CAHB LEGISLATIVE UPDATE

2021 General Assembly Wrap-Up

The Colorado General Assembly concluded the 73rd General Assembly session on June 8. The session began in January, but because of the COVID-19 pandemic, it was quickly adjourned until February for legislators, staff, and capitol journalists to receive vaccines. When they returned to the statehouse, the Democrat-controlled House and Senate passed most of their major agenda items, despite pushback from the business community and Republicans. 

The CAHB’s Government Affairs Committee met regularly throughout the session and provided positions, feedback, and concerns to the association’s lobbying team. The GAC took positions to support, amend or oppose 18 different bills out of the more than 60 bills that were flagged by the lobbying team.

Mary Kay Hogan, Virginia Morrison Love and Rachel Lee, along with CEO Ted Leighty, met with legislators, provided testimony, and collaborated with stakeholders from the construction and housing industry and the broader business community on several bills. The CAHB also worked through coalitions, including Building Jobs for Colorado (BJ4C) and the Homeownership Opportunity Alliance (HOA) on several key bills directly impacting our industry and members.

Rachel Lee provided a thorough review of the legislative session for CAHB members that addresses GAC-position bills, other bills of interest to the state’s business climate, and the politics of the session. That review can be accessed by clicking here.

 

 

This legislative wrap up includes updates on several key bills that the GAC and CAHB lobby team worked on during the session, including:

Consumer and Employee Dispute Resolution Fairness Would have created the “Consumer and Employee Dispute Resolution Fairness Act” to limit the use of arbitration, including in a construction issue. Along with our partners in the Home-ownership Opportunity Alliance (HOA), we worked with the bill’s sponsors to fix issues that would have harmed the Vallagio decision. The bill was killed during the shortened session. This issue is certain to reemerge in 2021.
Consumer Protection Construction Defect Time Period Would have increased the statutory limitation period for construction defects from 6 years to 10 years, allowed tolling of the limitation period on any statutory or equitable basis, and required tolling of the limitation period until the claimant discovers not only some physical manifestation of a construction defect but also its cause; effectively removing any statute of limitations for defect claims. The bill was also killed during the shortened session.
Workers’ Compensation for COVID-19 Would have changed workers’ compensation law to presume that essential workers, including those in construction, who work outside of the home and contract COVID-19 to be presumed to have contracted the disease through the course of employment, and contraction of COVID-19 will be considered a compensable accident, injury or occupational disease. This bill was postponed indefinitely in committee.
Price Gouge Amid Disaster Deceptive Trade Practice Creates a standalone claim of deceptive trade practice to clarify that price gouging during a disaster period is a prosecutable offense, enforceable by the Attorney General or the district attorney’s office with jurisdiction over the place where the act occurred. The specific items and services subject to the new law include building materials and repair or reconstruction services. The bill states that a price is not considered unreasonably excessive if the seller can show that costs are impacted by the supplier. CAHB worked with legislators to address concerns about supply chain and how that impacts Colorado builders.
Adjust Tax Expenditures for State Education Fund Eliminates tax credits for businesses to put more funds into K-12 funding. CAHB did not take an official position on the bill, but real estate groups worked to amend the bill to increase the thresholds for pass-through businesses like S corps and LLCs, protecting many small businesses. CAHB supported the business community’s efforts to increase the trigger on pass through income from $75,000/$150,000 to $500,000/$1 million.
Sick Leave for Employees Creates the Healthy Families and Workplace Act, which requires employers to provide paid sick leave to employees. The bill would require that beginning January 1, 2021, all employers in Colorado allow employees to accrue up to a 48 hours per year of paid sick leave. Hours are not required to roll over from one year to the next for purposes of accruing over 48 hours total, or be paid out upon separation of employment. Paid sick leave may be used for the employee’s health care or a family member; absences related to domestic abuse; and when a public official has ordered the closure of the employee’s workplace or the school or child care facility of the employee’s child, due to a public health emergency. The bill also requires additional paid leave during a public health emergency. Employees may use this leave for up to a month after the end or suspension of a public health emergency. The CAHB opposed this bill because it creates another mandate on employers for a benefit that many companies already provide, and the additional sick leave requirements for a public-health emergency do not require employees to track or demonstrate a need to take leave.

Unemployment Insurance Was introduced to align the unemployment insurance workshare program with federal rules during the COVID crisis and to allow for benefits to employees unable to return to work due to health issues. It was then amended in the House to try to shore up the fund by increasing the wage base (the amount of wages on which UI premiums are calculated) from $13,600 in 2021 to $17,000 in 2022 and increasing annually to $30,600 in 2026 and indexed in future years. This will result in much larger UI premiums for employers but will bring the fund into actuarial solvency in future years.

 

 

Legislative Forecast Improves

 

Last week, Legislative Council Staff (LCS) and the governor’s Office of State Planning and Budgeting (OSPB) presented their June quarterly revenue forecasts. Both economic agencies provided similar forecasts for Colorado’s improving economic outlook, showing a full recovery from the COVID-19 pandemic. Please use the following links to view the forecasts: LCS forecast and OSPB forecast.

 

According to both forecasts, Colorado’s economy appears to be rebounding from the pandemic recession. Many businesses and households are either recovering or have weathered the economic storm well. However, the reports note that others are still bearing the brunt of the pandemic’s effects and are still struggling, including high unemployment in several service sectors. At the same time, other sectors—such as construction and restaurants—are struggling to find enough workers. The reports noted that the housing market is extremely constrained with limited supply, resulting in high housing prices, and bottlenecks in the supply chain are causing problems for manufacturing and homebuilding.

 

The current fiscal year 2020-21 General Fund outlook is positive. Revenue collections have exceeded the expectations from the March forecast and are now projected to grow 11.4 percent, with the General Fund ending the year with $2.6 billion over the 2.86 percent required reserve. This improved forecast is expected to trigger a required TABOR tax refund in FY2021-22, with revenue expected to exceed the cap by $551.4 million.

 

For FY2021-22, the General Fund revenue collections are expected to be 3.7 percent above levels from the year prior. The General Fund is expected to end the year with a 27.9 percent reserve, which is $1.8 billion over the statutorily required 13.4 percent reserve. For the unbudgeted FY2022-23, revenue in the General Fund is expected to be $3.2 billion, or 22.1 percent more than what is budgeted for the FY2021-22 budgeted year. This amount does not take into account caseload growth, inflation, and other budgetary pressures.

 

TABOR refunds are expected to be trigged in all three fiscal years of the forecast period. Current law includes three mechanisms for TABOR refunds: property tax exemptions for senior and disabled veterans; a temporary reduction in the income tax rate from 4.55 percent to 4.50 percent; and a six-tier sales-tax refund mechanism based on income.

 

The forecast warned that the state’s Unemployment Insurance Trust Fund will remain insolvent through the forecast period. This will require ongoing borrowing from the federal government. Insolvency will trigger a higher rate schedule, beginning January 1, 2022.

To review a complete list of the CAHB’s legislative positions – including bills that the GAC supported, opposed and monitored – please visit the CAHB Bill Tracker