Colorado legislators have wasted no time in getting started on new laws that could affect businesses.
At the one-month mark of the 2020 session, more than 300 bills have been introduced. Many other proposals are being discussed but have not been introduced yet.
“Just the sheer volume of legislation has been pretty notable,” said Rachel Beck, vice president of government affairs for the Colorado Springs Chamber & EDC.
“This year, there’s a real emphasis on making sure that the growth in the economy is sustainable,” she said.
“There’s a lot of talk about affordability and accessibility for everybody,” Beck said. “So a lot of the policies that we’re seeing come out into bills … relate back to the idea of trying to make health care and benefits and education more accessible and affordable.”
The Business Journal asked two business advocacy organizations and two local legislators about the bills and issues they’re watching or supporting as they make their way through the legislature.
One of the top issues the Colorado Springs Chamber & EDC is following concerns revisions to the state’s sales and use tax regulations.
The state Department of Revenue instituted a new policy last year that requires retailers to collect and remit the state’s 2.9 percent sales tax even if they do not have a physical presence in the state.
Other states and many local taxing districts within and outside Colorado have instituted similar policies in the wake of a U.S. Supreme Court decision, subjecting businesses that ship to other locations to collecting sales taxes they may not know they owe.
After many concerns were expressed by businesses, the department of revenue postponed implementation of the new policy in Colorado until June 2019.
“The state is working on creating a software system that will give businesses the ability to look up an address and determine what the correct tax rate is,” Beck said.
House Bill 20-1023 contains a hold-harmless provision for businesses using the state’s GIS system to determine the jurisdictions to which they must pay sales tax and calculate the tax they must remit.
“That’s a much-needed provision,” Beck said.
Another bill, SB20-099, increases the threshold for small retailers to comply with the new sales tax collection regulations from $100,000 in retail sales to $200,000.
“That’s still a much lower threshold than we’re hearing from our businesses would be appropriate, but at least it’s movement in the right direction,” Beck said.
Another issue with which the legislature is grappling again this year is family and medical leave coverage.
A bill introduced in the last session would have created a new state agency to run the program, which carried a huge price tag to start up and maintain.
The bill was entirely changed as it went through the legislative process last year.
“It was converted to a study bill, and during the interim, there was a task force that oversaw several studies and actuarial analysis and some research on what other states were doing,” Beck said. “That task force ran some numbers and made some recommendations to the legislature.”
The task force report was released Jan. 8, the first day of the legislative session. The report recommended that paid leave be available in certain circumstances and found that models funded by employees would be financially sustainable.
One suggestion that came out of the study was a proposal by Pinnacol, the state’s workers’ compensation provider, for a private option for paid leave coverage.
“That’s an interesting new idea,” Beck said. She added that the chamber supports HB20-1193, an incentive-based alternative that would establish savings accounts for employees for family and medical leave and tax credits for employers that offer them.
The chamber also is watching HB20-1089, a proposal that would prohibit an employer from firing an employee for lawful use of marijuana outside work.
“I have heard a lot of concerns from our members,” Beck said. “Our defense contractors are particularly concerned, and some of our members who are in the trucking industry would like to be able to enforce drug-free workplace policies.”
Of the bills that have been introduced, Beck said the chamber is also following these:
• HB20-1093, which would allow counties to license and regulate businesses, Beck said. “It’s aimed at short-term rentals but is written so broadly that we’re concerned it would open the door to other uses.”
• SB20-021, which would require sunsets and performance measures for new tax expenditure bills, including metrics that can demonstrate the effectiveness of the tax in achieving its intended purpose. The chamber supports the bill, which was co-sponsored in the House by Rep. Marc Snyder, D-Dist. 18.
• SB20-093, which would make substantial changes in current dispute arbitration practices and specifies terms in standard consumer and employee contracts that are unenforceable and constitute deceptive practices. “We’re pretty concerned about that,” Beck said.
• SB20-133: Currently, any bill that has a fiscal impact on the state budget must have a fiscal note attached with analysis of how it would affect the state financially. This bill proposes the concept of a business fiscal impact note that would analyze how a bill would affect the business community. “We certainly think that’s a great idea,” Beck said.
GOOD BUSINESS COLORADO
The members of Good Business Colorado, a Denver-based association that advocates for business-friendly policies, are very concerned about health care, family and medical leave and retirement security, Executive Director Debra Brown said.
“Our small businesses are struggling so hard to not only take care of their employees, but to compete for talent,” she said. “That suite of benefits really would be a game-changer for leveling the playing field for small businesses that are trying to compete for talent in a really tight labor market. Our members are highly invested in these things because they see the ramifications of the absence of having access to these benefits every day.”
Policy Director Karen Moldovan said many of the organization’s member businesses struggle to provide health care for their employees.
“A bill has not been introduced yet, but we will be excited to review the bill draft around the public option,” she said. “We’re hopeful that the public option will be an opportunity to get Colorado and business owners in particular more meaningful choices on their coverage options, while also addressing some of the high cost of health care.”
Another bill yet to be introduced would give employees more options for retirement savings through the Colorado Secure Savings Plan.
“We’re excited about efforts to move forward access to retirement security for small businesses,” Moldovan said.
Good Business Colorado also favors HB20-1053, a bill that supports early childhood educators through scholarships, grants and building an apprenticeship program.
“Access to quality and affordable child care is another issue that has been articulated by our membership as a top priority,” Moldovan said.
Another proposal being watched by Good Business Colorado, HB20-1048, would prohibit discrimination in employment practices and other areas based on traits such as hair texture that are associated with race.
“We know that’s an equity issue for African American women,” Moldovan said. “We are supporting that bill; our members feel really strongly that our workplaces need to be places that are free of discrimination.”
“Ninety percent of the bills I’m working on are business-related,” said Snyder, a member of the House Finance Committee and the Business Affairs and Labor Committee.
Along with Sen. Pete Lee, D-Dist. 11, Snyder co-sponsored HB20-1013, a measure that addresses defective corporate actions.
Snyder said last year’s SB19-86 covered a lot of statutory cleanup and updating of the state’s corporate statutes. One area that was omitted was a process for boards of directors to remedy previous corporate actions that weren’t technically done correctly.
“This should be very helpful for corporations so that they will spare themselves the liability and get back into legal step,” Snyder said.
Snyder also is sponsoring HB20-1024, concerning modifications to the state’s net operating loss deduction. That bill would bring Colorado’s statute in line with federal requirements.
“Currently, [businesses] can do a 20-year lookback, and they can carry their net operating loss year over year,” Snyder said. “And then they have a good year and they can offset that income with the previous year’s net operating losses.”
Snyder’s HB20-1025 modifies the state sales tax exemption for industrial and manufacturing energy use.
“As it is now, we don’t tax inputs; we tax it on the back end,” he said. “So if you’re bringing in your raw materials and energy necessary to manufacture, when you sell your manufactured product, that’s when Colorado takes a bite of the apple.”
But Snyder said many manufacturers are getting a blanket exemption and don’t have to pay taxes for all of the energy they use.
The bill would continue to exempt energy used in the manufacturing process.
“But the rest of your facility — your office building or other facilities that aren’t directly involved in manufacturing, you’re going to have to be a typical customer in that regard.”
Lee said the legislature will be revisiting the Innovative Industries Workforce Development Program, created in 2015 to provide incentives for businesses to hire interns.
“We gave a business $5,000 to hire interns to address some of the costs that go into hiring interns and provide training,” Lee said. The program was targeted for advanced industries such as biosciences and high-tech firms.
“It’s been fabulously successful,” he said. “What was really exciting about it was that a lot of them went from apprentice to full time.”
Lee said 90 interns were employed through the program, which maxed out the $450,000 allocated for the bill.
“We’re going to bring that back and hopefully get more money into it,” he said. “We’re going to try to double it next year.”
Lee said the legislature also will be looking at incentivizing the development of recycling end markets through SB20-055.
The bill “requires the Pollution Prevention Advisory Board to develop formulas to reimburse some personal property taxes for businesses that reclaim or recycle materials,” Lee said.