Tuesday, 11 June 2019 23:38

Capitol Close Up - 2019 Legislative Session Review

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2019 Legislative Session Included Several Successes for Home Builders

The 2019 General Assembly session ended on May 3, and many would say that it was one of the most contentious and difficult sessions in recent memory. For business interests, such as the Home Builders and our industry partners, the session was marked by many bills that sought to change labor laws and to impact the state's business climate. The Colorado Association of Home Builders lobbying team of Virginia Morrison-Love and Mary Kay Hogan worked with CEO Ted Leighty, Government Affairs Committee chair Scott Smith and committee members to review and take positions on more than 65 pieces of legislation. Thank you to the GAC and CAHB's lobbying team for their dedication and hard work representing Colorado's home builders over the past five months.

Colorado Consumer Protection Act

Two bills -- House Bill 19-1289 and Senate Bill 19-237 -- sought to make changes to the Colorado Consumer Protection Act.

HB19-1289 passed after many amendments. The GAC opposed HB1289, legislation sponsored on behalf of Colorado AG Phil Weiser. The AG's office sought to create additional protections in the Colorado consumer code and enforcement of the CCPA for reckless acts. The GAC was especially concerned about Section 4 of the bill, which dealt with standard form contracts, which could have undermined arbitration, hurting our efforts to address construction litigation and housing affordability. Fortunately, CAHB successfully worked with House members and AG Weiser to remove Section 4 and to make other amendments in order to lessen the impact of HB1289 on the industry. As introduced, the bill would have permitted a private right of action. CAHB worked successfully in limiting actions on these new CCPA components to the AG or a district attorney.

SB19-237 was opposed by CAHB and was defeated.  It attempted to increase the penalties allowed under the Colorado Consumer Protection Act (CCPA). Under current law, damage is awarded the greater of $500, actual damages or treble damages where a clear and convincing bad faith violation is proven. This bill tried to increase to a minimum statutory damage of $500 per violation, even for minor violations that don't cause actual damages. It sought to incentivize class actions for smaller classes by making attorney fees available in class action lawsuits as opposed to only being able to get them in individual claims as it is currently. CAHB opposed SB237 over concerns of potential misuse by trial lawyers and an unnecessary change.

Working with allies, we were able to effectively kill the bill in the House. The House sponsor, understanding he did not have the votes to pass the bill out of committee, allowed it to die on the calendar.

Colorado Labor Laws

Several bills were introduced that sought to radically change Colorado labor laws. The business community worked together to oppose and amend these bills. The CAHB opposed both Senate Bill 188 and House Bill 1210 and monitored Senate Bill 85 as other organizations took the lead on that bill.

SB19-188 -- also known as the FAMLI Bill -- attempted to create a paid family and medical leave insurance program as an enterprise in the Colorado Department of Labor and Employment. The bill directed employees and employers to contribute to a monthly premium based on wages, with workers paying 60 percent of the premiums. The program would have funded a leave benefit for individuals to care for themselves or family members-and would have required employers to hold a position for a worker on leave. The CAHB joined the large business coalition opposed to this measure, and after months of lobbying and doubt raised by Governor Polis and legislative fiscal analysts, SB188 was amended and passed as a one-year study with a 13-member working group. We should expect a new version of SB188 in the next legislative session.

For more information about SB188 and what it means to businesses, please click here.

HB19-1210 -- which was amended and approved by the General Assembly -- will allow individual communities, including cities and counties, to establish higher local minimum wages, despite statewide voters recently approving a minimum-wage increase as part of a ballot measure. The CAHB joined with business stakeholders to oppose HB1210 because it will likely create a patchwork of different minimum wages, especially in the metro areas, that may force communities to compete for workers. It will also likely create discrepancies for employers and increase regulatory-compliance costs for companies. HB1210 was heavily amended to get out of the Senate, and that allowed for some protections for business-including a delay in implementation to after 2020, cap increases in a local minimum wage, and rules on calculating wages for workers who travel through different jurisdictions during their workday.

SB19-85 -- called the Equal Pay for Equal Work Act -- seeks to ensure gender pay equity by requiring employers to publicly post job openings with estimated salaries, prohibiting employers from asking about salary history and allowing an employee to sue over wage discrepancies. The business community successfully amended SB85 to ensure that mediation was not banned to resolve a claim, reduce the years of potential back pay to three from six if a claim was awarded, and delay the start date to 2021.

Colorado's Budget

Colorado's General Fund, or state budget, is subject to limitations set in the Taxpayer's Bill of Rights. As such, TABOR limits the budgets annual growth -- and prevents the state from investing in roads, infrastructure and education in strong economic times. In 2005, the state passed Referendum C to allow a 5-year timeout from TABOR for the state to catch up from a previous recession.

House Bills 19-1257 and 19-1258 will seek a similar solution as 2005's Referendum C by sending to statewide voters Proposition CC for the 2019 ballot. Proposition CC, if passed, will permanently exempt the General Fund from TABOR limits and direct that one-third of any additional revenue go equally to K-12 education, higher education and transportation -- with a transportation split to the state, local governments, and transit projects.

The GAC supported the legislation creating Proposition CC as part of the industry's commitment to transportation and infrastructure to help fuel our state's economy and address growing congestion. With a more than $9 billion backlog of critical roadway projects, Proposition CC represents the best opportunity to pump additional funds toward transportation.

The legislature in one of its most significant bipartisan efforts of the 2019 session put an additional $300 million toward road projects in the state budget for the next fiscal year.

Oil & Gas Regulation

SB19-181, opposed by the Colorado Association of Homebuilders, received quite a bit of political, media and statewide attention this session. The bill will fundamentally change Colorado's approach to oil and gas regulation by ceding more authority from the state to the local governments where drilling occurs, while changing the makeup of the Colorado Oil and Gas Conservation Commission (COGCC). The legislation also will make health and safety the preeminent consideration for all development for the COGCC.

SB181 did have some amendments that will soften concerns for surface-rights interests. Unfortunately, CAHB's efforts to amend SB181 to ensure protection of surface rights and builder/developer investments were not successful. SB181 will soon begin a lengthy -- and likely contentious -- rulemaking process at the COGCC. The CAHB will be engaged in that process and will keeps members updated.

Rural Broadband

SB19-107 sought to allow an electric utility or supplier to install and maintain above-ground broadband internet infrastructure for internal and external use to provide broadband service, or for lease of any excess capacity to a broadband internet service provider. The bill, as originally introduced, wanted to allow utilities to use existing electricity easements for commercial and other broadband services, in some cases without changing the easement.

The GAC opposed this legislation and was successful in amending SB107 to preserve private-property rights-primarily through adherence to existing easement agreements-and to ensure that any use of below-grade utilities is restricted to activating existing fiber-optic lines and not permitting trenching to lay new fiber.

CAHB, HBA Colorado Springs Successfully Pass House Bill 1274

Despite the challenges to home building and Colorado's business climate during the 2019 session, there were several successes for home builders, including the passage of House Bill 19-1274. This legislation, awaiting Governor Polis's signature, was developed by the Housing and Building Association of Colorado Springs and El Paso County and introduced last year. HB1274 passed this year after continuing to fine tune the bill and work with stakeholders.

HB1274, which had bipartisan sponsorship and support throughout the process, allows a Board of County Commissioners to delegate subdivision platting to county staff. Currently, counties are required to have all subdivisions steps heard and approved by their Board of County Commissioners. This creates an unnecessary delay in what should be a technical and engineering process. The additional steps and time that it takes for BOCC review often results in decreased lot availability and corresponding increases in housing costs.

Once HB1274 becomes law, it would apply only to the subdivision platting process-subdivision plats, amendments to plats and subdivision improvement agreements-but does not apply to land-use decisions by counties. For example, zoning decisions would still be made by the BOCC, and the zoning process would still provide opportunity for public input. Importantly, HB1274 does not authorize delegation to administrative staff the power to grant waivers from state or county requirements concerning the subdivision of land.

The bill is permissible since it grants counties additional flexibility concerning the subdivision process but does not require counties to make any changes. In addition, the bill allows counties to utilize their staffs' expertise, thereby preserving the commissioner's time to focus on other pressing issues.

We would like to express our sincere gratitude to Representative Marc Snyder and Senator Dennis Hisey for sponsoring HB1274

Affordable Housing

The Colorado Association of Home Builders participated in a stakeholder process this past fall that sought to address affordable housing. That process led to several following bills that were approved by the General Assembly. Several of these bills had the CAHB's support, as well as more than 80 other stakeholders

HB19-1319 will allow private and nonprofit developers to initiative financing and building of affordable housing projects. Affordable housing developers are having difficulty obtaining financing from lenders because the claw back gives lenders too many restrictions. The bill would require an inventory of Public Lands Suitable for Affordable Housing Development and then would limit claw backs of property-tax exemption funds for affordable housing projects to enable lenders more ease to finance projects.

HB19-1322 establishes a new state fund in the Division of Housing to provide sustainable funding for programs and projects that improve, preserve or expand the supply of affordable workforce housing in Colorado. Revenue sources include General Fund, Unclaimed Property Trust Fund, Marijuana Cash Funds, and Gifts, Grants and Donations. The fund will not use new taxes or fees on real estate to help fund affordable housing. HB1322 in its first year allocates about $38 million, with most of the funds coming from the Unclaimed Property Trust Fund. The Division of Housing is required to consult with stakeholders from urban and rural communities to determine how to meet the needs of local communities, serve populations with the greatest unmet need, and optimize the funds allocated.

HB19-1228 increases the amount of state affordable housing tax credits for 2020 through 2024 that the Colorado Housing and Finance Authority (CHFA) may allocate each year. By doing so, CHFA will have additional funds to leverage federal dollars for affordable housing.

HB19-1245 requires the state treasurer to credit a portion of state sales taxes attributable to a vendor fee change to the Division of Housing's housing development grant fund. This fund is used to make grants and loans to improve, preserve, or expand the supply of affordable housing in the state. HB1245 will help increase the supply of affordable housing across Colorado.

Landlord/Tenant Bills

Several bills were introduced on the legal relationships between landlords and tenants. The CAHB opposed these bills and worked with industry stakeholders to either defeat or amend each bill. The bills include:

SB19-225 -- opposed by CAHB and several other industry stakeholders -- was defeated. The bill sought to establish local rent control by removing the prohibition in current law barring local government from enacting ordinances that control rent on private residential housing units, and then permits local governments to enact local laws or regulations that stabilize rent on private residential property.

HB19-1170 -- awaiting the governor's signature -- will significantly modify the implied warranty of habitability in a residential lease between a landlord and a tenant. The bill adds mold to the description of an uninhabitable residence and the absence of functioning appliances; and requires that a landlord move a tenant to a reasonably comparable unit, pay for incidental moving costs, or pay for the tenant to reside in a temporary location when a property is hazardous or uninhabitable and conditions are being remedied.

The bill was amended to find common ground on defining the types of conditions that would trigger property owner responsibilities to mitigate any safety concerns for the resident and help define a time period that allows the property owner to properly address these concerns with any potential work that must be completed to improve the habitability for a resident. Changes include: definition of mold, an exemption for buildings with five or fewer units, and an extended time frame to address claimed breaches of the warranty of habitability from 24 hours to 96 hours.

HB19-1118 -- also awaiting the governor's signature -- was successfully amended to require a landlord to provide 10 days' notice of insufficient rent prior to beginning eviction proceedings, and 10 days' notice prior to terminating a lease agreement for a subsequent violation of terms. Current law provides 3 days for a tenant to pay unpaid rent or vacate the property before a landlord may begin eviction proceedings.

HB19-1106 prevents a landlord from charging a rental application fee unless the entire amount of the fee is used to cover the landlord's cost to process a rental application. It prohibits landlords from charging two or more prospective renters different amounts for applications to rent the same property.  HB1106 also requires that a landlord provide a tenant with specified notifications if the landlord rejects or places additional requirements in a rental application.



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