Dan Pilcher

CACI Senior Vice President

& Chief Operating Officer

Phone: 303.866.9600

E-Mail: dpilcher@COchamber.com

www.COchamber.com

Friday, February 20, 2009

NOTE:  Because of the large number of bills that CACI is lobbying saw action this week, I will send out a special issue of CACI’s Colorado Capitol Report on Monday to cover the bills that are not covered in today’s issue.

House Committee Kills Bill to Restrain the Colorado Division of Wildlife’s Role in the Issuance of Oil and Gas Drilling Permits; New Senate Bill Takes Up the Issue

On a seven-to-six vote this afternoon, the House Agriculture, Livestock and Natural Resources Committee killed HB-1225, sponsored by Representative Cory Gardner (R-Yuma), which would have limited the role of the Colorado Division of Wildlife (DOW) when the Colorado Oil and Gas Conservation Commission (COGCC) considers permits for oil and gas wells.

The Committee had taken testimony and debated the bill Tuesday and Wednesday, and then the Committee Chair, and then Representative Kathleen Curry (D-Gunnison), delayed action on until this afternoon.  CACI supported HB-1225.

Yesterday, Senator Jim Isgar (D-Hesperus) introduced a bill, SB-229, and the House sponsor is Representative Curry.  This bill would require COGCC to obtain consent from a landowner or tenant before it could impose any mitigation measures to protect wildlife from the effects of oil and gas drilling and production.  If the landowner or tenant refuses, then the Commission would have to take off-site mitigation steps.  The bill has been assigned to the Senate Local Government and Energy Committee.

CACI is seeking comments from its members on this new SB-229.  Please send them to Donnah Moody, CACI Contract Lobbyist, at capitolcorps@comcast.net

CACI was part of a business coalition advocating HB-1225 that argued that 2008 legislation (HB-1341 and HB-1298) and the rules approved by COGCC to implement that legislation will interfere with the rights of landowners to allow the highest and best use of their property by adding hurdles and delays for developing their property.

Specifically, the two bills called for the COGCC to “consult” with such state entities as the Division of Wildlife, which is a part of the Colorado Department of Natural Resources (DNR), and the Colorado Department of Public Health and Environment (CDPHE).

The business coalition believes, however, that the COGCC exceeded the “legislative intent” of the two bills when it promulgated rules that require a company applying for a permit to negotiate with the DOW on how to mitigate the impact of the drilling to wildlife.

In addition, the DNR and the CDPHE executive directors now have votes on the COGCC.  Consequently, the business coalition asserted that the DOW has been given an excessive opportunity to intervene in an already rigorous COGCC regulatory process.

For the business coalition, the larger issue is that the DOW appears to have little incentive to work with landowners because of the broad authority provided it with little in the way of standards for what constitutes wildlife mitigation.

Without corrective legislation, the business coalition believes that the DOW may suggest and effectively require whatever it wants from the property owner.  If the owner objects, the DOW can appeal to the COGCC Director and then to the full Commission.

The current situation also potentially can produce a three-way adversarial dynamic among the DOW, the property owner and the gas or oil drilling operator who is seeking a well permit from the COGCC.  The property owner may not want to agree to the DOW’s desired steps to mitigate the effects on wildlife, which then stymies the effort of the operator to secure his permit.

The rules, which were approved by the COGCC near the end of 2008, are part of an omnibus “rules bill” that the legislature considers each session as to whether or not the rules meet the legislature’s “intent” and on which the legislature must act.

On Tuesday, CACI Contract Lobbyist Donnah Moody testified in support of HB-1255, and here are the edited highlights of her comments:

Our issue today is the same as it was during legislative debate on last year’s HB-1341 and HB-1298 and rulemaking on those two bills, that’s the business case.  We all know and understand that economic development and a sustainable economy greatly depend on regulatory certainty and reasonable rules and regulations. 

Our regulated community must already adhere to existing regulations that are rigorous and failure to comply with those existing regulations will risk revocation or denial of permits that allow the regulated businesses and industries to continue to conduct business in the state.  We have a huge stake in doing the right thing and in being good environmental stewards.

It’s clear from the considerable testimony on this bill that reasonable people can and do disagree about the extent and impact of rule changes.  But it’s a false choice to say that we—collectively--have to choose between the interests of development of any kind and our state’s good quality of life.  It’s also indefensible to suggest that state agencies never exceed their statutory authority in promulgating rules and never miss the mark on interpreting legislative intent. 

It is true, as you’ve heard, that the initial proposed rules on HB-1341 were modified significantly after input from industry but to draw a line in the sand now and say it’s no longer appropriate to listen to industry is frustrating, to say the least. 

Finally, on behalf of the business community, we encourage your favorable consideration of HB-1244 because it has bi-partisan support and strikes a reasonable and appropriate balance between the interests of industry, landowners, wildlife and the environment.

In response to questioning, it was pointed out that the last remaining opportunity to make changes in the rules is in the rule-review bill and that, once items advance that far in the legislative process, changing them is difficult.

Additionally, the COGCC is already conducting training on the “new” rules, even though they have not yet been approved under the rule review bill.  It was also pointed out during questioning that the reason it is appropriate to address the wildlife aspect of the rules in a separate bill is that this is the aspect of the rules that is seen by industry as the most egregious and un-workable.

Other members of the business coalition supporting HB-1255 include the following CACI members: Encana, Colorado Petroleum Association, Noble Energy and the Colorado Oil and Gas Association.  For more on the HB-1255, click on:

http://www.gjsentinel.com/hp/content/news/stories/2009/02/18/021909_1a_oil_gas_rules.html#

Two Democrats Join Republicans to Kill HB-1208, which Would Have Forced Companies to Pay “Prevailing Wages” on State Public-Works Projects

On Tuesday, the House Business Affairs and Labor Committee killed HB-1208 when the Committee Chair, Representative Joe Rice (D-Littleton), and Representative Christine Scanlan (D-Dillon) voted with the minority Republicans against the bill.

CACI Governmental Affairs Vice President Loren Furman lobbied against the bill as did other members of a business coalition that included the Northern Colorado Legislative Alliance and the following CACI members: Associated Builders and Contractors (Rocky Mountain Chapter) and Associated General Contractors.

The bill, sponsored by Representative John Soper (D-Thornton), would have forced companies working on state public works projects, such as building and repairing roads and bridges, to pay “prevailing wages” set by the U.S. Labor Department to their non-unionized workers.  CACI believed that the bill would add millions to the price tag for such projects or force a cutback in the scope of the projects, or both.  For more on this bill, click on:

http://www.rockymountainnews.com/news/2009/feb/19/2-dems-join-in-vote-to-kill-pro-union-bill/

CACI-Opposed HB-1117, which Would Prohibit “Unearned Compensation” by Executives in Publicly Traded Companies, Dies a Bipartisan Death in House Committee

Also on Tuesday, the House Business Affairs and Labor Committee killed HB-1117, which was aimed at prohibiting or recovering “unearned compensation” from the top five executives at publicly-traded firms who earn more than $1 million per year when the firm is failing by being “undercapitalized.”  HB-1117 would have allowed shareholders, creditors, the Colorado Attorney General and others to try to recover the compensation.

The five Republicans on the Committee were joined by three Democrats to kill the bill: Representative Su Ryden (D-Aurora), Representative Christine Scanlan (D-Dillon) and Representative John Soper (D-Thornton).

We again thank Larry Marquess, a Shareholder with Littler Mendelson PC, who recently spoke against the bill before the Committee on behalf of CACI. 

Upcoming CACI Council Meeting

On Tuesday, the Governmental Affairs Council will meet.

NOTE:  CACI councils meet at 12 Noon in the Conference Room at the CACI Office.  Information about council meetings and agendas can be accessed on the CACI Web site.  If you, as a CACI member, are not yet a member of these councils and want to join, please e-mail Misty Fox at mfox@COchamber.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