Colorado Capitol Report

Senate Committees Approve The Colorado Chamber-Initiated, Bipartisan Space Equipment Tax-Exemption Bill

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State Policy News

Senate Committees Approve CACI-Initiated, Bipartisan Space Equipment Tax-Exemption Bill

This morning, the Senate Appropriations Committee unanimously approved by a 7-0 vote HB-1178, the bill that CACI initiated that would provide an exemption to the sales-and-use tax for qualified space equipment stored within the state.

The Senate sponsors of the proposal are Senators Mary Hodge (D-Brighton) and Kevin Grantham (R-Canon City).  Senator Hodge chairs the Senate Appropriations Committee.

On Tuesday, the Senate Finance Committee approved the bill on a 4-1 vote, with only Republican Senator Owen Hill (Colorado Springs) voting against the bill.

The Senate Finance Committee removed a five-year sunset provision for the bill that had been placed in the bill in the House before approving it.  Testifying in support of the bill before the Committee were the following CACI members:

The bill now goes to the Senate Floor for Second Reading action.

Representative Hill’s vote against the bill broke HB-1178’s remarkable record of three unanimous committee votes:

  • House Finance Committee,
  • House Appropriations Committee, and
  • Senate Appropriations Committee.

When the House passed HB-1178 on recorded, final, Third Reading on April 9th, only six Republican Representatives voted against the bill.  Voting for the bill were 58 Republicans and Democrats.  The six Republican Representatives who voted against the bill were Perry Buck (Windsor), Justin Everett (Littleton), Stephen Humphrey (Windsor), Dan Nordberg (Colorado Springs) Lori Saine (Firestone) and Jared Wright (Fruita).  Representative Frank McNulty (R-Highlands Ranch) was excused.

The proposal creates a sales-and-use tax exemption for “qualified property” used in space flight.  The qualified property includes space vehicles and components, equipment to be placed in a space vehicle and fuel for space flight.  The bill’s fiscal note says that the State will lose $74,327 in the current fiscal year ending June 30th and $77,895 in the following fiscal year.

CACI assembled a coalition of aerospace companies, business organizations and state and local economic development entities to support HB-1178, including the following CACI members:

The Colorado Office of Economic Development and International Trade and the Colorado Economic Development Commission are members of the CACI coalition.

For more details on HB-1178, read the February 14th article in CACI’s The Colorado Capitol Report.

For more information on HB-1178, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.

CACI-Opposed Paid Family Medical Leave Bill Set for First Hearing

Last week, the CACI Board of Directors voted unanimously to oppose SB-196, which was assigned to the Senate State, Veterans and Military Affairs Committee.

The bill has been scheduled for its first hearing when the Committee convenes on Monday, April 28th, at 1:30 p.m. in Senate Committee Room 353.  The Committee is chaired by Senator Jessie Ulibarri (D-Commerce City), who is the bill’s sponsor.

The bill would create a new division in the Colorado Department of Labor and Employment (CDLE).  Here’s the bill’s summary:

The bill creates the family and medical leave insurance (FAMLI) program in the newly created division of family and medical leave insurance (division) in the department of labor and employment (department) to provide partial wage replacement benefits to eligible individuals who take leave from work to care for a new child or a family member with a serious health condition or who are unable to work due to their own serious health condition.  Each employee in the state that has not opted out of the program will pay a premium based on a percentage of the employee’s yearly wages, and the premiums are deposited into the family and medical leave insurance fund from which family and medical leave benefits are paid to eligible individuals.  The division is established as an enterprise, and premiums paid into the fund are not considered state revenues for purposes of section 20 of article X of the state constitution (TABOR).

In brief, CACI’s objections to the bill include the following:

  • Although employers would not be required to match the worker’s contribution, all employers would be subject to the law and would have to absorb the substantial administrative cost of setting up payroll-deduction plans;
  • Since workers can opt out of the program, employers would have to manage the administration of the changes whenever a worker decides they don’t want to participate.
  • The bill treats workers differently based on the amount of their wages.
  • If this bill becomes law, then future sessions of the legislature would likely see attempts to impose an employer match, which would cost employers millions of dollars;
  • The bill interferes with the private, contractual rights of the employer-worker relationship;
  • The cost to establish a new CDLE division will run into the millions of dollars, which raises the serious question of where the money would be found.

A fiscal note for the bill has not yet been made public.  To learn more about this 19-page bill, read:

Paid family leave hot forum topic,” by Aldo Svaldi, The Denver Post, April 13th.

For more information on this proposal, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.

House Endorses Compromise Workers’ Comp Bill

Yesterday, the House gave final approval to the compromise worker’s comp bill, HB-1383, which expands an injured workers’ choice of physicians thus sending the measure to the Senate.

Last week, the CACI Board of Directors voted to support the measure.

The recorded House Third Reading vote yesterday was a party-line 37-27 tally, with Republican Cheri Gerou (Evergreen) excused.

No amendments were added to the bill in the House.  The House passed the bill on Second Reading on Wednesday.

On Tuesday, the House Business, Labor, Economic and Workforce Development Committee approved the measure by a seven-to-four vote.  The bill’s chief House sponsor is Representative Angela Williams (D-Denver), who chairs the Committee.

Republican Representative Jared Wright (Fruita) joined the six Democrats to send the bill to the House Floor for Second Reading debate.  According to The Colorado Statesman, Representative Wright faces a dicey race for re-election this year.  On Third Reading, however, he voted against the bill.

Loren Furman, CACI Senior Vice President, State and Federal Relations, testified before the Committee on behalf of CACI and the Metro Denver Chamber of Commerce in support of the bill.  Here is an edited version of Loren’s prepared remarks:

This probably surprises you since our organizations have often been on the opposite side of this type of legislation, but here’s why.  We learned last year–nearly nine months ago –that the AFL-CIO wanted to pursue a change to the current workers’ compensation system.

In response, CACI, along with the Metro Denver Chamber of Commerce and the Colorado Competitive Council, Denver Metro Chamber, convened the “Workers Compensation Employer Coalition” to make sure the business community had a coordinated voice on this issue.

The Coalition met several times over the last few months.  It started with about ten members and has since grown to more than 35 companies and business groups.  We reviewed various versions of draft bills, most containing language that raised concerns by the Coalition and that potentially increased costs for employers, which was a non-starter for our Coalition.

Then we started talking about the concept that you have in front of you now, HB-1383.  This bill increases physician choice for workers but makes sure that the identification of those doctors remains within the authority of the employer.

It also improves the rural exemption that is in current statute so that there are more protections for our rural employers who may not have a lot of choice in doctors.

As I mentioned, increased costs were a non-starter for us.  The National Council on Compensation Insurance (NCCI) prepared a cost analysis of the bill stating that there is a negligible impact to employers.

Also, Pinnacol Assurance, the workers’ compensation insurer for many employers across the state, has stated there is also a minimal impact to employers;

Based on this data, a super-majority of the Coalition has now determined that they are neutral or supportive of the bill.  Even though it has been a long and excruciating process, the process has helped us and many employers get to a good place on this bill.

We believe it maintains the good workers comp system we have in place, while still giving workers an increased choice in doctors, which is why we support the bill.

For more on this bill, read:

Workers’ comp reform bill moves on to Colorado Senate,” by Ed Sealover, The Denver Business Journal, April 24th.

Workers’ Compensation Legislation Introduced in Final Days of Session,” The CACI Colorado Capitol Report, April 18th.

Worker’s comp bill arrives in Legislature—in much-compromised form,” by Ed Sealover, The Denver Business Journal, April 17th.

For more information on HB-1383, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.

Oil-and-Gas Survey Bill Passes Senate Health and Human Services Committee

This week, the Senate Health and Human Services Committee passed HB-1297 “Oil and Gas Survey” by Representative Joann Ginal (D-Fort Collins) and Senator Iren Aguilar (D-Denver) on a party-line 4-3 vote.

The bill purports to commission a study of the impact of oil-and-gas production on health and quality of life for Front Range residents.  The bill’s fiscal note projects a cost to the State of $691,377 over the next three fiscal years.

The legislation requires a review of related literature by the Colorado Department of Public Health and Environment (CDPHE), followed by further study of two conditions and a report to the General Assembly, with oversight by a “Scientific Oversight Board.”

CACI’s Energy and Environment Council opposes the bill.  Although several amendments were adopted on the House Floor and in the Senate Committee hearing to address some of the concerns that CACI and others have voiced about the bill, CACI remains opposed to HB-1297 due to the bias toward identifying adverse effects that exists at the heart of the proposal.  The bill now moves to the Senate Appropriations Committee.

Carly West, CACI Governmental Relations Representative, testified on behalf of CACI at the Committee hearing.  Below is an edited version of her prepared remarks:

Dear Committee Members:

I am Carly West, with the Colorado Association of Commerce and Industry.  We are the statewide chamber of commerce, and represent hundreds of businesses across the state, as well as local chambers of commerce, trade associations and economic development organizations.  Thank you for the opportunity to comment today. I am here today to discuss some of CACI’s significant concerns regarding HB-1297.

As a trade association with many members representing many different areas of industry, CACI’s has three primary concerns with HB-1297.

I.  The Bill Does Not Seek to Gather Objective, Scientifically Valid Data and Information
HB-1297 states the objective of “analyzing the health and quality of life of residents in selected communities to understand whether there are any effects of oil and gas operations on the residents of these communities.”  This stated objective is problematic, as are the specific requirements of the bill intended to achieve this objective.

First, CACI strongly disagrees that the bill’s attempt to analyze the “quality of life” of residents should be part of any government-mandated “scientific study.”  Quality of life is too subjective a concept to render such an inquiry meaningful, measurable or replicable.    Additionally, the very language of the bill itself reveals a bias toward identifying adverse effects, rather than a neutral and impartial scientific inquiry.  Such bias is impermissible in responsible scientific endeavors, and yet HB-1297 assumes that oil and gas operations present only negative quality of life considerations. It does not even contemplate accounting for the quality of life benefits derived from daily use of oil and natural gas, even by the expected participants in the surveys.

Additionally, surveying the public as to their opinions on impacts from oil and gas operations does not constitute a scientific study or “analysis.”  It is more akin to opinion polling.  Members of the public bring with them a host of subjective, historical and other perspectives that cannot be understood or properly isolated in the analysis of any such survey’s results.  Accordingly, completion of this required task will not provide objective, scientific or even understandable data to the Department and the oversight board.  Truly scientific data obtained through such a study would be capable of validation through data quality analyses and other accepted means of ensuring the data and information obtained are precise, representative, accurate, complete and comparable, for example.  This is not required by the Bill, perhaps because it is not possible.

Finally, HB-1297 requires that the Department identify, following the literature review, any “conditions of interest” that “might” be related to oil and gas operations and summarize those conditions in its written report.  The Bill also requires case-control studies on at least two relevant conditions of interest identified in the public surveys – regardless of whether in fact there is any scientific basis or substantial evidence supporting that those “conditions of interest,” are causally related to oil and gas operations.  By assuming that the presence of conditions of interest indicate causation, the clear bias in HB-1297 eliminates any  scientific neutrality in the conduct of its required study, and guarantees bias in its results.

II.  HB-1297 Ignores The Significant Recent Efforts by the State of Colorado To Reduce Impacts from Oil and Gas Operations
HB-1297 ignores that numerous, ground-breaking rules and regulations related to oil and gas have been adopted by the State of Colorado and the Department of Public Health and Environment itself to mitigate potential impacts to the public from oil and gas operations.  These include:

  • Hydraulic fracturing disclosures
  • Baseline water sampling
  • Increased setbacks
  • Recent Regulation Number 7 reducing emissions

Additionally, numerous other studies, including those in which the Department is engaged, are ongoing.  Moreover, to require such an additional study be conducted even as the most far-reaching of these recent regulatory amendments are still being implemented is itself curious, and raises the question of whether any “conditions of interest” that may be identified, will likely be further mitigated through full implementation of the most stringent regulations in the Country.

Given the extensive public protections both on the books and on the way in Colorado, a study that merely assesses public opinion and requires that CDPHE effectively assume there are true and scientifically valid adverse impacts associated with those opinions does not assist in evaluating and addressing oil and gas operational impacts, and CACI questions whether this aids the CDPHE in the pursuit of its mission.

III.  HB-1297 Politicizes Scientific Inquiry
As each of you know, the debate regarding oil and gas development and the impacts of oil and gas operations on the environment and general public have become very politicized both here in Colorado and nationally.  To the extent any study or analysis should be performed to address these issues, it should be focused on just that:  the true impacts of oil and gas development from a scientific and unbiased perspective.

Under HB-1297, the scientific oversight committee would consist of voting members appointed by the Governor and members of the Colorado legislature.  This appears to be a political oversight committee by design, and not a scientific one. Out of the voting members, six of the voting members will invariably be from the same political party as the Governor and none of the three voting members outside of that political party can have any ties to or affiliation with the oil and gas industry.  Interestingly, HB-1297 contains no similar restriction against appointee affiliations with entities (NGOs) or communities that have a demonstrated political agenda against the oil and gas industry.  As a result, the scientific oversight board has a significant chance of continuing and not reducing, or even magnifying the politically charged nature of the current discourse around oil and gas operations.  This does not promote the conduct of sound scientific inquiry, in CACI’s view.

  1. Conclusion:

CACI and other representatives of industry and the oil-and-gas industry in particular recognize the importance and need for information to address real and perceived risks from oil-and-gas operations and to seek to alleviate public concerns.  In fact, many industry members have and continue to partner with renowned universities and national environmental organizations to evaluate various impacts from oil-and-gas operations.  These studies have the backing of academicians, leading environmental organizations and many members of industry.  Those types of studies will continue to reduce the real and perceived information gaps regarding impacts from oil and gas operations, with or without HB-1297.

In contrast, the pursuit of a “study” or “analysis” that focuses on individuals in areas known to have objections regarding oil and gas development, and that focuses primarily on their own subjective assessments as to the impacts from oil and gas operations is poorly conceived and prone to significant bias in its results. To then also require a busy and resource constrained state agency to evaluate impacts based on those subjective assessments does not strike CACI as a reasonable use of public funds, and unlikely to achieve the goals of developing better and more reliable information.

In sum, CACI has significant concerns regarding the precedent that HB-1297 would set in authorizing the expenditure of state funds to analyze public opinion, and to subsequently label that public opinion as “science.”  HB-1297 not only presents significant concerns to our oil-and-gas members, but also other industry representatives who disagree with politicizing science in principle and have many other reasonable concerns about the bill.   We urge the committee to vote postpone the bill indefinitely.

For more information on this bill, contact Carly West, CACI Governmental Affairs Representative at 303.866.9622.

News Media Coverage

Below is recent news-media coverage of business, political, policy and governmental issues of interest to CACI:

Tax break for data-center equipment introduced in legislature,” by Ed Sealover, The Denver Business Journal, April 25th.

Colorado health exchange oversight committee questions enrollment numbers,” by Ed Sealover, The Denver Business Journal, April 24th.

Colorado deserves a more secure financial future,” guest commentary, by Senator Pat Steadman (D-Denver) and Representative John Buckner (D-Aurora) The Denver Post, April 23rd.

Colorado higher-ed lessens plan to tie performance to state funding,” by Anthony Cotton, The Denver Post, April 21st.

Are energy taxes the answer to Colorado higher ed funding woes?” opinion, by Alicia Caldwell, The Denver Post, April 21st.

Make it harder to amend Colorado’s constitution,” editorial, The Denver Post, April 21st.

Tighter rules for constitutional ballot questions moves forward,” by Brandon Rittiman, KUSA, April 21st.

Federal Policy News

U.S. Forest Service Gives All-Clear to Summer Ski Area Attractions

At the end of last week, CACI sent a letter to the U.S. Forest Service to reiterate CACI’s support of year-round use of ski resorts on public lands.   Winter sport communities, local businesses and ski resorts all widely support the new rules and see them as a best practices model and standard begun here in Colorado several years ago.

The new rules will allow for greater use of ski areas for non-winter sports (hiking, biking, climbing) and nature activities (nature trails, learning centers) while utilizing infrastructure already in place and helping drive a more robust, year-round business climate.

The Forest Service accepted comments on the proposed rules in December, publishing the final rules on April 17.

Export-Import Bank Faces Uphill Battle with Congress

The Export-Import Bank may be one of the most effective trade tools manufacturing and business has had since the financial crisis, however some in Congress are putting ideology ahead of economics.  Colorado alone has 89 exporters of which 65 are small businesses and many are CACI members.  The Ex-Im Bank supports business transactions, expansions and investments, driving $712 million in supported sales for our state.  Nationwide, Ex-Im supports $229 billion in export sales, lending where traditional institutions haven’t been able to in recent years and because lending fees cover operations costs and Ex-Im operates at less than 2% loss – it doesn’t cost the U.S. government or impact our budget.

NAM Leads All Hands On Deck Effort to Re-Authorize Export-Import Bank

Politico Pro (4/23, Bradner) reports that NAM’s efforts to build support for reauthorization of the Ex-Im bank “now includes launching a two-week ad buy on news websites frequented by political junkies and conservative activists.” The ads will run on policy-focused new sites like POLITICO, Wall Street Journal, National Journal, and Daily Beast as well as Fox News, the Drudge Report, and the shows of radio hosts Rush Limbaugh and Mark Levin. NAM has also launched a blog series highlighting specific companies who have used the services of the bank. NAM members want to read the full article for free may contact National Association of Manufacturers Account Manager, Molly Fluet at [email protected].

Bloomberg News (4/23, Wingfield) reports that NAM is working in conjunction with several other trade organizations to reauthorize the Ex-Im bank. Linda Dempsey, the National Association of Manufacturers’ vice president for international economic affairs, said, “This is an all-hands-on-deck effort” from businesses. Bloomberg News reports the “nuclear industry, who want to ensure that companies can supply the technology for reactors under construction in other nations, and the aerospace industry, which is seeking to expand sales of satellites” have all been stepping up their lobbying efforts along with NAM in recent weeks.

NAM writes in their Shopfloor (4/23) blog, “One of the main elements fostering” the impressive recent growth in US manufacturing is the Ex-Im Bank of the US. Wallquest, a family-owned wallpaper manufacturer in Pennsylvania, was able to use funding from the Ex-Im bank to lower their “cost of capital and open up a new, expanded market for foreign customers.” In the four years after the company started working with Ex-Im they were able to add 105 employees for a total of 185. NAM writes, “it is critical that [members of Congress] recognize why companies like Wallquest deserve a level playing field to continue to grow our economy and contribute to America’s future.”

Texas Business Representatives Urge Congress To Reauthorize Ex-Im Bank

In an op-ed in the Austin (TX) Business Journal (4/23, Subscription Publication), Tony Bennett, President of the Texas Association of Manufacturers, and Bill Hammond, President of the Texas Association of Business, write, “It’s baffling that some in Congress want to shut down one of the most important tools we have to generate exports of U.S. manufactured goods — the Export-Import Bank.” The authors call the act of eliminating an institution that is so important to Texas businesses an “irrational crusade” by members of Congress and emphasize that banks have not been able to step in and make the same loans the Ex-Im Bank has done since the financial collapse. The authors end with a call to members of Congress, urging them to reauthorize the Ex-Im Bank.