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AttyGenl Brief 4.8.21
AttyGenl Brief 4.8.21
certifies that:
The brief complies with the word limits set forth in the
Court’s March 25, 2021 Order. It contains 6,248 words (of the 9,500
C.A.R. 32.
Noah C. Patterson___________
Signature of attorney or party
TABLE OF CONTENTS
PAGE
INTERROGATORY PRESENTED ........................................................... 1
INTRODUCTION ...................................................................................... 1
STATEMENT OF THE CASE AND FACTS ............................................ 3
I. TABOR requires advance voter approval in several specified
circumstances that are not applicable here. .................................... 6
II. After TABOR was adopted, the General Assembly
incorporated each school district’s TABOR property tax
revenue limit (or waiver) into the public education funding
system. .............................................................................................. 7
III. TABOR’s property tax revenue limit was applied even after
school districts’ voters had waived it. ............................................ 10
IV. In 2007, the General Assembly prevented further
unauthorized decreases in school district mill levies. ................... 12
V. HB 20-1418 and HB 21-1164 complete the correction of the
unauthorized decreases in school district mill levies that
occurred between 1994 and 2006. .................................................. 13
A. HB 20-1418 required school districts to reset their mill
levies to where they would have been had the 1994 Act
been properly applied but enacted temporary tax credits to
offset the immediate impact on taxpayers. ................................. 13
B. HB 21-1164 requires school districts to gradually phase out
the temporary tax credits. ............................................................ 17
APPLICABLE LEGAL STANDARDS .................................................... 18
SUMMARY OF THE ARGUMENT ........................................................ 20
ARGUMENT ........................................................................................... 22
I. TABOR does not require the State to seek advance voter
approval for the enactment of HB 21-1164’s phasing out of
the temporary property tax credits. ............................................... 23
i
TABLE OF CONTENTS
PAGE
II. TABOR does not require the school districts to seek advance
voter approval to put the proper mill levies required by the
1994 Act into place by phasing out the temporary tax credits. .... 24
A. The school districts do not need to obtain advance voter
approval to reduce the temporary property tax credits as
contemplated by HB 21-1164. ...................................................... 25
1. The 1994 Act’s plain language was violated......................... 26
2. Addressing the statutory violations here does not
require a second wave of school district TABOR votes. ....... 29
B. TABOR does not require advance voter approval because
the mill levies set between 1994 and 2006 are void as ultra
vires acts. ...................................................................................... 31
CONCLUSION ........................................................................................ 33
ii
TABLE OF AUTHORITIES
PAGE
CASES
Barber v. Ritter, 196 P.3d 238 (Colo. 2008) ............................................ 19
Bickel v. City of Boulder, 885 P.2d 215 (Colo. 1994)......................... 19, 30
Bolt v. Arapahoe County Sch. Dist. No. Six, 898 P.2d 525 (Colo.
1995) ..................................................................................................... 18
Colo. Dep’t of Revenue v. Woodmen of the World, 919 P.2d 806
(Colo. 1996) ........................................................................................... 37
Glendinning v. Denver, 114 P. 652 (Colo. 1911) ..................................... 31
Havens v. Bd. of County Comm’rs, 924 P.2d 517 (Colo. 1996) ........... 7, 19
Martin v. People, 27 P.3d 846 (Colo. 2001) ............................................. 19
Mesa County Bd. of County Comm’rs v. State, 203 P.3d 519 (Colo.
2009) ............................................................................................. passim
People v. Hyde, 393 P.3d 962 (Colo. 2017) .............................................. 28
Resolution Tr. Corp. v. Heiserman, 898 P.2d 1049 (Colo. 1995) ............ 19
Ryan Ranch Cmty. Ass’n. v. Kelley, 380 P.3d 137 (Colo. 2016) .............. 28
TABOR Found. v. Reg’l Transp. Dist., 416 P.3d 101 (Colo. 2018) ......... 19
Town of Superior v. Midcities Co., 933 P.2d 596 (Colo. 1997) ................ 31
Zaner v. City of Brighton, 917 P.2d 280 (Colo. 1996) ............................. 18
CONSTITUTIONS
COLO. CONST. art. IX, § 2 ........................................................................... 3
COLO. CONST. art. X, § 20 .......................................................................... 6
COLO. CONST. art. X, § 20(4)(a)................................................ 6, 24, 29, 32
COLO. CONST. art. X, § 20(7)(c) .............................................................. 7, 8
STATUTES
§ 2-4-401(13.7)(a), C.R.S.......................................................................... 28
iii
TABLE OF AUTHORITIES
PAGE
§ 22-54-104(1)(a), C.R.S............................................................................. 8
§ 22-54-106(1)(a)(I), C.R.S. ........................................................................ 8
§ 22-54-106(1)(b)(I), C.R.S. ........................................................................ 8
§ 22-54-106(2.1)(a), C.R.S.................................................................. 11, 31
§ 22-54-106(2.1)(c), C.R.S. ....................................................................... 16
§ 22-54-106(2.1)(d), C.R.S.................................................................. 16, 24
§ 22-54-106(3), C.R.S. .............................................................................. 17
Ch. 154, sec. 2, § 22-54-106, 1994 COLO. SESS. LAWS 791–92 .. …9, 10, 27,
28
Ch. 154, sec. 2, § 22-54-106(2)(a), 1994 COLO. SESS. LAWS 791–92 .. 11, 30
Ch. 196, sec. 4, § 22-53-114(2)(c.7)(I)(A), 1993 COLO. SESS. LAWS
881 ........................................................................................................ 29
Ch. 196, sec. 4, § 22-53-114, 1993 COLO. SESS. LAWS 881–82 ................... 9
Ch. 197, sec. 33, § 22-54-106(2.1)(a), 2020 COLO. SESS. LAWS 950–
51 .......................................................................................... …14, 15, 29
Ch. 197, sec. 33, § 22-54-106(2.1)(b)(I), 2020 COLO. SESS. LAWS 951 ..... 15
Ch. 197, sec. 33, § 22-54-106(2.1)(c), 2020 COLO. SESS. LAWS 951–
52 .......................................................................................................... 16
Ch. 199, sec. 5, § 22-54-106(2)(a)(I), 2007 COLO. SESS. LAWS 736 .......... 30
Ch. 199, sec. 5, § 22-54-106(2)(a)(III), 2007 COLO. SESS. LAWS 736 ....... 16
OTHER AUTHORITIES
18 MCQUILLIN MUN. CORP. § 53:77.28 (3d ed.) ....................................... 31
House Bill 20-1418 .......................................................................... passim
House Bill 21-1164 .......................................................................... passim
Senate Bill 07-199 ................................................................. 12, 13, 14, 29
iv
Philip J. Weiser, in his capacity as the Attorney General for the
INTERROGATORY PRESENTED
all excess property tax revenue but were required, without legal
authority, to then reduce their total program mill levies, can the General
their total program mill levies to the levels that would have been in effect
for the unauthorized reductions, now require such school districts to:
House Bill 21-1164; and (b) do so without again obtaining voter approval?
INTRODUCTION
State budget.
mill levies for future years by freezing the school districts’ mill levies. But
because the calculation of each new mill levy is based in part on the
calculation of the mill levy in the previous year, the impact caused by the
House Bill 20-1418 (“HB 20-1418”) and House Bill 21-1164 (“HB 21-
from 1994 to 2006 by resetting the school district’s mill levies to what
they would be today if the CDE had not provided incorrect guidance
sought and received voter approval to waive their property tax revenue
limits.
3
To give effect to TABOR’s revenue limit, the General Assembly
amended school finance law in 1993 and later enacted the 1994 Public
School Finance Act (“the 1994 Act”). The 1994 Act incorporated TABOR’s
revenue limit into its text. However, the 1994 Act did not add any
the plain text of the 1994 Act, school districts that held successful waiver
limit.
mill levies that did not account for the voters’ approval to waive their
property tax revenue limits.2 As a result, between 1994 and 2006, this
incorrect guidance caused the local share to decrease (in violation of the
In 2007, the General Assembly froze the mill levies at their then-
existing levels. That action was challenged under TABOR and upheld in
Mesa County Bd. of County Comm’rs v. State, 203 P.3d 519 (Colo. 2009).
2 This brief does not evaluate the basis for this incorrect calculation
as it is not relevant to the statutory question before the Court.
4
What the 2007 legislation did not do, however, was address the
between 1994 and 2006, declaring the mill levy reductions void for
establishing each school district’s accurate mill levy in future tax years.
correct the results of the incorrect application of the 1994 Act that
occurred between 1994 and 2006. The Interrogatory asks whether the
being reset to what they would have been but for the CDE’s
among other things, any “mill levy above that for the prior year” or “a tax
policy change directly causing a net tax revenue gain to any [taxing
apply here.
6
Subsection (7) of TABOR imposes what is known as TABOR’s
to “inflation in the prior calendar year plus annual local growth, adjusted
for property tax revenue changes approved by voters ….” COLO. CONST. art.
language, voters have the authority to waive the TABOR property tax
revenue limit. Id.; see also Havens v. Bd. of County Comm’rs, 924 P.2d
contributions. Mesa County, 203 P.3d at 523. To calculate the State and
7
local shares of public-school funding, the State first determines a
much of their total program they must raise through their property tax
mill levies, with the State share providing the balance of the funds. § 22-
the then-existing school finance formula several times. First, in 1993, the
Ch. 196, sec. 4, § 22-53-114, 1993 COLO. SESS. LAWS 881–82, with COLO.
CONST. art. X, § 20(7)(c); see also Mesa County, 203 P.3d at 524 (“After
the voters adopted [TABOR], the General Assembly amended the School
system. But as with the 1993 changes, the 1994 Act again incorporated
1994 COLO. SESS. LAWS 791–92; Mesa County, 203 P.3d at 524. The
For the 1994 property tax year and property tax years
thereafter, each district shall levy the lesser of:
Ch. 154, sec. 2, § 22-54-106(2), 1994 COLO. SESS. LAWS 791–92 (emphasis
9
property tax revenue limit. Id. And by referring to “[t]he number of mills
that may be levied by the district under the property tax revenue
longer qualify as “the lesser of” the three options in the 1994 Act. That
Since the 1994 Act framed the mill levy as “the lesser of” three
III. TABOR’s property tax revenue limit was applied even after
school districts’ voters had waived it.
property tax revenue limit. Mesa County, 203 P.3d at 524. As a result,
10
Despite the plain language of the 1994 Act incorporating the results
levies to the number of mills that a district could levy under the property
And since the 1994 Act limited each school district’s levy to the number
formula in one year affected the district for future years as well. See Ch.
district mill levies, resulting in lower local shares. This, in turn, required
the State to increase its funding of local schools via the State share. Mesa
11
IV. In 2007, the General Assembly prevented further
unauthorized decreases in school district mill levies.
In 2007, the General Assembly enacted Senate Bill 07-199 (“SB 07-
199”). This legislation amended the 1994 Act to: (1) state that the TABOR
property tax revenue limit only applied to districts that still had such a
limit in effect (i.e., districts that had not held a successful waiver
election); and (2) impose an upper limit of 27 mills on school district mill
litigation. Id. at 526. Rejecting that challenge, this Court upheld SB 07-
199, finding that the original 1994 Act incorporated TABOR’s property
referred to in TABOR, the Court held that SB 07-199 merely required the
State and school districts to give effect to the voters’ pre-existing waiver
of the property tax revenue limit. Id. at 535. Therefore, there was no need
12
stated, the incorrect application of the 1994 Act “may have caused harm
future years, it did not address that misapplication’s effect—that, for over
a decade, the mill levies were set improperly and out of alignment with
the 1994 Act, which has caused a continuing ripple effect. Only recently,
Interrogatory.
In 2020, the General Assembly took the first step to remedy the
13
legislation specifically recognized that the mill levy reductions that
waiver elections misapplied the 1994 Act. Ch. 197, sec. 33, § 22-54-
106(2.1)(a), 2020 COLO. SESS. LAWS 950. Since those reductions were
inconsistent with the 1994 Act, HB 20-1418 voided their use when
determining a school district’s correct mill levy for future tax years. Id.
in tax year 2020, that had previously waived their revenue limits by
14
• 27 mills.4
Ch. 197, sec. 33, § 22-54-106(2.1)(b)(I), 2020 COLO. SESS. LAWS 951.
HB 20-1418 did not retroactively alter the mill levies for years prior to
2020. The General Assembly further noted that a school district must
certify the correct mill levy under the statute; no TABOR vote was
needed. Ch. 197, sec. 33, § 22-54-106(2.1)(a), 2020 COLO. SESS. LAWS 950–
mills … does not require action by the district other than to certify the
mill levy”). Because HB 20-1418 merely clarified what the 1994 Act had
districts where voters had approved waivers of the limit—the mill levies
For property tax year 2021, HB 20-1418 returns to the formula that
has been in effect since SB 07-199’s enactment. Compare Ch. 197, sec. 33,
15
§ 22-54-106(2.1)(c), 2020 COLO. SESS. LAWS 951–52 with Ch. 199, sec. 5,
§ 22-54-106(2)(a)(III), 2007 COLO. SESS. LAWS 736. So, going forward, all
• 27 mills.
§ 22-54-106(2.1)(c), C.R.S.
districts did not experience any movement in their effective mill levies
were required to fully offset any increase in the property tax burden that
required the State to include the amount of property tax revenue the
districts lost from the temporary credits in the State’s share of total
16
program funding. § 22-54-106(3), C.R.S. As a result, individual taxpayers
Although the General Assembly expressed its intent that the tax
73rd Gen. Assem., 1st Reg. Sess. (Colo. 2021) (adding § 22-54-
temporary tax credits at a rate of no more than 1 mill per year for the
next 20 years until each district has fully eliminated the credits. Id.
17
advance voter approval under TABOR. The General Assembly has this
authority. And, for the reasons discussed below, HB 21-1164 does not
State nor school district levels. Rather, the decision as to how to address
this past mistake—and whether and how to change relevant property tax
contributions at the local level—is one for the General Assembly to make
in the first instance. This brief does not address that issue.
construction.
amendment, the Court’s goal is to give effect to the intent of the electorate
that adopted it. Zaner v. City of Brighton, 917 P.2d 280, 283 (Colo. 1996).
To do so, the Court gives TABOR’s terms their “ordinary and popular
meaning.” Bolt v. Arapahoe County Sch. Dist. No. Six, 898 P.2d 525, 532
18
When interpreting the Constitution, the Court will also seek to
Boulder, 885 P.2d 215, 229 (Colo. 1994). The Court has also “consistently
v. Ritter, 196 P.3d 238, 248 (Colo. 2008) (citing Havens, 924 P.2d at 521).
“to give effect to the General Assembly’s purpose or intent in enacting the
statute.” Martin v. People, 27 P.3d 846, 851 (Colo. 2001). To do so, the
898 P.2d 1049, 1054 (Colo. 1995). Finally, the Court presumes that “a
101, 104 (Colo. 2018). And this Court has “long required parties
19
SUMMARY OF THE ARGUMENT
from their voters. This brief focuses solely on the second question.5
Addressing mill levies set in violation of the 1994 Act does not
require advance voter approval under TABOR. There are only two types
of electorates possibly implicated here: (1) the State; and (2) the school
statutory violation.
districts to reduce temporary property tax credits at the local level does
5On the matter of the first question—whether the legislature has the
authority to require school districts to phase-out the temporary property
tax credits under the provisions of HB 21-1164—this brief leaves that
question to be answered by the General Assembly in its brief.
20
not implicate any of the State’s TABOR obligations. The State is simply
prior mill levies that were inconsistent with statute. There is no question
that, when mill levies were calculated for over a decade without giving
effect to the school districts’ waiver elections, those levies violated the
1994 Act. Mesa County makes that clear. Because HB 20-1418 and
required for decades, there is no mill levy increase here that implicates
Further, because the mill levies violated state statute for over a
decade, they are, from a TABOR perspective, void as ultra vires acts. As
such, when applying TABOR’s requirement that voters approve mill levy
increases, it is inappropriate for the mill levies set in violation of the 1994
Instead, the proper analysis must focus on the last time the mill levies
21
were set correctly. Returning the mill levies to the last time they were
enacted, does not require a TABOR vote because there will be no revenue
ignoring the school district waiver elections, it does not require advance
ARGUMENT
out temporary tax credits does not require advance voter approval at
either the State or local level. HB 21-1164 addresses the incorrect setting
of mill levies between 1994 and 2006 by resetting certain school districts’
mill levies to where they should have been under the plain language of
the 1994 Act. TABOR does not require advance voter approval to correct
statutory misapplications.
22
I. TABOR does not require the State to seek advance voter
approval for the enactment of HB 21-1164’s phasing out of
the temporary property tax credits.
gradually reducing the local temporary property tax credits under HB 21-
scheme, the school districts are the relevant taxing authorities for the
local share of program funding under TABOR because the school districts
taxes.” Mesa County, 203 P.3d at 528. This is true even though the school
So, even though State law directs school districts on how to set their
mill levies, the school districts—not the State—are the relevant taxing
authority on this issue for TABOR purposes. See id. at 530 (“Although
under the [1994 Act] the state dictates the overall scheme of school
taxes levied by the school district, the school district remains the relevant
taxing authority. As such, the school district is the only ‘district’ with the
phase out the temporary property tax credits; therefore, HB 21-1164 does
not require statewide voter approval to take effect upon enactment by the
General Assembly.
II. TABOR does not require the school districts to seek advance
voter approval to put the proper mill levies required by the
1994 Act into place by phasing out the temporary tax
credits.
level implicates only one TABOR provision: the requirement for advance
voter approval of a “mill levy above that for the prior year.” COLO. CONST.
24
Although HB 20-1418 already reset the mill levies to where they
would have been but for the unauthorized reductions, that action had no
practical effect because the temporary tax credits completely offset the
new mill levies. The phase-out of the credits called for in HB 21-1164,
however, means that the mill levy a property owner pays in some school
districts will be more than that actually set in the 2019 property tax year.
But, assuming the General Assembly elects to pursue this policy, it would
mill levy will simply be what the plain language of the 1994 Act had
always required. TABOR does not require advance voter approval for
Two points are central to the conclusion that school districts do not
Facts above, the plain language of the 1994 Act incorporated the results
of successful waiver elections. See also Mesa County, 203 P.3d at 524
election.” (emphasis added)). However, the mill levies set by the school
7As noted above, this brief does not examine or explain the basis for
the CDE’s action leading to the questions before the Court.
26
It merits emphasis that a mistake by a state agency does not
the CDE provided erroneous direction to the school districts for over a
Revenue v. Woodmen of the World, 919 P.2d 806, 817 (Colo. 1996).
The 1994 Act limited mill levies to the number “that may be levied
by the district under the property tax revenue limitation imposed on the
district by” TABOR. Ch. 154, sec. 2, § 22-54-106, 1994 COLO. SESS. LAWS
792. And TABOR expressly allows voters to waive the property tax
revenue limitation. See Section I of the Statement of the Case and Facts
the 1994 Act’s plain language, the waiver elections should have been
27
followed immediately after the voters granted their approval. See Mesa
immediately and gave the school districts … the right to receive property
tax revenue above the subsection (7)(c) limit.”). But that did not happen.
“each district shall levy the lesser of” one of three mill levy options. Ch.
154, sec. 2, § 22-54-106, 1994 COLO. SESS. LAWS 791–92 (emphasis added).
This Court has held that “shall” generally indicates that the legislature
969 (Colo. 2017); Ryan Ranch Cmty. Ass’n. v. Kelley, 380 P.3d 137, 146
(Colo. 2016) (“Like the word ‘shall,’ the word ‘must’ connotes a mandatory
person has a duty.”). Nothing in the 1994 Act suggests that its formula
28
Because the 1994 Act imposed a non-discretionary formula for
setting school district mill levies and because that formula required
giving effect to the waiver elections, school districts that reduced their
levy above that for the prior year.” COLO. CONST. art. X, § 20(4)(a).
since 1993 by prohibiting a mill levy above that of the prior year. 8 Ch.
196, sec. 4, § 22-53-114(2)(c.7)(I)(A), 1993 COLO. SESS. LAWS 881; Ch. 154,
8 HB 20-1418 did not replicate that requirement for tax year 2020
because it reset the mill levies in school districts where the 1994 Act had
been misapplied between 1994 and 2006. See Ch. 197, sec. 33, § 22-54-
106(2.1)(a), 2020 COLO. SESS. LAWS 950. For property tax year 2021,
HB 20-1418 returns to the formula that has been in effect since SB 07-
199’s enactment. See Section V of the Statement of the Case and Facts
above.
29
sec. 2, § 22-54-106(2)(a), 1994 COLO. SESS. LAWS 791–92; Ch. 199, sec. 5,
has been long enshrined in Colorado statute, once school districts applied
an incorrect levy in even a single year, that levy in turn affected the mill
mill levies required by the 1994 Act. The mill levies set by HB 20-1418
Colorado statute long required; the only reason these levies are not in
result, there is no imposition of a mill levy above that for a prior year for
purposes of TABOR.9
30
B. TABOR does not require advance voter approval
because the mill levies set between 1994 and 2006
are void as ultra vires acts.
district mill levies for property tax years 1994 through 2006 were not
doctrine of ultra vires acts. An ultra vires act “is one that [a]
MUN. CORP. § 53:77.28 (3d ed.). An ultra vires act is void. Glendinning v.
Denver, 114 P. 652, 652 (Colo. 1911) (“All municipal ordinances must be
in harmony with the general law of the state; if they are inconsistent or
repugnant to such general law, they are void, ultra vires, and no one can
Midcities Co., 933 P.2d 596, 602 (Colo. 1997) (holding that municipal
procedure).
Here, the mill levies set in violation of the 1994 Act are void as ultra
vires acts. As discussed above, the 1994 Act states that districts “shall
31
levy” the number of mills required by the 1994 Act’s formula. This is not
school districts “shall levy” the lesser of one of several potential mill
levies was not optional and doing otherwise exceeded their legal
authority.
All mill levies set between 1994 and 2006 that disregarded the
school districts’ waiver elections were void as ultra vires acts because
they exceeded the legal authority provided by the 1994 Act. Since those
mill levies are void, the question becomes which year’s mill levy should
serve as the reference point to determine whether the school districts are
imposing a “mill levy above that for the prior year.” COLO. CONST. art. X,
§ 20(4)(a). The only reasonable answer is the last year in which the mill
levy was set correctly without consideration of the void mill levies that
That is the exact same mill levy that HB 20-1418 and HB 21-1164
ultimately require the school districts to adopt. All that HB 20-1418 and
HB 21-1164 do is return the mill levies to their level at the time they
were correctly set under the 1994 Act’s mandatory formula. As such,
32
these bills do not result in a mill levy increase above that in the prior
The General Assembly faces a policy question above and beyond the
legal issue outlined in this brief: how to address the difference in payment
called for by the 1994 Act and the mill levy levels now in effect? The
General Assembly, in other words, must decide whether and for how long
to keep in place the temporary tax credits it adopted to substitute for the
issue, or on any potential legal constraints that would guide this decision.
This issue, in short, is one that the General Assembly must decide how
CONCLUSION
33
While this Answer Brief concludes that voter approval is not
34
Dated April 8, 2021.
PHILIP J. WEISER
Attorney General
Mark G. Grueskin
RECHT KORNFELD, P.C.
Terry Gill
Sharon L. Eubanks Russell D. Johnson
Julie A. Pelegrin COLORADO DEPARTMENT OF LAW
OFFICE OF LEGISLATIVE LEGAL Attorneys for Jared S. Polis, in his
SERVICES official capacity as the Governor of
Attorneys for the Colorado General the State of Colorado
Assembly