Colorado Capitol Report

Transportation Funding Bill Awaits Critical, Second Senate Committee Hearing

State Policy News

Transportation Funding Bill Awaits Critical, Second Senate Committee Hearing

On Tuesday, the Senate Transportation Committee amended and approved HB-1242, which sends the complex transportation funding bill, whose main feature is a sales tax increase, to the Senate Finance Committee, which has not yet scheduled the bill for a hearing.

The current version of the bill, which was approved by the House, does not yet contain the Committee amendments.

If approved by the legislature, HB-1242 will refer a ballot question to the voters in November as required by TABOR.

The bill is the most important bill this session to CACI and the statewide business community that it represents.  On March 16th, the CACI Board of Directors voted to support HB-1242 as introduced.

CACI’s Loren Furman, Senior Vice President of State and Federal Relations, testified before the Committee in support of the bill.  Loren told the Committee that there is widespread agreement that Colorado faces a critical transportation challenge, but there is disagreement about how to fund improvements.   She said that HB-1242 has identified “the most viable funding source” to improve transportation.  The measure “keeps with the spirit of TABOR” by “allowing the voters to decide” if they want an increase in the state sales tax to pay for long-term transportation funding, Loren said.

One Senate prime sponsor of the bill is Senator Randy Baumgardner (R-Hot Sulfur Springs), who chairs the Committee.  The other Senate prime sponsor is Senate President Kevin Grantham (R-Canon City).

The House added 25 amendments to the introduced version of the bill, and it was supported by all of the Democrats plus four Republicans.  The House prime sponsors are Democrat House Speaker Crisanta Duran (Denver) and Representative Diane Mitsch Bush (D-Steamboat Springs)

The introduced bill was the product of more than half-a-year of negotiations between and Senator President Kevin Grantham and Speaker Duran.

The most significant of the 13 amendments proposed by Senator Grantham and approved by the Senate Transportation Committee include the following:

  • Reducing the proposed increase in the state sales tax from 3.62 percent to 3.4 percent (the current tax is 2.9 percent).
  • Committing General Fund support of $100 million annually for two decades for future bond payments to pay for about $3.5 billion in projects to expand highways.
  • Ensuring that the Colorado Department of Transportation (CDOT) receive a set percentage of the above funding stream instead of a fixed $375 million annually that was in the bill that came to the Transportation Committee.
  • Creating a new, multi-modal transportation grant fund.
  • Reforming the contracting practices of the Colorado Department of Transportation (CDOT) to open up the bidding process and make it more transparent.

The vote to approve the bill by the Committee was 3-to-2.  Senator Baumgardner joined the two minority Democrats, Senator Nancy Todd (Aurora) and Senator Rachel Zenzinger (Arvada), to advance the bill.  The Committee’s other two Republicans, Senator John Cooke (Greeley) and Senator Ray Scott (Grand Junction), opposed the bill.

The hearing by the Senate Finance Committee is next critical step for the HB-1242.  To pass this five-member Committee, the bill will need the vote of at least one Republican lawmaker.  The Committee members are:

The House-approved version of the bill would have increased the state sales-and-use tax by 0.62 percent from 2.9 percent to 3.52 percent for 20 years to generate a projected $705.2 million in new revenue during the first full fiscal year (2018-2019) in which it would be in effect.  This version would use the revenue stream from the sales tax increase to allow the issuance of up to $3.5 billion in State bonds to kick-start priority projects.   Funds also would be provided to local governments and for “multi-modal” projects.

A new fiscal note, which will reflect the Senate amendments, has not yet been issued.  The latest fiscal note was issued April 4th.

For more information about HB-1242, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.

For news media coverage of the bill, read:

Colorado Senate president trims proposed transportation tax hike as it advances,” by Ed Sealover, The Denver Business Journal, April 12th.

Tax hike for Colorado roads remains a political lift” by John Frank, The Denver Post, April 11th.

Transportation Funding Bill Awaits First Senate Committee Hearing,” CACI Colorado Capitol Report, April 7th.

House Sends Transportation Bill to Senate,” CACI Colorado Capitol Report, March 31st.

Senate Committee Endorses “Rural Sustainability” Bill

On Tuesday, the Senate Finance Committee extensively amended and approved by a 4-1 bipartisan vote a recently introduced 57-page bill that seeks to promote rural sustainability by increasing funding for K-12 education, health care and transportation funding.

The Committee Chair, Senator Tim Neville (R-Littleton), was the lone “no’ vote.

Next stop for the measure is the Senate Appropriations Committee.

SB-267 is co-sponsored by Senator Lucia Guzman (D-Denver) and Senate President Pro Tem Jerry Sonnenberg (R-Sterling).

CACI supports SB-267 as introduced because CACI last year endorsed HB-1420, which would have converted the hospital provider fee to a state enterprise.  HB-1420 died at the end of the 2016 session in the Senate Finance Committee.

The five salient provisions of the bill are laid out in the bill’s fiscal note:

  • repeals the existing Hospital Provider Fee, creates the Colorado Healthcare Affordability and Sustainability Enterprise (enterprise) to administer a similar new fee, and makes an adjustment to reduce the state TABOR limit (Referendum C cap);
  • authorizes the Department of Personnel and Administration (DPA) to execute lease-purchase agreements on existing state facilities and credits the proceeds of such agreements to fund transportation and capital construction projects;
  • repeals the current General Fund transfers under Senate Bill 09-228 and instead transfers a portion of this money to the State Public School Fund for allocation to rural and small rural school districts;
  • requires executive departments to submit FY 2018-19 budget requests to the Office of State Planning and Budgeting (OSPB) that are 2 percent lower than the amounts they receive for FY 2017-18; and
  • conditional on enactment of the federal Advancing Care of Exceptional Kids Act (ACE Kids Act), requires the Department of Health Care Policy and Financing (HCPF) to seek federal waivers necessary to fund an enhanced pediatric health home for children with complex medical conditions.

Here’s the legislature’s summary of the introduced measure:

Section 3 of the bill eliminates annual statutory transfers of general fund revenue to the highway users tax fund (HUTF) and the capital construction fund for state fiscal years 2017-18, 2018-19, and 2019-20. Section 1 makes statutory general fund transfers to the state public school fund in amounts equal to the amounts of the eliminated statutory transfers to the HUTF for the sole purpose of reducing, proportionally to the extent feasible, the financial impacts of inconsistent funding of the state share of district total program on rural and small rural school districts.

Section 2 requires executive branch departments to submit 2018-19 budget requests to the office of state planning and budgeting (OSPB) that are at least 2% lower than their 2017-18 budgets. The OSPB must strongly consider the budget reduction proposals made by each department when preparing the annual executive budget proposals to the general assembly and shall seek to ensure that the executive budget proposal for each department is at least 2% lower than the department’s actual budget for the 2017-18 fiscal year.

Section 5 authorizes the state to execute lease-purchase agreements for eligible state facilities to generate up to $1.35 billion of net proceeds, with maximum annual lease payments of $100 million for up to 20 years. Lease payments must be paid first from any legally available money under the control of the transportation commission and next from the general fund or any other legally available source of money. $1.2 billion of the net proceeds are credited to the HUTF and allocated to the state highway fund and $150 million of the net proceeds are credited to the capital construction fund, with such amounts being reduced proportionally if the full $1.35 billion of net proceeds is not received. As specified in section 19 , the department of transportation (CDOT) may use the net proceeds only for qualified federal aid highway projects, with at least 25% of the money being used for projects that are located in counties with populations of 50,000 or less.

Section 6 creates the Colorado healthcare affordability and sustainability enterprise (enterprise) as a type 2 agency and government-owned business within the department of health care policy and financing (HCPF) for the purpose of participating in the implementation and administration of a Colorado healthcare affordability and sustainability program (program) on and after July 1, 2017, and creates a board consisting of 13 members appointed by the governor with the advice and consent of the senate to govern the enterprise. The business purpose of the enterprise is, in exchange for the payment of a new healthcare affordability and sustainability fee (fee) by hospitals to the enterprise, to administer the program and thereby support hospitals that provide uncompensated medical services to uninsured patients and participate in publicly funded health insurance programs by:

  • Participating in a federal program that provides additional matching money to states;
  • Using fee revenue, which must be credited to a newly created healthcare affordability and sustainability fee fund and used solely for purposes of the program, and federal matching money to:
  • Reduce the amount of uncompensated care that hospitals provide by increasing the number of individuals covered by publicly funded health insurance; and
  • Increase publicly funded insurance reimbursement rates to hospitals; and
  • Providing or contracting for or arranging advisory and consulting services to hospitals and coordinating services to hospitals to help them more effectively and efficiently participate in publicly funded insurance programs.

The bill does not take effect if the federal centers for medicare and medicaid services determine that it does not comply with federal law.

The enterprise is designated as an enterprise for purposes of the taxpayer’s bill of rights (TABOR) so long as it meets TABOR requirements. The primary powers and duties of the enterprise are to:

  • Charge and collect the fee from hospitals;
  • Leverage fee revenue collected to obtain federal matching money;
  • Utilize and deploy both fee revenue and federal matching money in furtherance of the business purpose of the enterprise;
  • Issue revenue bonds payable from its revenues;
  • Enter into agreements with HCPF as necessary to collect and expend fee revenue;
  • Engage the services of private persons or entities serving as contractors, consultants, and legal counsel for professional and technical assistance and advice and to supply other services related to the conduct of the affairs of the enterprise, including the provision of additional business services to hospitals;
  • Seek any federal waiver necessary to fund and, in cooperation with HCPF and hospitals, support the implementation, no earlier than October 1, 2019, of a health care delivery reform incentive payments program that will improve health care access and outcomes for individuals served by HCPF while efficiently utilizing available financial resources. The health care delivery reform incentive payments program must include, at a minimum, an initial planning phase to assess needs and develop achievable outcome-based metrics to be used to measure progress towards specified program goals and address specified focus areas.
  • Adopt and amend or repeal policies for the regulation of its affairs and the conduct of its business.

The existing hospital provider fee program is repealed by section 18 and the existing hospital provider fee oversight and advisory board is abolished, effective July 1, 2017.

So long as the enterprise qualifies as a TABOR-exempt enterprise, fee revenue does not count against either the TABOR state fiscal year spending limit or the referendum C cap, the higher statutory state fiscal year spending limit established after the voters of the state approved referendum C in 2005. The bill clarifies that the creation of the new enterprise to charge and collect the fee is the creation of a new government-owned business that provides business services to hospitals as an enterprise for purposes of TABOR and related statutes and does not constitute the qualification of an existing government-owned business as a new enterprise that would require or authorize downward adjustment of the TABOR state fiscal year spending limit or the referendum C cap.

Section 4 lowers the referendum C cap for the 2017-18 fiscal year and subsequent fiscal years. Section 16 requires HCPF, within 120 days of the enactment of the federal ‘Advancing Care of Exceptional Kids Act’, to seek any federal waiver necessary to fund, in cooperation with hospitals that meet the specified requirements, the implementation of an enhanced pediatric health home for children with complex medical conditions.

For more information about SB-267, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.

For more news media coverage of the bill, read:

Rural funding bill survives first crucial test,” by Marianne Goodland, The Colorado Independent, April 11th.

Sweeping effort to prevent cuts in rural Colorado passes first test,” by Brian Eason, The Denver Post, April 11th.

Colorado’s cash-strapped rural schools could get boost from lawmakers,” by Nicholas Garcia, The Denver Post, April 11th.

Colorado budget bill introduced along with funding measure for rural hospitals, roads,” by Ed Sealover, The Denver Business Journal, March 28th.

Major overhaul to help rural Colorado could be a game changer for the legislative session,” by John Frank and Brian Eason, The Denver Post, March 27th.

Phoenix Rises: House Democrats (Again) Introduce Anti-Business “Messaging Bills”

Once again, the progressive House Democrats have introduced a package of “messaging bills,” as they are known under the Gold Dome, that in one way or the other target the Colorado business community mainly under the rationale of helping low-income workers.

Among the various bills, here are the three most important that CACI is opposing:

  • HB-1305, “Limits on Job Applicant Criminal History Inquiries.”  The bill was scheduled to be heard this afternoon by the House Judiciary Committee.
  • HB-1290, “Colorado Secure Savings Plan.”  The bill was scheduled to be heard this afternoon by the House Business Affairs and Labor Committee.

For more information about these bills, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.

For more information, read:

They’re back!  Colorado business groups fight bills killed in past,” by Ed Sealover, The Denver Business Journal, April 11th.

Return of ‘Ban-the-Box’: HB-1305,” CACI Colorado Capitol Report, April 7th.

Paid Family-and-Medical Leave Bill to be heard Tuesday in House Committee,” CACI Colorado Capitol Report, April 7th.

’Colorado Secure Savings Plan’ Calendared for First Hearing,” CACI Colorado Capitol Report, April 7th.

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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