Dan Pilcher

CACI Senior Vice President

& Chief Operating Officer

Phone: 303.866.9600

E-Mail: dpilcher@cochamber.com

Friday, May 1, 2009

NOTE:  The Colorado State Constitution limits the legislative session to 120 days, which means that the 2009 session must adjourn by midnight next Wednesday, May 6th.  Today, the grapevine at the State Capitol says adjournment may be Tuesday.

House Approves Autism Bill, SB-244, on Second Reading

This afternoon, the House gave tentative approval to an amended SB-244 on Second Reading by voice vote.  The House should vote on the bill Monday on a recorded, and final, Third Reading vote.  CACI will regard this final vote as a KEY VOTE, which means a legislator’s vote will be considered when CACI decides next year on whether or not to endorse and support an incumbent who runs for re-election.

CACI objects to this bill because it would burden companies and workers at a time when many firms are struggling and unemployment is rising.  SB-244 would force businesses to provide unprecedented health-insurance coverage for their workers whose children have autism.  The bill would mandate that group health-insurance polices that are regulated by the State would have to provide coverage for applied behavior analysis for autism spectrum disorders (ASD).

As introduced in the Senate, the bill would have imposed an estimated $372 million burden on employers and their workers.  Amendments added in a House committee, however, will likely reduce this price tag.

In the Senate, the bill was sponsored by Senate President Brandon Shaffer (D-Longmont).  The House sponsor is Representative Diane Primavera (D-Broomfield).

The Senate passed the bill Monday on final, Third Reading.  Two Democratic Senators—Gail Schwartz (Snowmass Village) and Peter Groff (Denver), who is the Senate President—voted against SB-244, along with the minority Republicans which passed on a vote of 19-16.

On Wednesday, the House Business Affairs and Labor Committee heard the bill, amended it and sent it along to the House Floor.  The amendments, however, were agreed to before the Committee’s meeting without the input of the business community and, therefore, have not lessened CACI’s policy of strong opposition to the bill because of the cost that it would impose on the private sector.  The amendments include maximum annual benefits; the introduced bill did not have annual benefit limits.

The Senate exempted from the introduced bill the following: State Government workers, higher-educational institutions’ workers and children insured under the State-Federal health-insurance plan known as CHP+.  The Senate decided that the State could not afford the cost because of the budget problems.

In other words, the bill’s proponents would impose costs on the private sector--but exempt the public sector because of budget problems.  The naked hypocrisy of this stance by the bill’s advocates troubles CACI.

CACI and such CACI members as the Aurora Chamber of Commerce, the Colorado Hospital Association, the Colorado Springs Chamber of Commerce and the Colorado Association of Health Plans, along with other businesses and business organizations, continue to fight the bill.

In addition, CACI has the following specific objections to the SB-244:

• Because of this bill, higher premiums will likely result in fewer workers and employers being able to afford health-insurance coverage as well as increasing deductibles, co-pays and co-insurance for workers who employers retain health-insurance coverage.

• By making autism a special disease singled out for extraordinary health-insurance benefit, the legislature will start down a “slippery slope” because proponents for other diseases/syndromes (such as Alzheimer’s, bi-polar disorder, leukemia, Marfan Syndrome, asthma, Lupus, etc.) will advocate for similar, special treatment.

House Sends Bill to Eliminate Capital Gains Exemption to the Senate

Introduced last week, HB-1366 would eliminate the state income-tax exemption on qualifying capital gains beginning in tax year 2010.  The bill would become effective this July 1st.

The decision by the Colorado State Supreme Court in the case of the mill-levy freeze case has led some in the Colorado General Assembly to conclude that the legislature can eliminate various tax deductions, credits and exemptions without the approval of the voters as required under TABOR.  The Court’s decision has led to several bills--including HB-1366--this session that seek to do this, thus generating additional revenue to shore up the state budget.

The Fiscal Note for the bill projects that the State would receive in the fiscal year beginning this July 1st up to $7.7 million in revenue and up to $17.1 million in the following fiscal year.

Current law allows for the deduction of capital gains resulting from the sale of assets in Colorado if they had been held by the taxpayers for at least five years and had been purchased on or after May 9, 1994.  The gains must result from the sale of real or tangible personal property based in the state when stocks or ownership interests in a business in Colorado are sold.

The House Finance Committee approved the bill last Friday.  On Wednesday, the House amended the bill before passing it on Second Reading.  The amended bill now stipulates that the tax break would be capped at $500,000 of the value of the investment, and it “grandfathers” out five-year investments made before January 1, 2010.

Yesterday, the House passed the bill and sent it to the Senate, where it has been assigned to the Senate Appropriations and Senate Finance Committees.  The Senate Finance Committee this afternoon amended the bill to help the agricultural industry and then passed it.

The bill was sponsored in the House by Representative Jack Pommer (D-Boulder).  The Senate sponsor is Senator Chris Romer (D-Denver).  For coverage of the bill by The Denver Post, click on:

http://www.denverpost.com/breakingnews/ci_12223017

House Committee Approves Business Personal Property Tax Bill That Calls for Interim Study--but No Phase-Out

Yesterday, the Senate gave final, Third Reading approval to SB-85, but the bill was amended in its long, tortuous—and sometimes heated--journey through the Senate to remove the phase-out of the tax, which CACI supported.  Instead, the bill now simply calls for an interim study of the tax.

The House Business Affairs and Labor Committee heard the bill this afternoon.  The Committee’s Chair, Representative Joe Rice (D-Littleton), is the House sponsor of the bill.

Loren Furman, CACI Vice President of Governmental Affairs, told the Committee that CACI will participate in the study and that she hopes that the study will result in “positive legislation” for the 2010 legislative session that will start the phase-out of the tax.  The bill now goes to the House Floor for Second Reading.

On Tuesday, the Senate Appropriations Committee, taking a second look at the bill, eliminated the phase-out but added a provision to create a legislative task force to study how to end the tax and the fiscal effect on state and local governments.  The bill’s sponsor, Senator Mark Scheffel (R-Parker), was forced to accept the changes to get his proposal out of the Committee.

The bill had reached the Senate Floor for Second Reading last week with the phase-out intact, having emerged from the Senate Appropriations Committee by a one-vote margin.  But Senate Majority Leader Brandon Shaffer (D-Longmont) wanted the bill to go back to the Committee for a second look because a new Fiscal Note had been generated.  On Monday, the Senate agreed to do that.

The seventeen-member task force would meet at least six times after the legislature adjourns.  It would consist of members from the public and private sectors appointed by the legislative leadership and Governor Bill Ritter.  The Colorado Property Tax Administrator, JoAnn Groff, would also serve on the task force.  The report of the task force is due by November 1st and could include recommendations for legislation for the 2010 session.  The task force would not receive any staff assistance from the legislature.

On Monday, the Senate voted to send SB-85 back to the Appropriations Committee on a 20-15 vote.  Two Democratic Senators—Paula Sandoval (Denver) and Suzanne Williams (Aurora) joined with the minority Republicans to vote “No” against the motion.

For more on the bill by The Denver Post, click on:

http://www.denverpost.com/legislature/ci_12258839

http://www.denverpost.com/legislature/ci_12212402

SB-85, as introduced, would have phased-out the tax that is assessed at the local government level, but it would have exempted state-assessed companies.  The tax is estimated to be about $800 million annually.  Senator Scheffel discussed his bill with the CACI Tax Council and separately with members of the Tax Council who represent the centrally assessed companies.  CACI worked with Senator Scheffel to ensure that the centrally assessed companies would be treated fairly, and the bill was amended to include this provision.

CACI’s research has found that the top 100 companies in Colorado pay about 46 percent of the business personal property tax, and the centrally-assessed companies fall into this category.  Although CACI has long called for the elimination of the tax, CACI also traditionally opposes bills that favor one segment of the business community over another.

A major concern of legislators, however, was the amount of money that Colorado State Government would need to “backfill,” as required under the state school finance law, to local schools for the revenue that they would lose from the tax if it were phased out.  The Fiscal Note for the introduced bill projected that the State would have to allocate $1.35 million for backfill in fiscal year 2009-2010 and an increasing amount in following years, rising to $202 million when the exemption was fully phased in 2027.  Local governments also opposed the introduced bill.

Working with CACI Vice President of Governmental Affairs Loren Furman and CACI Contract Lobbyist Larry Hudson on this bill were the following CACI members: AT&T, Holland and Hart, Tomlinson & Associates, Qwest, Intermountain Corporate Affairs, Union Pacific, Colorado Petroleum Association, Tri-State Generation & Transmission, PriceWaterhouseCoopers, Verizon, Silverstein & Pomerantz and Xcel Energy.

For More Information on Legislation . . .

CACI members with questions about legislation that CACI opposes or supports should contact Chuck Berry, CACI President, at 303.866.9652 or e-mail him at cberry@COchamber.com

Questions pertaining to health-care bills should be directed to Ralph Pollock, Chair of the CACI HealthCare Council, at 303.866.9657 or via e-mail at ralph@apaccess.com

CACI Board Elects Three New Members

At its March meeting, the CACI Board of Directors elected three new members in a special election:

Darrin Henke

Vice President, EnCana USA

Business Unit Leader, South Rockies

Pam Nicholson

Senior Vice President, Strategic Integration

Centura Health

Bill Schuck

President and CEO

The Schuck Corporation

CACI Welcomes New Members

In recent months, the following have joined CACI as members:

Highlands Ranch Chamber of Commerce

Limon Chamber of Commerce

Member:

Eaton Metal Products Company, Denver

Shamrock Delivery Inc., Englewood

Apple Spice Junction, Denver

Bob Hinson Towing, Denver

Greeley Center for Independence, Greeley

Faster Plaster, Inc., Lakewood

Superior Mechanical Services, Inc., Thornton

Westco Express Inc., Commerce City

Clark & Srsich LLC, Littleton

Rebar Placing, Henderson

Mallory Construction, Inc., Parker

Performance Woodworking, Inc., Commerce City

R-Squared Incorporated, Centennial

EDS Waster Solutions, Inc., Golden

Gate City Moving, Denver

Advocate Member:

San Luis Valley Rural Electric Association, Monte Vista

Fennemore Craig, Denver

Rocky Mountain Natural Meats, Inc., Henderson

Qortex, Englewood

Heating & Plumbing Engineers, Inc., Colorado Springs

CACI Partner:

The Industrial Company, Steamboat Springs

Golden Casino Group, Black Hawk

Peerless Tyre Company, Denver

Frontier Mechanical, Englewood

Bronze Partner:

St. Mary's Hospital/Foundation, Grand Junction