In this Capitol Report:
Legislative Victory: Proposal Disrupting Small Business Lending Market Fails in Committee
Yesterday evening, a bill that would have put the banking industry at a tax disadvantage against credit unions failed in the House Business Affairs and Labor Committee after testimony from the Colorado Chamber alongside community banks across Colorado.
Currently in Colorado, public money is only permitted to be held at federally regulated banking institutions. House Bill 1277 would have authorized public entities, like municipalities and counties, to deposit funds with credit unions as well. While the intent of the bill was to encourage competition in the industry, it failed to recognize the different functions and regulatory environments of credit unions compared to banks.
The Colorado Chamber represents businesses of all sizes across the entire state, including local chambers of commerce and the thousands of small businesses they represent. Chamber President and CEO Loren Furman testified against the bill, emphasizing that this is about supporting small businesses and ensuring fair playing field between banks and credit unions. You can listen to Furman’s testimony here.
“There’s a big inequity between these types of financial institutions. One pays state and federal income taxes, and the other does not,” Furman said. “As a business organization, we would never advocate for an industry to get unfair competitive tax advantage.”
Jennifer Waller, CEO of the Colorado Banking Association (CBA), also testified against the bill. She pointed out that Colorado state-chartered banks pay roughly 225 million in Colorado income taxes annually. Factoring in out-of-state banks doing business in Colorado, that number is $500 million.
“When a credit union wants to offer the same services as a bank, they should have to play by the same rules,” Waller said.
Banks across Colorado are strong partners of the Chamber and are critical to supporting local communities, small businesses, and underserved areas of the state. Banks are also regulated by the Community Reinvestment Act (CRA), which helps ensure that federally insured banks meet the credit needs of the communities they serve by requiring banks to offer loans to vulnerable and distressed areas. Credit unions are not regulated under the CRA, meaning they are not required to offer these types of loans.
HB 1277 would have had far reaching impacts beyond just financial institutions, severely impacting the lending market for small businesses in particular. Banks rely on public funds held at their institutions to support small business loans and agricultural funds. Removing these funds from banking institutions would result in fewer loans to small businesses in Colorado, including in underserved communities.
According to Waller, small business loans under the CRA totaled $9.7 billion dollars in Colorado, which doesn’t include other small business loans issued across the state.
While HB 1277 purported to increase competition among financial institutions, vibrant competition already exists in the industry. There are 130 banks in Colorado with over 1400 branches across the state, according to CBA. As Rep. Marc Snyder pointed out in the hearing, the bill failed to address a critical need.
“I don’t find that it meets that test,” Rep. Snyder said.
Rep. Shannon Bird raised concerns about the tax disparity, which she said is justified in light of credit unions’ mission to invest in their communities – but it results in a lower cost of business for credit unions, presenting an unfair advantage.
“Banks pay all the same taxes that the credit unions do, plus they are paying the state and federal income tax,” she said.
Rep. Dylan Roberts, Chair of the committee, concurred.
“A change in the way we do things could disrupt those smaller community banks first,” the chairman said. “My ‘no’ vote is a reflection of the district I represent and the small towns I represent.”
HB 1277 failed in an 8-5 vote.
Colorado Chamber Calls for Increased Colorado Energy Production to Promote Affordability and Energy Security
The Colorado Chamber’s Energy and Environment Council this week voted to support Senate Joint Resolution 8, which calls for increased production of energy resources in Colorado.
The resolution supports expanding and diversifying clean energy production and an “all of the above” strategy to protect the national security interests of the United States. This includes increasing domestic production of energy from oil, natural gas, advanced nuclear, geothermal, pump-hydro, green and blue hydrogen, wind, and solar and making our state’s existing baseload fleet more sustainable with carbon capture and storage.
Specifically, the Resolution urges the state to accelerate its approval of permits to increase Colorado’s production of oil and gas and displace less-regulated foreign energy sources. Russian sources of energy production are known to employ poor environmental practices and are not up to Colorado’s robust regulatory standards to protect public health and the environment.
Currently, many permits are scheduled to expire soon and since companies need regulatory certainty to plan and make investments, increasing the output of permits from the state would support long-term production.
Colorado is the fifth largest producer of crude oil and the seventh largest producer of natural gas in the country. The state’s oil and gas industry is a global leader in clean, responsible production through the development of breakthrough technologies and best practices.
In a recent informal poll of Chamber membership, 70% of businesses surveyed said Russia’s attack on Ukraine has impacted their operations. The top issue cited was increased energy costs (55%), followed by inflation (50%) and general economic uncertainty (50%). Over one-third of participants (36%) said their company has responded to the crisis by contributing to humanitarian aid in support of Ukraine.
“This should be a reminder for us to be focused on the increased ability for the U.S. – and Colorado especially – to produce our own energy,” one survey participant said in an open-ended comment.
Business Community Defeats Workplace Marijuana Use Bill
A bill that would have prohibited employers from taking adverse actions against employees for marijuana use died in a House committee yesterday after significant backlash from Colorado businesses. A similar measure failed to pass the legislature in 2020.
The Colorado Chamber took an “opposed” position on HB 1152 and testified against it in the House Business Affairs and Labor Committee hearing.
“Businesses across the state continue to be very concerned about how this bill would impact the safety of their employees and the public,” particularly those who use high-risk equipment, said Colorado Chamber President Loren Furman in the hearing.
In addition to safety issues, the bill raised constitutional concerns. The retail sale and consumption of recreational marijuana was legalized in Colorado in 2012 with Constitutional Amendment 64. A Task Force which was established to implement the amendment specifically clarified that employers have the right to determine their own policies on company marijuana use, including the ability to terminate an employee who may test positive for recreational or medical marijuana use. HB 1152 appears to contradict with the intent of Amendment 64.
The bill failed on a 12-1 vote.
Energy and Environment Council Update
The Colorado Chamber’s Energy & Environment Council met on Wednesday to discuss recent regulatory and legislative issues impacting members.
The Council first heard from chairs of the Energy, Air Quality, Industrial Waste, and Water Subcommittees to provide updates on relevant regulatory actions from state agencies.
At the last Council meeting, members expressed concerns and questions over some proposed changes to dispersed modeling guidelines. The Chamber teamed with the Colorado Oil and Gas Association to schedule a meeting with the state’s air pollution control division and provided a list of concerns about the proposals. The meeting was very impactful, and division staff are reviewing the feedback provided.
Other regulatory issues discussed covered by the subcommittee chairs include the clean fleet enterprise, SIP rulemaking, and biosolids monitoring.
The Council also discussed key environmental legislation in front of the General Assembly, including a major bill the Chamber has raised concerns about – HB 1244, the air toxics bill. The Chamber remains opposed to the bill, which would create a new one-size-fits-all air emissions program that could have a sweeping effect on businesses with industrial or manufacturing operations in Colorado. The Chamber has built a coalition of more than 40 organizations opposed to the bill. The bill has yet to be heard in committee, but it’s expected to be scheduled for a hearing in April.
Other updates on legislation include:
- SB 131: The pesticide regulation bill which would prohibit the purchase of pesticides at retail outlets. The bill died in the Senate Agriculture and Natural Resources Committee.
- SB 138: The reduction of greenhouse gas emissions bill. The Chamber voted to take a “monitor” position on the bill previously, but due to some ongoing issues with the bill – including its impact on Class 6 injection wells – the Council updated its position to AMEND.
- HB 1026: The alternative transportation options tax credit bill. The Chamber took a position of support at the beginning of legislative session.
- SJR 008: Joint resolution to support Colorado energy production. The Council voted to SUPPORT this resolution.