Colorado Advances SB 137 to Improve Regulatory Evaluations and Business Climate

Colorado's Senate is advancing efforts to enhance regulatory evaluations, with Senate Bill 137 receiving unanimous backing by all 35 senators. This legislative move follows a report by the Colorado Chamber of Commerce identifying the departure or expansion redirection of 98 businesses from Colorado to other states since 2019, resulting in significant job losses and a decrease in headquarters listed by the Securities and Exchange Commission.

SB 137 proposes that state agencies conduct reviews of existing regulations every five years to assess their efficacy and relevance. These evaluations will be brought before legislative committees during annual SMART Act hearings, offering legislators the chance to request further audits or sunset reviews. Initially faced with concerns of potentially rolling back essential public health and safety regulations, the bill's language was adjusted to address these issues, gaining bipartisan support.

Senate President James Coleman emphasized the importance of periodic regulatory reviews to maintain balance and ensure rules effectively serve their intended purposes. According to a 2024 Chamber study, Colorado ranks as the sixth-most-regulated state, with nearly half of its regulations considered redundant or excessive. The study suggests that regulatory increases can redirect resources from business growth to regulatory compliance, thereby impeding economic expansion.

The outward migration of businesses due to regulatory burdens was highlighted in the Chamber’s Relocation Tracker, which recorded an increase in missed business opportunities from six in 2022 to 27 by 2025. These regulations have also been cited as raising housing costs and influencing large-scale investment decisions by sectors like bioscience, which redirected $500 million in capital investments over the past year.

Colorado Chamber of Commerce President Loren Furman expressed optimism about the bill's potential to enhance governmental transparency and reduce regulatory complexities for businesses. SB 137 will now move to the House, supported by leadership from both parties, Democratic House Speaker Julie McCluskie and Republican House Minority Leader Jarvis Caldwell.

Additionally, the Senate passed another regulation-focused proposal, SB 20, aiming to reform childcare sector regulations and enhance tax incentives to increase accessibility and affordability. Sponsored by bipartisan senators, this bill includes measures such as allowing centers to operate before securing local zoning permits and standardizing inspections.