House Bill 1232 passed the Senate on Wednesday with a vote of 19-16. It will now return to the House for a review of the amendments. Ahead of that vote, House Bill 1232 underwent further changes. Amendments included lowering the premium reduction goals from 18% to 15%, removing fines for doctors who do not participate in the state option and eliminating the threat of revoking a hospital’s license for not participating. These amendments do not resolve our concerns with the bill regarding cost-shifting and rate-setting, reaffirming that, although we are committed to working to reduce health care costs in Colorado, the Colorado Option is not the solution.
Senate Bill 175 also aims to solve the high cost of health care – through the artificial price-setting of prescription drugs. This bill passed House Health & Insurance last week and was set to be heard on the House floor this morning. We are opposed to artificial price-setting in any industry, and this bill fails to acknowledge the number of programs that already exist to assist Coloradans with the high cost of prescription drugs. Laura Giocomo Rizzo, Chamber senior vice president of external affairs, testified last week against the bill. You can read that testimony here.
We’ve been incredibly focused on these bills over the past few weeks, and while we support efforts to reduce health care costs that work for both consumers and employers, we feel strongly that these bills do not address the root drivers of rising expenses. We will continue to work with sponsors and advocate for the business community at the Capitol.
Continued Concerns about Details of the Workers’ Rights Act
Earlier this month, we told you about a top priority bill making its way through the legislature. Senate Bill 176, “Protecting Opportunities and Workers’ Rights Act,” creates and expands definitions and processes for harassment and discrimination claims. We know employers do not condone harassment of their employees and that employers must take steps to ensure the safety of workers. However, several provisions of this legislation are problematic to employers and could result in greatly increased liability and litigation without clear benefit to employees.
While a number of our concerns have been addressed, including changes to restrictions on confidentiality agreements and the implications of workplace harassment training, we continue to have conversations with bill sponsors about additional challenges.
Sponsors seek to change the standard by which harassment claims are determined and move away from the current law of severe, which means the harassment may happen in one episode if it involves a particularly offensive incident, or pervasive, which means the harassment involves less serious conduct but happens frequently over a long period of time. We must ensure the law is predictable for employers and removing the current standard, which has legal precedent and provides that stability, will lead to confusion and could open the floodgates to increased litigation.
Additionally, the inclusion of independent contractors in this legislation has been an ongoing concern for us. We’ve seen numerous instances both in legislation and regulatory rulemakings where there is an attempt to expand the definition of “employee” to include independent contractors. Independent contractors are not employees, and all legislation and rules must provide that continued clear distinction between the two.
Senate Bill 176 passed on third reading in the Senate with no amendments. We’ll continue to work with bill sponsors on additional amendments and track this one closely as it moves through the House.
Governor Releases Plans for Federal Funds as Legislators Consider Bills that Raise Taxes
For the last couple of weeks, we’ve been updating you on House Bills 1311 and 1312 that would raise taxes for businesses and certain Coloradans. Lawmakers are considering this legislation to increase taxes at the same time that Gov. Jared Polis announced an influx of federal relief dollars for businesses.
On Monday, Gov. Polis and other legislative leaders held a press conference to announce how Colorado will spend $3.8 billion in American Rescue Plan Act funds to “power the Colorado Comeback.” Through the plan, the state will spend $2 billion this legislative session and $1.8 billion at the beginning of the next session.
Here’s how the funds will be used:
- $1 billion to fortify the state budget and maintain fiscal integrity
- $300 million to the state’s ongoing response to COVID-19
- As much as $550 million to affordable housing and homeownership efforts
- As much as $550 million to mental and behavioral health programs
- $200 million to workforce development and education
- $817 million to economic recovery and relief
- As much as $414 million to transportation and infrastructure, and parks and agriculture
So far, none of the funding is allocated to shoring up the Unemployment Insurance Trust Fund. The state borrowed $1 billion in federal loans to keep the fund solvent.
We think it is illogical and inefficient to provide emergency relief to employers on the one hand, while simultaneously rewriting the tax code to increase their taxes with the other.
House Bill 1311, “Income Tax,” would impact personal and corporate income taxes and limit a variety of specific federal deductions. The bill would change the way state taxes are determined for C corporations and limit deductions, including 199A Qualified Business Income deductions, contributions to 529 plans, food and beverage expenses and the capital gains subtraction. Revenue would go to the expansion of the Earned Income Tax Credit (EITC) and Child Care Tax Credit.
House Bill 1312, “Insurance Premium Property Sales Severance Tax,” would change certain rules, definitions, procedures and exemptions related to business personal property tax. This bill would substantially impact the home office insurance premium tax rate deduction and significantly reduce tax credits and exemptions on coal.
Funds generated by both bills would be used to expand the business personal property tax exemption from $7,000 to $50,000.
Legislators’ goals of providing tax relief to working families by expanding the EITC and Child Tax Credit are admirable – and ones we strongly support because we know they help the same working families that businesses employ. But legislators are setting up a false and unnecessary choice. With our state budget in a strong position and the influx of federal stimulus dollars providing additional cushion, Colorado has the opportunity to provide tax relief to families, without eliminating tax credits for businesses.
Both bills passed out of Senate Finance on Wednesday on a party line vote. Read Rizzo’s testimony. We will continue to work with lawmakers to push additional amendments.
Colorado’s Stimulus Plans
Colorado’s local reporters have been covering the story about how the state will use its American Rescue Plan funds closely, and we’ve rounded up a selection of their articles, detailing how the funds will be spent:
- Colorado Will Cash In $4 Billion Of Federal COVID Relief Money To Invest In Mental Health, Affordable Housing And More
By Bente Birkeland, Colorado Public Radio
- Housing, workforce development, infrastructure: How Colorado Democrats plan to spend $3.8B in federal aid
By Jesse Paul, The Colorado Sun
- Polis, Colorado legislators discuss plans for $3.8 billion in federal stimulus funds
By Wilson Beese, 9NEWS
- Polis, legislative leaders offer blueprint for $3.8B federal stimulus allocation
By Ed Sealover, Denver Business Journal
Join Us June 15 for State of the State Presented by Xcel Energy
The 2021 legislative session is one that we won’t forget for a long time. From stimulus funding to public option to transportation, the business community was in the thick of discussions when it came to policy. At this virtual State of the State, you’ll have the opportunity to hear Colorado Gov. Jared Polis’ thoughts about what crossed his desk – or didn’t cross his desk – in 2021 and what he sees for the future of our state. We’ll also convene a panel of business leaders to talk about the deep connections between our workforce, economic development and policy changes, and Denver Metro Chamber President and CEO Kelly Brough will share the business perspective on this unprecedented session and what it means to Colorado’s economy. Register today.
Chamber Takes Positions on Two Bills
This week, the Chamber also took a position on two bills.
- House Bill 1234 Promote Innovative and Clean Energy Technologies | Rep. Rob Pelton (R-Cheyenne Wells), Rep. Dylan Roberts (D-Avon), Sen. Robert Rodriguez (D-Denver) and Sen. Dennis Hisey (R-Fountain)
- Senate Bill 282 Continue Small Business Destination Sourcing Exception | Sen. Jeff Bridges (D-Greenwood Village), Sen. Rob Woodward (R-Loveland), Rep. Mark Snyder (D-Colorado Springs) and Rep. Kevin Van Winkle (R-Highlands Ranch)
Visit our current legislation page to see all our positions and testimony so far this session.