Colorado Capitol Report

In this Capitol Report:

• House Committee Gives Initial OK to Family Medical Leave Bill
• Houses Passes Bill Affirming Court Ruling that Public Safety and Environment Supersede Oil-and-Gas Production
• Climate Change Lawsuits in New York, Los Angeles & … Boulder?
• Tax Reform 101: Sen. Gardner’s Tax Counsel to Brief CACI
• We Are Pleased to Announce the 2018 CACI EXECs Advocacy Class!
• CACI's Legislative Agenda

House Committee Gives Initial OK to Family Medical Leave Bill

On Tuesday, a CACI-opposed bill (HB-1001, the “FAMLI Family Medical Leave Insurance Program)  that would create an employee-funded but state-administered paid medical-leave system was approved by the House Business Affairs and Labor Committee.  The sponsors of HB-1001 are Representatives Faith Winter (D-Westminster) and Matt Gray (D-Broomfield).  The CACI Labor and Employment Council, which has opposed similar bills in the prior three legislative sessions, voted to oppose HB-1001 when it met on January 24^th.  This is the fourth year in a row that the legislature has considered such a proposal.

Summary of introduced bill:

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).

Outcome of Committee Hearing:

The Committee passed the amended bill on a party-line, 7-6 vote and next stop is the House Finance Committee.  The Committee Chair, Representative Tracy Kraft-Tharp (D-Arvada), added an amendment that would require that the FAMLI Program reimburse employers for establishing and administering the program.

The top concerns for CACI is that such a bill requires businesses to maintain the position for 12 weeks, continue to pay health care benefits for that position and try to find temporary, skilled workers during that time; the unreimbursed costs on employers to administer the program; the potential for employers to keep the program solvent if insufficient funds are collected from workers; and the compliance and operational requirements that would fall on a business to not only meet the current federal FMLA requirements but also the requirements in this legislation.

Loren Furman, CACI Senior Vice President, State and Federal Relations, testified against the bill as well as other business group representatives including:

• Robert Golden, President and Chief Operating Officer, South Metro Denver Chamber.
• Nina Anderson and Michael Bento (remote testimony), Grand Junction Chamber of Commerce
• Kevin Hougen, President and Chief Operating Officer, Aurora Chamber of Commerce, and Member, CACI Board of Directors
• Colin Walker, Colorado Society of Human Resource Managers (SHRM) District Council
• Nick Colglazier, Director, Colorado Competitive Council

Below is an edited version of Loren’s prepared testimony:

CACI is opposed to HB-1001.  This is the fourth year we’ve seen this legislation, so my concerns won’t be new to the Committee.  Quite simply, we believe this bill creates an unreliable program with long-term and unintended consequences for the same workers whom it intends to help.

 

1. The bill is very different from, and is an expansion of, the FMLA which has been in place since 1993 and would apply to employers of all sizes while the FMLA only applies to employers with 50 or more workers.
2. Employers are concerned with the threshold of hours that an employee needs to work to qualify.  The FMLA requires 1,250 hours; this bill requires only 680 hours.  It appears the bill would allow a worker who is not yet eligible for FMLA to receive 12 weeks of leave under the bill–and then take FMLA when they become eligible.
3. Our members tell us repeatedly that complying with the FMLA is not easy; this bill creates an even bigger operational and compliance nightmare for businesses.
4. CACI is concerned that the bill requires an employer to guarantee a worker the same or an equivalent position pay when her or she returns to work after the leave has expired.  Our members have said they can’t afford to locate and hire another skilled, temporary worker when a worker is out on leave for 12 weeks.  This quote from a CACI member speaks for itself: “It’s virtually impossible to find a temporary worker with the skills needed to take on the job and not expect full time status.”
5. The bill also appears to allow a worker to collect unemployment insurance benefits while collecting paid leave.  Would there ever be a financial incentive for someone to return to work?

Concerns for workers:

The employer is the first point of contact when a worker decides that he or she doesn’t want his or her payroll reduced, and a 0.99% payroll tax premium on an employee’s wages is the equivalent of a 21 percent increase in the state income tax for that individual;

Employees would be required to pay even more through a “solvency surcharge” to keep the program afloat.  The Legislature should be concerned that other states didn’t accurately project participation by workers in similar programs so don’t assume all workers will opt into the program.

Employers are very concerned that, if the premium stream is inadequate to keep the FAMLI Program solvent, then the legislature would be under great pressure to require employers to fund it!

In conclusion, surveys by CACI and the Employers Council show that employers in Colorado offer many leave programs to accommodate their workers’ needs.  Each employee’s needs are different, and the best solution is to continue to allow employers and employees work out leave agreements that work best for both parties.

The bill’s Fiscal Note states that, by fiscal year 2020-2021, the FAMLI Program would employ 200 workers.  Revenue by fiscal year 2020-2021 is projected to be between $568 million to $1.705 billion while expenditures would be $216.4 million.

For information about HB-1001, contact Loren Furman, CACI Senior Vice President, Federal and State Relations, at 303.866.9642.

For news media coverage of the bill, read:

“The hard economics of paid family leave in Colorado,” by Megan Schrader, opinion columnist, The Denver Post, February 6^th.

“Bill requiring paid leave for workers gets 1^st OK in Colorado House,” by Ed Sealover, The Denver Business Journal, February 6^th.

Houses Passes Bill Affirming Court Ruling that Public Safety and Environment Supersede Oil-and-Gas Production

This morning, the Democrat-controlled House passed HB-1071 on final, Third Reading on a  party-line 34-30 vote, which sends the measure to the Republican-controlled Senate where its fate is problematic.  One legislator, Representative Dominique Jackson (D-Aurora), was excused

Two CACI-opposed bills (SB-64 and SB-63) that would have restricted oil-and-gas production have already died in the Senate.

The CACI Energy and Environment Council opposes HB-1071.

HB-1071 is sponsored by Representative Joe Salazar (D-Thornton).  On February 1^st, the 13-member House Health, Insurance and Environment Committee approved HB-1071 on a party-line, 7-to-6 vote.

Here’s the legislative summary of the introduced bill:

HB-1071  “Concerning the regulation of oil and gas operations in a manner consistent with the protection of public safety.”

Current law declares that it is in the public interest to ‘[f]oster the responsible, balanced development, production, and utilization of the natural resources of oil and gas in the state of Colorado in a manner consistent with protection of public health, safety, and welfare, including protection of the environment and wildlife resources’. The Colorado court of appeals, in Martinez v. Colo. Oil & Gas Conservation Comm’n , 2017 COA 37, has construed this language to mean that oil and gas development is not balanced with the protection of public health, safety, and welfare, including protection of the environment and wildlife resources. Rather, that development must occur in a manner consistent with such protection.

The bill codifies the result reached in Martinez .

On January 29^th, the Colorado Supreme Court announced that it will hear the Martinez case.

The bill’s Fiscal Note provides the following analysis of the legislation:

Summary of Legislation

This bill clarifies that the Colorado Oil and Gas Conservation Commission (COGCC) in the Department of Natural Resources (DNR) is required to regulate oil and gas operations in a manner consistent with the protection of public health, safety, and welfare, including the protection of the environment and wildlife resources.  The commission must regulate oil and gas operations so as to prevent and mitigate adverse environmental or public health impacts.

Background

Under current law the COGCC is charged with regulating oil and gas resource production in the state in a way that balances production and public health, safety, and welfare.  In 2013, a rule was proposed requiring that the commission withhold drilling permits unless it could be independently confirmed that the drilling would not adversely impact human health or the environment.  The commission concluded that the proposed rule would readjust the balance between production and public safety, and that the proposed rule would require regulatory actions that are beyond the commission’s statutory authority.  In 2014, the district court upheld the commission’s decision to deny adopting the proposed rule.

The Colorado court of appeals, in Martinez v. Colorado Oil & Gas Conservation Commission 16CA0564 (Colorado 2017), overturned the district court’s decision.  The court of appeals concluded that current regulation is not balanced between production and public health and safety, and that current law gives the commission the authority and obligation to regulate oil and gas development in the interest of public health and the environment.  This bill codifies the result reached in Martinez.

Under a limited set of circumstances, the Colorado Department of Public Health and Environment (CDPHE) consults with the commission on surface location permit applications.  In general, CDPHE staff evaluate the permit application, conduct a site visit, review public comments, confer with staff from air, water and solid waste divisions, and with commission staff.  Currently, the CDPHE consults on about 12 applications annually.

For more information about HB-1071, contact Bill Skewes, CACI Contract Lobbyist.

For news media coverage of HB-1071, read:

“Colorado Legislative fight over oil and gas begins anew, with predictable end,” by Joey Bunch, ColoradoPolitics, February 2^nd.

“Bill Affirming Court Ruling that Public Safety and Environment Supersede Oil-and-Gas Production Jumps First House Hurdle,” CACI Colorado Capitol Report, February 2^nd.

“Oil and gas bill would make controversial court ruling state policy,” by Cathy Proctor, The Denver Business Journal, February 1^st.

Climate Change Lawsuits in New York, Los Angeles & … Boulder?

In recent weeks, anti-fracking activists and a Washington, D.C. law firm have been venue-shopping lawsuits – trying to convince municipalities to sue individual energy companies for creating climate change.  The coastal megacities of New York City and Los Angeles have made headlines for these antics, but now these stories are closer to home in Boulder.

Climate and environmental activists have long viewed Boulder, and thus Colorado, as a testing ground for more and more extreme environmental ideas.  In recent years, there have been millions of dollars from national activist groups and foundations flooding in to influence Colorado’s common sense approach to protecting our environment and our businesses, particularly where it comes to fracking.  We’ve seen efforts to ban fracking in our state through ballot initiatives, local bans and statewide provisions to cripple energy development efforts – despite those bans being ruled unconstitutional by the Colorado Supreme Court and ballot measures failing to collect enough signatures.

Funders of those efforts have included billionaire activist Tom Steyer, the Leonardo DiCaprio Foundation, the Rockefeller Brothers Fund, the Community Environmental Legal Defense Fund, as well as the groups those foundations funded such as Wild Earth Guardians –  all of which placed people, talking points and money in our state in attempts to ban fracking, specifically, and fossil fuel energy development in general.

Now the Boulder City Council has said they want to initiate this lawsuit against our state’s energy developers.  A timeline for this suit has not yet been released, but it is expected in coming weeks. 

In reference to who would be paying for this law suit, Boulder Mayor Suzanne Jones said, “(T)hey’re not expecting us to pay for the litigation – they would be doing it themselves. We would be a named party. We would have some potential risk if it was deemed frivolous for attorney’s fees but I would want to work and examine how to limit that potential risk so that the city didn’t have any exposure.  Mostly it would be other lawyers being paid by other people to do this.”

Potential business defendants have not yet been named by Boulder, but in California’s lawsuit the following companies (and all of their subsidiaries) were named:

• Chevron, Exxon, BP, Shell, Citgo, ConocoPhillips, Total, Eri, Anadarko, Hess, Encana, Apache, American Petroleum Association (API) & Western States Petroleum Association

For more background on the major players and recent history of environmental activists in Colorado, check out this blog from “Energy In Depth.”  

See also:

• Boulder Pursues Legal Action Against Fossil Fuel-Producing Corporations, Boulder Daily Camera
• Boulder Considers Suing Fossil Fuel Companies, Denver Post

Tax Reform 101: Sen. Gardner’s Tax Counsel to Brief CACI

Join us for a one-hour Q&A session with U.S. Senator Gardner’s legal counsel & tax expert! 

Congressional staffer Brian Wanamaker will be briefing CACI members in two weeks!  Brian will offer insight into how Congress’ tax reform provisions will help businesses and individuals here in Colorado.  Curious about how certain provisions were included?  He can answer those questions, too.

Find out about:

• What employees & employers should look for to benefit their families;
• Which provisions help businesses make bigger capital investments,
• Where pass-through provisions can lower tax bills;
• Which business formations are favored under new tax law (i.e. S-Corp, LLC, etc.)
• New accounting methods for small manufacturers;
• How businesses can repatriate overseas revenue at a one-time 15.5% rate; and,
• Which tax provisions no longer exist.

WHEN:  Friday, February 23^rd, 2018 –  2-3pm

WHERE:  CACI Offices, 1600 Broadway, Ste. 1000

WHY: Ask questions from an expert & gather ideas on how to best utilize new tax changes

RSVP here by COB Thursday, February 22^nd.

We Are Pleased to Announce the 2018 CACI EXECs Advocacy Class!

We are pleased to announce the 2018 CACI EXECs Advocacy Class!

The program kicks off next Thursday, February 15^th and runs through October 3^rd. For more information about the EXECs Advocacy Program, please visit our website at http://bgv.010.myftpupload.com/get-involved/execs/ .

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.