Senate Finance [Mar 31, 2026]

Senator Spennavides.

Wright.

LaBelle.

Polker.

Mullica.

Excused.

Excused.

Let's do this.

And I'd like to welcome President Coleman to the committee today because the committee will be more funky and cool with him in it. So with that, let us start off with a confirmation for the Limiting Gaming Control Commission and we have, I believe, Deputy Director Kristen Gregg to introduce Under Sheriff Gregory Demo. Thank you both for being here. And Ms.

I have.

For everybody who's going to come and talk later, the button is on the table. It's not on the microphone, and it's a little gray button that makes the light go on. But please proceed.

Thank you. And before we go to Mr. Demo, let me welcome Senator Snyder, Senator Frizzell, and Minority Leader Simpson to the committee this afternoon. and let them roll call reflect that they are here. And Mr. Demo, thank you so much for stepping up to serve on the commission, and please tell us why you are willing or qualified to do that or whatever you wish to tell us.

Thank you, Mr. Deem. I really appreciate that, and please let the record reflect. Senator Molka is here, and I will just note that the people who get here first get to pick their seats. I'm so sorry. Okay. Do we have questions or comments for Mr. Demo on the Limited Gaming Control Commission?

Madam Chair, in my career, I've seen the effects of persons with gambling addiction, and I hope working with the division, those individuals that want to be put on a list that excludes them on their own free will from the gaming industry is upheld and that would be one of my goals sharing with the other members of the committee their experience and their knowledge to guide me through that process as well as persons identified through our court system and through the Division of Gaming that are no longer fit to be in the casinos for whatever reason.

Thank you, Madam Chair. I move to the full Senate with a favourable recommendation, the appointment of Gergia Demo to the Limited Gaming Control Commission. Thank you.

Senators, Benavides.

Bright.

Gosell.

Kolker.

Mullica.

Simpson.

Snyder.

Coleman.

Madam Chair.

And Senator Kolker.

Is there any objection to the consent calendar for this nomination? Seeing none, congratulations, Mr. Dimo. Thank you so much for stepping up to serve. We really appreciate everybody who steps up to serve on all of our boards and commissions, but I know this seems to have a special place in your heart, and so thank you for your willingness to do it and putting in your time. We really appreciate it. You will be on the consent agenda, which means your nomination should go pretty darn quick. we think through the Senate. Thank you so much.

Absolutely. Okay. First up on our agenda today, we have SB 26137, Measures to Reduce Administrative Burdens. I do want to let everybody in the audience know we have a lot of people signed up to testify on this and other bills today. So we will be limiting testimony to two minutes per person. So if you are waiting to testify and you have three minutes, Cut it down to two while you wait. At any rate, thank you for being here, Mr. President and Mr. Minority Leader. Who would like to begin? Mr. Minority Leader.

Mr. President.

Thank you, Mr. President. Do we have questions for our sponsors? Seeing none, I do have one question. You have four people signed up against, two amend, and 23 for. Would you like to start with four against, amend, or what is your preference?

I think that's a fabulous idea. We will do that. Thank you so much. Thank you. And with that, we are going to call up our first panel. We will take everybody who is in an amend or an against position on this bill, because we have some of those folks remote. So we have Kirsten Forseth, Cindy Copeland, Ian Tafoya, Jessica Herrera, Bev Stables, and Megan Kemp. And we will start with our in-person witnesses, and we will go from my left to my right, and then we will go online. But Ms. Forseth, why don't you begin?

Ms. Stables, please go ahead.

Thank you so much. Ms. Kemp.

Thank you so much. Please hold for questions. We're going to go to our online witnesses, and Ms. Copeland, you are up next.

Thank you. Please hold for questions, and Ms. Herrera, you are up.

Thank you. Members, do we have questions for this panel? Okay. Well, thank you all very much. We really appreciate the time you took to come and testify, and we will move on to our second panel. Thank you. So I'm going to call up Lauren Furnham, Patty Salazar, Nicole Real, and Debbie Brown. Seeing three people come up, I'm going to call Rebecca Hernandez. as well. Okay, and we are going to continue going from my left to my right. Oh, and Ms. Brown will be online. That's great. So, please introduce yourself, and you have two minutes. Thank you, Madam Chair,

Thank you. Please proceed. Thank you, Madam Chair. Good afternoon, everyone.

Thank you. Please proceed. Thank you, Madam Chair, members of the committee.

Good afternoon, Madam Chair and members of the committee. Thank you for the opportunity to testify today. My name is Rebecca Hernandez, and I'm here on behalf of the Denver Metro Chamber of Commerce, representing over 1,200 businesses of all sizes across the Denver Metro region, and 85% of which are small businesses. We're here today to testify in support of Senate Bill 137. From a business perspective, this bill aligns with three priorities we consistently hear from employers and site selectors across Colorado. Economic competitiveness, cost of doing business, and the cost of living, which are our three policy pillars. On economic competitiveness, Senate Bill 137 helps create a more stable and predictable regulatory environment for employers, making long-term decisions about where to invest and grow. That kind of certainty matters, especially as businesses evaluate opportunities across state lines. On the cost of doing business, the proposal moves in a constructive direction by reducing costs and unnecessarily compliance burdens for employers. Even incremental improvements in cost structure or administrative simplicity can have a meaningful impact, particularly for small and mid-sized businesses operating on tight margins. And on cost of living, a strong and efficient business climate benefits Coloradans more broadly. When businesses can operate sustainably and expand, that supports job creation, wage growth, and more stable prices for consumers. We also want to emphasize the importance of clear and workable implementation. Ensuring that businesses can easily understand and comply with the policy will be key to achieving its intended outcomes. Senate Bill 137 reflects a balanced approach that supports both employers and the broader economy, and we respectfully urge your support. Thanks for your time and consideration.

Thank you. Good afternoon, Chair Kipp and members of the committee. I'm grateful for the opportunity to speak with you today. I serve as the president of Colorado Business Roundtable, representing CEOs and senior executives from across Colorado committed to a strong competitive economy. Economic growth is maximized and sustained by achieving a business-friendly regulatory balance and supporting policies that incentivize innovation, job attraction, and retention. Colorado competes for jobs nationally and globally, and we must be mindful of our position in the wider marketplace. Regulatory balance is important, and we're pleased to support SB 137. This bill creates a thoughtful process to identify outdated, unnecessary, or duplicative regulations and streamline requirements while protecting the public interest. This bill helps Colorado's regulatory system become more efficient, modern, and more supportive of a strong business climate. A well-functioning regulatory system is essential to both protecting and enabling economic growth. However, regulations can become outdated, duplicative, or unnecessarily burdensome, creating challenges for businesses and slowing innovation. This bill offers a practical balance solution by establishing a regular review process for state agency rules. This approach helps ensure regulations remain relevant, effective, and aligned with today's economic and technological realities while continuing to safeguard the public interest. We appreciate the thoughtful approach and collaboration behind this bill and the focus on maintaining a regulatory environment that works for both businesses and our communities. We respectfully urge support for this bill. Thank

Chair and members of the committee, thank you for the opportunity to be here today. I'm Candace Carnahan, President and CEO of the Grand Junction Area Chamber of Commerce, who represents businesses across Mesa County and the Western Slope. I'm here in strong support of SB 137. On the Western Slope, policy creation can often feel distant, like something happening in the background, but in reality, it shows up in our front door every single day, inside real businesses, making real decisions. Through our annual survey each year, pressure from state government consistently ranks among the top three barriers to business success in Mesa County. Not one policy, but the cumulative weight of regulation, the uncertainty, the pace, and the layering of requirements that do not always reflect how businesses operate in rural economies like ours. It can be easy for western Colorado and rural communities to feel removed from these conversations. our voices are further away. But today, I drove 195 miles to be in this room because this matters to the businesses I represent. At its core, this conversation is about good governance. We all share the same goal, strong communities, and a healthy economy. And that requires thoughtful policy, but also transparency and a willingness to evaluate how these policies perform once they are in place. Just as important as passing policy is taking the time to circle back and understand how it is working in practice so we can continue to learn and work together toward a true economic stability in all corners of Colorado Because the difference between intent and outcome matter I speak with businesses every single week who tell me they want to grow. They see the opportunity, but navigating increasing complexity and uncertainty tied to regulation is dampening their ability to expand and invest. SB 137 creates an opportunity to pause, evaluate, and better understand real-world impact before adding additional layers. That kind of transparency and accountability is not a barrier to progress. It ensures progress is sustainable. And for communities like ours on the western slope, that matters. Because when businesses are confident in the environment they are operating in, they invest, they hire, and they grow. That is what drives long-term economic vitality across our state. And on behalf of Western Slope businesses, I respectfully ask you to support SB 137. Thank you.

Sure. Madam Chair, members of the committee, thank you for the opportunity to testify today. My name is Jeff Thormitzgaard, and I'm representing Colorado Springs Chamber and EDC. I'm here in support of Senate Bill 137. At its core, this bill is about predictability and functionality in our economic environment. Two things businesses rely on to make decisions about hiring. Investment and growth. Right now, one of the biggest challenges we hear from employers across the sector, whether it's construction, health care, advanced manufacturing, is uncertainty. When policies are unclear, inconsistent, or difficult to navigate, it slows down projects, increase costs, and in some cases, the businesses look elsewhere. Cinepo 137 helps address that. It provides clearer rules of the road and more stable framework that businesses can actually plan around. That matters not just for large employers, but especially for small and mid-sized businesses that don't have teams of lawyers or compliance staff to figure these things out. From Colorado Springs perspective, we are competing every day for jobs, for capital, and for talent, not just with other regions in Colorado, but with other states. We can point to regulatory environments that are fair and understandable and consistent. That's a competitive advantage, and we need that. The bill also sends an important signal that Colorado is serious about being a place where business can operate with confidence. While still meeting the state's policy goals, the two things are not mutually exclusive, and the bill strikes that balance well. At the Chamber, our role is to advocate for a strong business climate that supports job creation, wage growth, and long-term economic vitality. 137 moves us in that direction and we respectfully ask for your support thank you very much thank you

Thank you. Sure.

Thank you. Please hold while we go online. And Mr. Nava, you are up.

Thank you so much. Members, do we have questions for this panel? Again, you all seem to have answered all of our questions up front, so thank you very much for your time. I do want to say, rather than driving 195 miles or limping over when you are on a device that I would personally find challenging to navigate, you are always welcome to come and testify online. That is one of the great things that we have that was one of the positive outcomes from the pandemic. So please, you are always free to testify remotely. Next up, we have Nick Hoover, Ted Lighty, Tony Milo, Carly West, Karen Bigelow, and either Diana or for Adam Ekman. I believe it is going to be one or the other. But why don't we start with you, Mr. Hoover. Ready? We are ready for you.

Thank you so much. Mr. Leidy, you are up next.

Thank you so much. Please hold for questions. And I think, Mr. Griesner, you are here instead of Carly West.

Proceed.

Thank you. Please hold for questions. We're going to go to our online witnesses and Mr. Milo, you are up first.

Thank you so much. Please hold for questions, and Mr. Ekman, I believe.

Members, do we have questions for this panel? Senator Snyder. Thank you, Madam Chair, and thank

Mr. Riesner. Thank you, Madam Chair. Thank you, Senator. I think that this bill and the reason that we're here today supporting it is because this is a really positive step in that direction of trying to influence the rulemaking process. And especially what I was referring to with our industry specifically, the volume that we've been through and are still going through in rulemaking in our sector, we are deeply involved in that and deeply involved in the stakeholding process in that as you would be with any piece of legislation that goes through this building. However, I think when you have continuous rulemaking going on for year upon year upon year, it starts becoming really hard to track what's coming out of that and what's piling up, for lack of a better term, inside of that. So I don't know if this directly answers your question, but I think that this bill is a really good start in trying to influence that process a little bit. We're not supporting this legislation with the expectation that there's going to be some sort of a massive rollback in rulemaking. What we see is the benefit coming out of this is an opportunity, just creating another opportunity for the legislature itself to say, you know what, we want to take a closer look at this and make sure that it's not duplicative or redundant or costing too much money or whatever the other criteria is outlined in the bill. Thank you.

Madam Chair, members of the committee, I want to thank you for your time today. My name is Rich Werner. I'm the policy chair for the Economic Development Council of Colorado, representing over 300 economic development professionals in the state of Colorado, along with their partners in the public and private sectors. I'm also a member of the Northern Colorado Legislative Alliance, which you'll hear from here shortly. We enthusiastically support the passage of Senate Bill 137. Yes, we support a business-friendly environment. Many of the speakers that you've heard from talk about that. But as this progresses, it is critical that you apply a process that systematically applies an economic development lens that addresses the cost burden to not only our businesses but our communities themselves. This bill addresses a five-year window to examine regulations. But as you take the first step in addressing the positive and negative consequences of your actions as a legislative body, It is important to note that you are all running at a clip of approximately 3,000 bills that you have passed in the past five years. So that makes it a little difficult. We understand that every bill has certain reasons and certain meanings, and to the prior comments before, it's really about that rulemaking process. The state has placed an emphasis on health and welfare of its citizens under the current administration, and we applaud that intent. But when a legislative body hands the reins to rulemaking to individual departments, the side effects can be, frankly, longer and more severe than some of the side effects you see in pharmaceutical commercials. The rulemaking that occurs has a cost effect on everything. It's not enough to say corporations will adjust, corporations will pay. When you change the rules in agriculture and farming, the cost of eggs go up. When you legislate water, our costs go up. When you legislate wastewater, our costs go up. And that's just not a utility bill. It's the cost of new infrastructure. It's the cost of treatment. It's the cost of housing. It's a very indiscriminate system, as you know. And this ecosystem that we are all blessed to live in and work in, as we live in the best state in the country, frankly, we need to be really thoughtful about the fixes on some of these issues. So let's maybe start with 250 bills a year.

Can you please wrap up your comments?

Oh, I still have a couple seconds?

Okay, we're good.

Understood. It's the indirect and induced impacts that are measured in many ways. Please consider the economic development lens at a local and state level as we work to provide meaning deregulation that still protects our quality of life while allowing business and our communities to flourish.

members of the committee. My name is Parker White. I'm the Director of the Colorado Competitive Council, and we are here today in strong support of Senate Bill 26-137. Regulation plays an important role in protecting both the public and ensuring fair markets, but the cumulative burden of regulations can also discourage investment, increase costs, and make it harder for businesses and consumers to access affordable goods and services. When rules pile up over time without consistent evaluation, they can create unintended inefficiencies that were never intended by policymakers when they were written. Put simply, this bill strengthens existing processes by making regulatory reviews more effective. Instead of simply checking a box, agencies would be required to look closely at whether rules conflict with one another or duplicate existing requirements. Senate Bill 26-137 also asks agencies to consider whether rules have become outdated or obsolete. Markets evolve, technology advances, and business models change rapidly. A regulation written for yesterday's economy may not fit today's reality, and continuing to enforce outdated requirements can unintentionally hold back progress and limit Colorado's competitiveness. The bill also requires examination of whether agency funding matches the agency's regulatory requirements. Good policy shouldn't only exist on paper. It should work in practice. If a rule is not achieving its purpose or if the resources to implement it are not there, that deserves attention and correction. Most importantly, the bill requires agencies to weigh whether the burdens placed on businesses and consumers are justified by the societal benefits created. A rule may deliver value, but if the cost to comply is disproportionate to the benefit achieved, it is appropriate for the state to take a second look and for lawmakers to have the opportunity to weigh in. For Colorado's business community, predictability and efficiency in the regulatory environment are essential to maintaining competitiveness. When regulations are clear, coordinated, and regularly evaluated, businesses can invest with confidence, hire workers, and deliver services more efficiently. Thank you for consideration. We respectfully urge your support for this bill.

Thank you, Chair and members of the committee. My name is Kevin McFatridge on behalf of the Colorado Association of Health Plans. I am here today in support of Senate Bill 137. 137. At its core, this bill is about something we talk about often in this building, ensuring that regulation keeps pace with reality. Over time, even well-intentioned rules can become outdated, duplicative, or unnecessarily burdensome. Senate Bill 137 creates a structured, thoughtful process to periodically review those rules and ask a simple but important question, are they still delivering value? From a health plan perspective, our members operate in one of the most highly regulated environments in the state. We support strong consumer protections, but also, but we also see firsthand how overlapping or outdated requirements can drive administrative costs without improving outcomes. Those costs ultimately show up in premiums. This bill does not eliminate protections. Instead, it strengthens accountability by requiring agencies to evaluate whether rules are effective, coordinated, and aligned with their intended purpose. It also better integrates that review into existing SMART Act processes, which promotes transparency and legislative oversight. We also appreciate the bill's focus on identifying redundancies and reducing unnecessary administrative burden, particularly where there is no clear public benefit. That is a common sense approach that benefits agencies, regulated entities, and consumers alike. In a year where affordability continues to be a top concern, this type of regulatory discipline is an important step toward ensuring we are not adding cost without value. For those reasons, CAP respectfully asks and urges your support for Senate Bill 137. Thank you.

Thank you, Madam Chair, members of the committee. My name is Joe Rowan. I am a board member of the Northern Colorado Legislative Alliance which represents both the Fort Collins Loveland Greeley Chambers of Commerce roughly 2 members of that are not just business owners We We also residents We also interested in quality education We're interested in clean environment. And so we appreciate a lot of the efforts that have been made by the state to address those concerns. But in our support for 137, which is very strong, we are asking you to indulge in three very difficult challenges, both for legislators and for regulators. It requires humility, restraint, and candor. And those are three of the things that are very hard to find in this environment. As has been mentioned, best intentions of legislation often run aground when it gets to the regulatory process, where again, the checks and balances are much more opaque. A lot of businesses find out about whether or not they're in compliance or not when complaints are made, because we don't necessarily follow every movement of our regulatory agencies. And under 137, it actually would require those agencies to express a little bit of humility that maybe they're overstepping. Maybe we got it wrong. Maybe we don't have it quite right, and it's time to modify. It's also going to require some restraint. The best is not always what is the best outcome from an environmental regulatory perspective may not be the best economic outcome, which, again, will cause those environmental concerns to fall apart when our economy starts to suffer. It also requires candor. And that means being honest about whether or not this is truly in the best interest of all of society or just segments of it. And therefore, we ask your strong support for 137. Thank you.

Senator Mullica. Thank you, Madam Chair. And still trying to figure out if the business community likes this bill or not. Hopefully we can find out in future panels of witnesses. And look, I like this bill, and it seems like I just keep liking it more and more with every panel of witness that comes up testifying in support of this bill. And so I appreciate that. But I have a question for the gentleman on my left here, because I did find the testimony that you offered to be pretty, you painted with a pretty broad brush. And I appreciate what's trying to happen here in Senate Bill 137. But, you know, I guess I want to try to understand from your testimony your thoughts on what role the government does play, because I believe that, yes, we can be more efficient. Yes, we can be better. but there's also a role the government plays in protecting our communities and making sure folks are safe, that they have clean drinking water, that they have safe communities. And so I just want to try to determine if that's the same viewpoint that you have as well with the testimony that we heard.

Senator Mullica. And I guess I appreciate that example, but I think at the crux of that, we want clean drinking water for that community. Absolutely. And that's not just a given unless you want to take it out of the creek and boil it or do that. And so, you know, I think that there's obviously a balance, but I just want to make sure that I think for the folks who are listening at home and we look at this bill that there is a role for the government. And there is a role for what we are doing in this building, you know, and really trying to be a voice for our communities and try to make life better for folks. can we be better is I think 137 trying to do that. But I just want to be clear that we do have a role to play, and I think it's an important one to make sure that we are providing, you know, deliverables to the people of Colorado and making sure that their lives are a little better. And so I don't want to discount that, even though I think in the same breath we can say that we can always be better.

Yes, thank you, Madam Chair. I agree with you wholeheartedly, and I want to make sure that you understand that my comments are directly related to the experiences of the communities that we all live in. There is not a community or a person, I believe, in this state who does not believe we should not be addressing environmental concerns, infrastructure deficits, all of these things. This is what this body concentrates on every session. We understand that. When you, as a body, produce a bill and a fiscal note, typically that fiscal note addresses the cost of implementing that bill. Typically it is a FTE administrative focus. From the economic development lens, what we encourage is that when every bill comes to fruition, we are looking at what is already on the books. You've heard a lot today about redundancy and eliminating redundancy. As to your correct point, we can always do better, and we agree. So I don't think there's any disagreement with you, Senator, whatsoever. We just need to take into account the effects on all of our citizens as to the cost of not only doing business, but making a better place to live.

Senator Snyder. Thank you, Madam Chair. And Mr. Werner, at the expense of giving you unlimited airtime, I have a question for you also. It's pretty much the same question I asked the gentleman from API at the last panel, because I see how legislation gets enacted, gets passed and signed, and it often just defers to rulemaking. Oh, they'll make rules around this. But I know in those August meetings you know the only people that are really there are industry representatives and lobbyists and they able to have you know an outsized voice And I think I just trying to tie that in with how does that process do you see that as contributing to the perceived overregulation of Colorado? And I just thought if you had some thoughts there, I'd appreciate it.

And do you think that that, because I've noticed that same process where we're not even done making rules on a bill and another bill gets passed and we're doing it, but do you think that leads to more of the confusion and the discomfort and the cost to the industries that are affected by that process?

Thank you. Do we have further questions for this panel? Okay, thank you so much for everybody for being here today. We are going to call up our last panel, which will have Michael Smith, Amy Goodman, Tim Siebert Sherry Lynn Boyles and this is the last call for witnesses as well because some of those witnesses are remote so if you have not signed up to testify and you have or you showed up late and your name had already been called this is your time to come forward we have two empty seats and if those are not filled they will remain unfilled we also should have a couple of our folks online I believe but sir we will start with you You have two minutes.

members of the committee. I'm Amy Goodman with the Colorado Bioscience Association, and I'm here today to voice support for Senate Bill 137. Colorado's life sciences ecosystem is an innovation engine employing more than 41,000 Coloradans with an economic impact exceeding $52 billion. Our ecosystem is developing life-saving and life-changing innovations, including rapid diagnostics that identify aggressive forms of cancer earlier, needle-free injection systems delivering critical vaccines to children in the developing world, and surgical technologies that reduce patient recovery times. CBSA champions the health and growth of this community, which has raised more than $10 billion over the last five years. Yet we are also at an inflection point. States across the country are making aggressive coordinated investments and making concerted efforts to attract innovation companies and advanced manufacturing. This is an especially critical time for life sciences growth because of national and global forces driving companies to look for pharmaceutical onshoring opportunities. But Colorado has not yet been chosen for any of these opportunities. Our recent analysis of competitive life sciences site selection processes shows that Colorado has lost major life sciences investment opportunities to other states, including Ohio, Maryland, and Texas. These missed opportunities represented more than half a billion dollars in capital investment and more than 1,000 high-paying jobs. Site selectors tell us clearly, Colorado cannot compete on great weather and mountains alone. Companies evaluating locations for research and manufacturing facilities will look elsewhere if Colorado state regulations needlessly decrease speed to market, increase cost, or conflict with or duplicate federal regulations. As a highly regulated industry with a long capital-intensive development cycle, before any revenue is generated, overly burdensome state regulations are especially damaging. To keep unnecessary, ineffective, unduly burdensome, and sometimes harmful overregulation from getting in the way, we ask for a yes vote on Senate Bill 137 Thank you for your time Thank you Members do we have questions for this panel Seeing none thank you so much We really appreciate you being here today Let us call our sponsors back up

Thank you very much, Madam Chair. I move L001.

Thank you very much, Madam Chair. A couple of things. Pace three lines one through two. It removes language that would have restricted state agencies from doing the sunset reviews during the timeline that they already have a scheduled sunset review. Also on page 4, lines 5 through 15, it removes language required in a review of whether a rule creates administrative burdens without a corresponding public benefit. We receive requests from interest groups to remove this language because the corresponding public benefit isn't defined already in law and would be difficult to define in this bill. On page 4, lines 23-27, as well as page 5, lines 1-3, clarifies the current process for a committee of reference to make a recommendation for a sunset review or an audit of a program function. And then lastly, on page 5, lines 1-3, L001 clarifies that the bill does not apply to any collective bargaining agreements. We ask for an aye vote. Thank you.

President Coleman. Thank you very much, Madam Chair. I move L002.

Thank you very much, Madam Chair. This amendment removes language related to the federal government in Section G. Again, just something else that was asked of us by our amazing committee members, one in particular. We asked for an aye vote.

No, Madam Chair.

President Coleman. Thank you, Madam Chair. Good bill vote, yes.

Thank you, Madam Chair. I'm going to be a little redundant and talk a little bit more about the, but first off, thank you to everybody that testified in an abundance of support and even the folks that were suggesting amendment and were opposed. The bill is really a thoughtful approach of, I would characterize it as a first step in a direction where I think there's room for even further conversation in this space and I reject the notion that we can't have both, that we can't have a robust regulatory environment that is helpful and creates environment where businesses can thrive in this state. And I think we're not quite there, so this is an effort to kind of move in that direction and would ask for your support today.

Senator Snyder Thank you Madam Chair and thank you to the bill sponsors You know this is an effort It not brand new It been going on a couple years I know the Colorado and the Metro Chamber have been leading an effort to try and get something like this going They started out asking for certain departments to be audited and what have you. This really is a good bill for what we need to have a continual process where we're looking at the regulations we have. But times are changing and circumstances are changing even faster. And I think that's part of the reason why we need something like this. We're not keeping pace, culling through and see what is not working, what we can get rid of. At the same time, we recognize regulations aren't pulled out of thin air. There's a good reason behind a lot of them. But I really do appreciate this continued effort in this direction, and I'll be glad to support it today. Thank you.

Mr. President. Thank you very much, Madam Chair. I move Senate Bill 137 to the committee of the whole with a favorable recommendation to the, oh, approves. I'm so sorry. Appropriate motion would be to the appropriations committee with a favorable recommendation to then be on the consent calendar after unanimously passing out of appropriations.

Okay, Ms. Rudebush, please call the roll.

Aye.

Snyder.

Madam Chair. Yes. Congratulations. You are on your way. Well, maybe condolences. You are on your way to the Committee on Appropriations. next up we have SB 26141 wildlife collision prevention and I see our sponsor just our second sponsor just entered the room 300 witnesses on the next bill yes And I will remind everybody on the committee that this bill was already heard in transportation and local government. so this bill has already been heard by a committee and sadly it will also be motioned to go to the

Senator Roberts. Thank you, Madam Chair, and thanks to the good minority leader for his partnership on this. And he's right. We heard a bill in this committee last year to fund the same thing that we're trying to fund, something that works incredibly well at reducing animal vehicle collisions and saving lives, both animal and human. But the funding mechanism is very different than what this committee heard last year. So what we're proposing in Senate Bill 141 is an opt-out $5 fee that would be collected at the time of your annual car registration. So you don't have to pay it if you don't want to, but if you do want to contribute $5, it would go to what we're calling the Collision Prevention Fund, which would be split 75% to the bridge and tunnel enterprise within CDOT and 25% to CPW, which is an enterprise in and of itself. CPW helps in terms of land acquisition and habitat connectivity with these projects. And so that's the proposal that's in front of you and particularly pertinent to the Finance Committee. I'm happy to answer questions about how the bill works. other than that. I will just say before we get into testimony, we do plan to offer two amendments when we get to that today. You'll hear from county clerks in a little bit. L003 is an amendment that was brought after further discussion with the county clerks in addition to the amendment we adopted with them last week. This is going to ensure that they get the information that they need to talk to customers, talk to Coloradans about what this new opt-out fee is and ensure that they get that material by December 1st of this year because this all begins on January 1st of next year. And then the second one we can talk more about when we get there, but at the suggestion of Senator Mullica, this will ensure that, and we think it's a good idea, that Colorado companies are given preference for these projects. Thank you so much.

Senator Mullica. Thank you, Madam Chair, and thank you, sponsors. and on amendment L4 specifically, I know we had conversations in the previous committee about it and I've actually had offline conversations with Ms. Hadaway. And so maybe during testimony, I would love to maybe speak to you offline because I think there still may be some conversations on what it looks like from a regional standpoint without necessarily, I know I'm not from rural Colorado and I'm not an expert on rural Colorado, but specifically language just on contracting with regional contractors of a project to maybe just have them look maybe a step further forward. and what that looks like. But would love to maybe talk to you here in the next few minutes about what that looks like. And I don't know if Ms. Hathaway is going to be testifying or not, but really appreciate the work that you've done and the conversations that you all are willing to have with a front-range legislator as rural legislators.

Senator Roberts, you look like that. Well, happy to chat more during the amendment phase on and offline. And I think Ms. Hathaway signed up for questions only. Thank you.

Good afternoon, Madam Chair and Honorable Members of the Committee. My name is Patricia McLaughlin. I'm here today representing the 60,000 members of the Colorado Sierra Club to ask you to vote yes on SB 26141. The bill contains a lot of information and statistics regarding the need for this bill, and you're going to hear from probably a lot of speakers, so I'll be brief. This bill is personal to me. Before my recent move to the Front Range, I lived in Breckenridge for over 20 years. On a night several years ago, I was coming home from a dinner at a friend's house outside of Silverthorne. As I rounded a curve on a dark stretch of Highway 9, I encountered a group of elk crossing the highway. Fortunately, I was able to swerve and miss them. If I had been a little faster or been a few seconds earlier, I would have become a statistics, one of the 7,500 Coloradans that collide with wildlife every year. Voluntarily adding $5 to my Keep Walk Colorado Wild Pass to build and maintain more wildlife passages over and under highways is a small price to pay to save a life. Thank you, Senator Roberts and Senator Simpson, for your bipartisan sponsorship of this important legislation. The Colorado Sierra Club respectfully asks that this committee vote yes on SB 26-141 for the wildlife collision prevention. Thank you.

Good afternoon, Madam Chair and members of the committee. I'm Jen Clanahan, Executive Director of Colorado Nature League. We're a coalition of scientists, sports people, and conservationists working to conserve Colorado's native wildlife and habitats because healthy functioning ecosystems require healthy populations of native species fulfilling their ecological roles. Thank you for the opportunity to testify today in support of SB 141. Scientists have found that connectivity of habitat is crucial for wildlife survival. Wildlife needs to be able to move safely from winter habitat to summer habitat, as one example. They may need to find food or mates. Connectivity supports habitat resiliency and enhances the ability of wildlife to respond to environmental changes of which there are many these days Human development, and especially roads, threaten wildlife habitat. Threats include not just being killed on the road, but roads also provide a vector for invasive species that weaken habitat. Roads also sever one area of habitat from another. When wildlife are stranded in smaller and smaller areas of habitat, they are more prone to stressors and those populations can wink out. Wildlife bridges help tremendously. They allow wildlife to move safely without the danger of being killed on the road or causing accidents for people. Wildlife can move to different areas of habitat to allow environmental recovery from wildfire or other environmental changes. They may go in search of mates to avoid the inbreeding that causes weakened populations which make them more prone to fall prey to other stressors. There is no question, wildlife needs large areas of habitat connected to other core areas of habitat by corridors. Colorado values our wildlife and should be doing more to protect it. As our state grows and more development takes place, more needs to be done to protect wildlife and the outdoor quality of life. In this time of climate change and biodiversity crisis, it's even more important. I respectfully ask for your yes vote for SB 141. Thank you.

Ms. Rodriguez, you are up next. Good afternoon, Madam Chair and members of the committee. My name is Mary Rodriguez, and I thank you for the opportunity to speak here today. I'm a resident in the town of Castle Rock, and I'm here in support of Senate Bill 141. On September 29th, 2024, at approximately 8 p.m., my parents were traveling home along U.S. Highway 85 and Castle Pines on their way back from a weekend in the mountains. A vehicle on the oncoming traffic side of the highway was coming at the same time as my parents and struck a roughly 700-pound cow elk, launching it into the air and onto the oncoming traffic side of the highway. The elk came from above and crashed directly through the windshield of my parents' vehicle, stopping the car dead in its tracks, killing my dad instantly. The head and the neck of the animal was on top of my mother, pinning her down in her seat. All she could do is sit there helpless while her husband of 55 years lay lifeless next to her. Thankfully, she was not killed. However, she sustained some injuries. The other driver survived the accident. For the last 18 months, my family and I have been petitioning for wildlife fencing and wildlife crossings along U.S. Highway 85 and Castle Rock between Daniels Park Road and Happy Canyon Road where the accident occurred. Had there been wildlife mitigation systems in place, my dad may still be here today. We will no longer be able to see his grandchildren grow up or celebrate many more milestones with our family. He's gone. We cannot get him back over something that could have been prevented. My family and I have petitioned for wildlife mitigation systems to be implemented in that area where my father was killed. The feedback we have received from the community has been overwhelmingly positive in support of these efforts for wildlife mitigation. People do not feel safe traveling that highway and have had similar run-ins with wildlife there. I'm happy I am here today in support of Senate Bill 141 as I feel it is imperative that our state has the proper funding to create safe passage. for wildlife and humans alike and gives people the opportunity to make a contribution to such an important cause will absolutely save lives. Please vote in favor of Senate Bill 141.

Senator Frizzell. Thank you, Madam Chair. Not a question, but I also wanted to thank Ms. Rodriguez for coming to testify today. This is a really important bill, and you and I have had some email communication, so I'm very grateful for you telling your very painful story. And this is an important bill. In Douglas County, we have Highway 85, which is where Ms. Rodriguez's father's accident was. But we also have Highway 83, and this is a significant issue in Douglas County. So thank you so much for lending your voice to this policy. Thank you.

Thank you so much, Madam Chair. Good afternoon, everyone. My name is Molly Fitzpatrick, and I serve as the Boulder County Clerk and Recorder, and I'm also one of the Motor Vehicle Technical or Legislative Co-Chairs with the Colorado County Clerks Association. and Colorado County clerks will be responsible for implementation of this bill and the administration of this bill. And over the past few weeks, we have worked closely with sponsor Senator Roberts to request a handful of changes that would support a smooth and effective implementation and just want to give credit to Senator Roberts. He's been a great partner in this process and we appreciate his willingness to offer amendments that will alleviate some of our concerns. One of our concerns has been around the alignment of the educational materials and education of the program, along with the implementation of the fee. And so that alignment is included in one of the amendments that Senator Roberts mentioned. And so we respectfully ask for your support of that amendment. And as we move forward, we continue to look forward to productive conversations with the bill sponsors as well as the Department of Natural Resources to ensure successful implementation. So again, I want to thank Senator Roberts for the thoughtful engagement that he's offered on this bill and to address some of our concerns regarding implementation of this bill. So thank you so much

Thank you, Madam Chair. Thank you, members of the committee. My name is Skylar McKinley I here on behalf of AAA and our 800 members in Colorado Colorado drivers know exactly what this bill is about because Colorado is a national leader in wildlife crossings with over 100 structures We have the data showing that these work when they're deployed. We have a bipartisan record of taking this issue seriously as a state, including the foundation that this body laid four years ago in SB 22151. All this to say, we know how to do this. What we lack, like we lack in so many issues, is a reliable, dedicated funding stream to to keep building. This bill fixes that. Since 2010, wildlife vehicle collisions have killed 48 Coloradans and injured more than 5,000. AAA members who walk away from those crashes still face repair costs that run into the tens of thousands, a number that climbs every year as vehicles get more sensor laden and expensive to fix. Colorado drivers feel that in their premiums, by the way. I should say, I looked this up the last time I testified on this issue four years ago. The average repair cost in our data for a wildlife collision was around $5,000. Now it's north of $10,000. Cars have gotten more expensive to fix. There's a labor shortage for repair, that sort of thing. I would say that since this is the finance committee, the fee discussed here is optional. No driver is required to pay it. But drivers recognize the instinct. At the AAA level, peace of mind on the road is why 65 million Americans belong to our organization. We've grown every year for 125 years. We do two out of every three road service calls in America. All of that and our members, most of them, never use our services, not even once. but they're happy to pay the $79 per year fee to be a member for peace of mind. For most folks, that same math applies here. For an optional $5 toward infrastructure that keeps them and their highways safer, most of them won't think twice. Many will quietly applaud the option. Some will opt out, and this bill gives those folks that freedom. I know that asking for an increase in registration fees sounds funny coming from the car lobby, but Colorado has a real chance to be the state that gets this right. we already have the model to prove it we just need the funds this bill solves that but yes thanks very much excellent timing thank you so much

Thank you so much. And we'll go to our last witness online, Commissioner Stevens. Nice to see you. Nice to see you as well. Good afternoon, Madam Chair and committee members. My name is Kristen Stevens, and I'm a Larimer County Commissioner. I serve as the Transportation Chair for the Counties and Commissioners Acting Together, also known as CCAT. CCAT works to bring a unified county voice to the capital in support of opportunity, equity, and sustainability for all Colorado communities. I am here today in strong support of SB 26141, Wildlife Collision Prevention. First, I want to thank the bill sponsors and stakeholders for bringing forward a thoughtful, data-driven approach to addressing wildlife vehicle collisions, an issue that impacts counties across Colorado in very real ways. In Larimer County, we see firsthand the risks and consequences of wildlife collisions along key corridors such as Highway 287 and Highway 34 and other high traffic areas that intersect with critical migration routes. Like many counties, we are actively working on wildlife crossings and mitigation projects, but funding constraints continue to limit the pace and scale of this work. And Larimer County is not alone. Across CCAT member counties, from mountain communities like Summit and Eagle and Pitkin to rural and western slope counties, local governments are partnering with CDOT and Colorado Parks and Wildlife to advance wildlife crossing infrastructure that protects both residents and Colorado's iconic wildlife. These projects are essential, but they require sustained, reliable funding to be successful. Senate Bill 26-141 provides exactly that. By creating a dedicated opt-out funding mechanism, this bill generates new revenue to support wildlife safe passage projects. Importantly, it does so without diverting limited local or state general funds from other critical priorities. Ultimately, this is about saving lives, both human and animal, while preserving the natural heritage that defines Colorado and supports our economy and our quality of life. On behalf of CCAT, I respectively urge your support for Senate Bill 26-141. Thank you for your time, and I'm happy to answer any questions.

Senator Mullica. Thank you, Madam Chair. Just a question for Ms. Hathaway. Looking at Amendment L-4, it references existing statute surrounding kind of CDOT's policy around contracting with in-state contractors. And I've spoken to Senator Roberts offline a little bit. And obviously where some of these projects potentially will be are in the more rural areas. And I think that there's a strong benefit to working with contractors in that area when possible. And so just kind of wanted to get your thoughts or your willingness to kind of have that conversation of definitely not trying to tie anyone's hands or stop any projects, but adding you know maybe another layer when it comes to these projects to really kind of look at regional contractors of where the project happening to try to see if some of those locals can benefit as well and just wanted to kind of get your sense on your willingness to have that conversation Thank you Ms Hadaway Thank you

Thank you. Senators, any more questions? Thank you both for coming for the questions-only portion of our agenda today. We really appreciate you both being here. Thank you so much. Okay, we've already had our last call, so that ends the witness phase. Let us move on to the amendment phase. And it looks like we have two amendments, and Minority Leader Simpson is a member of the committee, so he may move them if he wishes.

Thank you. Please tell us about L003.

Thank you, Madam Chair. So this is the amendment that Clerk Fitzpatrick mentioned. This will ensure that the education campaign and materials are delivered to the county clerks no later than a month before the fee begins, but hopefully come sooner than that as well. Thank you.

Minority Leader Simpson. Thank you, Madam Chair. I move L-004.

Okay. In response to the urban legislator who really wants to be a rural legislator. We're trying to work in that space of trying to recognize the opportunities for these projects to be constructed with folks from rural parts of the state. So this is, again, as referenced, a small step in that direction, and CDOT's still open to the conversation of how we accomplish what the urban legislator that wants to be a rural legislator really is trying to get at. I ask for your support.

Senator Mullica. Thank you. Madam Chair, and to our rural legislators who I think want to be rural legislators, I appreciate the work on this and the continued conversations, and just appreciate CDOT being willing to have that conversation to kind of look at that permissive next step, just trying to, I think, ensure that the communities that are impacted, that we – I think this bill has a lot of wins in it already, but not letting a potential win slip by us. And so I appreciate this. I think it's a step in the right direction. I appreciate your work and look forward to maybe some future conversations as well on it.

Senator Benavides. Thank you, Madam Chair. Okay That Amendment 4 is that reference to the procurement code Because I just wondering if it is consistent for resident bidders under the procurement code Senator Roberts Thank you Madam Chair

Thank you. Further questions or comments?

Seeing none, L-004 is adopted. Any more amendments, bill sponsors? No. Any more amendments, committee? Okay, seeing none, the amendment phase is closed. Wrap up. Who would like to go first?

Thank you.

Thank you very much. Members, do we have closing comments here?

Thank you. Further comments? I will say I was incredibly sad last year when this bill died. It was a good bill then. I believe it's a good bill now, and I am very happy to support it. I think one of the most, that's a very long legislative declaration, with good reason, because there's a lot of reasons to pass this bill, but I think that the number that sticks out to me, that stuck out to me from last year, is that these wildlife crossings have a 92% rate of reducing collisions with wildlife. So we should have done this last year, but I'm glad we're doing it this year. So thank you so much. And with that, the bill has been moved.

Senator Spenovich. Yes. Aye. Aye. Yes. Aye. Aye. Excuse.

Who would like to begin? Senator Feazell. Thank you, Madam Chair. Thank you, committee members. Okay. Okay. Bringing before you just a simple, short, little bill. Okay, it's not. But I'm going to just start with a little background. Two years ago, the Tyler v. Hennepin Supreme Court case was fresh. And we ran a bill, I was in the House at the time, and it passed through to conform Colorado tax lien processes and laws to the Tyler v. Hennepin Supreme Court case. That had to happen because basically this court case indicated that what we were doing in the state of Colorado was really wrong because what that Supreme Court case said was that local jurisdictions may not retain excess funds from a tax lien sale. So essentially equity. And that had been happening. So we wrote this also quite a large bill, and it was not just, it was not we, the legislature. This was done hand in hand with the Colorado Treasurers Association, who are tasked statutorily with overseeing and ensuring that the tax lien process is done correctly, legally. And it's a very complicated process. To back up a little bit, tax liens occur when people don't pay their property taxes for several years in a row. and there is a whole process around selling tax liens and people buy tax liens for investment purposes because the rate of return is actually pretty darn good. Most people redeem those tax liens before the sale actually occurs. Again, process around that. But this whole system had to be overhauled, and it was overhauled a couple of years ago. So that was the 2024 bill. And it's one of those situations where implementation really kind of is driving the necessity for this particular bill. And one of the reasons why it's so darn long is that we are combining Article 11 and 11.5 in the statute where the tax lien process resides. And so there's a bunch of different things happening. There's standardizing workflow and sequencing. Okay. of events, standardizing auctions, because right now those tax lien auctions are kind of up to the county. And so it can vary, not widely, not dramatically from county to county, but it does vary. And so one thing that Senate Bill 144 does is standardize the auctions. There's a whole bunch of information about repurchase rights. The current law is kind of quiet on what that looks like, and this creates a repurchase window. Current law also transfers the deed, but the time frame for transferring the deed is somewhat unclear. And this bill also has language in it around overbids. Another thing that this bill does is there's some changes with fee structures. So the old fee structure per the previous bill and what was in statute even before 2024, that really didn't align. And so this is creating a new fee structure based on CPI changes. And it also creates a process to correct minor errors, so typos and that sort of thing. I have a really long explanation. If we want to go section by section, and I'm happy to do so with the committee, but kind of rely on your guidance on that. You want me to do that? Okay.

There has been extraordinary and extensive stakeholding on this. Sadly, we do have some amendments that we're bringing to the committee today, and I'm happy to talk about those now, or I can also talk about those after testimony. Whatever you think is best.

Okay. Senator Linstead. Thank you, Madam Chair, and thank you to my incredible co-prime for inviting me to join her on this bill. We have a great question. This bill, I hope you enjoyed your 52 sections of weekend reading ahead of today's hearing. In short, it standardizes a lot of the things that our treasurers do in this process, and it helps protect property owners. I think that's really important to put these protections in statute, to standardize these processes, and modernize, continue to modernize the good work we did a few years ago when we completely revamped everything about tax liens. So there are 52 sections in this bill. We can help answer any questions you might have on any of them. We have a panel of incredible online witnesses, treasures from all around the state who will be available as well. With that, thank you for your time and for your diligent reading of the bill over the weekend.

So we're going to go to our amend witnesses first, and then we'll go to our panel of support witnesses. So Mr. Grantham, please, you have two minutes. Please tell us about why you would like to amend, introduce yourself and tell us why you would like to amend this bill. Good morning, or good afternoon, Madam Chair, members of the committee. Thank you for hearing me. My name is Justin Grantham. I'm the Fremont County Clerk and Recorder and the Recording Legislative Chair for the Colorado County Clerk's Association. I am in a position of amend. I do believe there's an amendment coming up that just addresses the the clerks part of this because there are fees involved with the recording documents. But I just wanted to thank the Treasurer's Association and the treasurers I worked with to make sure this bill does exactly what they're wanting to do. And I'm willing to work with them in the future. They're a great bunch of people and I just appreciate them. So I'll leave it short because I know it's been a long day for you guys. So if you have any questions, by all means, if not, I will give back my time.

Ms. Ryan, please go ahead. Thank you, Madam Chair, members of the committee. My name is Holly Ryan. I'm here for Douglas County Treasurer and Douglas County to support this bill. We do have amendments. I'm also here. I drafted this. It is months work. I had the support of the Douglas County Treasurer, David Gill, and Douglas County in having me draft this, and I did present it to the Colorado Treasurers and Public Trustees to get their support. I had a three-minute to actually go through this and give you a, in three minutes, I'm going to hit it in two. I've been in the Public Trustee Foreclosure world for over 25 years. I've been an attorney that does foreclosures. I've been an appointed public trustee by Governor Polis, and I'm now a chief deputy public trustee in Douglas County. So why am I drafting legislation regarding a treasury deed process? Because House Bill 241056 was intended to mirror the Colorado foreclosure process. If you're not aware, I know Senator Kipp is. She's sponsored several of my bills. we are the only state in the nation that has a public trustee process. We're it. It was established in 1873. So the last 150 years it has been tried and tested to be constitutional So the goal in this bill is to use that public trustee process to make sure that our treasurer deed process is not found unconstitutional again like it was in Tyler v. Hennepin. So the bulk of the bill starts on page 42. This is a complete rewrite of 3911.5, which is the treasurer deed process. This is after you've gone to tax lien sale. The investor has held the tax lien certificate of purchase for three years and now wants title to the property. This section from page 42 to 106 mirrors the Colorado foreclosure process completely. What happened in House Bill 24-1056 is 3911 got repealed in its entirety in error. So, starting on page 6, we now have 3911 reinstated in its entirety and amending the definition and then removing the unconstitutional portion. Also in House Bill 1056, we had treasurer fees and costs associated with that treasurer deed process that were referred to in the public trustee section under Title 38. So the first few pages is 30-1106, which is basically adding the treasurer deed fees to the treasurer deed portion of their statute. I'm here to answer any questions on this plus the amendments that you may have regarding this lovely legislation. Thank you.

Very good. Thank you, Madam Chair and members of the committee, and thank you for the opportunity to speak today. My name is Lane Yacobedo.

see Ms. Josie is back. Treasurer Josie, welcome. Thank you. Good afternoon, Madam Chair.

Thank you. Please hold for questions. Mr. Treasurer Broman, you're up next.

Thank you so much. Please hold for questions. And last up, I believe we have Treasurer Cui. Please tell me if I pronounced that incorrectly. Is that not? Oh, okay. So not here. Great. Well, members, senators, do we have questions for this panel?

Holly Ryan. Since you said you drafted a lot of this, I had a couple of questions.

Treasurer Ryan.

Thank you, Senator Benavides. So in the foreclosure process and in this treasury deed process, you'll have several times where you'll proceed to a treasury deed auction. And something happens and either legally the court has to set that aside and then you redo the auction or the lawful holder wants it rescinded, which is another fee that's in there where they have three business days after the sale to say, oops, we made a mistake. take it back. The set aside is where you actually have to go to court and say the court, some party said there was something wrong with this procedure or you proceeded incorrectly. So when the court sets it aside, there's a whole section under the statute that says you have to send that court order out to all the parties that are entitled to notice. You void any certificate of option for treasurer's deed. you void any treasurer's deed that's been issued. And then after you do that, then you can reset or restart the public auction again for the treasurer's deed, fixing that defect, and then you do your new notices, a new publication, and then you hold a new sale. Okay.

Yeah a couple more questions on page 33 and I did get a response from someone but I wasn real clear on this response On line 13, it says the proceeds of the sale conveyed to the county by the commissioner must be paid to the treasurer. I was confused why I said commissioner as opposed to board of county commissioners.

Thank you, Madam Chair.

I'm following that the board does this, but I'm guessing an individual commissioner can direct this at some point in that process.

Thank you, Madam Chair.

And I'm going to go to Treasurer Aya Kevetto because I believe she has something to add.

Thank you, Madam Chair.

Senator Benavidez.

Yeah, please.

Ms. Ryan.

Thank you, Senator Benavides. So it is kind of a circular definition. So in a foreclosure, once you have a sale, you are issued a certificate of purchase. Because under 3911, when we do our tax lien sale, you were issued a certificate of purchase, we had to come up with a new term for after a public auction, which is for treasurer deed. The certificate of option for treasurer's deed does not convey title. It is an interim title-like document. So even though after a tax lien sale you have a certificate of purchase, you have kind of a lien interest. You have an interest in the property, but you don't have ownership or title. The certificate of option is given to the purchaser at the public auction after the tax lien or tax deed sale has proceeded. They get the certificate of option, meaning that they have an option to get a treasurer's deed after the title vesting period has completed. So it is not a title document. It's an interim holding document giving them an option to a treasurer's deed at the conclusion of the process.

Thank you. And I kind of got the sense of that reading the rest of the bill, but that definition doesn't say that at all on page 42. So I guess maybe for the sponsors, if that other definition that somebody, a lobbyist sent me, I don't know who they got it from, would be put into an amendment maybe on seconds.

And then one final question.

Thank you, Madam Chair.

I just wanted to make sure it was going to be an amendment since it wasn't in this one. Okay. Thank you.

Would you like to move an amendment? I would love to.

I move Amendment L-001 to Senate Bill 144.

Would you like to tell us about it?

Amendment L-001, this is kind of language cleanup from stakeholding with the bankers. It changes the treasurer fee language from discretionary to mandatory, strengthens county authority to collect fees and removes ambiguity, cleans up the fee structure formatting and removes duplicative languages, sorry, language, singular, expands acceptable payment methods to include bank checks, cashier's checks, and money orders, requires property description, in tax lien sale notice to improve clarity and reduce disputes, defines business day for Article 11.5 to standardize timing calculations, and fixes internal statutory cross-references throughout Article 11.5.

Senator Frizzell.

I move Amendment L002 to Senate Bill 144.

Madam Chair.

Thank you, Madam Chair. L002 mostly clarifies timelines, and it gives treasurer's discretion to accept or reject deed applications based on capacity or other factors, establishes a 45-day review timeline once the application is accepted, changes filed to accepted to clarify the obligations upon acceptance and not submission, and then it removes certain language granting automatic rights to lawful holders, narrowing preferential treatment.

Senator Frizzell.

I move Amendment L-003 to Senate Bill 144.

Who would like to tell us about it?

Senator Frizzell. This is just kind of a terminology cleanup, some technical fixes, like it replaces certificate of option for treasurer's deed with property, simplifying terminology. you can kind of see just basically works throughout the bill just to clean up technical issues.

Seeing none, L-003 is adopted.

Thank you, Madam Chair.

Senator Linstead.

L4 cleans up all the cross references so it expands. Cross-references to ensure additional subsections are included in governing provisions, clarifies that property owners retain the right of redemption in all cases, imposes a one-year statute of limitations to challenge county commissioner determinations, and adds authority for counties to lease acquired property to affiliated non-profit entities.

Senator Benavides. I didn't see this until you were explaining to it, but on line 10 of the amendment it says after that's been done it will be forever barred. What is it that it's referring to that's forever barred?

Yes, I think it would be great if we could call up the bill drafter.

Thank you.

I'm Ms. Myers.

Nicole Myers, Legislative Legal Services. filling in for the drafter, Alison Killen. Senator Benavides, can you, I'm sorry, can you ask your question again?

Senator Benavides. Well, on page 29 after line 11, this says that to insert this paragraph E, that the action by the Board of Countercommissioners pursuant to this section, and this section is fairly long, So I was trying to figure out after one year of the board's order said action shall be forever barred.

Ms. Myers.

And I recognize that it does say this was existing language, right?

So the only thing changing is that. So if forever barred was already in there, I was just curious to what were forever barring, you know. But since we don't have settled questions, maybe I could, I don't have a problem with this if somebody looks it up and tells me, and if they needed to, to fix it on seconds.

Senator Lindstedt.

Okay.

We're happy to keep looking into what that reference is on second reading. We have a few things to clean up. Thank you.

Seeing none, L004 is adopted.

Madam Chair I move Amendment L005 to Senate Bill 144 Thank you Would you like to tell us about it Absolutely So this amendment is based on stakeholding with the clerks and recorders the clerks association

Seeing none, L-005 is adopted.

No, ma'am.

Senator Frizzell.

Thank you, Madam Chair. Committee members, I think we've heard from our witnesses how important this bill is. It has actually kind of been in the works for about a year. We started working on it last year. It's just an important update to what was passed a couple of years ago. Again, as the Treasurer's found with implementing the Tyler v. Hennepin fix a couple of years ago, there were just issues with what we had done. That was a much broader scope of legislation than this particularly is. But I appreciate your aye vote and your consideration today.

Thank you, Madam Chair, and gratitude again to my co-prime for inviting me to join her on this bill and to the Treasurer's Association for their diligent and hard work trying to get this cleaned up in the right way. So with that, we'll be working on second reading to continue to refine what is a long and detailed bill. But we appreciate your time and diligence in this committee.

Thank you, Madam Chair. I move Senate Bill 144 to the Committee of the Whole with a favorable recommendation.

Senator Spenavides. Yes.

Giselle.

Aye. Yes.

Snyder. Aye.

Thank you, Madam Chair, members of the committee, for the opportunity to present House Bill 26, 1311. At its core, this bill is about something simple, making sure businesses can access the money they've already earned while still protecting project owners. In Colorado construction today, 5% of a contract is withheld as retainage until the end of the project. That means contractors and subcontractors can wait months, sometimes even years, before receiving payment for the work they've already completed. For large companies, that may be manageable, but for small and mid-sized contractors, retainage ties up critical working capital needed to pay workers, purchase materials, and keep projects moving. This bill creates a simple, voluntary option. Instead of having retainage withheld, a contractor or subcontractor can provide a surety bond equal to the retainage amount. That bond provides the same financial protection to the owner while allowing the contractor to access funds they've already earned. It simply allows parties to use a different financial tool. We know some owners and developer groups that have expressed concerns about whether this shifts risk onto project owners. And so I would like to be clear about a couple things. First, retainage bonds are issued by licensed surety companies, which guarantee payment if contractual obligations are not met. In many cases, that protection is actually stronger than simply holding back cash. Second, the bill does not force anyone to use this option. Owners who prefer traditional retainage can still negotiate that in their contracts. So this bill adds flexibility. It doesn't take anything away. Construction is one of the engines of Colorado's economy. When retainage sits idle for long periods of time, it prevents capital from being used where it's needed most on workers, equipment, and future projects. By allowing a bond option, we help keep those dollars circulating in Colorado's economy while maintaining the safeguards that owners rightly expect.

Thank you, Madam Chair, and thank you to my co-prime sponsor. I think he did an excellent job of summing up the bill. I'll cover a couple of areas he may not have covered. So I think many of us who were in the legislature in 21 remember HB 21-1167, which brought the retainage amount down from 10% of the total contract price to 5%. And we heard a lot of testimony back in those days, and a lot of it is still relevant today. So even though we've lowered that retainage, that 5% retainage that currently is in statute does cause some hardships, especially for smaller contractors who really are living on tighter margins and having that cash held up. I think as you all probably know, the way the process works, these are mostly percent completion contracts where they hit 25% of the work, they get a check for 25% of the amount they're owed, and that carries on through. But when they get to the full completion, they've completed the work. Say you're an early subcontractor, plumber, foundation poor, or whatever. You go, you do your work, the inspector comes out and certifies it, but that principal, the prime contractor or the owner, are going to hold your 5% until they get their certificate of occupancy. In a large commercial project that could be two three years that money is being held where you could have that back and put it back into circulation and hire new laborers compete on more bids that type of a thing So this really is a modern option now that we're proposing here. As my co-prime sponsor said, it's not a mandatory option. They can still contract around a surety bond if that's something that's important to them. already two states many states have already done this in the public contracting space two states have done it in the public contracting Oregon and Washington a couple decades ago but in the last four years four years ago they enacted a bill very similar to the one you're looking at and I'm proud to report that we could find no evidence that there's ever been a claim under one of these bonds in four years in those two states so as my co-prime sponsor said this bill improves cash flow for contractors especially the smaller contractors it helps the small businesses stay operational it maintains owner protection the surety bond provides financial security and claims protection it's at least equal to if not better than what they get under a surety bond it aligns Colorado with modern construction practices as my co-prime sponsor said they must be a licensed Colorado insurer minimum financial strength rating up to an A- bond proceeds remain subject to the same lien and claim rights as retainage the bill I think we've explained that there's a couple of issues that have been circulating around about this bill and so I thought maybe I would take the time to address those quickly So one, why are public construction projects not subject to 1311? Mainly, it was perceived, and I believe correctly, that that would have triggered a fiscal note. You know, when a public contract is let, that's up by definition. A public entity, whether it's a university, a highway project, with CDOT, whomever, all of those have financial involvement of the state budget. and I think if we were to start doing it, plus it's a much more complicated process. There's much larger projects also sometimes may involve federal laws such as Davis-Bacon, other things. It would require extensive stakeholding and ultimately we felt it would have led to a higher, to it generating a fiscal note. So that's not something that's completely off the table. It's something maybe when times are a little shinier here in Colorado, something we might be able to revisit. The second is, and I got an email last night from one of the representatives for the home builders, and they were proposing and are still proposing that we include an option for a letter of credit in addition to the retainage bond. And I have agreed to continue to look at that as an option. and if we're able to get there and we feel that it's worthwhile and equitable to a surety bond, something we're considering running for second reading but not for today. I think last night was a little too short notice to put something together. But a letter of credit also has its own drawbacks. So in a letter of credit, the bank will issue that letter of credit, but they will require you either to keep a cash deposit in the bank, maybe not for the full amount of the letter of credit but a substantial portion or put other restrictions on you where they'll limit the amount you can borrow they'll reduce the amount of the letter of credit from that amount of money that you could borrow. So unlike the retainage of the surety bond, letters of credit have some problems. I will tell you that the fee for a letter of credit is very similar to what I've learned that they charge for a surety bond, about 1% of the retained amount, the retainage amount. But the difference is a letter of credit, banks will charge a $500 fee. So even if you have a small $10,000 retainage bond, you're going to get a letter of credit. You're only going to pay 1% or $100 for that. But you'd also incur this $500 letter of credit fee. And I think anybody who's worked with banks knows they are masters at assessing fees. so that I think is my initial reading although we've committed to some of the stakeholders some people are in an amend position that we will continue to pursue that and there's a way we can make that work just as well it's something we might consider for second reading so surety bonds as I mentioned two states Oregon and Washington have done these private contracts in the four years that's been the law in those states there have been zero claims under the bonds it actually had a beneficial effect in that once they opened this up it brought a lot of other issuers of bonds companies into that space and they started competing for the right to issue those bonds which in competition as it usually does brought prices down so for the subcontractor who's pursuing a bond this could have a beneficial effect on them Surety bonds, I think you could call the average 1% what they're going to charge the applying subcontractor. But you have to realize, too, this is a much more involved process. You know, a company like Travelers or another person who issues these bonds, they really do their due diligence. They do a rating system, and they look at the subcontractor, and they rate things about their likelihood of defaulting, likelihood of paying back, what have you. And while it averages 1%, it can go from half a percent for a really stellar record contractor with a stellar record up to 2.5% for much more risky issuance. But I think what's important is that they will be evaluating these subcontractors. And frankly, many of them may not qualify for a bond. In that case, the existing system of 5% retainage will stay in place, and that's what they can use. Yeah. All construction projects basically operate under a payment and performance bond structure. That includes the percent completion, and it sets a very tight schedule of when payments are due and what triggers those payments. When a surety bond is accepted by a prime contractor or an owner, whatever the case may be, they stick to that payments and performance bond schedule. So it's not like, okay, here's my bond, give me my retainage. It's more like, here's my bond, and you will get that retainage from a pre-scheduled amount. So it's not all at once. I think that might be a misperception people have. And lastly, you know, we still have freedom of contract. And if any particular party decides they don't want a surety bond or they want something else, they're free to put in the contract whatever they would like.

I'm the president of Evergreen Surety. We're a small bonding-only agency headquartered in Centennial, and I'm here on behalf of the American Subcontractors Association of Colorado in support of this bill. I've been a bond agent for 15 years, and I represent a mix of developers, general contractors, and subcontractors. As you just heard, retainage is the practice of withholding a percentage of each progress payment until a project is complete. While it is intended as security for property owners, it creates a serious cash flow burden for the subcontractors who do the actual work. For many of these firms, having 5% of every dollar earned, held back for months or even years, creates severe cash flow constraints. This often means they need to borrow money to cover payroll and materials. Retainage limits their ability to bid on new work, hire employees, and invest in equipment. It is, in effect, an interest-free loan from subcontractors to property owners. HB 1311 provides a straightforward market-based solution. It allows for a general contractor or a subcontractor to post a surety bond in lieu of having cash withheld. These retainage bonds are issued by surety companies with a minimum A and best rating of A minus, and the bonds guarantee satisfactory completion of the contract. If there's a problem, the owner makes a claim against the bond rather than withdrawing on the withheld cash. The important aspect here is contractors absolutely do not want claims filed against their surety program. Even a single claim can shut down their carrier's willingness to support future bonds, and the value of a strong surety relationship is worth significantly more than the 5% retainage. A common objection I hear is that surety carriers have a reputation of responding to claims slowly. This can be the case with complex performance bond claims that require formal investigations. That said, due to the comparatively small size of retainage bonds, carriers often instead simply cut a check to pay claims. As you just heard, Colorado will not be breaking new ground. Washington State extended retainage bonds to private construction in 2023, in Oregon passed nearly identical legislation unanimously in 2024. I have polled several underwriters that work in these states, and they indicated also that they have received virtually no claims against retainage bonds. This means that contractors are completing their work even when they do not have retainage withheld. In summary, this bill gives Colorado contractors an option to free up working capital and improve cash flow. Thank you.

Thank you, Madam Chair and members of the committee for letting me speak today. My name is Steve Hathaway. I'm Vice President of Finance for Native Sun Construction out of Monument, Colorado. And we are a utility contractor, so wet utilities, storm sewers, water lines, things like that, and an earthwork contractor. So we are in at the very beginning of a project, and our work is complete long before this building, whatever building they're putting up, breaks ground, right? So with that, let's take an example of a $10 million contract that we may have. If we had a million contract we may make 3 on that So okay if you have a million contract you going to make when it done However, in the meantime, retainage is being held at 5%. So 5% of that $10 million, $500,000, being withheld $500,000 when we're only going to make $300,000, which means we are in the hole $200,000 through the life of the project. And yeah, it's a cash flow problem. It means we have to go into our line of credit or we have owners that need to get a second mortgage on their house. Somewhere along the line, there's interest being paid for us to complete the work for the general contractor. And then on top of that, as was mentioned when the bill was introduced earlier, you're looking at projects that could go two years after our work is done. and that amount of money for that long, and also not knowing if you're actually going to get it at the end, because there are some developers, not all, but some that just come up with a reason to hold it as long as possible just because they want to use the cash to fund their next project. So in summary, I just want to say that I am for this bill and greatly appreciate your support.

Thank you, Madam Chair and members of the committee. My name is Luke Miller. I own a small asphalt paving contracting business here in Denver. I have about 25 employees, and we take care of primarily commercial general contractors. My trade typically comes at the end of a project. And I'd like to present one example of a particular coffee shop that my company paved the parking lot with concrete. in 2024. We completed the work in July and August and had the job completely done by September 8th of 2024. I had not received substantial payment for my $160,000 of work completed until November, and I still have $8,200 of retention out on this job, and I bought this coffee there today, which means they have a CEO. So whoever built this building is still holding my $8,210 for now over 500 days. There was a Google review for this business that said that they were at the grand opening for this coffee shop over a year ago. So when I try and ask for my money that we've earned, we just get the runaround. And this is very typical. So I have a list of $400,000 of retention for my tiny little company, and it stretches out to 1,400 days. Oftentimes, I'll be told by these developers or the GCs that I need a lawyer up to go get the money. and there's a lot of abusive practices happening here, which is why we like this bill, because it allows me with precision to go after certain builders that I know might be ones that hold my money and I can issue those bonds and collect that money quicker than the folks that pay me on a routine basis. So please, we'd love to see your support on this bill. Thank you.

Yeah, good afternoon, members of the committee, Madam Chair, thank you so much for your time. And I joining in support to my colleagues here I represent the Hispanic Contractors of Colorado and an association that advocates supports for small minority veteran on construction and design companies And we asking your support in House Bill 26 As you heard, retainage is an issue for a lot of small businesses. Some of the surveying, geotechnical firms, they have to wait years to get this. And for them, it can improve the line of credit. It can help them train more people. it can hire and we heard the concerns that you know it can be held to complete the quality control there's already performance and payment amount there's warranties we're asking the owners to be flexible and have this opportunity for small businesses we also advocating there are small businesses will be educated to know the risk of having a bond placed on these projects then like Like my colleague Tom Patton mentioned, defaulting on a bond, it can be more financially impactful for small businesses. So they will be educated enough. They're not going to pull bonds for every project. They just want to have the education to say that once they're going to take forever, three years, four years, they can have that money back invested in their companies. We would like definitely more progressive payment reform. but at this point we will be happy with the support to this bill and to support the small businesses to put money back in their businesses. Thank you for your support. Thank you. Please hold

I addressed you earlier today and it's a pleasure to be here to support two bills in one day. This bill, the Colorado Contractors Association, represents the infrastructure contractors statewide who perform a vast majority of public works projects in the state. This bill is absolutely pro-business, pro-construction. It's going to help small and medium-sized contractors the most. Our members are large contractors and small contractors, and on any given day, they could be a prime contractor or a subcontractor. And so they see this from both perspectives and feel overwhelmingly that this bill will be a positive for the construction industry and for the state of Colorado. So we support the bill and urge a yes vote. Thank you. Thank you. Members,

Tom Patton

the question I have is on bonds using the other gentleman's situation he completed the work two years ago roughly and so that your bond if they get your bond at the start from you as a surety and are there additional charges or anything to the subcontractor? I mean, is there a time frame? Because two years is probably not every situation, but for some it is.

Senator Benevito. So, and I'll just say asphalt contractor, not you, but you give them a bond. for them and then later when they do a punch list and finally close out the project, there's a problem with that. And they have already paid the retainage to him, but whatever the rest of the problem is, you would pay that with the bond. What if it was, if the bond is only up to 5% over that, it would be the sub's responsibility? Mr. Patton.

Okay. So then just so I'm understanding how the bond works, the requirements to get the bond is to pay the 1 to 2 percent. But are there any other requirements that a sub has to show with regard to their debt-to-income ratio or anything else? Because I would think some of the small contractors, it might be somewhat problematic to get a lot of bonds if they're doing non-public projects.

Further questions for this panel? I do have a question. So there are also typically warranties associated with the work that you're performing that they're holding money for, right? Who would like to take that? I don't care. Sorry, Mr. Miller.

Great question.

Thank you, Madam Chair. Yes, that's a great question. And the issue comes from the contract is typically being negotiated between the property owner and the general contractor. The incentive for the general contractor, while they do benefit from obtaining their retainage quickly, isn't as strong as a subcontractor who's actually cash flowing the project. And the subcontractor doesn't have a contract or relationship with the property owner. So their inability to have that contractual relationship means that these conversations are not having when the project is being developed. The, within the state, there are very few examples of private construction allowing for the subcontractor or general contractor to post a retained bond with the property owner even though they're free to contract that way. This isn't like a secret. Like everyone knows that they could do this but no one does because the general contractors aren't incentivized to pursue that with the property owner as much as a subcontractor. and the subcontractors are the ones that don't have a vote in that situation. Thank you, Mr. Miller. And if I may add some color to that. So being a small subcontractor, my industry is extremely competitive. I probably have 120 competitors here in the Denver metro area, so I take whatever I can get. I have no bargaining chips with the GCs. They hand me their contract. It's a 40-page document drafted up by an attorney, and I'm just a guy trying to pave a parking lot. and I do the best I can to strike certain provisions out of that contract that are unfavorable to my business, and most of the time they're rejected, and I'm told that they just use another subcontractor in lieu of my company if I'm holding to the strikeouts. So I really have no bargaining chips to say that you shall pay me 100% upon completion of the project.

Senator Benevito?

Mr. Miller.

Senator Benevides.

tell me the time frames for the mechanics liens yeah so mechanics lien you usually have to send a

Senator Benavidez.

Mr. Patton, did you want to comment on that?

May I ask just one more question? So what is to prevent if people from going around this in their contracts? I mean, will the law be good if everybody just does loopholes in the contracts to get around this? Will this still help you?

Thank you, Madam Chair. This is a bit of a stretch for me, but again, because of the difference between the subcontractor's relationship with the general contractor and the property owner, yes the property owner may say we will not accept retainage bonds from the GC but they don have the contractual agreement with the subs So the subs would be able to still post the bond in lieu of retainage The property manager property owner again sorry would have to provide the retainage, and then that flows down. So the GC will benefit, the subcontractors will benefit. Yes, it does to some degree put the property owner at risk, but they have the surety bond that is guaranteed by an AMS-rated carrier, and the likelihood, as we've seen, from Washington and Oregon having no retainage bond claims is showing that contractors are still completing the work even when they have the retainage in hand. Thank you. That's helpful.

Thank you, Madam Chair and committee. Tyler Carlson, I am an owner and a contractor here today and on behalf of ICSC and NAOP, Commercial Real Estate Associations. And since I do live in both sides of this issue as both a contractor and an owner, I can tell you that the concerns of the sponsors are real. You know, the early subcontractors do generally get the short end of the stick in terms of how to wait for longer periods of time because a lot of times their retainage is tied to the overall contract. But we tried working with the sponsors on this over the last couple of months because there's other solutions that are much better for both sides of the coin than a payment performance bond. bond companies are insurance companies and i'm not sure if any of you have ever tried to make a homeowner's claim or an auto insurance claim but it's generally not a pleasant process because their business is to collect premiums and not make out payments make payouts so with all due respect to the representative here from the bond groups that's not what their incentives are their incentives are is to tie up these bonds and fight them and minimize them and what that does is it puts small business owners like myself, who employs 20 people here and tries to build real estate projects, a significant disadvantage because if we have a bad contractor who doesn't do the work or who walks off the job and we have to then call a bonding company, that's a severe punishment and penalty to us because then guess what happens? Either the project is delayed until it's resolved, which can take months or sometimes years with a bond company, or it requires us as a small business to come out of pocket to pay for the work that this project, this contractor did not finish or did incorrectly. So there's a reason why 48 states don't do this. It's because it's a severe penalty to small business owners. And the trigger for this is $150,000. That means your major home remodel will be subject to this. And guess what? The negotiating power of a big contractor with a homeowner is very imbalanced. And there's no incentive for them to finish up a job if it's a small homeowner who can't defend themselves and fight with a bond company. So there's two sides of this coin. We would strongly support the HBA a suggestion to offer letters of credit as an alternative. And I want to clarify with all due respect to sponsors, this is not optional. The actual summary says the bill authorizes a contractor to submit a surety bond in lieu of withholding retainage and the property owner must accept the bond and not withhold retainage if the bond meets the bill's standards. So this is not an optional bill. That's why I'm here today. If it was an option, it's already available. It's not a big deal. Thank you.

Thank you, Madam Chair, committee members. Apologies to be off camera, but I am driving to my next meeting. But thank you. We are here in amend on 1311. I would like to thank the sponsors and the proponents for being willing to work through our issues on the bill. While we haven't yet reached any agreement, we do remain hopeful, as one of the sponsors mentioned, that we can come to an agreement. Retainage, as you've heard, has been an important tool between owners and their subcontractors. It's utilized to ensure that work is performed timely, but also that the work performs as intended. We don't think the system is broken, and subcontractors who do not want to abide by tannage do have the freedom to contract with entities that will allow them to bond. But we also understand the limited instances that the proponents have conveyed and why that's led them to advocate for this bill. But as I mentioned, tannage is a tool. And I would assume the proponents look at this bill as adding another tool to that proverbial toolbox. Well, we believe even an additional tool or option is necessary. We believe, as you heard earlier, a letter of credit should also be an option that the contracting parties could agree to. Our fear with bonding alone is going to make things, that it will make things more difficult. For instance, if a builder developer comes into a lien issue with their subcontractor, or there need to be funding of repairs for construction defect claim corrections, and there's a dispute between who is responsible between the developer and builder, this could cause issues. Our final concern is that the bill appears to open the possibility of a mix of retention. I think you may have heard that a little bit from the last panel, where you have some contractors submitting retainage bonds and others relying on cash retainage, which is going to create a paperwork nightmare, an administrative nightmare for the owners of projects like you just heard from Mr. Carlson. So with those comments, we do appreciate, again, the work that's been done. We hope we can continue to work on this bill further. Thank you for your time.

I do have just one question. Is it, in your mind, okay for somebody not to have any idea when they're going to complete payment for a job?

I'm so sorry. We have weird rules around here. I know. I don't come up here often enough to remember that.

Thank you.

Thank you, Senator. Madam Chair, thank you. It answers your first question. Yes, $150,000 is a threshold. So, yeah, minor remodel projects would not fall under that. But for any type of major remodel, it would trigger. I don't know if you've bid anything out lately, but home remodels have gotten very expensive lately. But then to your more important question, I think, yes, states with strong prompt pay laws have all the – the prompt payment is not just for the 95% of the contract. It's for, you know, the full 100% of the contract, including retainage. So, just like you indicated for, and the real issue, this bill is being sponsored by the utility contractors, who are at the front end of projects. That's what started this whole ball rolling. And it's addressing that very issue you raised, Senator, that these early contractors, like utilities, like earthwork, like pipes, things of that nature, are having to wait until the full project is completed. And that's not fair. And we agree it's not fair. The real issue is getting anyone whose work has been done, who's requiring a punch list to go through a certain time frame and then requiring payment after that punch list is completed, should happen. And we would fully support that. What we don't support is inserting an insurance company with no incentive to pay out a claim into a private party contract. You're forcing everyone to get insurance. That's what this bill does. And, of course, all the surety contractors want it. We had $480 billion of contracts. That means there 200 million dollars worth of retainage being held back And guess what 1 on that a pretty big number So of course they all in favor because they want to collect those premiums And they not collecting them right now because it doesn work for the market

Any private party could go contract right now today due to surety bonds, but no one does it because the owners experience the wrong side of this issue.

Sorry, I couldn't get off mute. No, I thank you, Madam Chair, for calling on me. I just, Senator Benavides, I just want to reiterate what Mr. Carlson just talked to you about, because that is one of our big concerns. I failed to cover it in my remarks, is that insurity companies aren't in the business of just, like insurance companies, you know, when you have a claim saying, well, here's your check, you got a claim. So we're very concerned that this is going to have to lead to litigation for us to go access those funds. Why we like cash retainage or letter of credit, something that acts more similar to cash than having to go after the proceeds of a bond. So I just wanted to reiterate that, that many of our attorneys and builders have raised the same concern that Mr. Carlson just did. Thank you for allowing me

I just want to welcome Mr. Carlson to the Senate. I know your family has some deep ties to Adams County, and I appreciate you coming here. And I worked with you when I was on North Glen City Council on a development on 104th and Huron, and so I know how much you care about our community. And so really neat seeing you here down at the Senate advocating.

Drove by yesterday, actually. I love that project, Kyle. I always will. Thank you. Okay, great.

Yeah, the gray button on the table. There you go. Thank you, Madam Chair, members of the committee. My name is Tom Peterson, and I'm with the Colorado Asphalt Pavement Association. We're the statewide trade association representing the asphalt industry of Colorado, and we speak in support of the bill for the reasons that were presented by the co-prime sponsors. We feel it's a step in the right direction. We feel that it is also a balanced solution. You heard just a minute ago that the system, we feel the system is broken. We heard that retainage is a tool. We feel it's an abuse tool. And we're often, as Senator Snyder alluded to, specialty subs. Sometimes we're the first one in. Sometimes we the last one in on a project And there are examples in our industry of greater than a thousand days before contractors are paid their retention The prompt pay we seen that for 95 of the pay but that doesn't, in our opinion, fix the retention issue. Also, when is a project complete? If you're putting in a new subdivision, you pave, and then it could be two years or greater. And I I talked to a contractor, one of our members, within the last week, and it's over 1,000 days since they have kept their retainage. And there's nothing on the punch list that is alluded to them. There are other things that are on the punch list but not related to the paving. And Madam Chair, your comment on warranty. Warranty is for a defect in materials and workmanship. And yes, it's covered under the warranty, but often you have examples of retainage where there is not a punch list associated with the work you've done over two years ago. And so we feel that this bill is a step in the right direction. It is a balanced solution that provides protection to the owners, and we give it our full support, not as a utility contractor, but as a paving contractor.

Just a quick introduction. I'm Rob Slauson, current president of the National Underground Contractors Association here in Colorado. Thanks for allowing us here today to speak. I do want to clear up a couple things that our opposition said real quickly. Seven or eight years ago when we tried to pass a bill to reduce retainers from 10% to 5%, we had a prompt payment part of that. We got so much opposition during that time from the same people who are now saying they would support this that we had to drop the prompt payment out to get the retainage passed from 10% to 5%. So I completely disagree with the fact that they're very willing to entertain that idea now when they were big proponents against us seven or eight years ago. I was going to tell a quick story. Hopefully I can fit in this. I was trying to explain this legislation to my wife who's not in the construction industry, so I put it in very basic terms for her. I said, if you go to King Soopers and buy $100 worth of groceries, and you only pay them $95 and say, I will come back and give you the other $5 when I'm satisfied with these groceries. King Soopers starts calling you in a couple months. Are you satisfied? Are you satisfied? Well, I've got a pound of hamburger in my freezer. I haven't ate yet. So I'm going to keep holding your $5 until I decide I want to eat this pound of hamburger. This is what we're talking about. It's the abuse of the system. It's these people keeping that hamburger in their freezer for years until they decide they're satisfied, and then they determine they can pay us. Or in Luke's case, they just don't pay you at all. And they realize that the amount of money that they owe you, it's going to cost you more to collect it than it is to just write it off to bad debt. That is the problem we're trying to address is the abuse of the system. The retainage law right now is currently they don't have to hold anything on us, but they do it because they can. That's really what it amounts to, and we have no bargaining chips against that abuse.

Ms. Barnes, please proceed. Good afternoon, Madam Chair and members of the committee. Thank you for the opportunity to testify today. My name is Christine Barnes. I'm the executive director of the National Utility Contractors Association of Colorado. I'm here today representing our 115 member companies and their thousands of diverse employee constituents across the state who build and maintain Colorado's critical underground infrastructure, water, sewer, gas, electric, and telecommunications systems. The majority of our companies that we represent are small and medium-sized businesses. We do have contractors that act as both subs and GCs for projects. NUCA of Colorado is proud to support and help bring forward House Bill 26-13-11. Retainage directly impacts cash flow. What I hear most from my members is that the money that they could get from receiving the rest of their money from this retainage would help to pay employees and provide wage increases when available, invest in equipment, take on additional projects, take on additional needed employees, provide benefits or improve benefits to keep and attract employees, provides additional safety and education training. So this helps really the entire industry, not just contractors, but the suppliers and the supporters of our industry as well. This approach has already been successfully implemented in Washington State, where Anuka Chapter is also active. We have consulted directly with our counterparts there, and their experience has been overwhelmingly positive. This is not a mandate, and it does not relieve contractors of their responsibility to complete punch list items or meet project requirements. The bond ensures full accountability. This bill simply provides an additional option to improve cash flow where the industry, it is a meaningful step forward, strengthening Colorado's construction industry. It allows contractors to reinvest in their businesses, their employees, and their communities. We respectfully ask for your support. Thank you

Richards. Thank you, Madam Chair and members of the committee for having me here today. My name is Jessica Richards, and I've been a contract underwriter in the surety industry with a national company for over a decade. A large part of my role involves evaluating contractor financial strength, project risk, and helping stakeholders understand how surety bonding works in practice. I'd like to spend my testimony addressing some of the concerns that some of the opposition pointed out. The first being that we are an insurance company. I would like to point out that while a surety is usually housed under an insurance company, we could easily be employed under a bank. An insurance product versus a surety product are two vastly different things. The claims processes are completely different. So when the concerns are brought up that have you ever filed a claim on your homeowner's policy, I'm afraid to say that it is incredibly different. Working with contractors for over a decade, I have to be honest and say that our relationships with our contractors are very strong and very different than any relationship that an insurer would ever have with their clients. One of the benefits of having a bond is that the owners aren't going to be addressing any issues alone. The surety is going to bring in a third party that has already evaluated the contractor and has a real financial interest in making sure that the project has been successfully completed. The bond serves as a financial backstop if needed, but just as importantly, it provides an additional layer of support for the owners. Imagine that if in the current situation 5 retainage is withheld and a contractor takes the money and runs Well the owner can sit there and call this contractor for forever and not get any response back and have five percent left to maybe fix things. But with a surety backing this contractor, you're less likely to have a contractor go into claims for all of the reasons that Mr. Patton and some of the other members today because they don't want to risk their bonding program. And then you'll have a surety that has a legal obligation under the contract to make sure that this project is getting completed per the requirements of the contract agreement. And I'm happy to answer any other questions that the committee might have on how the surety process works in the background. Thank you.

Okay. No amendments today, Madam Chair, but amendments are being discussed.

Senator Brighton. Thank you, Madam Chair, members of the committee. As is the case with most legislation that comes through this building, we're often trying to solve issues, solve gaps in the system, solve problems for folks that are experiencing some issues. And this is no exception to that rule. We have situations where folks who are doing work need to get paid for that work that they're doing. So we're here to provide that solution. The reason that the legislature continues to exist year over year over year is because there are always new solutions to be had. So this may not be the last time we ever address this, but it's certainly some time to address this with this

Thank you. Any closing statements, Committee? Senator Mullica.

Thank you. Other statements? Senator Benavides.

Anybody else? Okay, yeah, this is an amazing problem that I'm surprised still exists in the world today. So thank you for taking on part of the problem, and I'm sure there will be more to come, but really appreciate you taking on this piece. And with that, an appropriate motion would be to move this bill to the Committee of the Whole. Who would like to make that motion? Senator Snyder.

That is the proper motion. Ms. Rudebush, will you please take the roll?

Yes.

and one of you has a suggestion

oh there's an objection

Yeah. And did we remember to do that for the last one?

No, I meant this one.

Okay, so you didn't want your bill going to the consent on consent either. Okay. Okay, I just wanted to make sure that everybody got on a consent who wanted to be on consent, but nobody wants to be on consent. There is no consent on this committee. with that congratulations you are on to the cow and our business for the day is concluded thank you very much finance committee thank you madam chair and committee