SESSION HIGHLIGHTS, FEB 29 – MAR 4, 2016
Attorney General Rules on Hospital Provider Fee
Breaking this week is a ruling from the state Attorney General Cynthia Coffman (R) which approved a maneuver to ease the state's budget issues by exempting the billion-dollar Hospital Provider Fee (HPF) program from limits determined by the Taxpayer Bill of Rights (TABOR).
The formal legal opinion does not overcome the unresolved political gridlock on the question of state spending, a prominent topic for debate this legislative session.
Attorney General Coffman argued that the HPF – which is a program that collects fees from hospitals, is matched by federal dollars and helps cover Medicaid costs and other uncompensated care – would meet requirements to qualify as an enterprise fund.
"Today's formal opinion concerning Colorado's hospital provider fee is a thoroughly researched legal analysis based on the language of the constitution and informed by Colorado court interpretations of TABOR," the Attorney General said. "While some may attempt to politicize this legal conclusion, my opinion is based solely on the law and its application to the facts. The debate over whether to create a hospital provider fee enterprise can now shift back to the General Assembly."
This ruling aligns with the opinions of Gov. John Hickenlooper (D) and Democrats in the legislature who want to reclassify the HPF. This move would allow roughly $200 million flexibility for budget writers, but would also put off taxpayer refunds for the foreseeable future; something the Republicans have in the past had issue with. There are now conversations at the capitol about whether and how to push this forward.
Tax-Haven Bill Comes Back for 2016 Session
The House Appropriations committee passed a bill from Reps. Mike Foote (D-Lafayette) and Brittany Pettersen (D-Lakewood) to close offshore tax havens that some corporations use to avoid paying taxes. This bill is very similar to a bill that passed last year in the House, but died in the Senate.
Many large, multinational corporations create subsidiary companies overseas to hide profits and avoid paying state income taxes. This leaves every other taxpayer to foot the bill, or necessitates reduced services like education and transportation funding.
HB15-1346, which will refer a question to Colorado voters on the 2015 ballot if passed, requires corporations filing a combined income tax return in Colorado to include income from affiliated or subsidiary corporations overseas. The money collected, estimated at up to $150 million annually, would go into Colorado’s state education fund.
“When large corporations game the system and hide profits in offshore tax havens, hard-working Colorado taxpayers are left to pick up the bill,” Rep. Foote said. “This is about making sure that multinational corporations pay their fair share just like everyone else.”
“Some big corporations that use tax shelters hurt Colorado small businesses, our schools and our children’s future,” Rep. Pettersen said. “This bill will ensure that these companies, which should be paying their fair share, restore funding back to the state, our kids and their classrooms.”
The bill will now be heard in the House Appropriations Committee.
Rain Barrels One Step Closer to Being Legal
A bill by Reps. Daneya Esgar (D-Pueblo) and Jessie Danielson (D-Wheat Ridge) to allow residents to store rain water in up to two 55-gallon rain barrels for use on personal gardens and lawns passed the House on third reading this week.
“This is a common-sense bill that earned overwhelming bi-partisan support across Colorado,” said Rep. Esgar. “I've heard it from my constituents and others across the state—why can't we collect some rain to water our gardens? I hope the Senate also votes to free the rain barrels so that a simple conservation tool is no longer outlawed in our great state.”
Last year, HB16-1005’s predecessor bill ran into a serious roadblock over concerns that it didn’t protect against injury to other water rights. This year, thanks to collaboration between the parties and the Colorado Farm Bureau, the bill recognizes the state’s prior appropriations system and will allow the State Engineer to address injuries to other water rights should they occur in the future.
The bill passed with partisan support on a vote of 61-3 and now moves to the Senate.
Oil and Gas Commission’s Mission Remains Unchanged
The Senate Agriculture and Natural Resources Committee, chaired by Sen. Jerry Sonnenberg (R-Sterling), killed a bill by Sen. Matt Jones (D-Louisville) that would drastically change the mission of the Colorado Oil and Gas Conservation Commission (COGCC).
This bill, SB16-129, supported by some of the more radical-environmental groups, initially stemmed from a minority report by the Colorado Oil and Gas Task Force which was established by Governor John Hickenlooper (D) through and executive order in the fall of 2014. The task force convened seven times and issued a final report, which contained nine recommendations for the Governor. Those recommendations received the support of two-thirds of the task force members. But not among those, was the recommendation that this bill partially implements.
Of significant concern was that the bill upset the balance that was achieved eight years ago during a complete re-write of the Commission rules. That included several significant first-of-their-kind regulations on frack fluid disclosure, groundwater monitoring, well setbacks, a 1500 percent increase in enforcement penalties and several rulemakings improving local government involvement.
In addition to the Colorado Oil and Gas Association (COGA) and other industry players, the bill was opposed by the Metro Denver Chamber of Commerce, Colorado Farm Bureau, Colorado Concern, National Association of Royalty Owners, Colorado Business Round table, and the Colorado Association of Mechanical and Plumbing Contractors.
Bill Introduced Mandating Strict Liability for Oil and Gas Companies
Rep. Joe Salazar (D-Thornton) and Sen. Morgan Carroll (D-Aurora) introduced a bill this week which he says will hold oil and gas drillers liable for any earthquakes they supposedly cause.
This bill, HB16-1310, attaches the concept of “strict liability” to the production of oil and gas. In tort law, strict liability is an imposition of liability on a party without a finding of fault. The claimant would only need to prove that an act occurred and then the defendant would be legally responsible. This means that oil and gas companies would be considered inherently dangerous and opponents of the bill say that the bill has no basis in reality and serves only to inflame the opponents of development.
Sen. Ray Scott (R-Grand Junction), chairman of the Senate State, Veterans and Military Affairs committee, told Colorado Public Radio that liability would be difficult to prove. He also said that Colorado already has strict environmental guidelines – and he cautioned against targeting an industry that provides a great deal of revenue to the state.
“How much longer do you want to stand on the throat of the oil and gas industry to limit that amount of money that’s being generated by the state of Colorado?” Sen. Scott asked.