2015 Legislative Archives
2014 Session Sine Die Report
May 07, 2014
2014 Session Facts
Democrat/Republican split in House of Representatives: 37/28
Democrat/Republican split in the Senate: 18/17
Number of bills introduced during the 2014 Legislative Session: 621
Number of bills signed by the Governor as of 5/07/14: 166
Number of bills vetoed as of 5/07/14: 2
Last day for the Governor to act: June 6, 2014
Following a tense 2013 legislative session and two recall elections and a resignation that altered the make-up of the Senate, expectations for the 2014 session were varied. Some believed with the upcoming election, session would be a quick in and out affair with legislators’ sticking to issues with bipartisan support and the potential of ending before the 120 days was up. Others believed the Democrats in control would continue to push an aggressive liberal agenda while they still held majorities in the House, Senate and Governor’s Office. What the Capitol actually experienced was somewhere in between. New leadership in the Senate largely mirrored the former leadership in priorities. And while partisanship wasn’t as apparent as the previous year, it was clear there were still deep divides and animosity from 2013 that cascaded into the current session.
The legislative session began with an attempt by minority party Republicans to repeal last year’s controversial legislation. Each bill met its end in the first committee. Long floor debate ensued when Democrats ran clean up bills on last year’s election law reform. Marijuana was a topic of focus for a second year in a row. In the last week of session, a bill was introduced with strong support from the Governor’s Office to create a mechanism for marijuana businesses to utilize banking services.
This year’s version of “jobs bills” came in the form of tax credits and tax exemptions. The long-awaited telecommunications modernization was finally achieved after many years of effort, as a package of five bills cleared both Chambers. The Governor and the legislature made a big priority of financially supporting both K-12 education and higher education. For the first time in memory, higher education saw an increase of more than $100 million.
Messaging during the 2014 session was focused on positioning each party best for the upcoming elections. “War on Rural Colorado” and “Out of Touch with Coloradans” were constant headlines in press releases from both sides of the aisle. Although Democrats are widely expected to maintain control of the House, the Senate is seen as up for grabs with a handful of competitive races that will determine the outcome. The Governor is also facing a tough reelection with four Republicans remaining in the race to unseat him.
FY 2014-15 Budget
On November 1st, Governor John Hickenlooper outlined his budget priorities for the upcoming session. Shortly thereafter, the Joint Budget Committee began their work to craft the FY 2014-15 budget, taking into account the Governor’s priorities as well as their own. For the second year in a row, the JBC was in the fortunate position to be dealing with an increase in state revenues over the prior year. After 5 months of debate and shifting priorities, the Joint Budget Committee introduced the Long Bill and its accompanying package. Highlights included:
- A commitment of $144 million to recovery from recent floods and wildfires and an additional $44 million in wildfire prevention funds.
- Increase of Medicaid provider rates by 2% and all other provider rates by 2.5%.
- More than $100 million for higher education including $40 million for financial aid.
- Raising state employee salaries by 2.5% plus merit raises of 1%.
- Funding for a statewide child abuse reporting hotline and an accompanying public awareness campaign.
- An increase of 2.8% for K-12 education that keeps pace with enrollment and inflation and raised PPR to $7,019 for FY 2014-15 from $6,652 this current year.
- Growing the state’s General Fund reserve to 6.5%.
- Full funding for the state’s crisis response hotline when litigation subsides.
- A $15 million commitment to childcare assistance.
- Though not initially included by the JBC, the legislature added a commitment to fund a number of higher education capital construction projects and level 2 controlled maintenance projects with monies that come in above the revenue projection.
The debate on the budget in the House and Senate was at times contentious, though not always down party lines. Despite no Republican support for the budget in the House, the budget left the Senate with only 8 no votes. The FY 2014-15 budget totaled $9 billion State General Fund, and $24.4 billion total funds.
It’s widely accepted that Colorado’s transportation system is chronically underfunded. For years, various stakeholders have explored remedies for this issue, including an increased gas tax, going to the ballot for an increase in sales or income taxes for roads, and/or adopting a Vehicle Miles Traveled assessment. In the meantime, state and local governments have sought public private partnerships as a funding alternative. The US 36 project is the product of a P3 contract. Signing of the P3 contract during this legislative session prompted significant community outcry, and area legislators brought those concerns to the Capitol. The controversy and headlines culminated in an audit request and introduction of a bill to mandate certain transparency measures in public private contracting. Despite vehement opposition from the contracting industry, local governments, and the statewide chamber of commerce, SB 197 passed both Chambers. Opponents are seeking a veto from Governor Hickenlooper.
Minority Leader DelGrosso tried to help Colorado’s suffering roads with the introduction of HB 1259. The bill would have increased the HUTF by $100 million for the coming year from the General Fund. The proposal made it through its first committee and then died in the Appropriations committee due to lack of available funds. The contracting community was engaged in another debate about retainage levels this year. Representative Fischer introduced HB 1165 which would have limited retainage from sub-contractors to 5%. The bill abandoned the “prompt-pay” issue that similar legislation had raised in the past. Stakeholders from all sides spent months trying to work together and find a compromise, but that effort failed and the bill was killed by a large margin in the House Business committee.
The devastating fires and floods during the session interim were the perfect rallying cry for bipartisanship. Through the interim the Flood Disaster Committee and the Wildfire Matters Review Committee met and compiled recommendations for legislation to run during the session. These recommendations were the basis for some of the first bills introduced this year including: HB 1004 which eliminates the Colorado Emergency Planning Commission and transfers its responsibilities to the Division of Fire Prevention and Control and also gives the Governor the ability to provide financial assistance without a federal disaster declaration; SB 008 that creates the wildfire information and resource center; and SB 179 which creates a $2.5 million grant fund to help pay for stream restoration and river clean up in areas impacted by the floods. The legislature also approved legislation to lend a hand to emergency workers who respond to Colorado crisis. HB 1003 by Rep. Nordberg exempts non-residents from state income tax if they perform disaster emergency-related work in the state on infrastructure that was affected by a declared state disaster emergency.
A report released at the end of March by Director Paul Cooke of the Division of Fire Prevention and Control, recommended the creation of a Colorado aerial firefighting fleet. For the last two years, Senator Steve King of Grand Junction has spearheaded a similar proposal. With the blessing of the Governor’s Office, Senator King offered an amendment to the FY 2014-15 Long Bill to spend $20 million for start-up costs of the state’s first aerial firefighting fleet. The fleet will increase detection capabilities and aims to increase firefighter’s ability to intervene quickly on the ground and contain a fire before it gets out of control.
Jobs, the Economy, and the Tax Credit
For the first time in several years, jobs and the economy wasn’t the only rallying call at the Capitol, though it was still a prevalent topic. The Office of Economic Development and International Trade continued their push to fund advanced industries programs. HB 1012 created a tax credit for advanced industries program which was equal to 25% of a qualified investment or 30% if the business was located in a rural community. Senators Scheffel and Heath with Representatives Kraft-Tharp and DelGrosso carried the job growth incentive tax credit modification bill, HB 1014. The changes extend the tax credit from 5 to 8 years and lower the wage requirements. The legislation is projected to generate up to $30 million in revenue for the state by FY 2027-28.
The historic preservation community partnered with the business community to develop the Job Creation and Main Street Revitalization Act. HB 1311 modernized Colorado’s state income tax credit for the rehabilitation of historic residential and commercial buildings and districts. Proponents argued successfully that the bill will attract out of state resources to invest in Colorado’s economy. Modeled after successful legislation in other states, Colorado’s funding will kick in FY 2015-16 and will deliver $35 million in tax credits over a 4 year period. The bill passed the House and Senate with solid bipartisan support. Colorado’s aerospace industry also saw a boost with the passage of HB 1178, which created a sale and use tax exemption for qualified property used in space flight.
The Colorado Technology Association spearheaded a measure to permit sales and use tax exemptions for the sale, storage, and use of IT equipment that will be used in qualified data centers. HB 1389 also allows tax exemption for purchases to upgrade and replace current IT equipment. The idea was to draw massive data centers, which will bring decent wage jobs, to Colorado. Although the bill passed the House, it was assigned to four committees in the Senate and died in Senate State Affairs. Colorado’s agriculture industry also received a boost in borrowing capabilities with the passage of HB 1289. The legislation expands the type of FDIC-insured deposits through deposit placement services that can be used for PDPA purposes to include money market fund deposits and demand deposits, in addition to CDs.
In August, the business community, the Colorado Department of Labor and Employment, and AFL-CIO began discussions about changing Colorado’s workers compensation law. AFL-CIO requested reforms in three areas of workers compensation law: physician choice, safety rule violations, and separation agreements. From August until April, stakeholders met to negotiate language. Ultimately the bill introduced, HB 1383, made changes only to the doctor’s choice provision of workers compensation law, increasing the number of physicians from 2 to 4. It passed through both Chambers with bipartisan support and the neutrality of the business community. Senator Ulibarri introduced legislation this year to create a state-run, employee-funded insurance program to provide paid medical and family leave. Although the program under SB 196 was employee funded, the business community came out in stiff opposition. The biggest sticking point is that until the insurance fund is built up the state has to pay for the program, which is estimated to need 200 employees. The bill was postponed by the sponsor but is likely to come up again next session.
After a three year process, SB 005, the Wage Protection Act, finally passed through the state legislature. Three years ago, Representative Singer brought the issue before the legislature. The past two years, his bills made the crime of wage theft punishable under the criminal code. This year though the sponsors took a different route and instead set up an administrative process through the Colorado Department of Labor and Employment to submit claims of wage theft. The new version of the bill was able to garner Republican support. Although the Colorado Association of Commerce and Industry took a neutral position on the legislation, the Colorado Restaurant Association remained adamantly opposed.
A several year effort finally culminated in the passage of a package of telecommunications reform bills. Stakeholders from the telecommunications industry, the public safety community, state regulators and local governments tediously negotiated and vetted the approved language. Bills included in the package were:
- HB14-1327 – Broadband Deployment Act – Scheffel, Tochtrop, Williams, Murray
- HB14-1328 – Deployment of Broadband into Unserved Areas of Colorado – Williams, Coram, Nicholson, Crowder
- HB14-1329 – Exemption of certain IP enabled services from oversight by the PUC – Williams, Murray, Kerr, Scheffel
- HB14-1330 – An Update of Telecommunications Terminology for Intrastate Telecommunications Services – Williams, Tochtrop
- HB14-1331 – Regulation of Basic Local Exchange Service as it Affects Effective Competition – Williams, Murray, Nicholson, Kerr
The package received overwhelming bipartisan support. The bills are slated to be signed by the Governor on May 9.
After months of behind the scenes discussion, three bills were introduced in the final full week of session aimed at removing barriers to for-sale condo development. SB 216 would have created state-level affordable housing incentives to offset the insurance costs of building multi-family owner occupied products. The bill was killed on the floor during second reading debate on Friday when a division was called by opponents. SB 219 called for an owner occupied affordable housing study over the interim. This bill was killed by the Appropriations committee. These two bills were proposed by leadership as an alternative to the capstone of the package, SB 220, Common Interest Community Arbitration Construction Defect Litigation. The bipartisan measure was the product of months of meetings by a diverse group of stakeholders including cities and counties, developers, contractors, and affordable housing advocates. The group argued that the proposal was a very modest step to attempt to reduce barriers to owner occupied multi-family dwellings. Opposed by the Colorado Trial Lawyers Association and the Community Association Institute, the bill faced an uphill battle with Senate and House leadership and was effectively stalled by leadership moves that prevented a vote on the Senate floor.
Oil and Gas
During the November 2013 elections, four municipalities voted to place a moratorium on hydraulic fracturing in their community. The passage fueled the debate about whether local communities or the state should control decisions related to oil and gas activity in the Colorado. As session began, local communities and environmentalists announced their intentions to seek a handful of ballot measures that would put local government in control of determining if oil and gas could operate in their jurisdiction. Legislative leaders and the Governor’s office convened meetings behind closed doors to see if they could negotiate an agreement to run legislation in exchange for pulling the measures off of the ballot. Up until the final days of session, all waited for a bill to drop. A draft of the potential legislation that was circulated specified that local governments could regulate noise, impose setbacks, and conduct inspections or monitor oil and gas development to meet local permit conditions. Due to lack of consensus, the bill was never introduced. Now all sides are preparing for a costly interim battle over oil and gas regulation. The fight will pit Coloradans for Local Control, which supports the potential ballot measures against Coloradans for Responsible Reform. Coloradans for Responsible Reform has strong support from the business community as well as former US Senator Ken Salazar. If the ballot measures move forward, tens of millions of dollars are expected to be spent between the two sides. It’s rumored that a special legislative session may be called to resolve the issue.
The legislature did introduce a handful of bills related to oil and gas impacts this session. After being defeated last year, Representative Foote and Senator Jones were able to successfully work with the oil and gas community to get agreement on legislation to increase the maximum penalty for industry violations to $15,000. On the other hand, Representative Ginal failed to get consensus on legislation to study the health impacts of oil and gas activities on the Front Range and the bill was killed in the second chamber. Opponents argued that HB 1297 had predetermined outcomes and the study wouldn’t be fair and balanced.
Transportation Network Companies (TNC)
Colorado is poised to become the first state in the nation to legislatively authorize the operation of ride sharing companies like Lyft and uberX. A bipartisan measure by Senators Harvey and Jahn and Representatives Pabon and Szabo created a new category for “transportation network companies,” and laid out the framework for their limited regulation by the Public Utilities Commission. Initially the loudest opposition to SB 125 was the taxi industry and unions, with claims that Lyft and uberX operated with an unfair advantage because of their lack of regulation and workers comp coverage. However, the insurance industry quickly joined the fight and forced numerous amendments. The final version of the legislation requires TNC companies to carry primary commercial insurance coverage for the period when a driver has been matched with a rider. The bill is awaiting action by the Governor.
Urban Renewal Authority
HB 1375, the Urban Redevelopment Fairness Act, pitted the cities and the counties against each other this session. Initiated by House Minority Leader DelGrosso, the bill, passed on the final day of the session, requires cities to allocate a part of their sales tax revenue to counties in order to offset property tax revenue dedicated to Tax Increment Financing. During the House debate, legislators unsuccessfully ran amendments to turn the bill into a study. In the Senate, Senator Johnston ran an amendment to significantly water down the bill. Although it passed the Senate Judiciary Committee, it was stripped off when the full Senate debated the bill. The bill is awaiting action by the Governor.
Compared to 2013, the 2014 Session overall was less explosive, and legislators were generally more open to working across the aisle on important issues facing our state. However, partisan divides did arise and will likely be in the spotlight during the upcoming election season. Some of the unresolved issues from 2014 that are expected to reemerge in 2015 include:
- A continued look at construction defects reform
- Further regulation and direction around marijuana legalization
- Conversations about insurance for individuals who take leave under the Family Medical Leave Act
- Continued push to invest in K12 education
- Reexamining K12 student testing requirements and Colorado’s use of the PARCC test
The 2014 election season is already underway, and legislator’s attention will quickly shift now that the session is over. Once the elections shake out, legislative priorities for 2015 will become more clear. In the meantime, The Capstone Group team will work to educate candidates and returning members on priority issues and keep tabs on the interim committee efforts that continue under the Gold Dome.