Colorado Capitol Report

The Colorado Chamber Tax Council Hosts Governor’s Office and Executive Director Michael Hartman, Department of Revenue

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CACI Tax Council Hosts Governor’s Office and Executive Director Michael Hartman, Department of Revenue

Today, the CACI Tax Council had the opportunity to hear from Mark Bolton, Office of the Governor, who provided an overview of the 2018 draft legislation shifting Colorado from the current single-sales factor methodology to a market-based sourcing methodology for the sourcing of sales.  If the legislation is adopted during the 2018 Legislative Session, receipts for the sale of services or from the sale, lease, license or rental of intangible property will be apportioned to Colorado based not on where the service is performed, but where the service is delivered.  The Governor’s Office and the Department of Revenue shared that they will continue to work with CACI Tax Council members on the legislation and on the regulations that will need to be adopted if the new law passes.   The legislation will be introduced at the end of January 2018, and the House Finance Committee will hear the bill in early February.  The CACI Tax Council will take a position on the bill during its February 9th meeting assuming that the bill has been formally introduced.

The Council also got an opportunity to hear from Michael Hartman, Executive Director of the Colorado Department of Revenue as well as Phil Horwitz and Matthew Scott on behalf of the Department.  Director Hartman discussed his background and approach for leading the Department as well as the impact that the Federal Tax Reform law has had on Colorado.  Director Hartman shared details regarding the increase in tax revenue that the State has recently experienced since the reform has passed, and he expects that revenue to continue to increase.  He also shared that he doesn’t expect the State to decouple on any areas of the federal tax reform.  When asked about priority legislation for the 2018 Session, Director Hartman stated that the market-based sourcing bill is the DOR’s priority.

If you should have any questions regarding this Council meeting or future Tax Council meetings please contact Loren Furman at [email protected].

Next CACI Tax Council Meeting Details:

Date:  February 9, 2018
Time:  Noon
Location:  CACI Office, 1600 Broadway, Ste. 1000, Denver

CACI Health Care Council Hears from State Policy Leaders & Responds to Health Care Legislation

Bill Skewes, Wes Skiles, Tom Massey, and Kevin Patterson

With the 2018 legislative session underway, CACI council meetings have begun. CACI welcomed Kevin Patterson, CEO Connect for Health Colorado and Tom Massey, Policy and Communications Office Director for the Department of Health Care Policy and Financing as guest speakers for our first Health Care Council of 2018.  CACI council members discussed the following health care-related legislation and took an oppose position on the three bills that were discussed.

  • HB 18-1007 – Substance Use Disorder Payment and Coverage
  • HB 18-1009 – Diabetes Drug Pricing Transparency Act 2018
  • SB 18-023 – Promote Off-label Use Pharmaceutical Products

Council meetings provide an open and frank dialogue between our members, key legislators and state agency leaders.  Learn more about joining a CACI council.

CACI Tax Council Comments on Proposed Rule in Response to Concerns by Colorado Retailers

On December 20, 2017, the Colorado Department of Revenue held a rulemaking hearing to discuss a proposed rule applying new requirements on retailers to document exempt sales.  CACI’s Loren Furman, VP of State and Federal Relations, testified against the proposed rule in addition to other CACI Tax Council members who shared concerns with the significant administrative burdens the rule could place on Colorado retailers that currently struggle to comply with the state’s complicated tax system.

CACI has submitted formal comments to the Department of Revenue staff in response to the proposed rule which are provided as follows: CACI Comments on DOR Proposed Rule 39-26-105(3) documenting exempt sales.  The deadline for receiving the comments is today and the Department staff shared that it will take a few weeks to review the comments submitted to determine next steps.

Please contact Loren Furman at [email protected] or at 303-866-9642 with any questions regarding this issue or the comments submitted.

Is A Government Shutdown Really Looming Today?

What actually happens if the federal government shuts down

This week, several major political stories and events have collided to create the possibility of a federal government shutdown starting at midnight tonight.  Here’s what you need to know:

How we got here & what it means for businesses –

  • Timing: House and Senate leadership passed a Continuing Resolutions (CR) on December 22 — funding the government through Friday, January 19, and averting a government shutdown in 2017.  Fast-forward to yesterday, the House Freedom Caucus offer support of the CR at the last minute, giving Speaker Ryan much-needed votes for passage of a CR (230-197).  However, this time around for the Senate, the GOP majority is smaller and to avoid a filibuster, must still have 60 votes. This means Senate Republicans will need at least nine, but as many as 12, Democrats to support the House-passed bill – or face a government shutdown.
  • Immigration: After a bipartisan plan was publicly and controversially rejected by President Trump this week, proponents on both sides of the aisle and many rank and file Democrats, have threatened to withhold support for the CR.  The original proposal would address the 700,000 Deferred Action for Childhood Arrival (DACA) people facing deportation when the program expires March 3, but the proposal did not include funding for a border wall, which the President has said must be included to earn his signature.
  • Children’s Healthcare: House Speaker Ryan included a six-year extension of CHIP – the Children’s Health Insurance Plan – as a means of bringing along Democratic votes, however a Tweet from President Trump yesterday morning appeared to say POTUS opposed the CR and at best just misunderstood the CHIP extension.  Although the White House issued “breaking news alerts” to demonstrate support for the CR and the long-term CHIP extension, support among both parties may have waned enough to prevent passage of funding and trigger a shutdown.
  • Military Spending: Some Republicans say that without a more long-term military spending package included in the CR, they are unwilling to support the current CR.  However, the desired military funds would trigger required spending offsets and many Democrats say that that’s also a non-starter.

Should the Senate fail to pass the House CR and there is a federal government shutdown, all funding for government programs and workers cease temporarily until funding is approved again.  In real terms, this means:

  • Social Security, Medicare and food stamp payments DO continue;
  • State programs receiving federal funding are often able to use stop-gap measures to prevent interruptions in funding and benefits; and,
  • National security roles and air traffic control continues.

However, with a shutdown:

  • Members of Congress & staff cannot respond to emails, answer phones or work on your/our behalf;
  • Federal agencies and staff are under the same restrictions, whether it’s with the Small Business Administration to EPA, or Department of Agriculture to the Patent Trademark Office;
  • Federal permit applications, inspections and audits are suspended;
  • Federal research & health studies are put on hold (think FDA, Centers for Disease Control and National Institute of Health);
  • Agencies such as the Veterans Health Administration (VA) have changed the way they’re funded since the 2013 shutdown & will continue operations, although likely with backlogs.  However, VA home loans would be delayed until shutdown eliminated;
  • The IRS will not be able to respond to requests, pay out or process tax returns, OR verify income for those in the home-buying process (& neither will the Federal Housing Administration (FHA));
  • If you need a passport with a quick turnaround, have it expedited for approval once the government is funded again — because the U.S. Diplomacy Center is federal, considered non-essential and there’s typically a backlog and delays in approvals after any shutdown.
  • If traveling overseas, during a shutdown you may face even longer wait times to get through customs
  • Additionally, a shutdown means 400+ national parks are closed across the country (think all D.C. museums & closer to home, Rocky Mountain National Park and Yellowstone);

Round Four: Family Medical Leave Bill Introduced

The first bill introduced by a legislative chamber’s presiding majority caucus is usually seen as one of the caucus’ top policy priorities for the session.  The bill sends a strong signal to the caucus’ political base, which is especially important in an election year.

For the majority House Democrats this session, their first bill out of the chute is HB-1001, the “FAMLI Family Medical Leave Insurance Program.”

Speaker Crisanta Duran (D-Denver) described the bill this way in her speech on Wednesday, January 10th, when the session opened:

We can improve family leave laws so more Coloradans can take paid time off to care for a sick parent or loved one without having to quit their jobs, or risk being fired.

This session is the fourth in a row for House Democrats to advance a bill to establish a state-administered program funded by private-sector workers that would permit them to enroll in the program, pay premiums and receive partially paid leave to take care of their children or family members.

The bill is scheduled for its first hearing before the House Business Affairs and Labor Committee when the Committee convenes at 1:30 p.m., February 6th, in Room A of the Legislative Services Building.

The CACI Labor and Employment Council, which has opposed similar bills in the prior three sessions, will discuss HB-1001 when it meets on January 24th.

A top concern for CACI is that such a bill, if it were to become law, would entail unreimbursed costs on employers to administer the program in the short run and, potentially, it could lead to a mandated universal system in the long run to which employers could be forced to contribute.

Here’s the bill’s description:

The bill creates the family and medical leave insurance (FAMLI) program in the division of family and medical leave insurance (division) in the department of labor and employment to provide partial wage-replacement benefits to an eligible individual who takes leave from work to care for a new child or a family member with a serious health condition or who is unable to work due to the individual’s own serious health condition.

Each employee in the state will pay a premium determined by the director of the division by rule, which premium is based on a percentage of the employee’s yearly wages and must not initially exceed .99%. 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 director may also impose a solvency surcharge by rule if determined necessary to ensure the soundness of the fund. The division is established as an enterprise, and premiums paid into the fund are not considered state revenues for purposes of the taxpayer’s bill of rights (TABOR).

In the  House, the primary co-sponsors of HB-1001 are Representatives Faith Winter (D-Westminster) and Matt Gray (D-Broomfield).

At the end of the 2017 session, a similar bill, HB-1307, sponsored by Representative Winter, died on a party-line, three-to-two vote in the Republican-controlled Senate State, Veterans and Military Affairs Committee.

Other anti-business bills

In addition to HB-1001, CACI anticipates that it will have to oppose similar House Democrat “messaging” bills.

Speaker Duran, in her remarks, alluded to one such bill, which would establish a private-sector, worker-funded, state-administered retirement program funded by private-sector workers.  CACI has opposed such bills in the past for several reasons, including the administrative cost that would be placed on employers and the potential for the legislature in future years to force employers to pay into the system should it run into financial problems.  In Speaker Duran’s words:

Hard-working Coloradans deserve a secure retirement, but almost half of Coloradans have no employer-sponsored or personal retirement plan. We will see a bill this session to increase access to retirement plans for our friends and neighbors who have none.

Contact CACI

CACI members with questions about HB-1001 should contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.

CACI is Hiring! Manager of Member Engagement

Dave Tabor, Senior Vice President of Business Partnerships

Sadly for us at CACI, and for our many members who have worked over the years with her, Bonnie Finley is retiring from CACI in early 2018.  I’ll miss working with Bonnie – her institutional knowledge, savviness on issues, and diligent approach to the job will be hard to replace!  The City of Longmont is fortunate to have her continued service as a Council Member.

So it’s onward with a focus on finding our next Manager of Member Engagement.  Here is the job description.

CACI's Legislative Agenda

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

Health Care Council BillsBill Title/DescriptionCouncil Position
HB 1007 by Rep. Kennedy & Sen. LambertSubstance Use Disorder Payment & CoverageMonitor/Passed
HB 1009 by Rep. Roberts & Sen. DonovanDiabetes Drug Pricing Transparency Act 2018Oppose/Dead
HB 1097 by Reps. Catlin, Danielson & Sens. Coram, ToddPatient Choice Of PharmacyOppose/Dead
HB 1279 by Rep. Esgar & Sens. Priola, MorenoElectronic Prescribing Controlled SubstancesSupport/Dead
HB 1311 by Reps. Rankin, HamnerSingle Geographic Rating Area Individual Health PlanOppose/Dead
HB 1358 by Reps. Foote, Beckman & Sens. Lundberg, AguilarHealth Care Charges Billing Required DisclosuresOppose/Dead
HB 1370 by Reps. Esgar, Singer & Sen. JahnDrug Coverage Health PlanOppose as Introduced/Dead
HB 1392 by Reps. Kennedy, Rankin & Sens. Coram, DonovanState Innovation Waiver Reinsurance ProgramOppose/Dead
SB 136 by Neville & Reps. Kraft-Tharp, SiasHealth Insurance Producer Fees And Fee DisclosureSupport/Signed by Governor
SB 023 by Sen. Martinez Humenik & Rep. GinalPromote Off-label Use Pharmaceutical ProductsOppose/Dead
Tax Council BillsBill Title/DescriptionCouncil Position
HB 1022 by Reps. Sias, Kraft-Tharp & Sen. Jahn,Requiring DOR to do RFI for Sales Tax Simplification SystemSupport/Signed by Governor
HB 1185 by Reps. Kraft-Tharp, Wist & Sens. Neville, MorenoMarket Sourcing For Business Income Tax ApportionmentSupport/Passed
HB 1036 by Rep. Leonard & Sen. NevilleReduction of Business Personal Property TaxSupport/Dead
HB 1201 by Rep. Thurlow & Sen. CoramSeverance Tax Voter-Approved Revenue ChangeSupport w/ Amendment/Dead
HB 1387 by Rep. Rankin & Sen. MorenoEliminate Oil & Gas Abatement Refund InterestOppose/Dead