GOP Reverses Pre-Majority Democrat Initiatives

Senate Republicans took advantage of their newfound majority this last week by reversing, on initial action, gun laws passed in 2013 and rural area renewable energy mandates also imposed in 2013.  The action, is likely shortlived, however, as the measures face an uphill battle in the Democrat controlled House.

In 2013, the Democrat controlled legislature passed a law that forced rural electricity providers to join their urban counterparts in getting 30 percent of their electricity from renewable sources by 2020.  Republicans have long argued the mandate was unfair.  Senate Democrats, led by Senator Morgan Carroll (D-Aurora), argue that the standard has helped lower the cost of renewable energy, which they say now is cheaper than coal or natural gas to produce electricity. The proposed change only affects rural areas, leaving Xcel Energy and other urban providers to comply with the renewable energy standard.  The Senate passed Senate Bill 44 on a party-line 18-17 vote.  The bill moves to the House where it faces one of the sponsors of the 2013 legislation, Representative Dickie Lee Hullinghorst, now Speaker of the House.  NCLA opposed the 2013 measure.

The passage of a myriad of gun control measures in 2013 spelled the demise of three State Senators and contributed to the shift in majority to Republicans in the 2014 election cycle.  This week, Republicans went to work on reversing several of the gun control measures and began bring a few Democrats into the fold in the process.   Republicans efforts to reverse several of the measures were defeated in the Democrat-controlled House this week but they found success in passage of a measure repealing the expanded background check requirements on private and online gun sales.

Hickenlooper Oil and Gas Panel Floats 57 Ideas

After months of hearings and enduring changes to the political landscape, the Governor’s oil and gas task force began the process of floating and winnowing ideas for addressing concerns about drilling in Colorado.  The task force is charged with making recommendations to the Governor and to the Legislature by February 27^th setting the stage for vibrant debate in March on the volatile issue.

The task force has 57 proposals before it with two-thirds vote of the commission required to include the proposal among the list of recommendations from the task force.  The proposals run the gamut from increased state oversight of oil and gas operations, a study of health impacts to increased local control of operations and disclosure of drilling chemicals.

Increased state oversight of operations garnered a sufficient amount of task force member support to move to the next phase in the process.  A measure which sought to increase setbacks for operations depending upon the number of wells and tanks, however, was rejected by 57% of the task force on a straw vote.

The task force was formed last year by Governor Hickenlooper in a deal that kept four measures off the November ballot, two of which would have restricted hydraulic fracturing.  Congressman Jared Polis was behind the two restrictive measures and has indicated he will pursue ballot initiatives in 2016 if he is not satisfied with the task force recommendations and legislative action on the issue.

The legislature will receive the recommendations from the task force in March and will consider any legislative action necessary.

Health Care Exchange to Undergo Scrutiny

The Colorado Health Benefit Exchange is a step closer to undergoing additional scrutiny with the passage of a pair of legislative proposals last week.   The health benefit exchange, doing business with Colorado consumers under the name Connect for Health, is the state-compliant exchange under Obamacare and has been the subject of criticism for high costs and logistical issues with the consumer interface.

The bills, SB 15-019 and SB 15-052, propose to build in legislative oversight of the exchange, oversight that is currently absent from its statutory and regulatory framework.

SB 92 by Senator Jerry Sonnenberg (R-Sterling) and Representative Dan Norberg (R-Colorado Springs) provides authority for the Office of the State Auditor to conduct periodic and comprehensive audits of the exchange.   A recent limited performance audit found discrepancies in financial management and unexpected cost overruns in certain segments of the implementation of the exchange.   SB 19 authorizes deeper and more comprehensive audits to assure sufficient transparency and accountability to consumers and state lawmakers.  The NCLA supports SB 19 and the bill passed the Senate Health and Human Services Committee on a unanimous vote.

SB 52 by Senator Larry Crowder (R-Alamosa) responds to a controversial bonus that the Connect for Health board was planning to give the Executive Director at the time while the first year roll out of the exchange was still struggling to implement.    SB 52 wouldrequire that the Legislative Health Benefit Exchange Implementation Review Committee vote on any bonuses proposed for Connect for Health employees.  The bill was also passed by the Senate Health Committee but the issue drew a partisan response and was passed on a 3-2 vote.

Both bills move to the full Senate for debate in the coming weeks.

Pot Revenues could Benefit Transportation Funding

While Republicans and Democrats dig in their heels on the question of whether TABOR surpluses should be returned to the taxpayers (generally, the Republican point of view) or retained for other state purposes (generally, the Democrat point of view), legislators may be finding common ground on asking voters for permission to retain the overage of revenue generated by marijuana sales taxes, and the unintended beneficiary could be transportation.

A year after Amendment 64 was passed in 2012, voters approved a 10% state sales tax upon the sale of recreational marijuana.  Although the revenues haven’t kept pace with the $70 Million in projected revenue, the $50 million in actual revenue is contributing to the “surplus” revenue to the state, revenues that are generated by all sources.

A transportation funding mechanism in SB 09-228 was hoped to push over $200 million in funds to transportation projects this year but a quirk in the mechanism when taken with TABOR surpluses will mean no funds will be directed toward transportation projects.  Unless, however, fewer surpluses are refunded to taxpayers.

There appears to be general agreement on both sides of the aisle that when voters passed Amendment 64 and the referendums of 2013 related to pot taxation that they did so with the expectation that revenue generated from the sale of legal marijuana would be reinvested in the various needs in Colorado, including education, prevention and enforcement of the marijuana laws.

Should the $50 million in revenue to retained, those dollars will be free to be spent on a multitude of state budget items but the move could also mean the SB 228 trigger will kick in, allowing a portion of the $200 million to flow.

Three things have to occur for those funds to flow, however: 1) A referred measure to keep the pot revenues would have to pass a 2/3 vote hurdle by the legislature, 2) the voters in November would have to approve the referendum and finally, 3) economic projections in March would have to show no additional anticipated TABOR surpluses.

Hickenlooper Begins Second Term with Details on Agenda

As Governor John Hickenlooper began his second term as Governor, he outlined an agenda for more economic growth, investment in Colorado’s transportation system, the building and connecting of statewide bike trail system and recognition of the fiscal policy challenges facing the state during his Inaugural Speech and State of the State address.

The Governor highlighted a number of the economic successes of his prior term including a reduction in the unemployment rate, attracting key employers and increasing its emergency reserve from 2% to 6.5% of the budget.  “Colorado is no longer in a precarious state,” Hickenlooper declared in his inaugural speech. “It is poised to be a model state.”

The Governor acknowledged, however, that many areas of Colorado are not experiencing the same economic rebound as others and high unemployment still exists.  He made a commitment to renewing his first-term economic development strategy “Colorado Blueprint” in the form of “Colorado Blueprint 2.0”.  The original Blueprint program was a bottom up approach to identifying needs and economic drivers in the various regions of the state.  A similar approach will be taken in 2.0.

The Governor echoed the theme of workforce development by Speaker of the House Dickie Lee Hullinghorst (D-Boulder) and President of the Senate Bill Cadman (R-Colorado Springs) in their respective opening day speeches.

In the face of a split legislature, the Governor sounded his trademark theme of collaboration on issues without offering pre-determined solutions.  Noting Colorado’s history in water and its importance to our economic past and future, water served as the primary example of collaboration on a critical issue.  “The Colorado Water Plan represents a paradigm shift of cooperation and collaboration, and goes a long way to ensure we strategically allocate this precious resource to maximize our entire state’s ability to grow and flourish,” Hickenlooper lauded.

A call for collaboration on difficult issues left less clarity or no mention at all on his agenda about a number of key business issues, including transportation funding and oil and gas regulation, the budget surplus, tax incentives, and construction defects.

Without tipping his hat about his position on the impending recommendations of his Oil and Gas Taskforce, Hickenlooper acknowledged that, “One of the more fertile fields of employment in Colorado has been our energy industry. I look forward to the recommendations of this task force, and,” he continued, “pledge to work with you [legislators] and other stakeholders in developing our energy resources, protecting property rights and our natural environment and public health.”

On transportation funding, the Governor spoke of the successes of rebuilding flood-damaged roads and bridges and the widening of the twin tunnels along I-70 in the mountains.  For the first time in his five State of the State addresses, Hickenlooper stated that, “We are committed to finding solutions that add capacity on I-25 and I-70.  We need to think creatively about how we fund both I-25 and I-70.”   While not specific about solutions, Hickenlooper continued, “We must take action whether it be new funding sources or funding partnerships.”

And finally, the Governor lauded the beauty of Colorado.  To capture the beauty, and to “make sure we get more Colorado cyclists out there,” Hickenlooper announced the launch of a Bike Health Initiative, which will, among other things, “create a plan to connect bike routes across communities and around the tallest mountains in Colorado.”

2015 Legislative Session Underway with New Dynamic at Play

The 2015 Legislative Session got underway last week to the traditional pomp and circumstance. 2015 also ushered in a dramatically different political dynamic for the business community than experienced the last couple of years. The 70th General Assembly will be governed by a split majority between the State House of Representatives and the State Senate.

The 2014 election generated a new Republican majority in the Colorado Senate after 10 years of Democrat control. The narrow 18-17 majority means a new President of the Senate and new committee chairs. Former Senate Minority Leader Bill Cadman (R- Colorado Springs) was elected President of the Senate. Cadman and newly elected Senate Majority Leader Mark Scheffel (R-Douglas County) appointed new committee chairs. Northern Colorado was well represented among the committee leadership with Senator Kevin Lundberg (R-Berthoud) appointed chair of the Senate Health and Human Services Committee and Vicki Marble (R-Windsor) named as chair of the Senate Local Government Committee.
On the House side, Democrats maintained their majority coming out of the 2014 election cycle but their majority narrowed from a prior 38-27 majority to a 34-31 majority. Former House Majority Leader Dickie Lee Hullinghorst (D-Boulder) was elected Speaker of the House by her colleagues. Northern Colorado retains power positions by holding key leadership positions with the election of Representative Brian DelGrosso (R-Loveland) as the House Minority Leader and the appointment of Representative Dave Young (D- Greeley) as vice-chair of the powerful Joint Budget Committee and chair of the House Appropriations Committee.
The split majorities are present an opportunity for collaboration between the two bodies and two parties. The split majorities also assure to great degree that proposals that are viewed as too extreme in either political direction are either not introduced in recognition of their inability to pass the opposite body or are quickly defeated by the opposing party’s majority.

Given the new political dynamic, we predict a relatively tame session in terms of negative implications for business. Time will tell is such prediction comes to pass

Follow Action at the State House through NCLA’s Legislative Tracking Report