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Positions on 2020 State Legislation

Jul 24, 2020

With little doubt, the 2020 regular legislative session has been unlike any other in Colorado history. For perhaps the first time, the Colorado General Assembly took a recess in mid-March and returned in late May to complete the session. Legislators had to request a ruling from the Colorado Supreme Court on whether the General Assembly is required to meet for 120 consecutive days each January to May or could pause the session in order to resume at a safer time.

In March, Governor Jared Polis issued a "stay-at-home" public health order requiring most businesses to close their offices in order to limit the spread of COVID-19. With doors closed to the public, many businesses and nonprofits furloughed employees. Due to increased unemployment and reduced tax revenues, Colorado's state budget went from having a budget surplus to addressing a historic shortfall. When legislators returned in May, they had to let many bills die to balance the budget. Legislators debated new bills to balance the budget, spend federal COVID-19 relief funds, and make other policy changes in response to the pandemic.

Colorado Nonprofit Association tracked over 70 bills during the 2020 session and took action to support or amend 16 bills. Below is a summary of the key bills followed and supported by the Association and our recaps of and takeaways from the 2020 Colorado legislative session.            

Visit our bill trackers for the complete list of all the bills we actively followed during the 2020 legislative session:

View end of session reports from Aponte and Busam and our staff giving an overview of what passed and what didn't pass.

Legislative session takeaways

1. Legislators cut over $3 billion from the state budget to address the shortfall. The end of session report from Aponte and Busam provides more details on how legislators balanced the budget.

2. Legislators used CARES Act funding to support small employers and augment key public services. Colorado used federal funds from the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act to establish grant and loan programs for small employers for 2020 and future years. Legislators passed several more bills to fund key public services such as support for food pantries, mental health services, and more.

3. Voters will be asked in November to repeal the Gallagher Amendment and freeze current property tax assessment rates. Severe declines in local property tax revenues supporting K-12 schools, fire departments, and health districts will likely occur if voters do not take action this November. The Gallagher Amendment has resulted in an ongoing decline in residential property tax assessment rates to maintain the non-residential property rate and taxation ratio (45% residential/55% non-residential) in the constitution.  

4. Colorado's workers will benefit from several new laws expanding employer benefits. Workers, including nonprofit staff, will be automatically enrolled in a state-managed retirement savings plan unless their employers sponsor a plan already. For the first time, all workers must be provided a minimum of 48 hours of paid sick leave per year by employers starting in 2021.      

5. The Governor signed several civil rights reform bills. This includes repealing the death penalty and increasing the accountability of police officers for interactions with the public and use of force.   

6. Several laws focused on improving unemployment benefits for employers and employees. Public health orders to address COVID-19 resulted in many businesses laying off employees. Legislators took important steps meant to help return the unemployment trust fund to long-term solvency, prevent spikes in employers' unemployment taxes, and provide full unemployment benefits for employees having to separating from employment due to COVID-19.    

7Despite major budget cuts, the General Assembly increased some revenue to fund education and expansion of the state earned income tax credit (EITC). Colorado is one of several states that uses federal taxable income as a basis for calculating state income taxes. Legislators stopped several federal tax breaks on for-profit businesses and high income taxpayers from automatically reducing state income tax revenues (i.e. decoupling). Increased revenues will go into the state education fund and expand the benefit of the EITC.   

8. Several bills passed to support nonprofit fundraising efforts. In November, voters will be asked to loosen constitutional rules to allow more charities to run bingo/raffle games. Legislators also limited civil liability for food establishments, schools, and prisons that donate apparently wholesome food to nonprofits that might otherwise go to waste.

9. State funding affected which changes to behavioral and physical healthcare bills moved forward in 2020. New fees on health insurers and hospitals will provide funding needed to support the state reinsurance program meant to increase assistance for high-risk consumers. Legislators also passed several bills to expand behavioral health services and address the opioid crisis. However, legislation to establish a public option for health insurance did not move forward due to the budget shortfall.

10. Numerous bills focused on improving the tax code. Colorado law now requires clear performance standards and repeal dates for new and renewed tax credits, deductions, and exemptions. Legislators will also continue a task force to simplify state sales and use taxes. However, a bill to establish a tax commission and legislative committee to review tax expenditures did not pass. Most bills to repeal little used tax policies benefiting nonprofits did not go forward this year.          

Key bills for Colorado Nonprofit Association in 2020

HB 20-1022 Sales and Use Tax Simplification Task Force

What the bill does:

  • renews the task force for 5 more years;
  • directs the task force to consider additional issues, including sales taxes collected by nonprofits

Fiscal impact: Increases state expenditures by $42,000 and 0.5 FTE for legislative staff support. 

Our view:  We support continuing the task force for five more years to simplify sales and use tax collection by businesses and nonprofits.

Status: Governor signed

HB 20-1138 Public Real Property Index

What the bill does:

  • Requires state government, local governments, and special districts to report annually on unused properties available to the public for rental or purchase
  • Requires the state architect to create a database listing these properties 

Fiscal impact: Increases state expenditures by $551,000 and 0.8 FTE for database development and updates

Our view: We support developing a database that nonprofits could use to save money by renting or buy unused government properties.  

Status: Died, not funded by House Appropriations Committee.

HB 20-1160 Prescription Drug Transparency

What the bill does:

  • Establishes detailed price transparency requirements for prescription drugs and reporting requirements for drug companies, insurance carriers, and Pharmacy Benefit Managers (PBM).

Fiscal impact: Increases state revenues from fees and fines by over $340,000. Increases state expenditures by $340,000 and nearly 3.0 FTE to oversee reporting requirements. 

Our view: We did not have a position on the overall bill. As introduced, the bill would have required nonprofits that work on issues related to prescription drugs to report annually on gifts received by staff or board members over $1,000 from drug companies, carriers, or PBMs. The bill sponsors decided to remove this requirement from the bill upon hearing concerns from Colorado Nonprofit Association and other nonprofits. 

Status: Died, not taken up on House floor.

HB 20-1203 Helping Colorado Families Get Ahead Act

What the bill does:

  • Increases Colorado's Earned Income Tax Credit (CO EITC) to 20% of the federal EITC (currently 10%).
  • Allows Colorado's Child Tax Credit (CTC) to be available starting in 2021 (currently depends on passage of federal Marketplace Fairness Act)
  • Provides funding by removing application of a federal tax deduction for pass-through businesses to state income tax rate 

Fiscal impact: Net revenue decrease of nearly $58 million in '21-22, increases state expenditures by over $507,632, and adds 7.0 FTE    

Our view: We support the EITC and CTC because they support the ability of working families to become more self-sufficient and economically mobile. These policies help reduce the need and demand for assistance from nonprofit organizations. EITC expansion is partially included in HB 20-1420 (see below).  

Status: Died, not funded by House Appropriations Committee.

HB 20-1296 Civil Action Statute Of Limitations Sexual Assault

What the bill does: 

  • Remove the limitation on bringing a civil claim after Jan. 1, 2021 based on sexual misconduct against a child
    • This includes claims brought against a person or entity who is not the perpetrator as well as derivative claims
    • Currently, the statute of limitations is 6 years and is tolled when the victim is a person under disability or in a special relationship with the perpetrator.
  • Expands economic damages that may be recovered after a plaintiff alleges sexual misconduct 15 years or more after turning age 18
  • Removes an exemption for a claim of negligence based on a sexual assault occurring in medical practice

Fiscal impact: No significant impact on state expenditures and revenues. 

Our view: We support expanding civil remedies and protections for children who are survivors of sexual misconduct. This includes civil suits against businesses, nonprofits, and institutions that fail to address sexual misconduct of employees or their volunteers.  

Status: Passed House. Postponed indefinitely (killed) by Senate State, Veterans, and Military Affairs Committee

HB 20-1335 Colorado Homeless Project Contribution Tax Program (HCTC)

What the bill does: 

  • Repeals eligibility for Enterprise Zone (EZ) Contribution Tax Credits for nonprofits and local governments serving people experiencing homelessness
  • Makes entities providing homeless services eligible for a new HCTC credit
  • Expands the types of homeless services eligible for tax credits
  • Moves administration of the credit from the Office of Economic Development and International Trade (OEDIT) to the Division of Housing   

Fiscal impact: Reduces state revenues by $13 million in '21-22 which incentivizes $52 million of giving. Increases state expenditures by $535,000 and 7 FTE

Our view: Makes changes to expand the benefit of the tax credit for homeless service providers and their donors. Aligns the program with other state housing priorities    

Status: Postponed Indefinitely (killed) due to fiscal impact by the House Transportation and Local Government

HB 20-1411 Behavioral Health COVID-19 funds

What the bill does:  Uses $15 million of federal CARES act money to support behavioral health programs integral to addressing COVID-19

Fiscal impact: Increases state expenditures by $15 million.

Our view: We support this bill to provide more funding for behavioral health services, which are facing increased demand due to COVID-19.   

Status: Signed by Governor

HB 20-1420 Adjust Tax Expenditures for State Education Fund

What the bill does:

  • Increases transfers to the State Education Fund by $113 million in '20-21 and $23 million in '21-22
  • Increases the state EITC to 15% of the federal EITC in 2023
  • Makes filers with Individual Taxpayer Identification Numbers (ITIN) eligible for the state EITC
  • Stops certain federal tax expenditures from the CARES Act and Tax Cuts and Jobs Act from also applying to businesses' taxable income and losses under state law

Fiscal impact: Increases transfers to the State Education Fund by $113 million in '20-21 and $23 million in '21-22. Reduces state revenues by $34 million in '22-23 and $58 million in '23-24. Increases state expenditures by $0.8 million in '21-22 and $0.6 million in '22-23 and '23-24 respectively.

Why we support the bill: 1420 increases state funding in the State Education Fund, expands the EITC for all eligible taxpayers in 2023, and includes ITIN filers in 2022 who pay income taxes but are ineligible for social security. These funds are increased by stopping certain federal tax credits and deductions from automatically reducing state taxes on income and losses of business and high income taxpayers. 

Status: Governor signed.

HCR 20-1001 Amend Constitutional Bingo/Raffle Licensure Requirements

What the bill does:

  • Refers a measure to the 2020 ballot asking voters to make the following changes to the state constitution:
    • Requiring a nonprofit to exist for 3 years (rather than 5 years) before becoming eligible for a bingo/raffle license
    • In 2023, allows the General Assembly to establish how long a nonprofit must exist before being eligible for a license
    • Licensees may pay minimum wage to game managers and operators. Currently, the constitution does not allow charities to pay game managers and operators.  

Fiscal impact: Increases state expenditures by $82,720 in 20-21 and 0.6 FTE. Increases fee revenues by $5,200 in 20-21. 

Our view: We support this referendum to allow nonprofits to be able to obtain charitable gaming licenses earlier in their lifecycle if voters approve this change. Also, nonprofits can more easily recruit and retain game managers and operators with the option to pay minimum wage. 

Status: On Nov. 2020 ballot

SB 20-002 Rural Economic Development Initiative (REDI) Grant Program

What the bill does: 

  • Enhances the REDI grant program for projects that create jobs through new employers, expand existing employees, or create economic diversity and resiliency
  • Local governments, or organizations or individuals working in partnership with a local government, are eligible
  • Authorizes use of funds if a rural community needs assistance due to the impact of a significant economic event

Fiscal impact: No fiscal impact

Our view: We support this bill to provide additional funding for nonprofits in rural communities that partner with local governments on programs that create jobs

Status: Signed by Governor

SB 20-007 Treatment Opioid And Other Substance Use Disorders 

What the bill does:

  • Requires insurance carriers to cover certain levels of treatment and specific medications in accordance with American Society of Addiction Medicine (ASAM) criteria 
  • Prohibit certain providers from denying access to medical or substance use disorder treatment services to persons who are participating in prescribed medication-assisted treatment for substance use disorders.
  • Requires managed care entities to provide coordination of care for the full continuum of substance use  and mental health treatment and recovery services, including support for individuals transitioning between levels of care.
  • Allows courts and parole, probation, and community corrections to use medication-assisted treatment as a condition of participation or placement

Fiscal impact: Increases funding for certain state departments by $27,382 and 0.3 FTE  

Our view: We support this bill to provide additional resources to study and address the opioid crisis in our state.

Status: Signed by Governor.

SB 20-090 Limit Liability For Food Donations To Nonprofits 

What the bill does:

  • Extends immunity from civil and criminal liability to entities that donate food to nonprofit organizations including correctional facilities, hospitals, schools, and farmers
  • Encourages retail food establishments, correctional facilities, and school districts to donate apparently wholesome food to nonprofit organizations for distribution to needy or poor individuals

Fiscal impact: Does not impact state revenues or expenditures

Our view: We support this bill to remove barriers and encourage charitable donations of apparently wholesome food that could otherwise go to waste

Status: Signed by Governor

SB 20-200 Colorado Secure Savings Plan

What the bill does:

  • Creates a secure savings fund and a board appointed by the Governor to oversee the program
  • Establishes an automatic enrollment payroll deduction Individual Retirement Account (IRA)
  • Employees may raise or lower the percentage deducted from each paycheck or opt out of the program
  • Employers that offer a retirement plan to employee may seek an exemption from this program
  • Applies to businesses and nonprofits with 5 or more employees

Fiscal impact: Increases state expenditures by $866,461 and 5 FTE in '21-22 to implement the program.

Our view: Having access to this secure savings plan would allow many Coloradans to start putting money away for retirement for the first time. This program would help employees of nonprofit organizations set part of each paycheck away from retirement even if they work for an organization that has been unable to offer its own retirement plan to employees.    

Status: Signed by Governor

SB 20-205 Sick Leave for Employees

What the bill does:

Requires employers to do the following:

  • Provide up to two weeks of paid sick leave (80 hours) in 2020 at 2/3s of employees’ regular pay if they are diagnosed with or experiencing symptoms like COVID-19
    • Employers may claim federal tax credits under the Families First Act to reimburse their expenses for paid sick leave used for COVID-19
  • In 2021, employers with 15 or more employees must provide 1 hour of paid sick leave for every 30 hours worked up to a maximum of 48 hours per year
    • Employees accrue leave when employment begins and leave may be carried forward into future years subject to 12-month caps
    • Leave may be used for mental or physical health care, child care due to a school closure, and safe time for survivors of domestic violence or sexual harassment 
    • Employers must not retaliate against employees who use leave or exercise rights under this act
  • In 2022, all employers must provide sick leave meeting the standards implemented in 2021.

Fiscal impact: Increases state expenditures by $298,000 and 3.5 FTE

Our view:  We supported this bill because employees of nonprofit and for-profit businesses shouldn't have to choose between going to work sick and keeping a job or earning a paycheck. The COVID-19 pandemic has underscored the need for all employers to offer a minimum standard of paid sick leave to protect the health of the public, sustain the capacity of our hospitals, and protect jobs. 205 implements a minimum standard for paid sick leave that many nonprofits already surpass. 

Status: Signed by Governor

SB 20-217 Enhance law enforcement integrity

What the bill does:

  • Increases transparency by requiring demographic data collection and use of body cameras during public encounters;
  • Removes qualified immunity from officers, and 
  • Penalizes unnecessary use of lethal force.

Fiscal impact: Increases state expenditures by nearly $2.6 million in '21-22 and 4.3 FTE in '21-22 to implement these reforms.

Our view: We support SB 217 because prohibiting excessive use of force and enacting meaningful accountability for law enforcement officers are significant steps toward dismantling systemic racism. Nonprofits must act for racial justice or the work of the nonprofit sector will be in vain. 

Status: Signed by Governor

SCR 20-001 Repeal Property Tax Assessment Rate

What the bill does:

Refers a measure to the Nov. 2020 ballot to amend the state constitution to do the following: 

  • Eliminate the requirement to maintain a property tax assessment ratio of 45% residential property to 55% non-residential (including commercial) property
  • Eliminate the requirement for the General Assembly to periodically adjust the residential assessment rate to maintain this ratio
  • Freeze the residential property tax assessment rate at the current levels of 7.15% for residential property and 29% for non-residential property

Fiscal impact: No state appropriation required.  

Our view: In 1982, voters approved a constitutional measure called the Gallagher Amendment which requires a property tax assessment ratio of 45% residential/55% non-residential be maintained between each assessment cycle. In effect, this froze the non-residential property tax rate at 29% and allowed the residential property assessment rate to decline over time. The residential rate is projected to decline from 7.15% to 5.88% next year.

Repealing the Gallagher Amendment now would freeze the non-residential rate and prevent further reductions in the residential assessment rate. If the latter rate continues to decline, property tax revenues for schools, fire departments, health districts, and other public services that receive this funding will also decline. 

We supported SCR 20-001 because getting rid of the Gallagher Amendment would not only prevent forthcoming declines in funding for local public services, it would stop the trend of increasing the amount of property taxes owed by businesses and nonprofits to maintain the 45:55 ratio.

Status:  On Nov. 2020 ballot

Region: 
Statewide