Building the Era: Colorado Audits the Rulebook
This spotlight is the second in Next American Era’s “Building the Era” series – a monthly look at governance that strengthens communities, fuels innovation, and expands economic opportunity for Americans across the country.
The Problem
Colorado has a lot going for it.
An educated workforce, a flourishing tech and outdoor economy, and a high quality of life consistently draw talented people from across the country to the state. But, as the Colorado’s leaders know, sustained success requires staying competitive, and a growing body of data from the past few years has spotlighted an area that needs addressing: the regulatory burden many businesses and employers face.
The state is the 6th most regulated state in the nation, with over 200,000 regulations on local businesses and residents.
That burden is only growing, with the number of rules and restrictions increasing 7.1% between 2020 and 2023, and another 2.4% between 2024 and 2025.
These statistics show real roadblocks for residents and small businesses. New reporting from the Colorado Chamber of Commerce found 98 companies had relocated their business operations outside of Colorado between 2019 and 2025 – including 27 in 2025 alone – taking over 13,500 jobs with them. And just last week, the Wall Street Journal reported that cumbersome regulations around AI specifically are scaring off the very companies that once put Colorado on the map as an emerging tech hub (and that trendline is moving in the wrong direction. Even recently, proposed regulations – in the height of an affordability crisis – would outright ban companies from offering personalized deals to consumers).
For everyday Coloradans, these departures mean fewer employers competing for their labor, fewer local businesses to shop at, and upward pressure on prices as market competition thins.
Earlier this month, a bipartisan coalition of more than 230 state business leaders sent an open letter calling out over-regulation as a direct barrier to growth and warning that “the foundation of Colorado's technology and business leadership is deteriorating."
Luckily, Colorado's leaders are listening.
The Solution
Last week, Colorado's House passed Senate Bill 137 – the Measures to Reduce Administrative Burdens Act – by a decisive 55-8 margin.
SB 137 asks a deceptively simple question: Are our rules still working?
It emphasizes quality and efficacy over quantity by:
Mandating reviews every 5 years: Departments must regularly examine all rules on the books (currently, there's no required timeline).
Eliminating redundancy: Agencies must identify and cut rules with overlapping or duplicative purposes.
Weighing costs vs. benefits: Reviews must assess whether rules create administrative burdens without commensurate public benefit.
Giving legislators teeth: Committees can now act on reviews, triggering sunset reviews or audits of programs that may need bigger-picture reform.
The bipartisan, commonsense bill is co-sponsored by Democratic Senate President James Coleman and Republican Senate Minority Leader Cleave Simpson, along with their counterparts in the House. In today's political climate, a 55-8 vote is about as close to all-around consensus as it gets.
The Bottom Line
SB 137 is a prime example of the type of no-brainer policy that comes when lawmakers actually listen to their residents. This is not a deregulatory blank check.
It’s pro-accountability, sector-neutral, and common-sense. It asks state agencies to do what any well-run organization should do: look at what's on the books, ask whether it's working, and clean house where the answer is no.
When outdated rules get cleared out, businesses can hire workers faster, entrepreneurs can launch without having to clear a labyrinth of outdated rulebooks, and consumers benefit from more competition and lower costs.
During floor debate, legislators kept returning to one phrase to describe the bill: "good governance." In this instance, we’d have to agree.