The lobbyist for the Colorado Bar Association was aghast. The watching bankers slumped against the wall. The Senate proponents looked on in amazement. A major commercial bill pushed by the money interests and without any organized opposition went crashing in flames on the last day of the 2000 legislative session. No newspapers reported on what the bill did and no newspapers reported on what happened on May 3rd and why it happened.
HB 1435 was a 216 page monster weighing slightly over one pound, with the first 188 pages in CAPITAL LETTERS ONLY. Plunk that down on a legislator's desk and watch him or her wince, with eyes glazing over.
No legislator is going to take THAT bill home and turn the pages in front of a warming fire on a cold March night. Ever try to read 188 pages in CAPITAL LETTERS ONLY? Each Colorado bill now contains a summary in front of the bill. When it's detailed enough, a reader could at least pretend to know what was going on. But that couldn't happen with HB 1435.
This 216 page bill had slightly over two pages of "summary", or one page for every 108 pages of bill. There were 10 page bills in this legislative session that had larger summaries than HB 1435. My guess, and it is a guess, was that to do a detailed summary on HB 1435 would have required 30 pages and that wasn't going to happen.
HB 1435 repealed and re-enacted Article 9 of the Uniform Commercial Code (UCC) which article deals with consumer transactions. Before the reader's eyes glaze over, there isn't an adult in Colorado who isn't now, or hasn't been, or won't be in the future affected by the changes proposed in Article 9, unless you are a hermit residing in an inaccessible mountain cave.
Non-lawyers will have a tough time understanding this bill. The Commercial Code is taught in law schools and some business schools and not every student passes the course. I also discovered this session that even legislative lawyers shied away from delving into this monster, relying instead on "credentials" of those behind the missive.
First, there is the National Conference of Commissioners on Uniform State laws who push the measure across the nation through appointed commissioners from each state. What legislators don't know is that the last time this group sent out a pro-consumer measure was in the 1970's.
Second, when legislators realize they are going to vote on a bill without any idea of what it contains, they check the sponsors and the lobbyists. The sponsors were Rep. Bill Kaufman, R-Loveland, and Sen. Doug Lamborn, R-Colo. Springs, both of whom have good reputations. The Colorado Bar Assn. lobbyist was heavily involved and there was support from various banking groups.
Let's be fair about this. The legislature is not elementary school. There is no teacher to check on whether or not you did the assignment. Nothing in the state constitution requires that a legislator know what he or she is doing when casting a vote for or against a bill such as HB 1435.
So what did you miss by not reading this bill? Here's one item that has nothing to do with the complications of filing financing statements or securing goods provided as collateral for loans:
In 1999, the legislature passed SB 65 by Sen. Peggy Reeves, D-Ft. Collins, and Rep. Gloria Leyba, D-Denver. That bill took control over filing of secured transactions under Article 9 of the Commercial Code from the secretary of state and gave it to the newly-formed Central Information Board.
This was because the State Auditor and others had found Vikki Buckley not able to handle the central indexing system which had been formed several years earlier. In SB 65, secretary of state employees were put under control of the board and the board was to monitor performance, including that of the secretary of state. Buckley tried to get Gov. Bill Owens to veto the measure but he did not.
Buckley died and Donetta Davidson was appointed secretary of state. The bankers who like Ms. Davidson and didn't like Ms. Buckley added language to turn the central information operation into a weak advisory position and restore full authority to the secretary of state. That included returning all the employees who were one year earlier transferred to the board. The change also wiped out oversight authority by the board over the secretary of state.
Why wasn't this major revision of the law, only one year after its passage, included in the summary of the bill? Will the legislature move control back to the Central Information Board if bankers don't like a particular secretary of state?
Here is another item: In a section titled "Restrictions on assignment of promissory notes, health-care insurance receivables, and certain general intangibles ineffective", 4-9-408 (e) provides:
"This section prevails over any inconsistent provisions of an existing or future statute (misspelled as statue), rule or regulation of this state unless the provision is contained in a statute of this state, refers expressly to this section and states that the provision prevails over this section."
If this is in the present law, I couldn't find it. If new, what present laws, rules or regulations should have been amended to preserve their status? None were added in the bill. Usually in a bill of this magnitude, legislative drafting includes the prior section number in parenthesis so that those who care can see what changes have been suggested. Why wasn't that done in this bill?
HB 1435 passed the House on April 18th, by a vote of 54 to 0. In the Senate, the bill was NOT sent to Judiciary, but to Business Affairs, the lobbyists being aware that Sen. Bill Thiebaut, D-Pueblo, had major doubts and questions to ask about the measure, and he was on Judiciary.
There was debate on the Senate floor, but the bill, with amendments added to aid the agriculture community, passed by 23 to 12. The 12 "no" votes were cast by Sens. Evans, Feeley, Hernandez, Linkhart, Martinez, Matsunaka, Pascoe, Perlmutter, Rupert, Sullivant, Tanner, and Thiebaut.
The bankers and lobbyists opposed the agriculture amendment. Feeling confident, they had the House sponsor seek a conference committee. When both the House and Senate agreed to a conference committee, Sen. Thiebaut predicted to Sen. Dave Wattenberg, R-Walden (who was very supportive of the Senate agriculture amendment), that the conference committee would eliminate that amendment. Which it did.
The conference committee report was adopted by the Senate 18 to 17. That should have alerted proponents to stall on repassage of the bill, but it didn't. Voting "no" on the conference committee report were Sens. Chlouber, Congrove, Dyer, Hernandez, Lacy, Linkhart, Martinez, Matsunaka, Nichol, Owen, Pascoe, Phillips, Sullivant, Teck, Thiebaut, Wattenberg, and Wham.
Sen. Lamborn moved to pass the bill as amended, and the vote was 14 "yes" and 21 "no". Sens. Andrews, Dennis, Evans, Perlmutter, Rupert, and Tanner joined the "no" votes. Sens. Phillips and Wham joined the "yes" votes. Sens. Wattenberg and Thiebaut were responsible for rounding up the votes to ensure the bill's defeat.
At the beginning of the 2000 session, only about 13 states had adopted this new version of Article 9 of the Code. Colorado doesn't have to worry about being "out-of-step". There is time to see what changes other states have made in this new law. In 1965, Colorado was the LAST state to adopt the Uniform Commercial Code, and it didn't hurt us at all.
Jerry Kopel writes a column for the Statesman based on 22 years past experience as a state legislator.
Copyright 2012 Jerry Kopel & David Kopel