Colorado Capitol Report

Construction-Litigation Bills Encounter Stormy Weather


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State Policy News

Construction-Litigation Bills Encounter Stormy Weather

The likelihood that the legislature can pass bipartisan legislation to significantly reform the state’s construction-litigation laws is starting to look doubtful now that the session has passed the half-way mark, and two of the five introduced bills have died while a third is headed to a likely demise.

SB-157

SB-157 died in the Senate Business Labor and Technology Committee Monday.  SB-157, “Construction Defect Actions Notice Vote Approval,” was sponsored by Senator Angela Williams (D-Denver).  Here’s the legislature’s summary of the introduced bill:

The bill requires that, before the executive board of a unit owners’ association (HOA) in a common interest community brings suit against a developer or builder on behalf of unit owners, the board must:

  • Notify all unit owners; and
  • Except when the HOA contracted with the developer or builder for the work complained of or the amount in controversy is less than $100,000, obtain the approval of a majority of the unit owners after giving them detailed disclosures about the lawsuit and its potential costs and benefits.

HB-1169

HB-1169, “Construction Defect Litigation Builder’s Right To Repair,” was sponsored by Representative Tim Leonard (R-Evergreen).

The bill died on a party-line, 6-3 vote on March 1st in the House State, Veterans and Military Affairs Committee, which is known as the chamber’s “kill committee.”

Here’s the summary of the introduced bill:

The bill clarifies that a construction professional has the right to receive notice from a prospective claimant concerning an alleged construction defect; to inspect the property; and then to elect to either repair the defect or tender an offer of settlement before the claimant can file a lawsuit seeking damages.

SB-156

The bill, which has the support of the business community, has been assigned to the House “kill committee,” the House State, Veterans and Military Affairs Committee.

The bill is scheduled for a hearing when the Committee convenes at 1:30 p.m. on Wednesday, April 19th, in Room A in the Legislative Services Building.

The bill passed the Senate on a final, bi-partisan Third Reading 23-to-12 vote.

SB-156, Homeowners’ Association Construction Defect Lawsuit Approval Timelines,” was sponsored in the Senate by Republican Senator Owen Hill (Colorado Springs).  The House co-sponsors are Republican Representatives Cole Wist and Lori Saine.

Here’s the introduced bill’s description:

The bill states that when the governing documents of a common interest community require mediation or arbitration of a construction defect claim and the requirement is later amended or removed, mediation or arbitration is still required for a construction defect claim. These provisions are in section 3 of the bill. Section 3 also specifies that the mediation or arbitration must take place in the judicial district in which the community is located and that the arbitrator must:

  • Be a neutral third party;
  • Make certain disclosures before being selected; and
  • Be selected as specified in the common interest community’s governing documents or, if not so specified, in accordance with applicable state or federal laws governing mediation or arbitration. 

Section 1 of the bill specifies that, in the arbitration of a construction defect action, the arbitrator is required to follow the substantive law of Colorado with regard to any applicable claim or defense and any remedy granted, and a failure to do so is grounds for a district court to vacate or refuse to confirm the arbitrator’s award.

Section 4 of the bill requires that, before a construction defect claim is filed on behalf of the association:

  • The parties must submit the matter to mediation before a neutral third party; and
  • The board must give advance notice to all unit owners, together with a disclosure of the projected costs, duration, and financial impact of the construction defect claim, and must obtain the written consent of the owners of units to which at least a majority of the votes in the association are allocated.

Section 5 of the bill adds to the disclosures required prior to the purchase and sale of property in a common interest community a notice that the community’s governing documents may require binding arbitration of certain disputes.

The bill’s fiscal note provides another analysis of the introduced bill.  The bill was amended by the Senate Business, Labor and Technology Committee and further amended on Second Reading on the House Floor.

SB-45

SB-45, “Construction Defect Claim Allocation of Defense Costs,” stands out among the other bills in that is has bipartisan, leadership sponsorship in both chambers.  In the Senate, the bill is sponsored by Senate President Grantham and Senator Angela Williams (D-Denver).  In the House, the sponsors are Speaker Duran and Senate Assistant Minority Leader Cole Wist (R-Centennial).

The bill was heard by the Senate Business, Labor and Technology Committee on February 8th.  After being amended on an unanimous vote, the Committee passed the bill on a six-to-one vote and sent it to the Senate Appropriations Committee.  Only Democrat Senator Cheri Jahn (Wheat Ridge) voted against the bill.

Because of the sponsors, statehouse participants give the bill the best chance of being passed by the legislature and sent to Governor John Hickenlooper (D) for his signature.

As introduced, SB-45 is summarized in the following way on the legislature’s Web site:

In a construction defect action in which more than one insurer has a duty to defend a party, the bill requires the court to apportion the costs of defense, including reasonable attorney fees, among all insurers with a duty to defend. An initial order apportioning costs must be made within 90 days after an insurer files its claim for contribution, and the court must make a final apportionment of costs after entry of a final judgment resolving all of the underlying claims against the insured. An insurer seeking contribution may also make a claim against an insured or additional insured who chose not to procure liability insurance for a period of time relevant to the underlying action. A claim for contribution may be assigned and does not affect any insurer’s duty to defend.

SB-155

SB-155, “Statutory Definition of Construction Defect,” is sponsored by two Republicans, Senator Jack Tate (Centennial) and Representative Lori Saine (Dacono).  Here’s the introduced bill’s description:

The bill separately defines and clarifies the term ‘construction defect’ in the ‘Construction Defect Action Reform Act’.

The bill was assigned to the Senate Business, Labor and Technology Committee.  The bill’s Fiscal Note summarizes the bill this way:

Summary of Legislation

The bill defines the term “construction defect” to mean a defect in the design or construction of any improvement to real property that causes damages to or the loss of use of personal property, or causes personal injury.

More Information

For more information on the issue and the legislation, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.


NAM, CACI Honor U.S. Sen. Gardner With Manufacturing Legislative Excellence Award

Senator Cory Gardner and Chuck Berry, CACI

Each year the National Association of Manufacturing (NAM) looks at legislative issues before Congress and identifies which ones are key to a bright and productive manufacturing sector  – as well as flagging harmful bills which could create unnecessary or burdensome reporting, redundant layers of regulation, as well as bills which pick winners and losers in our economy.  Based on the key legislation reviewed and identified by the NAM, votes by all members of Congress are weighed against this matrix.  We are pleased to announce that U.S. Senator Cory Gardner supported manufacturing priorities 87% of the time.

CACI is proud to recognize Senator Gardner’s legislative efforts!  Through his voting record, he has proven time and again that he is a friend of Colorado’s businesses, workers and a true partner in protecting our state’s growing business environment.  This is the second time as a U.S. Senator that Gardner has been honored with this award, and his fourth while as U.S. Representative for the Colorado Fourth District.

The NAM awards members of Congress with the Manufacturing Legislative Excellence Award when support reaches levels of at least 70% on key or targeted votes.  Click here to find the key Senate and House voting lists.  Other members of the Colorado Congressional Delegation receiving this award are:

Rep. Mike Coffman (R-CO-6) – 93%

Rep. Doug Lamborn (R-CO-5) – 89%

Rep. Scott Tipton (R-CO-3) – 86%

Rep. Ken Buck (R-CO-4) – 80%

U.S. Senator Michael Bennet was 3% short of also receiving the award.

 


Colorado Energy Office Chief Speaks to CACI Energy and Environment Council

The CACI Energy and Environment Council, at its meeting Tuesday, heard a presentation by Kathleen Staks, Executive Director of the Colorado Energy Office.  Staks was appointed to the position in January by Governor John Hickenlooper.

Staks told the Council that the Office’s funding expires June 30th and renewal of its funding by the legislature is her top priority.  She noted that the mission of the Office was expanded by the legislature in 2012 to cover energy resources.  She reviewed in detailed the various programs of the Office, including energy efficiency, transportation, alternative energy sources and education and communication.

Here is a summary of the Office’s activities and programs:

Energy Performance Contracting: 146 county, municipal, special districts across 75% of counties have used EPC to finance energy performance improvements. 194 projects completed providing over $500 million leveraged private investment and $31 million in annual energy savings.

Energy Savings for Schools: Provides rural and small schools energy and water audits, technical support to identify and implement priority projects, and assistance in securing financial resources.

Agricultural Energy Efficiency: Provides energy audits, technical assistance, and helps secure financial resources for dairies, powered irrigators, greenhouses, and cold storage facilities. CEO secured a $1.6 million grant from USDA for program participants. Program will generate more than $4.5 million in savings for participants.

Commercial Property Assessed Clean Energy (C-PACE): Program facilitates private financing energy and water improvements in commercial properties. 14 counties have opted into the program which gives access to 58% of commercial buildings.

Charge Ahead Colorado: Funded from electric vehicle registration fees, this program has provided competitive grants for 129 electric vehicle charging stations.

Weatherization Assistance Program: has served 14,173 eligible households (~2,800/yr) across every county in the state. It has saved clients more than $6.7 million with an average annual savings of $200-$500 per household.

ALT Fuels Colorado: Federally funded program has provided grants for 14 compressed natural gas fueling stations across major transportation highways, including connecting the entire I-25 corridor.

Hydropower: Efforts in streamlined state/federal permitting and technical guidance have led to over 20 MW installed and more than 10 MW additional filings for exemptions at FERC. Projects range from municipal water conduit, pressurized irrigation, dams, and ditches.

 


Federal Policy News

Save-the-Date: Next CACI Federal Policy Council is April 11th

Put these dates on your calendar for the rest of 2017:

  • June 6th
  • July 18th
  • August 9th – CACI Congressional Luncheon
  • October 3rd

If you have any questions, ideas or suggestions about federal issues, please contact CACI Federal Policy Director Leah Curtsinger at (303) 866-9641.


CACI's Legislative Agenda

Below is a list of bills and their status on which CACI Policy Councils and the Board of Directors have taken positions.  For more information on the bills, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.

Energy & Environment Council BillsBill Title/DescriptionCouncil Position
SB 14 by Sen. Baumgardner/Rep. Becker, J.Inspection requirements/Underground TanksSupport
SB 89 by Sens. Fenberg & LundbergInstallation Electricity Storage SystemsOppose/Dead
SB 145 by Sen. Fenberg & Rep. FooteElectric Utility Distribution Acquisition PlanOppose/Dead
SB 188 by Sen. MarbleRepeal Income Tax Credit Motor VehiclesOppose/Dead
HB 1227 by Reps Winter & Sen. PriolaElectric Demand-Side Mngt Program ExtensionSupport
SB 271 by Sen. Cooke & Rep. PabonInvestor Owned Utility Cost Recovery ProgramNeutral as Amended
HB 1336 by Reps. Young & FooteAdditional Protections/Forced PoolingOppose/Dead
HB 1256 by Rep. FooteOil & Gas Set-Backs/SchoolsOppose/Dead
SJM 005 by Sen. Jones & Rep. FooteReduce Energy SubsidiesOppose

 

Health Care Council BillsBill Title/DescriptionCouncil Position
SB 003 by Sen. Smallwood & Rep. NevilleRepeal of CO Health Benefit ExchangeMonitor
SB 57 by Sen. GuzmanHospital Provider Fee EnterpriseSupport/Dead
SB 88 by Sen. Holbert & Rep. HootenNetwork of ProvidersNeutral /Signed by Gov
SB 151 by Sen. Crowder & Rep. GinalConsumer Access to Hlth Care/IntermediariesOppose/Dead
SB 206 by Sen. Gardner & Rep. SingerOut-of-Network Providers PaymentsOppose/Dead
HB 1236 by Rep. Kennedy & Sen. CoramAnnual Report on Hospital ExpendituresOppose/Dead
HB 1247 by Rep. Danielson & Sen. SonnenbergPatient Choice Health CareOppose/Dead
HB 1286 by Rep. Esgar & Sen. CrowderState Employee Health Carrier RequirementsOppose/Dead
HB 1318 by Rep. Ginal & Sen. CrowderAnnual Report Pharmaceutical Costs DataOppose/Dead

 

Labor & Employment Council BillsBill Title/DescriptionCouncil Position
SB 001 by Sen. Neville & Rep. NevilleAlleviate Fiscal Impact of State RegulationsSupport/Dead
HB 1001 by Rep. BucknerParental Leave for Academic ActivitiesNeutral/Dead
SB 186 by Sen. Tate & Rep. CarverReduce Regulatory Burden Rules on BusinessSupport/Dead
HB 1269 by Rep. Danielson/Nordberg & Sen. DonovanDiscussing Salaries Among EmployeesNeutral
HB 1290 by Rep. PettersenRetirement Savings MandateOppose/Dead
HB 1254 by Rep. K. Becker & Sen. KaganRemoval of Cap on Non-Economic DamagesOppose
HB 1305 by Rep. Foote & Sen. GuzmanLimits on Job Applicant Criminal History InquiriesOppose/Dead
HB 1307 by Rep. WinterFamily & Medical Leave Wage ReplacementOppose/Dead
SB 276 by Sen. Tate & Rep. TateAlleviate Fiscal Impact of State RegulationsSupport
HB 1314 by Reps. Salazar & MeltonColorado Right to RestOppose/Dead

 

Tax Council BillsBill Title/DescriptionCouncil Position
SB 009 by Sen. CrowderIncrease Per-Schedule Exemption on BPPTSupport
HB 1049 by Rep. ThurlowElimination of Interest/Tax AbatementsNeutral as Amended
HB 1063 by Rep. Leonard/Sen. NevilleConcerning Reduction in BPPTSupport/Dead
HB 1090 by Rep. Kraft-Tharpe/Sen. GardnerContinuation Advanced Industry Tax CreditSupport
SB 112 by Sen. Neville & Rep. PabonIntergovernmental Tax DisputesSupport/Signed by Gov.
HB 1216 by Rep. Kraft-Tharpe/Sen. NevilleSales & Use Tax Simplification Task ForceSupport

 

Governmental Affairs Council BillsBill Title/DescriptionCouncil Position
SB 191 by Sen. Tate & Rep. Wist, WillettMarket Based Rates/Interest on JudgmentsSupport/Dead
SB 213 by Sen. HillAutomated Driving Motor VehiclesSupport
HB 1254 by Rep. KC Becker & Sen. KaganRemoval of Caps on Non-Economic DamagesOppose/Dead
HB 1309 by Rep. Jackson & Sen. GuzmanDocumentary Fee To Fund Affordable HousingOppose/Dead

 

CACI Board of Directors’ BillsBill Title/DescriptionBoard Position
SB 45 by Sen. Grantham & Rep. DuranConst. Defect Claim Allocation of Defense CostsSupport
SB 155 by Sen. Tate & Rep. SaineStatutory Definition of ConstructionSupport
SB 156 by Sen. Hill & Rep. WistHOA Const. Defect Lawsuit Approval TimelinesSupport/Dead
SB 157 by Sen. Williams & Rep. MeltonConst. Defect Actions Notice Vote ApprovalSupport/Dead
HB 1169 by Rep. Leonard & Sen. TateConst. Defect Litigation Builder's Right To RepairSupport/Dead
HB 1242 by Speaker Duran & Prez. GranthamNew Transportation Infrastructure FundingSupport/Dead
SB 267 by Sen. Sonnenberg & Rep. K. BeckerSustainability of Rural Colorado (Hosp Provider)Support
HB 1279 by Rep. Garnett and Sen. GuzmanConst. Defect Actions Notice Vote ApprovalSupport