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4B1ED5B07031121E872584400072037F Hearing Summary


Date Jul 23, 2019      
Location HCR 0112

TABOR and Single Subject Considerations - Committee Discussion Only

02:45:28 PM  

Ms. van Mourik introduced the Taxpayer's Bill of Rights and stated that it includes a list of items that require voter approval including a tax policy change directly causing a net revenue gain to any district. She explained that this provision complicates the committee's considerations and pointed out the Mesa County and RTD vs. TABOR foundation cases for guidance. She state that, based on these cases, the Office of Legal Services will provide guidance to the General Assembly. Ms. van Mourik outlined the Colorado Supreme Court's ruling in TABOR Foundation vs. Regional Transportation District (RTD), which indicated that a tax policy change resulting in a net tax revenue gain to any district does not require voter approval if the net tax revenue gain is both de minimus and incidental.

02:53:57 PM  

In response to a question, Ms. van Mourik explained what may or may not constitute an "incidental" change to tax policy in light of the RTD decision. She explained that in the RTD decision, the Colorado Supreme Court identified the bill in question to have an incidental impact on revenue because it found the purpose of the legislation to be harmonization of the state, RTD, and Scientific and Cultural Facilities District (SCFD) sales tax base. However, Ms. van Mourik stated that the question of what other policy changes may have an incidental effect on revenue remains open based on the court's decision.

02:59:19 PM  

In response to a committee question, Ms. van Mourik  explained that the holding requires that the change be de minimus in additional to being incidental. She explained that while the holding did not explicitly define either de minimus or incidental, the holding seemed to imply that a revenue increase of less than 1 percent of the RTD or SCFD budget would be de minimus. Based on the June 2019 LCS forecast for FY 2019-20 General Fund and cash fund revenue subject to TABOR, a 1 percent de minimus threshold would be something like $153 million.

03:05:47 PM  

Ms. van Mourik proceeded to explain how the RTD holding interacts with the court's previous holding in Mesa County Board of County Commissioners vs. State of Colorado. She explained that the Mesa holding applies even if legislation is not found to require voter approval under the de minimus and incidental test in RTD. So, if a piece of legislation was determined to be both de minimus and incidental, it would still require voter approval if state revenue is expected to exceed the TABOR limit.

03:10:13 PM  

In response to a committee question, Ms. van Mourik explained that subsection (8) of TABOR prohibits a change to the definition of taxable income during the current tax year; for example, the state could not enact legislation to create an income tax deduction in the year when the bill was passed. In response to additional committee questions, Ms. van Mourik explained that her office advises that the legislature rely on the fiscal note and the economic and revenue forecast in order to make its decisions.

03:15:36 PM  

Committee discussion continued regarding forecast uncertainty, and whether a potentially inaccurate forecast ought to bind the legislature under the Mesa decision. Ms. van Mourik explained that she has laid out the best advice that her office can provide regarding the legislature's compliance with what she described as the confusing test in the Mesa decision.

03:19:42 PM  

In response to a committee question, Ms. van Mourik provided a definition of "incidental" from the Supreme Court cases. Ms. van Mourik read a passage from the RTD ruling, where the court held that House Bill 13-1272 resulted in an incidental change in revenue because the legislature's purpose in enacting the bill was to harmonize the state, RTD, and SCFD sales tax basis.

03:23:58 PM  

In response to a question of whether the court would abide by the tests it imposed in Mesa and RTD. Ms. van Mourik explained that she cannot be certain of the court's future action in this area.

03:24:55 PM  

H. Pierce Lively, staff attorney at the Office of Legislative Legal Services, introduced himself. He explained that the Colorado constitution requires that all bills, other than general appropriations bills, have a single, clearly-stated bill subject. In response to a question about case law interpreting the constitutional requirement. Mr. Lively explained that there has been extensive case law establishing the parameters of the single subject requirement on appeals of the jurisdictional decisions made by the State Title Board. Mr. Lively proceeded to identify the purposes of the constitutional single subject requirement as identified by the courts. He explained that while these purposes call for a narrow title, there are consequences of using either a broad or narrow title. He also explained that a bill sponsor may want to include a trailer if they decide to use a broad title.

03:30:47 PM  

Mr. Lively concluded his presentation by stating that the five bills referred by the committee to the Legislative Council will need to comport with the single subject requirement even if they attempt to treat multiple tax expenditures under a single bill title.

03:32:46 PM  

Ms. van Mourik explained that, in conjunction with the committee's bill requests, OLLS will make recommendations regarding which legislative concept(s) may be joined in a single bill title, but that OLLS and the committee will be bound by the constitutional single subject requirement when making such determinations.

03:34:27 PM  

In response to a question on whether the Colorado Supreme Court's ruling concerning the single subject of ballot initiative 2019-2020 #3 changes OLLS's analysis concerning a single subject, Mr. Lively indicated that the implication of this decision beyond a TABOR repeal measure is as of yet unclear.

The effective date for bills enacted without a safety clause is August 7, 2024, if the General Assembly adjourns sine die on May 8, 2024, unless otherwise specified. Details