In the News

Business counts up wins, losses as Colorado legislative session ends

Source: Denver Business Journal

The legislative session clearly wasn’t good for business, but it could have been a lot worse. Troublingly, not all businesses truly understand how these regulations may affect their business operations. If you are unsure and considering speaking to a legal professional, you can see more about how to do this online.

Five bills that would have ramped up-regulation on the oil and gas industry died in the last week of the 120-day General Assembly, as did a late-session measure that would have aided union members in defensive-employer lockouts. This is very good news for the oil and gas industry because the regulation would have hindered some of the major drilling projects that are currently going on. This has also meant that more people are investing in oil stocks using the Öl Profit app because they wanted to wait and see if the regulations were going to go through or not before they made their investments.

The Colorado Association of Commerce and Industry (The Colorado Chamber), among other groups, spent much of the early session working to tamp down or kill bills regarding prospective employee credit checks, criminalization of wage theft, and expansion of the federal Family and Medical Leave Act, measures that they said could have placed extreme burdens on some businesses.

So, while business leaders were hard-pressed to identify measures that will help private companies this year – only the extension of a 3-year-old job-growth income tax credit was named by more than one group as an actual job creator – they also agreed they dodged a lot of bullets in a session that could have produced more fees and regulations than it did.

“Going into the session, we knew it was going to be fraught with conflict; we knew it would be a difficult one. So, we tried to find compromise from the very beginning,” said Loren Furman, The Colorado Chamber’s senior vice president of state and federal relations. “No, these bills were not all wins for the business community. But they certainly became much more palatable for the business community at the end of the day.”

This session was supposed to be marked by increased regulations on the oil and gas industry. Democrats introduced nine bills to remove industry promotion from the mission of the Colorado Oil and Gas Conservation Commission (COGCC), increase groundwater testing in the Greater Wattenberg Area north of Denver and add new fees to help local governments deal with the impacts of drilling.

But each of those bills fell in the Senate. The Legislature passed just two regulatory bills, and the industry opposed neither. One requires increased reporting of spills; the other requires the state Department of Natural Resources to develop a strategy to concentrate inspections on wells that are more likely to experience spills.

The specter of governor’s veto

Rep. Mike Foote, a Lafayette Democrat who sponsored several of the proposed regulatory increases, said the bills failed partly because of opposition from Gov. John Hickenlooper, a former petroleum geologist who often sides with the COGCC. Sponsors who were planning to bring forth even more controversial bills on giving more power to local governments, and increasing setbacks between wells and residential development, decided not to offer them because they felt they couldn’t get the approval of both the Legislature and Hickenlooper, he said.

Doug Flanders, director of policy and external affairs for the Colorado Oil and Gas Association, said that despite the outcomes, what concerned him most was that sponsors made little effort to include in their discussions an industry that creates $31 billion in economic activity. He believes a group of Democratic senators decided to stand with Republicans and kill some of the most controversial measures when the larger business community began saying the bills could cost it jobs.

Still, Sen. Greg Brophy, a Wray Republican who led Senate GOP efforts to stop the bills, said he believes the consideration of anti-industry legislation, even if the bills ultimately failed, will hurt the industry. As national companies determine where to invest their drilling resources, they are likely to be more leery of Colorado because of the regulatory instability that could occur in future years, he said.

“More than anything else, it’s the message that you get out of the building that they’re under the gun still,” Brophy said. “It’s like we’ve dodged a bullet but we’ve still got shrapnel, and we know that they’re coming back for more.”

Outside of oil/gas sector

The shrapnel from other bills wasn’t as sharp.

Senate Bill 18, sponsored by Sen. Jessie Ulibarri, D-Commerce City, originally banned employers from doing credit checks on virtually all job and promotion applicants or face the threat of a lawsuit. When Ulibarri allowed exemptions on the ban for virtually all managers or employees dealing with company finances and removed the ability for wronged employees to file lawsuits, the business community went neutral, and Hickenlooper signed the bill into law.

House Bill 1222, sponsored by Rep. Cherilyn Peniston, D-Westminster, originally expanded the federal Family and Medical Leave Act to let workers take 12 weeks of unpaid leave to care for not just themselves, their spouses, parents and young kids, but also a wide swath of kin, including aunts, uncles, grandparents, in-laws and adult offspring. Peniston worked with business groups and narrowed the scope of the bill to civil-union and domestic partners, though, and business groups went from opposed to neutral before HB 1222 passed and was signed into law.

Phil Hayes, legislative and political director for the Colorado AFL-CIO, noted that his union organization worked closely with business and contractors’ groups on HB 1292, a heavily amended bill that requires state contractors to hire 80 percent of their workforce from within the state and allows the state to consider factors other than lowest bid prices in awarding contracts, something that many have spoken to their government contracts attorney about in the past. Most contractors’ groups went neutral on the bill, and labor groups were pleased the bill will lead to state money being used more on local residents and products, Hayes said.

Bills went by the wayside

A few times, business leaders couldn’t reach consensus with sponsors of unwelcome bills, and they worked with Democrats to kill offerings from their own party.

One such instance came when the chairwoman and vice chairwoman of the House Business, Labor, Economic and Workforce Development Committee – respectively, Democratic Reps. Angela Williams of Denver and Tracy Kraft-Tharp of Arvada – were set to vote against a bill to criminalize wage theft. The sponsor asked that his own bill be defeated.

In another instance, Hickenlooper asked Sen. Lucia Guzman, D-Denver, to kill her own HB 1304, which would have allowed defensively locked-out workers to receive benefits from the business-funded Unemployment Insurance Trust Fund. He wants more time to discuss the issue.

Business took some losses

Business didn’t win every battle. The biggest loss involved House Bill 1136, a bill that Hickenlooper signed into law on May 6 that increases the damages that small business owners have to pay in discrimination lawsuits.

Tony Gagliardi, state director of the National Federation of Independent Business, said the bill exemplified the way small businesses – which in the case of lawsuits can go broke fighting even meritless cases – were hurt more than large businesses this session.

Those smaller companies also will feel the impact more heavily of rising utility bills because of newly passed mandates on the use of more expensive renewable energy by rural electric associations, and they won’t benefit from some of the tax incentives that were passed to lure large companies to Colorado, he said. While businesses are opening their doors, and registering their offices with the aid of sites similar to, there is a fear that it might be hindered by this new progression.

“It’s ludicrous. This legislation is killing us,” said Gail Lindley, owner of Denver Bookbinding Co., of HB 1136 and some other bills. “This Legislature is so anti-business and anti-growth … Our little business is on 17th Street, and it’s running red [ink] right down to the highway.”

House Speaker Mark Ferrandino, who began the session saying that he wanted to have a laser-like focus on jobs and economic development, said at the end that the session did just that. His caucus passed bills, he noted, that set up a $17.5 million grant fund for growing companies in advanced industries such as aerospace and bioscience, added $600,000 to the Small Business Development Centers program, created a statewide economic gardening program and set up a new program to train unemployed workers with skills needed by growing companies.

“Over the last couple of years, there’s been a lot of discussions about what we can do to create jobs,” Ferrandino said. “I think we took good ideas and moved them through … They’re not revolutionary ideas. They’re projects.”

Income-tax credit draws praise

When asked which 2013 bills might actually create jobs, though, business groups cited few.

The bill they lauded the most was House Bill 1287, sponsored by Reps. Brian DelGrosso, R-Loveland, and Dianne Primavera, D-Broomfield, which extends by five years the income-tax credit that the state can offer to companies that are relocating or expanding by at least 20 jobs. That incentive has been given to 27 companies that expect to create more than 7,200 jobs, so far.

“We know how incentives help us. And even just a little bit shows this is a state that will put something on the table to bring you in,” said Kelly Brough, president/CEO of the Denver Metro Chamber of Commerce.

Brough also praised HB 1080, a bipartisan income-tax credit for airplane maintenance companies that grow jobs. And Furman singled out House Bill 1165, which creates an educational pathway for manufacturing careers.

Legislative Republicans criticized the session more heavily than most business groups. Rep. Spencer Swalm, R-Centennial, said the bills passed in 2013 “are rebranding the state in a way that’s not attractive to businesses to grow or move here.”

But Tony Milo, executive director of the Colorado Contractors Association, may have hit the mood more succinctly of a business community that expected to be playing defense all session and came away with fewer scars than expected.

“We are in many ways treading water,” Milo said. “We’re not any more excited or disappointed … about the outcome of this session.”

Ed Sealover covers government, health care, tourism, airlines and hospitality for the Denver Business Journal and writes for the “Capitol Business” blog. Phone: 303-803-9229.