CAHB LEGISLATIVE UPDATE

2020 General Assembly Wrap-Up

The Colorado General Assembly adjourned on Monday, June 15th after returning on May 26 to address unfinished business, including the state budget. The typical 120-day session only lasted 84 legislative days but spanned 160 days with a long pandemic recess and a two-day break caused by protests around the capitol.

The legislature’s primary task was to finalize the state budget and the school finance act. Legislators had to address a $3.3 billion shortfall, including a current year shortfall of $895.8 million and a 2020-21 fiscal year shortfall of $2.42 billion. The budget contraction for this downturn is expected to be twice the Great Recession (a -5.6 percent reduction versus a -2.5 percent reduction in 2009). Much of the budget reductions will be felt hardest by school districts, higher education and transportation.

The CAHB Government Affairs Committee took positions on 24 bills and reviewed dozens more. This update includes three bills that were killed that would have been significantly detrimental to home-building across Colorado.

The following bills were priorities for the CAHB’s lobbying team:
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.

In addition, two issues critical to the home building industry were close to having legislation introduced during the session. Several legislators, possibly in response to the Denver Post’s reporting series, were preparing legislation on metro districts. That legislation was not introduced due to the COVID-19 recess, but the CAHB expects legislation on special districts during the next session.

CAHB worked through the Colorado Water Congress and with construction-industry partners to help stop introduction of dredge and fill legislation developed by the Colorado Department of Public Health and Environment. The legislation would have created a permitting process for dredging and filling in state waters and was a reaction to new federal laws that will go into effect this summer as a replacement to WOTUS. CAHB will work with AGC of Colorado and the Colorado Contractors Association to work with CDPHE to address concerns on this issue.

Of note to our industry, the following bill was killed by the House Committee on Business Affairs & Labor:
Private Construction Contract Payment Requirements Would have required payment of contractors, subcontractors and suppliers within 30 days of billing – regardless of payment by property owner or contractors in the chain. It also would have limited retainage to 5 percent and required full payment within 60 days of completion of specific work. Before the bill died, we were effectively working with the proponents to exclude residential and mixed-use projects.
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

November 2020 Ballot

The General Assembly also referred two measures to the November 2020 ballot, both with bipartisan support. The first referred measure will repeal constitutional provisions set in the Gallagher Amendment on the ratio of valuation for assessment for residential property and nonresidential property for property taxes. The second referred ballot measure is a tax on tobacco, nicotine and vaping products to help fund preschool and education programs and tobacco-cessation efforts.

The CAHB Government Affairs Committee did not take a position on these referred measures but will likely review these and the many initiatives currently on the ballot or in signature collection over the summer. All initiative signatures are due by the first week of August, and the state’s ballot will be set by September 5.