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State Policy News
House Sends Transportation Funding Bill to Senate
This morning, the House gave final approval to an extensively amended HB-1242, which sends the transportation funding bill to the Senate.
The introduced bill would increase the state sales tax from 2.9 percent to 3.52 percent for 20 years to generate almost $700 million in new tax revenue per year. The proposal would use the revenue stream from the sales tax increase to allow the issuance of $3.5 billion in bonds to quickly kick-start priority projects.
On March 16th, the CACI Board of Directors voted to support HB-1242 as introduced.
The bill passed the House on a 41-to-24 vote, with all of the Democrats and four Republicans voting to advance the bill to the Senate:
- Representative Phil Covarrubias (Brighton)
- Representative Dan Thurlow (Grand Junction)
- Representative Marc Catlin (Montrose)
- Representative Polly Lawrence (Roxborough Park)
As with other bills that the Democrat-controlled House sends to the Republican-controlled Senate, the fate of HB-1242 is up in the air.
To reach the House Floor, the bill first traveled quickly through three committees: Transportation and Energy; Finance; and Appropriations.
During debate on the House Floor and in the three committees, major issues included the following:
- Whether or not toll lanes could be built on Interstate highways with money from HB-1242. House Speaker Crisanta Duran (D-Denver) was adamant that the bill would not allow this.
- The amount of revenue that would go to local governments and “multi-modal” projects vs. the amount that would go to the Colorado Department of Transportation (CDOT).
- The protest by House Republicans that cuts would not be made to the State budget to free up money for transportation.
On Monday, CACI’s Loren Furman, Senior Vice President, State and Federal Relations, testified in support of the bill before the House Finance Committee, repeating her testimony before the House Transportation and Energy Committee on March 23rd.
A new fiscal note, issued today, contains an updated analysis of the amended, complex bill:
Summary of Legislation
This bill refers a ballot question to voters at the November 2017 election. All other portions of the bill are conditional upon voter approval of the ballot question.
If voters approve the ballot question, the bill makes a number of changes to state transportation funding. These are described in the following paragraphs.
Transportation revenue anticipation notes. The bill authorizes the executive director of the Colorado Department of Transportation (CDOT) to issue transportation revenue anticipation notes (TRANs). The sale value of the TRANs must not exceed $3.5 billion, and the repayment cost must not exceed $5.0 billion. The term of the debt service is limited to 20 years.
Proceeds from the sale of TRANs are credited to the State Highway Fund (SHF) and used exclusively to pay for transportation projects, including multimodal capital projects, selected by the Transportation Commission. The bill requires CDOT to furnish its most recent project list to Legislative Council Staff (LCS) for inclusion in the ballot information booklet (“Blue Book”) sent to voters before the election.
Prior to the issuance of TRANs, the Transportation Commission is required to adopt a resolution specifying the revenue sources that will be used for debt service payments. The first $50.0 million in annual debt service obligations must be paid from SHF revenue that the commission controls under current law. Any outstanding amount is paid first from newly allocated sales and use tax revenue.
Sales and use tax increase. The bill increases the state sales and use tax rates by 0.62 percentage points, from 2.90 percent to 3.52 percent, between January 1, 2018, and December 31, 2037. Revenue is diverted from the General Fund to the Highway Users Tax Fund (HUTF) and a newly created Multimodal Transportation Options Fund as follows:
- $375 million to the HUTF to be allocated to the SHF for TRANs repayment; and
- of the remainder:
- 70 percent to the HUTF to be allocated to counties and municipalities for transportation projects; and
- 30 percent to the Multimodal Transportation Options Fund to be used for grants for multimodal transportation projects, including pedestrian and active transportation projects.
State Highway Fund share. From new sales and use tax revenue, the bill diverts $375 million annually to the HUTF for allocation to the SHF. This amount is required to be used for TRANs repayment. Any amount remaining after debt service costs is required be expended for transportation projects, including multimodal capital projects, that are on CDOT’s priority list for transportation funding and for maintenance of state highways, including rapid response maintenance. Funds may not be expended for toll highways, unless a federal record of decision has been issued as of January 1, 2018, or unless toll collection satisfies certain requirements. Tolls may not be collected for the singular or primary purpose of revenue generation, and toll lanes must demonstrably lower congestion in untolled lanes.
Local government share. The bill diverts 70 percent of new sales and use tax revenue remaining after the SHF share to the HUTF for allocation to local governments. Half of this revenue is disbursed to counties following the current statutory distribution formula for county
HUTF allocations. The other half is disbursed to municipalities following their current statutory distribution formula. Funds may be used by local governments for transportation projects in the same way that current HUTF distributions are utilized.
Multimodal projects share. The bill diverts 30 percent of new sales and use tax revenue remaining after the SHF share to a newly created Multimodal Transportation Options Fund. This fund is comprised of two accounts:
- the Transportation Options Account, which is administered by the newly created Multimodal Transportation Options Committee; and
- the Pedestrian and Active Transportation Account, which is administered by the Transportation Commission.
No more than 75 percent of the funding in the Multimodal Transportation Options Fund may be paid to the Transportation Options Account, and no less than 25 percent of the funding may be paid to the Pedestrian and Active Transportation Account. To receive funding from either account, most counties and municipalities must provide a 50 percent match to money received from the accounts; counties or municipalities that receive less than $15 million in annual sales tax revenues may provide a 20 percent match.
CDOT must annually report to the Transportation Legislative Review Committee (TLRC) concerning disbursements from the Pedestrian and Active Transportation Account. The Multimodal Transportation Options Committee, described below, must annually report to the TLRC concerning disbursements from the Transportation Options Account.
Disbursements from the Multimodal Transportation Options Fund are subject to the Keep Jobs In Colorado Act of 2013, which requires that 80 percent of the workforce on projects be comprised of Colorado residents, that state agencies disclose their rationale for selecting a particular bidding process, and that the cost and country of origin of the most costly goods used be disclosed to the Department of Personnel and Administration.
Road safety surcharge. For 2018 through 2037, the bill reduces the road safety surcharge, an annual vehicle registration fee, as follows:
- the fee for motorcycles and vehicles weighing up to 2,000 lbs is reduced from $16 to $6;
- the fee for vehicles weighing between 2,000 lbs and 5,000 lbs is reduced from $23 to $9;
- the fee for vehicles weighing between 5,000 lbs and 10,000 lbs is reduced from $28 to $11; and
- the fees for vehicles weighing more than 10,000 lbs are unchanged.
Under current law, surcharge revenue is deposited in the HUTF and allocated in shares of 60 percent to the SHF, 22 percent to counties, and 18 percent to municipalities. For surcharges paid on vehicles in the first three weight classes, the bill eliminates the state share of this distribution, allocating the surcharge revenue in proportionate shares of 55 percent to counties and 45 percent to municipalities.
Late vehicle registration fees. Effective January 1, 2018, the bill repeals the late fee assessed on vehicles that are not registered by the date required. Under current law, late fees accumulate at a rate of $25 per month after a one-month grace period, but may not exceed $100.
Fee revenue is deposited in the HUTF and allocated in shares of 60 percent to the SHF, 22 percent to counties, and 18 percent to municipalities.
Senate Bill 09-228 transfers. The bill repeals the outstanding SB09-228 transfers of General Fund revenue to the HUTF. Transfers to the HUTF are repealed for FY 2017-18 through FY 2019-20. Transfers to the Capital Construction Fund are unaffected.
Multimodal Transportation Options Commission. The bill creates the Multimodal Transportation Options Committee in CDOT. This committee is responsible for allocating funds from the Transportation Options Account of the Multimodal Transportation Options Fund. To this end, the committee is responsible for developing a formula to allocate money among regions of the state, providing supervision and guidance to the Division of Transit and Rail in CDOT in its solicitation and evaluation of transportation options projects, determining which transportation options projects receive funding, and proposing programs for transportation options service to low-income Coloradans. Grants for projects receiving funding from the Transportation Options Account must be matched at 50 percent. The committee is comprised of 11 members, including the executive director of CDOT or a designee, six gubernatorial appointees, and four appointees of legislative leadership. Appointees serve four-year terms without compensation but receive travel and expense reimbursements.
TRANs Citizen Oversight Committee. The bill creates the Transportation Revenue Anticipation Notes Citizen Oversight Committee to oversee expenditures from TRANs proceeds and any additional sales and use tax revenue allocated to the SHF and used by CDOT. The committee will meet at least four times per year to ensure that funds not otherwise pledged for debt service are used only for transportation projects that are on CDOT’s priority list for transportation funding and for maintenance of state highways. The committee is comprised of 14 members including 8 members appointed by legislative leadership and 6 members appointed by the Governor. The members of the committee will represent various stakeholders in transportation policy and different geographic regions of the state, and appointing authorities must specifically ensure that the western slope and eastern plains are represented. Members serve without compensation or reimbursement. The committee will report annually to the TLRC.
Study of high-occupancy vehicle lanes. The bill requires CDOT to prepare and present a report concerning options for more flexible use of high-occupancy vehicle and high-occupancy toll lanes. The report will evaluate options for conversion of lanes that are free for use by vehicles occupied by three or more people to make these lanes free for use by vehicles occupied by two or more people. The report must be presented to the TLRC of the General Assembly no later than August 1, 2018.
For more information about HB-1242, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.
For news coverage of HB-1242, read:
“Transportation bill gets final OK in Colorado House, sales tax measure moves to Senate,” by Brian Eason, The Denver Post, March 31st.
“Prohibition against taxing for toll roads draws mixed response as Colorado funding bill passes,” by Ed Sealover, The Denver Business Journal, March 30th.
“Colorado House gives initial nod to sales tax hike for $3.5 billion in road bonds, over GOP objections,” by Brain Eason, The Denver Post, March 30th.
“House Committee Approves Bipartisan Transportation Funding Bill,” CACI Colorado Capitol Report, March 24th.
Politics May Undercut Progress of Newest Regulatory Reform Bill
This morning, with a voice vote, the House gave initial, Second Reading approval to a regulatory reform bill that encountered partisan political seas when it was heard earlier in the week by a committee. The next step for the House will be a recorded, Third Reading final vote before the measure goes to the Senate.
On March 16th, Representative Tracy Kraft-Tharp (D-Arvada) introduced HB-1270, which has some Republican support. The bill is co-sponsored in the House by Representative Polly Lawrence (R-Roxborough Park). The Senate co-sponsors are Senator Don Coram (R-Montrose) and Senator Angela Williams (D-Denver).
In brief, the bill would provide state agencies with discretion about whether or not to impose fines on small businesses—defined by the bill as an employer having 50 or fewer workers—for a first-time, minor violation of certain state rules.
On Tuesday, the House Business Affairs and Labor Committee, which Representative Kraft-Tharp chairs, amended the bill and approved it on an 8-to-5 vote. Only Republican Dan Thurlow of Grand Junction voted for the bill along with the majority Democrats.
The politics surrounding HB-1270, however, may damage its chances of success in the Republican-controlled Senate.
A Republican regulatory reform bill, SB-1, which had bipartisan support in the Senate and which CACI supported, was killed by the House Business Affairs and Labor Committee on March 2nd on a party-line, 7-to-6 vote. SB-1 would have provided a modicum of regulatory relief to small companies that inadvertently run afoul of state rules by giving them a chance to first comply without facing a fine. Opponents of SB-1 included such labor unions as the AFL-CIO and environmental and conservation organizations.
CACI has not taken a position on the HB-1270, which also is opposed by the National Federation of Independent Businesses (NFIB).
Here’s the legislature’s summary of the introduced bill:
The bill contains a legislative declaration about the difficulties small businesses encounter when attempting to stay current with changing rules and new rules that affect their businesses. The bill identifies 4 specific actions that the executive branch could take to inform small businesses about proposed and new rules.
The bill creates a system that gives state agencies discretion in imposing fines upon a business for a first-time offense of a minor violation. The agency’s discretion applies to small businesses with 50 or fewer employees (business).
Unless specifically stated otherwise in statute, a state agency has discretion to give the business an opportunity to cure the violation and then waive the fine if the minor violation is cured or to reduce the penalties or fine.
The opportunity to cure a minor violation does not apply in cases where an agency is required by statute to assess a fine for noncompliance.
The bill defines ‘minor violation’ as a violation that:
- Relates to operational or administrative matters such as record keeping, retention of data, or failing to file reports or forms; and
- Relates to a rule promulgated within the 12 months immediately preceding the alleged violation; and
- Is enforced by a fine, either in total or in the aggregate, of $500 or less.
- ‘Minor violation’ does not include:
- Any matter that places the safety of employees; other persons; or the public health, safety, or environment at risk; or
- Violations relating to:
- The issuance of or denial of benefits or compensation to employees; or
- Activities required by federal law.
Each state agency shall conduct an analysis of noncompliance with its rules to identify rules with the greatest frequency of noncompliance, rules that generate the greatest amount of fines, how many first-time offenders were given the opportunity to cure a minor violation, and what factors contribute to noncompliance by regulated businesses. The agency shall consider and review what actions should be taken to address the issues identified.
Each principal department containing agencies that issue fines for violations of new rules shall prepare an annual report for the general assembly summarizing the results of its analysis of noncompliance. The principal department shall absorb the costs of preparing the annual reports within existing resources.
The bill’s fiscal note contains a separate analysis of the bill.
For more information about regulatory reform and HB-1270, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.
For more information on HB-1270 and the regulatory reform issue, read:
“Regulatory reform version 2.0 gets 1st backing in Colorado Legislature,” by Ed Sealover, The Denver Business Journal, March 28th.
“Update: Regulatory Reform Bills,” CACI Colorado Capitol Report, March 24th.
“Colorado House Democrats kill regulatory-reform efforts,” by Ed Sealover, The Denver Business Journal, March 2nd.
Chamber Day at the Capitol
Yesterday morning, CACI hosted its Annual Chamber Day at the Capitol in the Old Supreme Court Chambers. CACI members, members of the local chambers of commerce and CACI’s EXECs Advocacy Class attended. Local chamber executives discussed legislation of importance to their communities. A panel of business lobbyists described their work at the Capitol. The group observed action on the House floor and then returned to the Old Supreme Court Chambers for a discussion of such important business issues as construction litigation reform, transportation funding, Federal legislation and health care.
Save-the-Date: Next CACI Federal Policy Council is April 11th
Save-the-Date: Next CACI Federal Policy Council is April 11th – Where Do We Go With Tax Reform?
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 Bills||Bill Title/Description||Council Position|
|SB 14 by Sen. Baumgardner/Rep. Becker, J.||Inspection requirements/Underground Tanks||Support|
|SB 89 by Sens. Fenberg & Lundberg||Installation Electricity Storage Systems||Oppose/Dead|
|SB 145 by Sen. Fenberg & Rep. Foote||Electric Utility Distribution Acquisition Plan||Oppose/Dead|
|SB 188 by Sen. Marble||Repeal Income Tax Credit Motor Vehicles||Oppose/Dead|
|HB 1227 by Reps Winter & Sen. Priola||Electric Demand-Side Mngt Program Extension||Support|
|SB 271 by Sen. Cooke & Rep. Pabon||Investor Owned Utility Cost Recovery Program||Neutral as Amended|
|HB 1336 by Reps. Young & Foote||Additional Protections/Forced Pooling||Oppose/Dead|
|HB 1256 by Rep. Foote||Oil & Gas Set-Backs/Schools||Oppose/Dead|
|SJM 005 by Sen. Jones & Rep. Foote||Reduce Energy Subsidies||Oppose|
|Health Care Council Bills||Bill Title/Description||Council Position|
|SB 003 by Sen. Smallwood & Rep. Neville||Repeal of CO Health Benefit Exchange||Monitor|
|SB 57 by Sen. Guzman||Hospital Provider Fee Enterprise||Support/Dead|
|SB 88 by Sen. Holbert & Rep. Hooten||Network of Providers||Neutral /Signed by Gov|
|SB 151 by Sen. Crowder & Rep. Ginal||Consumer Access to Hlth Care/Intermediaries||Oppose/Dead|
|SB 206 by Sen. Gardner & Rep. Singer||Out-of-Network Providers Payments||Oppose/Dead|
|HB 1236 by Rep. Kennedy & Sen. Coram||Annual Report on Hospital Expenditures||Oppose/Dead|
|HB 1247 by Rep. Danielson & Sen. Sonnenberg||Patient Choice Health Care||Oppose/Dead|
|HB 1286 by Rep. Esgar & Sen. Crowder||State Employee Health Carrier Requirements||Oppose/Dead|
|HB 1318 by Rep. Ginal & Sen. Crowder||Annual Report Pharmaceutical Costs Data||Oppose/Dead|
|Labor & Employment Council Bills||Bill Title/Description||Council Position|
|SB 001 by Sen. Neville & Rep. Neville||Alleviate Fiscal Impact of State Regulations||Support/Dead|
|HB 1001 by Rep. Buckner||Parental Leave for Academic Activities||Neutral/Dead|
|SB 186 by Sen. Tate & Rep. Carver||Reduce Regulatory Burden Rules on Business||Support/Dead|
|HB 1269 by Rep. Danielson/Nordberg & Sen. Donovan||Discussing Salaries Among Employees||Neutral|
|HB 1290 by Rep. Pettersen||Retirement Savings Mandate||Oppose/Dead|
|HB 1254 by Rep. K. Becker & Sen. Kagan||Removal of Cap on Non-Economic Damages||Oppose|
|HB 1305 by Rep. Foote & Sen. Guzman||Limits on Job Applicant Criminal History Inquiries||Oppose/Dead|
|HB 1307 by Rep. Winter||Family & Medical Leave Wage Replacement||Oppose/Dead|
|SB 276 by Sen. Tate & Rep. Tate||Alleviate Fiscal Impact of State Regulations||Support|
|HB 1314 by Reps. Salazar & Melton||Colorado Right to Rest||Oppose/Dead|
|Tax Council Bills||Bill Title/Description||Council Position|
|SB 009 by Sen. Crowder||Increase Per-Schedule Exemption on BPPT||Support|
|HB 1049 by Rep. Thurlow||Elimination of Interest/Tax Abatements||Neutral as Amended|
|HB 1063 by Rep. Leonard/Sen. Neville||Concerning Reduction in BPPT||Support/Dead|
|HB 1090 by Rep. Kraft-Tharpe/Sen. Gardner||Continuation Advanced Industry Tax Credit||Support|
|SB 112 by Sen. Neville & Rep. Pabon||Intergovernmental Tax Disputes||Support/Signed by Gov.|
|HB 1216 by Rep. Kraft-Tharpe/Sen. Neville||Sales & Use Tax Simplification Task Force||Support|
|Governmental Affairs Council Bills||Bill Title/Description||Council Position|
|SB 191 by Sen. Tate & Rep. Wist, Willett||Market Based Rates/Interest on Judgments||Support/Dead|
|SB 213 by Sen. Hill||Automated Driving Motor Vehicles||Support|
|HB 1254 by Rep. KC Becker & Sen. Kagan||Removal of Caps on Non-Economic Damages||Oppose/Dead|
|HB 1309 by Rep. Jackson & Sen. Guzman||Documentary Fee To Fund Affordable Housing||Oppose/Dead|
|CACI Board of Directors’ Bills||Bill Title/Description||Board Position|
|SB 45 by Sen. Grantham & Rep. Duran||Const. Defect Claim Allocation of Defense Costs||Support|
|SB 155 by Sen. Tate & Rep. Saine||Statutory Definition of Construction||Support|
|SB 156 by Sen. Hill & Rep. Wist||HOA Const. Defect Lawsuit Approval Timelines||Support/Dead|
|SB 157 by Sen. Williams & Rep. Melton||Const. Defect Actions Notice Vote Approval||Support/Dead|
|HB 1169 by Rep. Leonard & Sen. Tate||Const. Defect Litigation Builder's Right To Repair||Support/Dead|
|HB 1242 by Speaker Duran & Prez. Grantham||New Transportation Infrastructure Funding||Support/Dead|
|SB 267 by Sen. Sonnenberg & Rep. K. Becker||Sustainability of Rural Colorado (Hosp Provider)||Support|
|HB 1279 by Rep. Garnett and Sen. Guzman||Const. Defect Actions Notice Vote Approval||Support|