March 23, 2010 the Honorable Brandon Shaffer President
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March 23, 2010 The Honorable Brandon Shaffer The Honorable Josh Penry President Minority Leader Colorado State Senate Colorado State Senate 200 East Colfax 200 East Colfax Denver, Colorado 80203 Denver, Colorado 80203 The Honorable Terrance Carroll The Honorable Mike May Speaker Minority Leader Colorado House of Representatives Colorado House of Representatives 200 East Colfax 200 East Colfax Denver, Colorado 80203 Denver, Colorado 80203 Dear Friends: As the gavel dropped on January 12, 2010, calling to order this year’s session of the Colorado General Assembly, Colorado’s business community was pleased to hear in your opening remarks a strong, bipartisan and unanimous message focused on the importance of strengthening our state’s economy and protecting and growing jobs. We could not agree with you more – the resurgence of our state from the current economic storm will come through private sector activity that is spurred by government partners creating an environment that provides certainty, stability and predictability. Undoubtedly, this is the most difficult legislative session in recent memory, and the challenge to carry out your stated goal of using these 120 days to help return Colorado’s economy to one that is again thriving has proven difficult to achieve. We recognize that 2010 is an election year, but we are gravely concerned about the partisan politics that are dominating the agenda inside our state’s capitol. We write today to share our serious concerns about the tactics that are being employed to move partisan agendas, which are counter-productive and detrimental to our crucial work together – putting Coloradans back to work and our economy on a sound footing. The legislative decisions before you this year are extremely serious. Know that the business community comprehends the challenge and pressure you and your colleagues are under when resources are limited. We are experiencing the same difficult choices and will continue to do our best to share information that will guide all of us in the right direction. The organizations that have signed this letter see as a key responsibility – on behalf of our members – to work in a collaborative fashion with the public sector to ensure a solid business climate that will allow Colorado to fully compete in a global economy. We are committed to sharing information that will shed light on whether a proposal enhances our business climate, economic prosperity and job growth, or will prove detrimental to those goals. In all instances, we come to you as a partner, armed with relevant information focused on what will lead to the best outcome for Colorado. As always, we strive for an environment that allows for mutual respect for each other and for facts. We commit to act in such a manner, and we ask that you commit to do the same. In that spirit, we come to you today to share our serious concerns regarding several pieces of legislation that we believe harm our business climate or our ability to grow industry and jobs in Colorado, ultimately making our state less competitive and our joint efforts to attract and retain employers more challenging. As you know, these measures are a moving target, and we are working diligently to see these bills postponed indefinitely or amended as needed. However, should these bills reach Governor Ritter’s desk, we will be asking him to take the steps necessary to ensure they do not become law, based on the critical importance of protecting and enhancing Colorado’s economy. The bills are as follows: SB10 –185 Residential Warrant of Habitability (B. Shaffer/Merrifield) This bill modifies residential warranty of habitability laws, which are currently implied into every residential rental agreement. Existing law was put into place less than two years ago following an extensive mediation process. This bill changes the policy by removing the requirement for a tenant to provide written notice prior to a breach of the warranty, and it modifies the standard of condition that would constitute a breach. Additionally, it creates a right of action for tenants including disciplinary action and treble damages. This bill will lead to an increase in rental housing costs, as well as limit the building of new properties, due to possible litigation. HB10 – 1012 Limit Surveillance Workers’ Comp Claims (Pace/M. Carroll) This bill limits the ability to verify the validity of workers’ compensation claims through commonly used fraud detection procedures. While it is unfortunate, the reality is there are abuses of all systems and checks and balances must be required to ensure fairness, especially for those workers who are truly injured. This bill makes it more costly to address fraudulent behavior, which leads to an increase in the cost of doing business. HB10 – 1017 Voluntary Agreements Affecting Rent on Private Residential Property (Kagan/Boyd) This bill alters current state law, passed in 1981, which prohibits counties and municipalities from enacting any ordinance that would control rent on private residential property. The legislation was adopted due to a statewide concern that, if rent controls could be imposed on private properties, investment in rental housing in Colorado would significantly decrease. The bill, as crafted, calls for a voluntary system with local governments, but concerns exist that this opens the door for any remodeling, construction or new development project – regardless of size or scope – to be subject to such requirements. A strong and healthy housing and development market is critical for our state’s future. As noted in a March 17, 2010 Denver Post editorial, 93 percent of U.S. economists stated that a ceiling on rents reduces the quality and quantity of housing available. It went on to quote a Swedish economist, Assar Linbeck, who said, “In many cases, rent control appears to be the most efficient technique presently know to destroy a city – except for bombing.” HB10 –1107 Urban Renewal Area Ag Lands (Fischer/M. Carroll) This bill restricts the inclusion of agricultural lands within urban renewal areas and outlines procedures for county assessors when classifying agricultural land for property tax purposes. In doing so it damages the prospects of additional job growth in Colorado’s fastest growing industry cluster – cleantech – which often has a sizeable manufacturing component and requires large parcels of land adjacent to rail lines. With the enactment of this bill, Colorado will effectively eliminate 12-15 percent of the total number of jobs we could gain in one year. Additionally, this legislation could lead to sprawl, as future developments would be forced to bypass open agricultural land. HB10 – 1263 Limit Income Tax Benefit for Comp Paid (Pommer/Boyd) This bill increases the state income tax on individual total compensation above $250,000 and limits the deductibility of income above that amount for corporations. That means the company pays taxes on an amount over $250,000 rather than deducting it as an operating expense. We encourage job creation and growth in key industries in Colorado, including the retention and attraction of company headquarters and high-paying primary jobs. This bill will damage those efforts – instead, driving headquarters and high-paying jobs away from Colorado and making our state less competitive than our neighbors. HB10 – 1269 Workplace Fairness Civil Remedies Act (Levy/M. Carroll) This bill significantly increases the damages in state employment discrimination lawsuits by adding, for the first time, pain and suffering penalties, punitive damage, attorney’s fees and other remedies already available under federal law. We support workplace fairness and believe that adjudicating the majority of such cases in federal courts, as happens today, serves both sides. Duplicating expanded lawsuit remedies for large businesses already available under federal law is unnecessary and will permit plaintiffs to “forum shop.” Exposing small businesses – currently exempt from federal law – to significantly expanded new liability every time they make a decision to hire or fire will discourage critical small business job creation. Colorado has a balanced business litigation environment compared to other states in our region, giving us a competitive advantage in attracting investment and new jobs. The bill will hurt job creation at a time we cannot afford it. We look forward to discussing these bills with you at your earliest convenience and any other bills you feel critical toward our efforts. Should you have questions please do not hesitate to contact Tamra Ward, senior vice president of public affairs and communications at the Denver Metro Chamber at 303-620-8033. Best regards, Charles L. Ward Don Kortz W. Perry Pearce Chairman Chairman Chairman Denver Metro Chamber of Commerce Colorado Concern Colorado Competitive Council cc: The Honorable Bill Ritter, Jr. Members, Colorado General Assembly .