2016 Legislative Session Review, 0816 COBJ, Vol. 45, No. 8 Pg. 27
| Author | Jeremy Schupbach, J. |
Jeremy Schupbach, J.
Legislative Update
This was another successful and hard-fought year for the CBA. In an election year that saw much politicking and grandstanding, the CBA both advanced several bills to improve the practice of law and helped kill several dangerous and misguided attempts to harm various practice areas and the judicial branch. In short-it was a busy, involved, exciting, and exhausting session.
As was the case in 2015, the House and Senate again split political control during this session. The Democrats controlled the House of Representatives over the Republicans by 34 to 31 seats. By contrast, the Senate was in Republican hands, but with only a one-vote margin, 18 to 17. This is likely to change with the coming November elections, but at this point it is far too early to accurately forecast the results. It is certain that the presidential and U.S. Senate races and the many initiatives on the ballot will garner much attention and airtime throughout late summer and early fall.
This session again had fewer lawyer legislators than the historical average. This presents both an opportunity and challenge as the CBA works with legislators on complicated measures and technical concerns on matters of law and seeks to educate the legislature about who we are and what we do. This situation is not likely to change much as a result of the November election, though there may be a slight increase in the number of lawyer legislators. In 2016, there were 15 lawyers, according to the Legislative Drafting Office.
It is important to note that the CBA develops public policy and takes positions on legislation through its Legislative Policy Committee (LPC), a panel of 13 members appointed by the president and representatives of the sections. These 13 members-assisted by liaisons and leadership from each section-consider the merits of bills and decide whether the CBA should adopt a position, and, if so, what that position will be.
The 2016 Session in Brief
This year, 686 bills were introduced throughout the session, and 408 have been signed into law. The Governor again vetoed the bipartisan red light camera bill, which the CBA did not comment or take a position on. All bills considered during the session can be found on the Colorado General Assembly website at www.leg.state. co.us/CLICS/CLICS2016A/csl.nsf/MainBills?OpenFrameSet.
Special Session?
It’s not unusual for rumors of a special session to circulate at the end of the regular legislative session, and there were rumors again this year. The Governor has the power to call the legislature back into session to address specific issues for which he sets the agenda and defines the specific issues to be addressed. The hospital provider fee, construction defects, and full-strength beer in grocery stores were all rumored to be potential topics. The prospects for a special session don’t look any better than they did during the session, but now that the Governor has signed SB 197 (the liquor store compromise bill) it is not likely that he will call legislators back between now and the fall elections.
CBA Priority Bills
The CBA tracked and worked on 50 bills in the 2016 session. The accompanying table lists each bill by number, title, CBA position on the bill, and outcome. The CBA opposed 13 bills, supported 25 bills, monitored with no position five bills, and sought amendments to seven bills. We achieved our intended outcome on 40 bills, for an overall success rate of 80%—an outstanding overall achievement for our LPC and our agenda at the Capitol.
Major Legislation and Hot-Topic Bills
The 2016 Session was framed by big-issue bills: a construction defects “package” of five bills, the hospital provider fee, and latebreaking bills on presidential primaries. For the most part, the CBA monitored the issues and the bills addressing them without taking a position or weighing in.
Construction defects was again a major theme this session, with groups working on a group of five bills, including a grand compromise bill, a bill for a pilot program at the Colorado Supreme Court, and three affordable housing bills. As it did last year, the CBA did not weigh in on any of these bills. The grand compromise bill was never introduced, and the Court pilot program bill was killed in committee very quickly.
The hospital provider fee and the subsequent legislation (HB 1420) was hotly debated throughout the session. While the CBA took no position on the issue, the potential impact on TABOR and the state budget was enormous. The hospital provider fee bill provides for collection of revenue from hospitals and matches it with Federal Medicaid dollars. The money is counted as general fund revenue. As such, it affects how the budget and TABOR are calculated. Creating an enterprise out of the fee could generate approximately $500 to $700 million within the general fund, which is money that could be directed to other spending priorities. This would come at the expense of TABOR refunds, and many Republicans believe the move to be unconstitutional. It should come as no surprise that both sides have extensive legal analysis to back their positions. HB 1420 was killed in committee, but it is not the end of the discussion, which will take on new life next year as the overall economy remains questionable.
Presidential primaries became a hot topic at the legislature as a result of the caucus and assembly process. Both political parties struggled with how the caucuses were held and how delegates were calculated and awarded. HB 1454 and SB 216 were drafted in response to constituent concerns, but neither bill survived the session. HB 1454 was killed in committee and SB 216 was laid over until after the end of the session, effectively killing it.
CBA Priority Bills
This year, the Legislature passed all of the bills sponsored or generated by CBA sections this year. We worked with a very supportive legislature and several new legislators to achieve bills that were a priority for our sections. In addition, we worked with several other stakeholder groups and leadership from both parties to promote and achieve our legislative agenda.
The first four bills discussed below were proposed and written by members of the Business Law Section as a means of cleaning up and clarifying the Colorado corporate codes. They are simple but important bills for businesses and how they operate.
Security Interest Owner’s Interest in Business Entity (HB 1270).
Under current law, the Uniform Commercial Code invalidates contractual limits on the transferability of some assets that can be subject to a security interest. In 2006, the Colorado Corporations and Associations Act was amended to clearly and broadly exempt an owner’s interest in a business entity from these code provisions to effectuate the “pick your partner” principle that allows small businesses to control their ownership. This bill narrows the exemption in the Act to that necessary for “pick your partner” and codifies this narrowed exemption in the code.
Limited Liabilities Companies Governing Law (HB 1329).
This bill deletes the requirement that a partner’s contribution to a limited liability company is a prerequisite to becoming a member of the company; clarifies that the tax status of a...
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