By Lynn Bartels , The Denver Post

A Pueblo lawmaker who said small businesses are going under because they aren’t being paid on time on Friday killed his own proposal to try to fix the problem.

Democratic Sen. Abel Tapia said he didn’t have the votes to pass the measure, although at one time he thought he did.

“Everybody agrees there’s a problem with contractors getting paid, but the lobbyists for the cities, the lobbyists for the counties and the lobbyists for the utilities really put pressure on their lawmakers not to support this bill,” he said.

Senate Bill 95 would have required that invoices be paid within 30 days, or within 25 days if a subcontractor is involved. Owners, contractors and subcontractors would have had to pay at least 12 percent interest on unpaid invoices.

Tapia told the Senate that many businesses are going at least 90 days without being paid, which impacts their lines of credit and bond ratings.

Tapia said he could have saved his bill by watering it down so much that it was almost irrelevant. He said he didn’t want to see that happen.

Sen. Chris Romer, D-Denver, said he couldn’t support the measure because it amounted to micromanaging contracts. But he said he thinks there should be a “Municipal Hall of Shame” for governments that delay payments to contractors.

Sen. Rollie Heath, D-Boulder, agreed late payments are a huge problem for businesses but also said he couldn’t support the bill.

He said he got a flood of letters from subcontractors who said the bill “didn’t accomplish what it said it would.”

In other action, the Senate gave initial approval to a bill critics call “marriage light.” Senate Bill 1260 allows adults in a relationship outside marriage to file beneficiary agreements with county clerks, a boon for those who can’t afford lawyers for wills, power of attorney and other documents, said the sponsor, Sen. Jennifer Veiga, D-Denver.\

This article can be found in the Denver Post here

FOR IMMEDIATE RELEASE (3/20/09)

Contact: Sean Duffy – 303-534-4399

www.buildingjobs4colorado.com

Study Details Major Hit on Jobs, Small Business In Colorado’s Construction Sector

(DENVER) – Stressing that more work is needed to overcome opposition from cities, counties, special districts and quasi-governmental entities that have burdened Colorado contractors with excessively slow payments, supporters of reform legislation have asked legislation to be laid over until the next legislative session, effectively killing SB95 for the 2009 Legislative Session.

The Construction Industry Recovery & Jobs Preservation Act (Senate Bill 95), sponsored by Sen. Abel Tapia and Rep. Jim Riesberg, would create a common-sense statutory framework to ensure that contractors are paid promptly.   The bill is backed by a major statewide coalition – Building Jobs4Colorado (www.buildingjobs4colorado.com) – that includes more than 1,500 employers representing 40,000 Colorado workers.

Construction companies pay their employees, taxes and suppliers promptly, regardless of how long it takes for the company itself to get paid.  It is not uncommon for construction companies to take out loans to float material and payroll costs while waiting to get paid, which on average takes 52 to 90 days depending on where the contractor is in the payment chain.  SB95 was seeking the same remedies that public agencies enjoy today — to be paid for properly performed work in a timely manner.  Public utilities, for example, have the legal right to turn off service if a customer doesn’t pay on time, yet contractors do not have similar remedies in the marketplace.  SB95 would provide a framework for fairness in construction payment cycles.

“The Colorado construction industry is dedicated to working towards a solution to this long standing issue that continues to threaten small business and construction jobs in the state” said Dave Davia, executive director of the Colorado Association of Mechanical and Plumbing Contractors. “We will continue to apply pressure to cities, counties, special districts and quasi-governmental entities until fair and prompt pay standards are achieved.”

Davia said action on the legislation is urgently needed and that the coalition will continue to stress the economic risk to jobs and the economy that stems from inaction.

A study from Colorado State University detailed the broad damage done when local governments and other entities take months to pay contractors’ bills that should be resolved within 30 days.  The result of this ongoing problem is that projects, particularly those funded by taxpayers, lose buying power because of sharply higher interest costs and/or contractors have significantly lower profits from their completed jobs.