Senate panel advances Sullivan bill to require local verification of contractors' workers' compensation coverage, 3–2

Senator Sullivan’s measure to standardize proof-of-workers’ compensation verification across local governments cleared the Senate Business, Labor and Technology Committee on a 3–2 vote after hours of testimony and two sponsor amendments.

The bill would require municipalities to use the Colorado Department of Labor and Employment’s (CDLE) online verification tool to confirm a contractor’s workers’ compensation policy when issuing covered building permits. Senator Sullivan said the change would help ensure that workers injured on the job are covered and would make verification routine for local permitting staff.

Opponents — including the Colorado Municipal League, industry trade groups and the state Division of Workers’ Compensation — urged a no vote. Elizabeth Haskell of the Colorado Municipal League testified the bill “enlists local permitting licensing authorities as frontline enforcement agents for a state regulatory function” and would create “significant new administrative burdens” without funding. Paul Toriello, director of the Division of Workers’ Compensation, told the committee the department opposes the bill, noting carriers report coverage, certificates are valid only on the day issued and falsified certificates can make an employer appear insured when they are not.

Construction-industry witnesses warned of practical problems and economic effects. Michael Gifford of the Associated General Contractors said it is often impossible for a general contractor to know every downstream subcontractor at permit time and that the bill’s requirement that a permit be suspended or revoked on a finding of noncompliance could be disruptive. Parker White of the Colorado Competitive Council said the proposal would add front-end verification for every contractor and subcontractor and “introduce additional delays into the already slow permitting process,” potentially raising housing costs.

Proponents including carpenters’ union representatives urged the panel to focus on worker safety and to address premium fraud and misclassification. Boris Gresley of the Western States Regional Council of Carpenters said the bill would “protect workers” and level the playing field for responsible contractors; union witnesses described instances of uninsured workers and urged standard verification.

The sponsor offered two amendments during the hearing. Amendment L002 narrowed the bill’s scope to building permits valued at $1,000,000 or more. Amendment L003 converted a mandatory requirement to a discretionary one in order to give local jurisdictions more flexibility; both amendments were adopted without objection.

Senator Henriksen moved the bill to the Committee on Appropriations with a favorable recommendation. Roll call recorded Ayes from Senator Judah, Senator Henriksen and the Madam Chair and Noes from Senator Catlin and Senator Liston; the bill advanced on a 3–2 vote.

The committee record shows proponents highlighted CDLE’s existing verification tool as the mechanism for checks, while opponents repeatedly urged strengthening enforcement at the state level or adding targeted penalties rather than creating a new local administrative duty. The bill now goes to Appropriations.