Consumer And Commercial Transactions - Digest of Bills

Digest of Bills - 2006

CONSUMER AND COMMERCIAL TRANSACTIONS

S.B. 06-91 Telephone records - unlawful use - exemptions - penalty. Prohibits knowingly procuring, illicitly possessing, knowingly selling or buying, and knowingly receiving telephone records without lawful authorization. Exempts law enforcement agents acting in the performance of their duties or as authorized by law and telecommunication providers acting to provide services, as authorized by law, to protect users or their property, to cooperate with a government entity in an emergency, to sell the telecommunications business, or to migrate a customer to another provider. Makes a violation a class 1 misdemeanor.

Authorizes civil liability for violations of the law. Provides for $5,000 dollars in statutory damages. Exempts telecommunications providers from the acts of third parties.

APPROVED by Governor April 24, 2006
EFFECTIVE July 1, 2006

S.B. 06-188 Effective financing statements - farm products - appropriation. Clarifies the required elements to be included in an effective financing statement. Clarifies the requirements for amending an effective financing statement. Requires that effective financing statements be on or in a medium as may be acceptable to the central filing officer. Establishes filing requirements for effective financing statements.

Allows the central filing officer to prepare, furnish, and require the use of specific forms when filing an effective financing statement and to charge fees for filing and other services. Requires the central filing officer to publish and distribute a master list of effective financing statements electronically.

Appropriates $656,333 to the department of state for the implementation of the act.

Provides that the act is effective ninety days following certification in writing by the secretary of state to the revisor of statutes that approval of changes to the central filing system enacted in the act has been obtained from the United States department of agriculture, and the secretary of state has implemented the necessary computer system to publish and distribute the master list electronically and is able to do so.

APPROVED by Governor May 25, 2006
EFFECTIVE May 25, 2006
NOTE: As of publication date, the revisor of statutes has not received written certification from the secretary of state.

S.B. 06-198 Contracts with health care providers - required contract provisions. Requires a person or entity that contracts with a health care provider on or after January 1, 2007, to include specific provisions in the contract. Requires a contract in existence prior to January 1, 2007, that is renewed to include specific provisions no later than December 31, 2007. The required provisions include:

● Detailed compensation and payment terms;

● Products provided by the health care provider;

● The term of the contract and means of termination, including the reasons for termination for cause, if applicable;

● Identity of persons responsible for processing compensation or payment;

● Mechanisms for dispute resolution;

● Provisions for the amendment of the contract;

● Order of the addenda, if applicable;

● A provision allowing for termination of the contract by either party after 90 days' written notice.

Requires a person or entity that enters into a contract with a health care provider to disclose the information required so that the health care provider may evaluate the payment and compensation for services. Requires 30 days' written notice and the allowance for the health care provider to object prior to a material change to a contract. If no resolution to the objection can be reached after 60 days, allows either party to terminate the contract. Prohibits as a condition of contracting that the person or entity require the provision of more than one product offered by the person or entity. Prohibits the enforcement of the contract by a person or entity other than the person or entity who executed the contract unless the identification of the enforcing party is clearly identified in the contract or the contract is amended prior to the provision of health care services. Allows for modification of a contract by operation of law without the need to renegotiate the contract.

Creates an exemption from the required contract provisions for:

● An organization that exclusively contracts with a single medical group in a specific geographic area;

● An employment contract or arrangement between an individual provider or a corporate entity consisting of health care providers and another provider;

● A contract or arrangement entered into by a licensed hospital or health care facility;

● A contract for health care services through workers' compensation or a public health benefit plan; and

● A contract between a person or entity for pharmacy benefit management.

Allows a health maintenance organization with fewer than fifteen thousand enrollees to comply with these provisions within 12 months after the applicable compliance date. Requires disputes concerning the enforcement of these provisions to be subject to arbitration. Allows a prevailing health care provider in the dispute proceedings to collect reasonable attorney fees and costs.

VETOED by Governor May 26, 2006

H.B. 06-1066 Private child support collectors - prohibited practices - contract provisions - rule-making. Establishes additional protections to supplement the provisions of the "Colorado Fair Debt Collection Practices Act" ("the debt collection act") that apply to private child support collectors. Prohibits private child support collectors from engaging in specific fraudulent, unfair, deceptive, or misleading acts. Limits the maximum amount of a contingency fee that a collector may collect to 35% of any amount collected. Identifies requirements for a private child support collection contract. Requires private child support collectors to provide an accounting of the collections they make and to verify account information. Imports the civil liability provisions from the debt collection act. Provides a 5-year statute of limitations for bringing an action under this act. Gives the administrator rule-making authority concerning notice to the obligee and accounting.

APPROVED by Governor April 6, 2006
EFFECTIVE July 1, 2006

H.B. 06-1115 Auto rental advertising - collision damage waivers - required disclosures - limitation. Limits the requirement that lessors of rental motor vehicles disclose collision damage waiver rates to advertising that includes rental rates.

APPROVED by Governor April 13, 2006
EFFECTIVE August 7, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 06-1119 Computerized personal information - security breach - notification. On and after September 1, 2006, requires an individual or a commercial entity that conducts business in Colorado and that owns or licenses computerized data that includes personal information about a resident of Colorado to, when it becomes aware of a breach of the security of the system, conduct in good faith a prompt investigation to determine the likelihood that the personal information has been or will be misused. Requires the individual or the commercial entity to give notice as soon as possible to the affected Colorado resident unless the investigation determines that the misuse of information about a Colorado resident has not occurred and is not reasonably likely to occur. Requires notice to be made in good faith, in the most expedient time possible and without unreasonable delay, consistent with the legitimate needs of law enforcement and with any measures necessary to determine the scope of the breach and to restore the reasonable integrity of the computerized data system. Requires the notification to be either written or electronic unless the cost of the notice exceeds $250,000, the affected class exceeds 250,000 people, or there is insufficient contact information, in which case conspicuous internet posting and notification to statewide media suffices. If an individual or commercial entity is required to notify more than 1,000 Colorado residents of a breach of the security of the system, requires the individual or commercial entity to also notify, without unreasonable delay, all consumer reporting agencies that compile and maintain files on consumers on a nationwide basis of the anticipated date of the notification to the residents and the approximate number of residents who are to be notified. Allows the attorney general to file suit to enforce the act.

APPROVED by Governor April 24, 2006
EFFECTIVE September 1, 2006

H.B. 06-1156 Social security numbers - confidentiality. Prohibits any person or entity from:

● Publicly posting or displaying in any manner an individual's social security number ("SSN");

● Printing an individual's SSN on a card required for the individual to access products or services provided by the person or entity;

● Requiring an individual to transmit his or her SSN over the internet, unless the connection is secure or the SSN is encrypted;

● Requiring an individual to use his or her SSN to access an internet web site, unless a password or unique personal identification number or other authentication device is also required to access the internet web site; and

● Printing an individual's SSN on any materials that are mailed to the individual, unless state or federal law requires, permits, or authorizes the SSN to be on the document to be mailed.

Lists exceptions, including uses required, permitted, or authorized by state or federal law. Allows a preexisting nonconforming use of a SSN to continue if all of the following conditions are met:

● The use of the SSN is continuous; and

● The person or entity provides the individual with an annual disclosure that informs the individual that he or she has the right to stop the nonconforming use of his or her SSN.

Requires the person or entity to implement a written request by an individual to stop the nonconforming use within 30 days after the receipt of the request. Prohibits the person or entity from denying services to an individual because the individual makes such a written request. Includes a SSN in financial data that may not be inspected as part of a public record, unless disclosure is required, permitted, or authorized by state or federal law.

APPROVED by Governor March 31, 2006
EFFECTIVE January 1, 2007

H.B. 06-1247 Uniform commercial code - general provisions - documents of title. Repeals and reenacts articles 1, regarding general provisions, and 7, regarding documents of title, of the "Uniform Commercial Code" ("UCC") as proposed by the national conference of commissioners on uniform state laws.

Regarding article 1, the act:

● Harmonizes the article with the drafting conventions of other, more recently amended articles of the UCC.

● Specifies that the substantive rules apply only to transactions within the scope of the other UCC articles.

● Redefines, subject to the narrower definition in article 5 of the UCC, "good faith" as "honesty in fact and the observance of reasonable commercial standards of fair dealing".

● Adds the concept of "course of performance", currently utilized only in articles 2 and 2.5 of the UCC, to course of dealing and usage of trade as the contextual factors that a court may use to interpret a contract.

● Deletes the statute of frauds requirement on transactions not otherwise governed by the UCC.

● Clarifies and simplifies the definition of "security interest" to distinguish "true leases" from transactions that are leases in form but security interests in substance.

Regarding article 7, the act:

● Generally updates the article to provide a framework for the further development of electronic documents of title.

● Allows commercial practice to determine which records issued by bailees are "in the regular course of business or financing" and thus adequately evidence that the person in possession or control of the record is entitled to receive, control, hold, and dispose of the record and the goods the record covers.

● Specifies that control of an electronic document of title is equivalent to possession and indorsement of a tangible document of title.

● Allows parties to substitute an electronic document of title for an already-issued paper document and vice versa.

● To the extent possible, harmonizes the rules for electronic documents of title with the rules for tangible documents of title.

APPROVED by Governor April 18, 2006
EFFECTIVE September 1, 2006

H.B. 06-1251 Price gouging - prohibition. Prohibits price gouging immediately prior to and during an emergency. Allows the attorney general to file suit to enjoin violations and for a maximum $10,000 per day civil penalty. Specifies the evidence needed to create or rebut a presumption of price gouging. Exempts electric, gas, and steam utilities from the act.

VETOED by Governor June 2, 2006

H.B. 06-1356 Supervised lenders - license exemptions - licensed collection agencies - licensed attorneys. Exempts licensed collection agencies and collection attorneys licensed to practice law in the state of Colorado from having to also be licensed as supervised lenders when taking assignment of supervised loans only after such loans are in default.

APPROVED by Governor April 18, 2006
EFFECTIVE April 18, 2006