because they believe that it
creates an unfair rate-setting policy for employees who are
medically unable to meet an outcome. The bill was amended in
the House Health and Human Services Committee to allow for a
waiver for those who are unable to achieve an outcome.
HB-1168, Senator Pat Steadman (D-Denver)/Representative Claire
Levy (D-Boulder), “Limit Reimbursement Fully Compensated Injured
Person (Subrogation)” OPPOSE
The Council is very concerned that HB-1168 will increase
insurance premiums for Coloradans because it will prevent
insurance carriers from recovering monies paid to injured
parties until the injured party is made whole. Currently, when
an insured person is injured, his or her insurance carrier will
provide treatment to allow that person to recover from his or
her injuries. The costs paid by the insurer can be recovered
(subrogated) from the “at-fault” third party, which prevents a
carrier from losing those costs and helps to keep premiums
affordable. If HB-1168 is passed, the injured party will be
compensated for the costs paid by the insurance carrier,
effectively creating a “double recovery.” This situation will
increase the likelihood of litigation because it is the only
available tool if an injured party declines to pay his or her
medical bills. At this time, the Council recommends that CACI
oppose this bill as written.
HB-1234, Representative Dianne Primavera (D-Broomfield), “Fair
Settlement Insurance Claims Medical Benefits”
OPPOSE
HB 1234 would make it an unfair practice to delay or deny
insurance claims if the person who denies or delays the claim is
not: a licensed medical practitioner in good standing, in active
practice in the same field or specialty as the claim or
requested medical service. This bill may create a situation
where medical claims are reviewed by the same doctor treating
the patient. Additionally, this mandate would impair an
insurance carriers ability to review claims for fraudulent
activity by trained claims adjusters. This measure will
increase the cost of reviewing claims substantially, which will
increase premiums in Colorado. The Council recommends that
CACI oppose this bill as written.
SB-76 , Senator Morgan Carroll (D-Aurora), “Unreasonable
Insurance Claims Practices” OPPOSE
A “solution in search of a problem,” SB-76 makes the assumption
that claimants are denied insurance benefits due to internal
policies of insurers to provide incentives to employees for
denying or delaying claims. This is not a practice of insurers,
nor is there any reasonable proof that any Colorado insurers
have engaged in this practice. Current Colorado law provides
that a person who feels that their insurance carrier has engaged
in an “unfair claim settlement practice” can file a complaint
with the Division of Insurance or pursue civil action against
the insurer. SB-76 will increase the cost of health care in
Colorado by removing authority over insurance companies from the
Division of Insurance and putting that authority within the
courts, thus increasing unnecessary litigation and making
insurance unaffordable to Coloradoans. The Council recommends
that CACI oppose this bill.
The March HealthCare Council meeting will feature as its guest
Representative Cindy Acree (R-Aurora). Representative Acree is
focused on health-care issues and will discuss her bills to
reduce premiums, increase incentives for medical professionals
to practice medicine in rural areas, the Primary Care Act and a
resolution to enable Colorado to “opt out” of any health-care
reform passed by Congress.
For information on health-care bills, contact Dan Anglin, CACI
Governmental Affairs Representative, at 303.866.9641 or via
e-mail at
danglin@COchamber.com
Upcoming CACI Council Meetings
Council meetings will be held at the CACI Office beginning at 12
Noon. Council members who would like to sponsor lunches for
Council meetings should contact Misty Fox, CACI Office Manager,
at 303.866-9652 or via e-mail at
mfox@COchamber.com
·
Governmental Affairs Council,
Tuesday, February 23rd; lunch sponsored
by Chris Howes, The Howes Group, whose website is:
http://chrishowes.com/
·
Labor and Employment Council,
Wednesday, February 24th; guest is Representative
Larry Liston (R-Colorado Springs), ranking minority member,
House Business Affairs and Labor Committee; Gary Estenson,
Deputy Director, Colorado Department of Labor and Employment;
Ben Curtiss-Lusher, Office of the Governor; lunch sponsored by
Anthony George, Holme Roberts & Owen LLP, whose website is
www.hro.com
·
Tax Council,
Friday, March 5th, invited guest is Senator Keith
King (R-Colorado Springs), member of the Senate Finance
Committee; lunch sponsored by Bill Schroeder, IREA, whose
website is
www.intermountain-rea.com
For the complete meeting schedule of CACI Councils during the
legislative session, please visit the CACI Web site:
http://www.cochamber.com/newsandevents_calendar.asp |
