By Peter Marcus, DENVER DAILY NEWS

Lawmakers and candidates from Colorado were split down party lines yesterday on the U.S. Senate’s long-awaited vote backing a $30 billion small business lending bill.

Democrats praised the Senate yesterday for creating a fund that the government would invest in for independent community banks to encourage lending to small firms. But Republicans immediately used the vote to call for opposition to a proposal by President Obama that would raise income taxes on the wealthiest 3 percent of U.S. households.

In addition to creating a $30 billion fund, the Small Business Jobs Act backed by the Senate yesterday would also exclude from taxes all capital gains on sales of small-business stock, and ease tax rules for expending and depreciating equipment. Tax breaks in the bill total $12 billion.

Democrats estimate the measure could create 500,000 new jobs. Some 8 million jobs have been lost since the recession began in late 2007, and a sobering report released yesterday points out that the U.S. poverty rate rose to 14.3 percent in 2009 from 13.2 percent the year before, bringing the percentage of the population living in poverty to the highest level since 1994.

Two Republican senators broke with their party on Tuesday to give Democrats the votes they needed to advance the small business lending bill. The 61-38 vote sends the measure back to the House, which has passed a similar bill and is expected to quickly approve the Senate’s version.

U.S. Sen. Mark Udall, D-Colo., criticized Republicans yesterday for “partisan delays and obstruction” of the bill. A Udall amendment that would have expanded the ability for credit unions to lend to small businesses was not included in the bill. But the senator said the bill will still help small businesses create thousands of new jobs.

“As I’ve traveled across Colorado, small business owners have told me they are poised to grow, they just need access to capital so they can expand and hire new workers,” Udall said in a statement. “This legislation will help turn that around without costing taxpayers a dime.”

Ryan Frazier, Republican candidate for the 7th Congressional District, used the vote yesterday as an opportunity to encourage Democrats to abandon a plan to let tax cuts expire from former Republican President George W. Bush’s era. The tax cuts for the wealthiest Americans expire at the end of this year. The proposal calls for letting the tax cuts expire, while extending lower tax rates for individuals earning less than $200,000 and families earning less than $250,000.

Frazier said the proposal would lead to “the largest tax increase in American history.” He tied the proposal to the vote yesterday by stating that the plan would have a negative affect on small businesses, as well as investors and American families. Frazier also made mention of the poverty report.

“Our poverty rate is completely unacceptable,” said the congressional candidate. “Businesses need regulatory certainty to invest and create new quality jobs for Americans.”

Frazier’s opponent, incumbent Congressman Ed Perlmutter, D-Lakewood, is in favor of the Obama proposal to let tax cuts for the wealthiest Americans expire, according to his spokeswoman, Leslie Oliver.

“Ed needs to see what the exact details of the proposals are, but generally speaking, he’s consistently supported extending middle class tax cuts for those earning less than $250,000 per year. He does not support extending tax cuts for the millionaires and billionaires,” she said.

Perlmutter had introduced an amendment to the House version of the small business lending bill that aims to increase loans for small businesses by allowing small banks to temporarily amortize their losses on commercial real estate. Banks with less than $10 billion in assets would be allowed to amortize their losses on commercial real estate over a seven-year period. The goal is to provide small community banks with more liquid capital to make loans.

The Senate version of the bill did not include a similar proposal.

“Unfortunately, unlike the bill the House passed in June, the Senate version does not include my amortization amendment, which would enable community banks to write down real estate losses over a six- to ten-year period, which would free up more capital for small businesses,” wrote Perlmutter in a statement. “This would allow more credit to flow to Main Street so small businesses could expand, buy inventory or hire new employees.”

Congresswoman Diana DeGette, D-Denver, also lashed out at Republicans for using the small business lending vote as an opportunity to criticize Obama’s plan to let Bush-era tax cuts expire at the end of the year.

“It is disappointing that small businesses across the country were denied relief while Senate Republicans tried to score political points by denying a vote on this legislation,” DeGette said in a statement. “I hope that my colleagues on the other side of the aisle do not make the same mistake as we discuss extending the Bush-era cuts.”

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Payday lenders will be required to give pro-rated refunds to customers who pay off their loans early, The Pueblo Chieftain reports.

Under enforcement rules adopted Tuesday by the Colorado Attorney General’s office, payday lenders cannot keep origination fees for their loans.

The rules relate to HB1351, which narrowly passed through the Legislature during its most recent session — by one vote in each chamber. It sets limits on the fees payday lenders may impose on customers.

In other coverage

The Durango Herald: Payday-loan critics won another victory Tuesday when the attorney general’s office adopted rules that require lenders to refund more fees when borrowers repay their loans early. A draft version of the rules caused a furor last month when critics alleged they were tilted in favor of the industry and that Attorney General John Suthers accepted more than $10,000 in campaign donations from payday-loan stores.

The Colorado Independent: After four hours of testimony and deliberation in the old Supreme Court chambers of the state Capitol, First Assistant Attorney General Laura Udis decided to reverse her proposed payday lending rules and effectively reinsert consumer protections which she said are more in line with the spirit of the law passed last legislative session. Payday lenders will now be forced to refund so-called origination or acquisition fees up to $75 when borrowers repay loans.

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By Debi Brazzale, COLORADO NEWS AGENCY

The Colorado business community is looking to November to regain stability after what some business groups say was an upsetting and volatile legislative session.

The Colorado Association of Commerce and Industry’s (CACI) Senior Vice President, Dan Pilcher, said the business community has picked up the pieces and is focusing on opportunities to put in place a more business-friendly government come election day.

“The legislature is over and done with, so the focus now will be on November–who gets elected,” said Pilcher.

Tony Gagliardi, state director for the National Federation of Independent Business, said his members are also dedicated to creating what he considers to be a pro-business environment in Colorado in the future.

“We are going to be working hard to change things in November,” said Gagliardi.

“The business community believes that this is the worst legislative session that we have ever seen for small business and for business in general,” said Gagliardi.  “It was not a pleasurable session and we look for better things to come.”

Pilcher, who has been watching the legislature for CACI since 1998, is equally dismayed, and said he believes that business was a target for the Democrats who were in charge of balancing the budget.

Attempts to reach several Democratic lawmakers Friday were unsuccessful.

“Without a doubt this has been the most difficult session in the last 12 years.” said Pilcher. “It became evident that they were going after business, and it would cost business more money.  They wanted the money because they wanted to spend it.”

Pilcher was referring to $231 million that will be collected by the state over the next two years after the legislature rolled back an array of tax credits and exemptions for business.  That figure doesn’t bode well with Pilcher, who says that it will simply hamper a much-needed economic recovery.

“We obviously don’t like that.  We don’t think that’s good policy for businesses coming out of a recession,” said Pilcher.

Talks between the business community and the governor’s office began in December, before lawmakers convened in January over the governor’s proposal to eliminate the tax credits and exemptions, given to businesses as incentives.   Both Pilcher and Gagliardi said that those talks were merely a prelude of things to come in the upcoming legislature—things they characterized as decidedly anti-business.

“What began was the creation of an anti -business climate, not just the actual dollars in taxes that business will pay–it was the questioning of everything in the tax code pertaining to businesses,” said Pilcher. “What we heard in the beginning was, ‘We need to look at these tax provisions to balance the budget,’ but as we went on we started hearing more and more of, ‘We need to look at all of these tax provisions.’ That really sent a message to the business community.”

Gagliardi said that there was a dynamic at play in the legislature that he found disconcerting.

“We were told that the tax bills wouldn’t take effect until July, and then the next thing you know, we were told on a Thursday afternoon, ‘Oh, by the way, these bills are being introduced Monday and they will go into effect March 1,’” said Gagliardi, who also said that the relationship between the business community and prevailing leadership was further eroded by the treatment of those in opposition by some lawmakers.

“We have always had respect for each other but the true colors were shown by the way witnesses were treated during testimony, particularly in the House Finance Committee when we were there until 2:30 in the morning on the tax bills and watched as our members were attacked at the table by certain representatives because they were opposing the bill,” said Gagliardi. “When you start seeing legislators having to apologize to witnesses for the way they were treated by other legislators on the committee, you know it’s bad.”

Overall, the business community is feeling anxious and nervous over what the future holds, particularly with the tax climate in Colorado—should the status quo in legislative and gubernatorial leadership remain in tact–say Pilcher and Gagliardi.

Pilcher said that CACI will begin examining the voting records of the incumbants who are up for re-election and will be conducting interviews and surveys with new candidates in anticipation of the November election of a governor, along with state House and Senate seats.

“We will then decide which candidates are pro-business and support them with our political action committee,” said Pilcher.

The NFIB will also be involved in a vetting process of its own and is determined not to have to relive another session like the one that adjourned this past Wednesday.

“Business was at the whim of the legislature,” said Gagliardi. “It was like that all session.”

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Gov. Bill Ritter Monday vetoed his first bill of the 2010 legislative session, shooting down House Bill 1101 (pdf), which would have removed the current requirement that county clerks thoroughly vet anyone seeking a farm vehicle registration, The Colorado Independent reports.

Sponsored in the House by Rep. Randy Baumgardner, R-Hot Sulphur Springs, and in the Senate by Sen. Ted Harvey, R-Highlands Ranch, the bill was meant to make it easier for farmers and ranchers to obtain cheaper farm truck registrations exempt from state emissions standards.

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A Colorado House of Representatives committee has killed two business-backed bills: One that would have made it harder to eliminate the state’s tourism marketing funding, and another that would have created job credits for the hiring of unemployed workers, The Denver Business Journal reports.

The defeats of Senate Bills 206 and 133 are the latest examples of the House Finance Committee clashing with the business community and with other legislative bodies that have backed what were considered to be pro-business bills.

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Senators have had enough talk about shepherds for the year, The Durango Herald reports.

A bill that would have set up a task force to listen to the troubles of immigrant sheepherders died Thursday.

House Bill 1407 began as an effort by two Denver Democrats – Rep. Daniel Kagan and Sen. Pat Steadman – to make working conditions better for Peruvian immigrants who are hired to tend sheep on the Western Slope.

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By Peter Marcus, DENVER DAILY NEWS
A bill that would allow employees whose hours are reduced to claim some unemployment benefits was given initial approval yesterday by the House.
Senate Bill 28, sponsored in the House by Rep. Sal Pace, D-Pueblo, was given an initial voice vote in the House yesterday. The so-called work share program would allow employers to reduce the hours of a group of employees instead of laying off the workers, allowing the workers to apply for some unemployment compensation.
“In a time when we need to watch every penny while still trying to protect jobs, this program is a win-win situation,” said Pace. “It saves jobs and helps small businesses keep their workers.”
Critics, however, say the state’s workers compensation insurance fund is nearly bankrupt. They don’t want to encourage more people to claim benefits.
“Encouraging employers to be able to put more people on the unemployment role is only going to degrade the solvency of the fund even more at a time when we can least afford to do that,” said Sen. Ted Harvey, R-Highlands Ranch, who voted against the measure when it was debated in the Senate Business, Labor and Technology Committee.
Harvey said lawmakers should be working on legislation that keeps people working, not “destroys the economy.” He is critical of Democrats this year for eliminating tax breaks and incentives enjoyed by business, as well as tough rules on the oil and gas industry.
“We need to do everything we can to incentivize them É not encourage employees to put more people on the workers’ compensation role,” said Harvey.
But supporters say Pace’s measure would save about $2 million each year from the unemployment insurance trust fund because giving benefits to underemployed workers is cheaper than giving benefits to unemployed workers.
Over the past two years, 17 states with similar legislation saved almost a quarter of a million jobs, according to supporters.
SB 28 is expected to face a final vote in the next few days.

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By Gene Davis, DENVER DAILY NEWS
Local craft brewers and liquor store owners are toasting the defeat of a bill that would have allowed select grocery stores to sell beer, wine and spirits.
But supporters of the measure warn that the bill’s opposition shouldn’t pour the champagne in celebration just yet. They expect an initiative allowing grocery stores to sell full-strength beer, wine and liquor to make it onto the November ballot.
House Bill 1279 would have permitted grocery stores with a pharmacy license that earn at least 51 percent of their annual revenues from food sales to purchase neighboring liquor stores. The grocery stores could have then sold beer, wine and liquor inside those stores. Bill sponsor Liane “Buffie” McFadyen, D-Pueblo, decided to pull the measure yesterday because she didn’t have enough votes to pass it through the House Committee on Finance.
McFadyen said her bill would be a better approach than a ballot initiative because she’d “much rather have liquor laws done in an approach involving public testimony and the ability to be flexible.”
“I’m disappointed we couldn’t come to a compromise that could work,” she said.
Meanwhile, Great Divide Brewing Company Founder Brian Dunn cheered the bill’s defeat as a victory for the state.
“I think that consumers, their dollars will be kept in Colorado more if they’re spending those dollars at independently owned stores compared to chains,” he said. “For Colorado, I think it’s good and I’m thrilled.”
Argonaut Wine and Liquor Store Owner Ron Vaughn believes the bill’s defeat is a sign that lawmakers and the voters they represent still don’t support allowing grocery stores to sell full-strength beer and alcohol. Vaughn argued that HB 1279 would have cost Colorado jobs as the grocery stores could have used their existing staff to sell the additional alcohol.
Despite an amendment requiring grocery store employees under the age of 21 to be supervised by an adult when selling alcohol, Vaughn worried that minors still could have more easily purchased alcohol at a grocery store because the checkout clerks might not be as well trained to spot a fake ID. It would also be possible for minors to sneak out alcohol, for example, by filling a root beer case with beer and then using the self-checkout line, according to Vaughn.
“I’m glad the measure was defeated,” he said.

Ballot initiatives
Blake Harrison, a candidate for House District 7, is sponsoring two ballot initiatives that would in part allow grocery stores to sell full-strength liquor, wine and beer. Following yesterday’s defeat of HB 1279, he was waiting to hear from the Colorado Retail Council, the group representing chain grocery stores and convenience stores, on whether they would put their manpower and checkbooks behind his initiatives. He is ready to start collecting signatures to get the measures onto the ballot as soon as next week.
“I’m ready to go if they (the Colorado Retail Council) are,” he said.
Sarah Kurz of Fair Markets Colorado, which represents the Colorado Retail Council, said it was her understanding that the Colorado Retail Council yesterday was still deciding whether to throw its support behind the ballot initiatives. And though HB 1279 was killed before it reached the House floor, Kurz remained optimistic about the future chances of getting full-strength alcohol into grocery stores.
Kurz pointed out that the bill made it through one committee, which is further than any previous similar bills survived. She expects the issue to be brought up until it passes.
Vaughn also expects lawmakers to keep on bringing forward legislation aimed at getting full-strength alcohol in grocery stores.
“It’s not going to go away because they (grocery stores) have deep pockets,” he said. “But so far the people of Colorado have recognized the uniqueness of the market and they want to keep it that way.”

In other coverage

The Durango Herald: The legislative liquor wars are over for another year, or at least until Election Day. The sponsor of the last remaining bill to allow grocery stores to sell liquor killed her own bill Wednesday. House Bill 1279 would have let grocery stores buy existing licenses from liquor-store owners. “Being the practical individual I am, the votes are not here to pass this bill,” Rep. Buffie McFadyen told members of the House Finance Committee, who complied with her request to kill it.

The Denver Business Journal: A Colorado legislative proposal to let some grocery stores buy the licenses of liquor stores died in a House committee Wednesday after its sponsor said she lacked the votes to pass it and asked that it be killed instead. The indefinite postponement of House Bill 1279, sponsored by Rep. Buffie McFadyen, D-Pueblo West, signals the end of three years of legislative battles over whether grocery and convenience stores should be able to sell full-strength beer, wine or alcohol.

Associated Press: The Colorado House Finance Committee has killed a measure that would have allowed grocery stores to sell liquor and other spirits.

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By a one-vote margin, the House on Tuesday sent Gov. Bill Ritter legislation putting new limits on payday loans that supporters said would help break a cycle of debt by borrowers, The Denver Post reports.

On a 33-32 vote, the House agreed to a Senate version that essentially does away with traditional, two-week payday loans as they exist in law now, replacing them with loans that can be paid back over as long as six months.

In other coverage

The Durango Herald: The sponsor, Rep. Mark Ferrandino, D-Denver, said he was happy with the result. “It’s not as strong as I introduced and as (strong) as I would have liked to have seen. But it really deals with the cycle of debt,” Ferrandino said. “The question now is, will the industry find ways to get around it.” Four Democrats sided with all the House Republicans to vote no.

Associated Press: A bill limiting the terms of payday loans was headed to the governor for his signature Tuesday after Democrats agreed to give consumers more control over how they repay such debts.

The Denver Post: On a 33-32 vote, the House agreed to a Senate version that essentially does away with traditional, two-week payday loans as they exist in law now, replacing them with loans that can be paid back over as long as six months. Under current law, payday lenders can charge fees that amount to a more than 300 percent interest rate measured as an annual percentage rate.

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