May 2017

2017 Colorado Legislative Session Summary

Colorado’s 2017 legislative session ended yesterday evening with about two and a half hours to spare before its midnight deadline.  As is typical, in the last week of the session, the pace was fast and major issues were not decided until the final few days.  The highest profile piece of legislation to pass this year was SB-267, the Hospital Provider Fee/rural infrastructure legislation.  The bill ultimately passed both chambers with bi-partisan support (Senate vote 25-10, House vote 49-16).  The legislation impacts just about every major spending priority of the legislature and marks the end of three years of attempts to convert the Hospital Provider Fee into an enterprise fund, exempting its revenue from the TABOR cap.  SB-267 will stave off cuts of over $500 million to hospitals in FY17-18, put $1.8 billion towards tier 1 transportation projects (25% must go to rural projects), increase the TABOR revenue cap by $350 million, put $30 million to rural schools in FY17-18, and increase the Business Personal Property Tax income tax credit limit from $15,000 to $18,000.  

However, the bill is not the solution to all of the funding issues facing the state on these issues.  It was most accurately described by legislators as an important starting point for future conversations and a bill that buys the state time on major decisions.  The bill can rightly be touted as a success in that it demonstrated that a majority in both parties could compromise on an array of major issues and not be dragged down by partisan politics, which has been the case over the last several years on many high profile issues.  

Other major accomplishments of the 2017 session include:  

  • HB-1279: Construction Defects Reform – Requires notification of all unit owners and a majority of condo owners’ consent to bring a lawsuit against a developer for defects.  This marks the first piece of reform legislation to pass on this longstanding issue which is blamed for Colorado’s very low percentage of new condominium starts.  
  • SB-254 FY17-18 Long Bill – The annual appropriations bill was passed in the last full week of the session, much later than usual.  The bill appropriates a $26.8 billion state budget for next year, and includes a 4% spending increase with modest increases for K-12 and Higher Education. 
  • SB-296/HB-1375 School Finance and Charter School Funding Equalization – The annual School Finance Act, SB-296, became a point of contention after the Senate added an amendment to require charter school equalization funding, which was originally in a separate bill.  Ultimately, a compromise was agreed to on the charter school piece, which  requires school districts to develop a plan by the 2019-20 school year to equitably share voter-approved tax increases (currently only about a third of the state’s 178 districts share this mill levy override revenue with charter schools). HB-1375 was introduced late on Monday night and passed both chambers in three days.  The issue divided the Democrat Caucuses in both chambers and there was strong opposition from school district superintendents.  
  • SB-40: CORA Modernization – Requires copies of electronic government records to be made available to the public in useful file formats that permit analysis of information in those records.  This bill had been introduced several times in past years but finally found agreement this session.  


There were also several high profile issues that failed to make it across the finish line, which is consistent with a split legislature.  Some of these issues included:

  • Energy Office Reauthorization – The Colorado Energy Office was up for reauthorization this year.  SB-301 was introduced and provided a four year extension of the office, but also included broader changes to the state’s energy policy such as allowing IOU’s to purchase natural gas reserves.  The bill was very political with House Democrats pushing for either a clean reauthorization bill or allowing for IOU’s to own more renewable generation if they were allowed to own natural gas reserves.  After negotiations by Xcel, electric co-ops, environmentalists, the oil and gas industry, and other stakeholders, the bill broke down yesterday evening.  The bill died and the Energy Office will lose the majority of its funding and staff on July 1st.  
  • Rural Broadband – Expanding broadband to rural parts of the state was a top priority of both parties and the Governor this session.   The closest any bill came to making significant changes came in the last three days of the session when the House Majority Leader amended a technical bill dealing with a $9.5 million transfer to the existing broadband expansion fund.  The amendment significantly sped-up the transfer of the state’s High Cost Support Mechanism fund, which all users of telecom services pay a fee for, into the broadband expansion fund.  Opposing sides could not find agreement and the amendment did not stay on the bill, leaving the original $9.5 million transfer to rural broadband as the only movement on this issue this session.
  • Transportation – Despite the $1.8 billion for transportation allocated in SB-267, there was no other major increases to address the state’s estimated $9 billion revenue shortfall for transportation.   There were several attempts.  HB-1272 would have increased sales tax by 0.5% and generated $3.5 billion for transportation projects over 20 years.  SB-303 would have increased the Specific Ownership Tax on cars over ten years old and taken 5% of existing sales tax to bond for a similar amount.  Both bills failed, with HB-1272 coming closest and having bi-partisan support, but not enough to get through the State Senate.
  • Labor and Employment – A host of bills that have been introduced in past sessions relevant to employers and opposed by the business community were again introduced this year, including: HB-1290, mandatory retirement savings for employees; HB-1305, limits on job applicant criminal history, so called “ban the box;” HB-1307, family medical leave insurance mandate; and HB-1314 homeless right to rest.  None of these bills made it through the process with most dying in the Senate, all will likely be back next year and in future sessions.
Questions? Please contact John Karakoulakis (303.295.8003 / jokarakoulakis@hollandhart.com).
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