Nestled among the final bills from the 2025 legislative session that Gov. Jared Polis signed into law over the past week were several regulatory reform efforts that could set the stage for a bigger discussion on the topic when the General Assembly reconvenes in January.
Three new laws attack the issue by requiring audits of state agencies that regulate and tax employers, mandating greater efficiency in water-quality permitting and forcing air-quality regulators to show how they are speeding up cumbersome permitting processes. In addition, Polis signed laws in recent weeks that roll back some rules under a 2021 bill on agricultural worker’s rights, set permitting time limits for local governments considering cell-tower applications and add transparency around foreign actors funding lawsuits.
Overregulation is by far the top concern of state business leaders, according to Colorado Chamber of Commerce surveys, leading that organization to make regulatory reform its top proactive issue this session. While business leaders would have liked to have seen more done on the subject and felt they spent too much time battling proposed new regulations in areas from wage-theft enforcement to price-gouging, Colorado Chamber President/CEO Loren Furman said there clearly were some wins too.
Key among them was Polis’ signing of Senate Bill 306, which mandates two performance audits each for the Air Pollution Control Division and for the Division of Unemployment Insurance to see if regulations enforced by them are accomplishing their goals or if they are outdated or duplicative. APCD oversees most of the new emissions-reduction rules being placed on sectors from oil and gas to commercial buildings, and the unemployment division oversees the Unemployment Insurance Trust Fund, which is funded by a direct tax on employers and other fees to ensure laid-off workers have a safety net.
Audits for key state regulatory agencies
“This bill is a critical first step in getting our regulatory climate under control by using a surgical approach to reviewing the state programs with the highest level of regulations compared to other states,” Furman said.
SB 305, also signed Wednesday by the Democratic governor, requires the Colorado Department of Public Health and Environment to take several steps to reduce its water-quality permitting backlog. CDPHE raised permitting fees and brought on new employees during the last fiscal year and, as a result, has increased from 25% to 50% the number of permits that are not expired (but are still active because of state inaction on re-permitting). But federal guidelines recommend a 75% threshold that it hasn’t hit yet.
Among the steps required by the bipartisan bill are the issuance of new report on department prioritization and inspections and establishment of a time frame for processing permit applications. The department now also must allow permit applicants to use independent contractors for review and approval if the applicants pay for it.
Finally, the governor signed SB 254, which transfers money to the Stationary Sources Control Fund that APCD uses to pay for air-quality programs but requires the division to report how it’s using funding to speed a permitting process that averaged 459 days last year. During an April 16 Joint Budget Committee hearing, Sen. Jeff Bridges,D-Greenwood Village, called this a “decent” bill, saying: “It creates transparency. Transparency is good.”
Efforts to speed permitting
Colorado Chamber leaders also had hoped to see a bill introduced this year that would direct the Office of the State Auditor to review new regulations passed in the last 10 years and determine whether they are being implemented properly and/or are hurting business. That effort got derailed, as labor and environmental advocates equated it to the far less surgical federal government-reduction efforts of Elon Musk’s Department of Government Efficiency, but Senate President James Coleman said he’d like to discuss it in 2026.
Speaking on the KUSA-9News streaming series “Business Buzz,” cohosted by this author, Coleman last month said that he’d like to see a bill pass next session that would examine whether recently passed rules are benefitting the state and its businesses. Such audits are necessary to ensure that bills are being implemented correctly, and rules that are not working as intended could be rolled back, allowing resources that now fund their enforcement to be used more effectively, he said.
“We don’t want to pass any bills for a bill signing and a nice pen and a photo opp. We actually want these bills to be implemented and make an impact,” Coleman said. “So, when it comes to regulatory policy, we are open to looking at things we can scale back on and how do we get more funding to provide more incentives to our businesses in the state of Colorado.”
Regulatory benefits for telecom, farm owners
Other bills penned by Polis should provide some immediate and targeted regulatory relief.
House Bill 1056, also signed on Wednesday, requires local governments to decide within 150 days of a permit application — with some limited exceptions — whether they will allow telecommunications companies to put up or expand cell towers. The governor commented in a news release that the bill will break down barriers that companies say now exist and will increase connectivity for all Coloradans.
SB 128 removes a provision from the agricultural workers’ rights law requiring employers housing farm workers to allow service providers onto their property — a move necessary following a U.S. Supreme Court ruling in a case challenging a similar law in California. While sponsors of the original law complained that the rollback was not necessary, its bipartisan sponsors said the bill is constitutionally required and also creates a new right for workers to get telehealth services at any time, which benefits both them and employers.
HB 1329, meanwhile, will help shine light on another pinch point for employers — the increasing number of lawsuits that are funded by third-party actors seeking a payout from their investment. The bipartisan law requires litigation funders from foreign countries of concern — adversarial states like China, North Korea and Russia — to disclose their involvement to the Colorado Attorney General’s office, which can bring charges against those who don’t.
Tax reform efforts passed too
Finally, it’s worth noting that Polis signed three bipartisan tax-incentive bills since the May 7 adjournment of the session that, while not directly related to regulations, could ease the cost burden for employers.
HB 1021 grows the tax credit available to company operators who convert their business to employee ownership from 50% to 75% of the conversion cost, up to $167,000, and it extends the tax credit through 2031. Cosponsoring Rep. Rick Taggart, a Grand Junction Republican who sold an outdoor-gear company that he founded earlier in his career, called it “a very, very important bill for entrepreneurs” looking to keep their creations run locally.
HB 1157 extends by five years a tax credit for residents who invest in early-stage companies in advanced industries like aerospace, bioscience and energy production.
And HB 1177 expands utilities’ allowance to offer lower rates to companies as an economic development incentive. The bill increases the maximum project size that can benefit from the rates without requiring Public Utilities Commission approval, expands the eligibility time frame from 10 years to 25 years and establishes 120-day deadlines for the PUC to act on deals it must approve.