The Art of Compromise: Colorado’s 2024 Legislative Session Ends with Major Wins

Brownstein Hyatt Farber Schreck

Entering the second regular session of Colorado’s 74th General Assembly, most Capitol observers were expecting more of the same—the same being the acrimony, contentiousness and rancor that characterized the end of the 2023 lawmaking period and certainly last November’s special session. However, as the 120-day legislative clock concluded last week, it became increasingly clear that this session would end with a more measured and productive tone.

Going into their 2024 work, Democrats maintained their 46-19 supermajority in the House and a 23-12 near supermajority in the Senate. Yet, while those margins were the same last year, there were new names and new faces joining both the House and Senate Democrats’ caucuses ranks. First, state Rep. Serena Gonzales-Gonzales was elected to Denver City Council, leading to a vacancy committee selecting community activist Tim Hernandez to serve the remainder of her term. Then, after Sen. Dominick Moreno left his role as the upper chamber’s majority leader to take a top post with Denver Mayor Michael Johnston’s administration, sitting state Rep. Dafna Michaelson Jenet was appointed to Moreno’s state Senate seat. Correspondingly, a vacancy committee selected Manny Rutinel, an environmental attorney, to replace Michaelson Jenet. Then, following an acrimonious late-year 2023 special session, two other House Democrats—state Reps. Ruby Dickson and Said Sharbini—stepped down, citing the legislature’s toxic work environment as one of the key reasons for their decision.

Dickson and Sharbini were replaced through the vacancy committee process by Chad Clifford and Julia Marvin, respectively, but it was clear the reshuffling had taken its toll. Leadership in both chambers and on both sides of the aisle spent much of their time in the lead-up to the 2024 session assuring their members and the public that this lawmaking period would be a return to normal operations and decorum. And, in a surprise to just about everyone,it was—for the most part—indeed a return to form.

That return to normalcy played out in a variety of ways, but it was most evident in a series of late-breaking bills on oil and gas development, civil litigation damage caps and property tax that represented true compromises between lawmakers, the governor’s office and key external stakeholders on those issues. First, Senate Bill 229 (Ozone Mitigation Measures) and Senate Bill 230 (Oil and Gas Production Fees) traded a moderate expansion of state agency enforcement authority and a new per-barrel fee on oil and gas production in exchange for more extreme measures—both in other bills and at the ballot box—being withdrawn.

A similar situation occurred with House Bill 1472 (Raise Damage Limit Tort Actions). After the trial lawyers and other plaintiffs organizations introduced a ballot initiative to remove the state’s civil litigation damage caps entirely, stakeholders met and negotiated the legislation to allow for more palatable increases on potential recovery on medical malpractice and wrongful death cases.

Last, but certainly not least, just this past Monday a bipartisan set of legislators introduced a bill designed to stave off two citizen-initiated measures on property tax, on literally the last day a bill could be introduced and still have time to pass. Senate Bill 233 (Property Tax) was the culmination of nearly six months of work by the state’s property tax commission, first convened in last November’s special session, to both provide a degree of residential and commercial property tax relief while helping ensure budget certainty for both the state and local governments moving forward.

To be sure, there was still no shortage of policy disagreements between members, ranging from revivals of extremely contentious housing bills that intercede into local governments’ planning and land use authority, an aggressive slate of gun violence prevention proposals that were met with fervent opposition by Republicans and a trio of bills that reignited the Capitol’s infamous liquor wars. Also, the state’s employers and business community still had to play defense on a variety of fronts, whether it was pushing back on state-imposed fees that targeted certain industry sectors or engaging on more wide-ranging legislation related to captive audiences and employer-employee speech or the use of emerging technologies such as artificial intelligence. Yet, through most metrics—whether it be the large compromise bills outlined above, the Colorado General Assembly’s overall productivity (526 of the 705 bills introduced passed the legislative process; comparatively, only 617 were introduced last year), or,perhaps more importantly,what was not introduced—the return to a more deliberate policymaking climate was palpable.

Please see below for a more detailed analysis on the headline issues debated during Colorado’s 2024 legislative session.

HOUSING AND PROPERTY TAX

The high cost and lack of availability of housing was top of mind for both the legislative and executive branch. Gov. Jared Polis advanced a package of land use bills, supported by most but not all Democrats, aimed at forcing changes to local zoning codes in a way that will create more housing options. Those bills will allow the development of accessory dwelling units as a use by right (HB 1152), require more density around transit (HB 1313), eliminate parking minimums for multifamily residential development (HB 1304) and prohibit local governments from limiting the number of unrelated people who can live together (HB 1007).

For their part, legislators passed bipartisan bills requiring local governments to undertake housing needs assessments (SB 174) and to expand the state’s affordable housing tax credit program (HB 1434). Some legislative efforts on housing failed, including providing a tax credit for qualified renters (SB 146) and a tax credit to convert commercial buildings to residential (HB 1125).

Progressive Democrats were finally able to pass narrower versions of bills from last year that would limit the circumstances of evictions (HB 1098) and would give local governments “first dibs” on purchasing affordable housing being put up for sale (HB 1175). Meeting a different end, a bill (SB 106) advanced by moderate legislators from both sides of the aisle and supported by homebuilders, developers and the business community to solve the construction defects issue that has stymied new condo construction faced significant headwinds including from the introduction of a competing bill (HB 1230) that would have swung the construction defect reforms in the opposite direction. In the end, both bills died.

Tangential to the conversations around housing affordability were discussions regarding property tax relief. Those discussions were highly informed by two ballot measures: Initiative 50 and Initiative 108. Initiative 50 has been approved for the November ballot and would impose a hard 4% cap on the annual growth of all property tax revenue. Initiative 108, which must still gather signatures before it will be approved for the ballot, would significantly cut property tax rates for both residential and commercial property and would require the state to reimburse school districts and other local districts for the estimated $3 billion revenue reduction from state funds.

Introduced and passed in the last three days before the end of the session, SB 233 caps local district (other than school district) revenue growth at 5.5%, reduces property tax rates for certain residential and commercial property, exempts a certain amount of residential and commercial property tax value from taxation and provides minimal local district reimbursement. School districts will receive full reimbursement for lost revenues this year from the state education fund, which is funded by income tax. The legislature’s fiscal analysts estimate the tax break will total $1.3 billion statewide, while the Governor’s Office estimates that homeowners will save an average of $300 to $400 a year on their property tax bill. The proponents of Initiative 50 and Initiative 108 do not support SB 233, but the legislature has postured the bill as an alternative to the ballot measures by making its enactment contingent on the ballot measures failing in November.

EMPLOYER AND BUSINESS LEGISLATION

Sine die marked a more successful legislative session for business, with a quieter session on the employment front. There were agreements reached on the caps for workers’ compensation claims (HB 1220), the rulemaking and penalties provisions on certain restrictive employment agreements (HB 1324), and the removal of language in an air quality bill (SB 165) that ultimately did not pass but that could have created an employer trip reduction program. Two bills that would have required workplace postings related to suicide prevention (HB 1015) and the availability of veterans’ benefits (HB 1110) stalled in the House Appropriations Committee and did not pass. Other wins for the business community included defeating a bill (HB 1151) that would have imposed broad requirements for fee disclosure, along with a bill that would have significantly changed the deceptive trade practice standard (HB 1014) and a bill (SB 33) that would have reclassified short-term rentals as commercial property.

A bill (HB 1260) that will restrict employer speech concerning religious or political matters remains concerning given the argument that the language is ambiguously broad and could encompass issues that are critical to an employee’s job. Also of concern is a wage theft bill (HB 1008) that makes general contractors liable for theft committed by independent and unaffiliated subcontractors. At issue was not addressing wage theft but instead the vicarious liability created by the bill. Although the bill sponsors and supporters have said they specifically focused on the construction industry because of the challenge of recovering lost wages in that industry, it remains to be seen whether the bill will be expanded in future years to other industries.

The legislature continued to add to the state’s regulation of data under the Colorado Privacy Act, which passed in 2021, with bills targeting specific types of data: biometric data (HB 1130), biological data (HB 1058) and children’s data (SB 41). Possibly the biggest news of the session, though, was passage at the 11th hour of a first-of-its-kind bill (SB 205) that will create a comprehensive regulatory scheme aimed at ensuring the responsible development, deployment and management of so-called “high-risk” artificial intelligence systems on the policy grounds that algorithmic discrimination by such systems present heightened risk for consumer harm. The legislature also passed a related bill (HB 1468), which establishes a legislative task force charged with studying and making recommendations for further regulation of artificial intelligence systems. If the governor signs the bills, work is anticipated to begin over the interim.

Businesses that manufacture consumer products with “intentionally added” PFAS will also face a new regulatory regime. A bill (SB 81) passed this session builds on legislation passed in 2022 to phase out PFAS over the next four years. As introduced, the bill would have imposed a sweeping ban on all products containing intentionally added PFAS by 2032. During the course of the legislative process, however, the bill was narrowed to cookware, certain cleaning products, certain personal care products, ski wax, outdoor apparel, artificial turf and products that directly contact food in commercial settings.

ENERGY AND ENVIRONMENT

This session’s energy and environment policymaking debate began with a long list of bills that sought aggressive regulation of the state’s oil and gas industry and ended in a news-making deal cut during the last weeks of session.

The deal—agreed to by the governor, environmental advocates and the three big oil and gas companies here in Colorado—was to “kill” four bills in place of the passage of two newly crafted compromise bills and notably, also an agreement on no new oil and gas bills for the next three years and the withdrawal of all ballot measures from both sides. The bills that saw their demise included what became infamously referred to around the Capitol as the “ozone trio.” Collectively, they proposed to implement a seasonal pause on oil and gas preproduction (SB165), increase and create new penalties on repeat air-quality violators (SB 166) and sought to ramp up modeling for air-quality permits (HB 1330). The deal also included HB 1367, which proposed eliminating a tax exemption on stripper wells in the state. In their place, SB 229, brought by Sens. Faith Winter and Kevin Priola, incorporated components of the failed legislation as well as new proposed industry regulations. SB 229 codified the governor’s 2023 executive order on nitrous oxide reductions, requires the state to provide an annual air quality report, expands state authority to revoke licenses and require air polluters to address equipment malfunctions, limits the court’s power to postpone license suspension or revocation, establishes new protections for disproportionally impacted communities, and expands the state’s orphaned well mitigation enterprise fund. SB 230, the other compromise bill brought by Sen. Lisa Cutter and Senate President Steve Fenberg and the more controversial of the two bills, created two new fees on oil and gas production that will go toward funding local transit systems, the buildout of the Front Range passenger rail and to Colorado Parks and Wildlife for species reintroduction, habitat cleanup and public land restoration. While the session ended with the deal intact, the next three years won’t be without energy legislation. The compromise only applied to oil and gas producers and doesn’t apply to manufacturing or other emitters in the state.

The other big debate on energy and environment legislation this session centered around wetland protections in the state. In the wake of a recent U.S. Supreme Court decision, Sackett v. EPA, certain bodies of water throughout the state were no longer under federal jurisdiction and left without a legal pathway for developers to seek dredge and fill discharge permits. Two competing bills were introduced, SB 127 and HB 1379. SB 127, a bipartisan proposal brought by Rep. Shannon Bird and Sen. Barbara Kirkmeyer, proposed establishing a new division in DNR, while HB 1379, sponsored by House Speaker Julie McCluskie, created a new program within the Water Quality Control Commission. Ultimately, SB 127 was tabled with Sen. Kirkmeyer signing onto the successful HB 1379.

SB 212, a Colorado Energy Office priority bill, which seeks to address local permitting of renewable energy projects, made its way to the governor’s desk. Initially planned as a hefty package that would have established a statewide framework on local renewable energy project siting, SB 212 ultimately commissioned a statewide study on local permitting processes, a compromise between local government, environmental advocates and renewable energy developers.

Other notable successful proposals included HB 1370, which allows local governments and certain utilities to develop neighborhood-scale alternative energy projects, and HB 1346, which streamlines the permitting of carbon-capture operations in the state.

HB 1357, which sought to establish new requirements for pipeline safety and increased penalties for violations, and SB 095, a bipartisan proposal requiring new air quality studies, did not make it across the finish line. HB 1339, brought by Reps. Mike Weissman and Manny Rutinel, also died on the calendar and brought stark criticism from the energy industry as it sought to reverse a contentious and lengthy AQCC rulemaking on greenhouse gas emitters in 2023, which environmentalists believed ended with loopholes favoring the energy industry.

PUBLIC SAFETY AND CRIMINAL JUSTICE

Public safety and criminal justice issues continued to earn their fair share of attention from policymakers. Democrats passed a new slate of gun violence prevention measures, ranging from bills to ban concealed carry in “sensitive spaces” (SB 131), increased training for permit holders (HB 1174) and referring a new excise tax for firearms and ammunition to the voters (HB 1349), among others. However, Democrats failed for a second year in a row to pass a so-called assault weapons ban when the Senate sponsor asked for this year’s version—HB 1292 (Prohibit Certain Weapons Used in Mass Shootings)—to be tabled in the second to last day of the session.

Meanwhile, other public safety reforms to increase penalties for firearms theft (HB 1162) and prevent certain prior offenders from owning firearms (SB 107) were rejected by progressive members who have historically balked at criminal policies that, in their view, could disproportionately impact marginalized communities. However, other policies focused on law enforcement practices also faced a high level of scrutiny. For example, legislation to constrain law enforcement’s use of prone restraint (HB 1372) was quickly pared back to focus on education and training on appropriate uses of the hold; meanwhile, a surprise bill to impose professional and civil liability on peace officers who fail to report instances of alleged policy violations or other misconduct (HB 1460) was defeated in dramatic fashion on the House floor after law enforcement uniformly expressed the proposal was not properly stakeholdered.

HEALTH CARE

Health care was front and center in the 2024 legislative session, with dozens of bills filed to achieve goals both broad and specific. The health committees in the House and Senate, chaired by Rep. Daugherty and Sen. Fields, respectively, were two of the most active in the General Assembly and considered legislation related to how health care programs are administered, how Coloradans access health insurance and prescription drugs and what health insurance and Medicaid may cover, among other topics.

Of particular interest to the provider community was legislation related to workforce protection. HB 1066(Prevent Workplace Violence in Health Care Settings) sought to put in place additional obligations for health care employers in the event of an incident of workplace violence. This bill fell short of achieving the required funding and never received a hearing in the House Appropriations Committee. Legislation aimed to ensure prior authorization for Medicaid recipients, SB 110, received broad support, while a bill that sought to place requirements around ID badges for health care staff, SB 82, failed in its first committee. The legislature approved measures related to substance use disorders, HB 1045, and eased access to professional accreditation for midwives, HB 1262.

A particularly contentious negotiation materialized late in the session around medical malpractice insurance caps for damages paid in the event of suboptimal health care outcomes. SB 130 initially sought to increase damages that can be awarded in the event of medical malpractice from the current level of $300,000 per incident, to $500,000 per incident over the course of five years. This bill was introduced in response to ballot measures filed by the Colorado Trial Lawyers Association to remove the caps altogether, a move that would have significantly impacted the health insurance market. The Governor’s Office stepped in to broker a deal, the result of which is an increase to $875,000 over the next five years for standard malpractice claims, $1,575,000 for wrongful death claims and an adjustment every two years to align with the CPI rate of inflation. As part of this deal, the ballot measures were pulled from consideration.

Access to medication for rare diseases also proved contentious, with SB 60 aimed to prohibit the Prescription Drug Affordability Board from considering rare disease or orphan drugs for an upper price limit stalling on the Senate floor. But a compromise bill, SB 203, found its way to the governor’s desk. Additionally, far-reaching legislation seeking to create a statewide children’s behavior health system of care found traction in the Senate despite a staggering $200 million fiscal note, but eventually faltered in the House in a late-night hearing.

Unsurprisingly, health care affordability and access for underserved populations remained a goal for the progressive majorities of the House and Senate. This was reflected in the tone and tenor of committee work and floor discussions, and in the content of legislation introduced and passed. This also remains a long-term policy goal of Gov. Polis, whose Office of Saving People Money on Health Care was closely involved in many of these efforts.

TRANSPORTATION

Colorado’s Democratic leaders and the Governor’s Office mounted an ambitious campaign aimed at overhauling the state’s transit systems, with a particular focus on securing funding for the Front Range Passenger Rail project.

Central to this initiative was SB 184 (Support Surface Transportation Infrastructure Development), which introduced a new and controversial $3 rental car fee statewide. This fee is designed to feed a special fund earmarked primarily for rail projects, coupled with SB 230 (Oil and Gas Production Fees). Leveraging the Bi-Partisan Infrastructure Law’s 80-20 funding match, this strategy is further designed to potentially unlock billions in federal dollars necessary to complete these projects.

To accommodate the expanded funding, the legislature enacted several key measures. HB 1012 restructured the Front Range Passenger Rail District, enhancing its accessibility and accountability. SB 032 initiated an exploratory committee to consider statewide transit passes and complimentary fares for young people. Although significant reforms proposed in HB 1447 to overhaul the RTD board of directors were ultimately pared back, the legislative goal to make transit operations more transparent and efficient remained clear.

The legislative session also prioritized transit safety. New mandates included HB 1030, which introduced stringent safety protocols for rail operations. HB 1464 refined highway zone designations and SB 100 increased enforcement and penalties for road safety violations. Finally, SB 65 prohibited the use of mobile electronic devices while driving, reflecting a comprehensive approach to transit safety.

Colorado’s goal is to elevate the state from 42nd to 23rd nationwide in transit funding. This leap forward is set to dovetail with significant developments in transit-oriented infrastructure, fostering increased density and connectivity, particularly along the Front Range.

LIQUOR

This session witnessed a series of alcohol-related bills that, as is usual and customary, brought all sides of the liquor industry to the Capitol. After a multiyear respite that was largely due to the Liquor Advisory Group established in 2022 by the governor, contentious inter-industry battles returned to the Capitol. As industry players worked to adjust to changes implemented by voters in the 2022 election cycle—primarily the availability of wine in grocery stores—lawmakers were presented with several pieces of legislation that sought to change the landscape of the industry.

HB 1373 (Alcohol Beverage Retail Licenses) proposed to eliminate the liquor-licensed drug store license type, allow liquor stores to sell directly to bars and restaurants, allow liquor stores to deliver products to other liquor stores and prohibit any retailer other than a licensed liquor store from selling spirits. The bill was presented as a lifeline for smaller liquor stores reeling from the availability of wine in grocery stores but was strongly opposed by other segments of the industry who claimed it was little more than a market grab by a group that already controls the vast majority of the retail space. After a contentious path through the House, the bill eventually failed by a one-vote margin in the Senate Finance Committee in the last week of the session.

SB 24-181 (Alcohol Impact and Recovery Enterprise) revisited a concept initially floated in the 2023 legislative session. The bill proposed to create an enterprise fund comprised of fee revenue levied on individual servings of alcohol. The fund created was intended to be allocated to substance abuse and behavioral health treatment programs in an effort to address growing concerns about the rise of problematic alcohol and drug abuse disorders in the state. As initially drafted, the enterprise would have generated over $100 million annually for these programs, well over the threshold in statute that requires an enterprise fund to be approved by voters—a hurdle the bill sidestepped by virtue of language in the legislation itself. After significant changes in the Senate, the bill eventually failed on a vote of 4-7 during a contentious, late-night hearing in the House Finance Committee.

One piece of legislation that did see passage was SB 24-231 (Alcohol Beverage Liquor Advisory Group Recommendations). This bill packaged together a majority of the recommendations from the governor’s Liquor Advisory Group into a single bill title that worked its way quickly through the legislature after a late introduction by Senate Majority Leader Robert Rodriguez. Championed by the Department of Revenue, the bill saw very little opposition during committee hearings or floor work, largely due to the extensive stakeholder process that produced the policy changes in the bill.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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