April 21, 2014

IAALS Releases Preliminary Findings on Colorado Civil Access Pilot Project

Corina_Gerety_bw_smallThis post originally appeared on IAALS Onlinethe blog for IAALS, the Institute for the Advancement of the American Legal System at the University of Denver, on April 7, 2014.

By Corina Gerety

IAALS is pleased to announce the completion of its preliminary evaluation report on the Colorado Civil Access Pilot Project (CAPP), which tests a new set of pre-trial procedures for business actions in state district court. The project, which began in January 2012 and runs through December 2014, is in place in five Denver metro-area courts.

Relating to pleadings, disclosures, discovery, and case management, the CAPP rules were designed to bring the disputed issues to light at the earliest possible point, tailor the process proportionally to the needs of the case, provide active case management by a single judge, and move the case quickly toward trial or other appropriate resolution. The preliminary report combines the results of a docket study with attorney and judge surveys.

Our initial analysis reveals that the CAPP process as a whole has succeeded in achieving many of its intended effects, including a reduced time to disposition, increased court interaction, proportional discovery and costs, and a lower level of motions practice. Much of the positive feedback relates to CAPP’s early, active, and ongoing judicial management of cases, with many calling for this to become a permanent feature of the rules.

For those cases that are at least minimally contested, one of the challenges of the project relates to differences between simple and complex cases. The first part of the CAPP process (rolling and staggered deadlines for pleadings and initial disclosures) appears to work better in simple cases, while it can fall apart in complex cases. The second part of the CAPP process (everything from the joint case management report forward) appears to provide a real benefit for complex cases, while it can be too much for simple cases. This is just one nuance in the results, and the full report will provide interesting reading for those engaged in these issues—both inside and outside of Colorado.

This report accompanies other recent reports on rules projects taking place around the country, includingNew HampshireMassachusetts, and Utah. It is preliminary because some cases in the docket study sample have not yet resolved and because differences in the survey data based on case or respondent characteristics will need to be more fully explored. The final report will be released in the fall of 2014.This is, however, a very valuable starting point.

Click here to download the Preliminary Findings on the Colorado Civil Access Pilot Project.

Corina Gerety directs long-term research and evaluation projects for IAALS. Her work involves legal and empirical research, analysis, and writing, as well as research-related collaboration and presentation. She conducts research for all IAALS initiatives on an as-needed basis. Gerety came to IAALS in the Spring of 2009 from the public sector, having worked for a number of years in the Office of the Colorado Attorney General and in clerkships at the Colorado Supreme Court, Colorado’s Second Judicial District Court, and the Office of the Presiding Disciplinary Judge.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

e-Legislative Report: April 14, 2014

CBA Legislative Policy Committee

For readers who are new to CBA legislative activity, the Legislative Policy Committee (LPC) is the CBA’s legislative policy-making arm during the legislative session. The LPC meets weekly during the legislative session to determine CBA positions on requests from the various sections and committees of the Bar Association.

Friday, April 11
At the request of the Juvenile Law Section, the LPC voted to oppose HB 14-1362. Concerning great grandparent visitation with great-grandchildren. The bill is sponsored by Rep. Dominick Moreno.

At the Capitol—Week of April 7

A scorecard of the committee and floor work follows.

In the House

Monday, April 7

Passed on 3rd reading.

  • HB 14-1013. Concerning the creation of the advanced industries workforce development program, and, in connection therewith, making and reducing appropriations. Vote: 37 yes, 27 no, and 1 excused.
  • HB 14-1061. Concerning sentences imposing monetary payments in criminal actions, and, in connection therewith, eliminating prison sentences for persons who are unable to pay criminal monetary penalties. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1072. Concerning an income tax credit for child care expenses paid by a resident individual with a federal adjusted gross income of $25,000 or less, and, in connection therewith, making and reducing appropriations. Vote: 39 yes, 25 no, and 1 excused.
  • HB 14-1199. Concerning changes to the regulation of consumer goods service contracts, and, in connection therewith, making and reducing appropriations. Vote: 61 yes, 3 no, and 1 excused.
  • HB 14-1203. Concerning funding to maintain the infrastructure for the digital trunked radio system, and, in connection therewith, making an appropriation. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1173. Concerning continuation of the controlled substances abuse act, and, in connection therewith, the treatment of controlled substances abuse and making an appropriation. Vote: 61 yes, 3 no, and 1 excused.
  • HB 14-1283. Concerning modifications to the electronic prescription drug monitoring program, and, in connection therewith, making an appropriation. Vote: 42 yes, 22 no, and 1 excused.
  • HB 14-1009. Concerning changing the wildfire mitigation income tax deduction to the wildfire mitigation income tax credit, and in connection therewith, making and reducing appropriations. Vote: 52 yes, 12 no, and 1 excused.
  • HB 14-1029. Concerning a recodification of the laws governing reserved parking for persons with disabilities, and in connection therewith, making and reducing appropriations. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1278. Concerning continuation of the workers’ compensation accreditation program administered by the division of workers’ compensation, and, in connection therewith, implementing the recommendations of the 2013 sunset report by the department of regulatory agencies. Vote: 51 yes, 13 no, and 12 excused.
  • HB 14-1316. Concerning methods to determine whether disparities involving certain historically underutilized businesses exist within the state procurement process, and, in connection therewith, commissioning a study to make such determination, requiring the department of personnel to track contracts awarded to historically underutilized businesses, and making and reducing appropriations. Vote: 37 yes, 27 no, and 1 excused.
  • SB 14-27. Concerning criminal history background checks for professionals who have the authority to appear in court, and, in connection therewith, making an appropriation. Vote: 52 yes, 12 no, and 1 excused.
  • HB 14-1095. Concerning the Colorado bureau of investigation’s authority to investigate computer crime, and, in connection therewith, making an appropriation. Vote: 61 yes, 3 no, and 1 excused.
  • HB 14-1266. Concerning the penalties for certain value-based offenses, and, in connection therewith, reducing an appropriation. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1011. Concerning the funding of advanced industry economic development programs. Vote: 39 yes, 25 no, and 1 excused.
  • HB 14-1014. Concerning modifications to the job growth incentive tax credit, and, in connection therewith, reducing an appropriation. Vote 51 yes, 13 no, and 1 excused.

Tuesday, April 8

Passed 3rd Reading:

  • HB 14-1273. Concerning human trafficking, and, in connection therewith, making and reducing appropriations. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1321. Concerning the membership of the Colorado task force on drunk and impaired driving. Vote: 64 yes, 0 no, and 1 excused.

Wednesday, April 9

Passed on 3rd reading.

  • HB 14-1330. Concerning an update of telecommunications terminology for intrastate telecommunications services. Vote: 63 yes, 0 no, and 2 excused.
  • HB 14-1327. Concerning measures to expand the deployment of communication networks, and, in connection therewith, enacting the “Broadband Deployment Act.” Vote: 57 yes, 7 no, and 1 excused.
  • HB 14-1328. Concerning the deployment of broadband into unserved areas of Colorado through grant-making from moneys allocated from the Colorado high cost support mechanism, and, in connection therewith, making an appropriation. Vote: 47 yes, 17 no, and 1 excused.
  • HB 14-1127. Concerning disclosure of information for asset recovery, and, in connection therewith, making an appropriation. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1338. Concerning planning for the effective use of Colorado’s regional centers for persons with intellectual disabilities, and, in connection therewith, making an appropriation. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1211. Concerning ensuring access to quality complex rehabilitation technology in the medicaid program, and, in connection therewith, making and reducing appropriations. Vote: 49 yes, 15 no, and 1 excused.

Thursday, April 10

Passed 3rd Reading:

  • HB 14-1354. Concerning the ability of a county clerk and recorder to seek judicial review of final action by the secretary of state relating to elections. Vote: 50 yes and 15 no.
  • HB 14-1159. Concerning a state sales and use tax exemption for components used in biogas production systems. Vote: 54 yes and 11 no.

Friday, April 11

No bills were heard on 3rd Reading.

In the Senate

Monday, April 7

No bills were heard on 3rd Reading.

Tuesday, April 8

Passed on 3rd Reading:

  • HB 14-1057. Concerning the Colorado fraud investigators unit. Vote: 30 yes and 5 no.
  • HB 14-1176. Concerning the state audit cycle of the emissions program for motor vehicles. Vote: 20 yes and 15 no.

Wednesday, April 9

Passed on 3rd Reading:

  • HB 14-1299. Concerning the repeal of the six-year limitation on applying a salvage brand to a motor vehicle whose cost of being repaired exceeds the value of the vehicle without the recent damage. Vote: 22 yes, 12 no, and 1 excused.

Thursday, April 10

No bills were heard on 3rd Reading.

Friday, April 11

No bills were heard on 3rd Reading.

HB 14-1279: Creating Tax Credit for Businesses for Business Personal Property Tax Paid in Colorado

On February 13, 2014, Reps. Dianne Primavera & Dave Young and Sens. Rollie Heath and Mark Scheffel introduced HB 14-1279 - Concerning the Creation of a State Income Tax Credit to Reimburse a Business for Personal Property Taxes Paid in the State. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

For five income tax years beginning on January 1, 2014, as introduced, the bill creates an income tax credit to reimburse a qualifying taxpayer for personal property taxes paid in Colorado for which the taxpayer does not already receive a state or federal income tax benefit. This is accomplished by allowing a tax credit that is equal to the taxpayer’s personal property taxes paid multiplied by a percentage equal to 100% minus the sum of the taxpayer’s federal marginal income tax rate for the year and 4.63%.

To qualify for a tax credit, a taxpayer must have $25,000 or less worth of personal property on which property taxes are paid in Colorado during an income tax year commencing in 2014, or have less than an inflation-adjusted amount for each income tax year thereafter. The amount of the credit that exceeds a taxpayer’s income taxes is refunded to the taxpayer.

The bill has been approved by the Business, Labor, Economic, & Workforce Development and Finance Committees; the bill is scheduled next to go before the Appropriations Committee.

Since this summary, the bill was amended in the Appropriations Committee and referred to the House Committee of the Whole for Second Reading.

HB 14-1274: Repealing Limitations on Qualifications for Bank Directors

On February 10, 2014, Reps. Tracy Kraft-Tharp & Chris Holbert and Sen. Cheri Jahn introduced HB 14-1274 - Concerning the Modification of Certain Limitations on the Managers of a Bank Chartered by Colorado. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

Current law prohibits a state bank from executing a contract for the employment of an officer for more than one year and requires 2/3 of the directors of a state bank to be residents of this state and a majority of the directors to reside within 100 miles of the place of business of the bank. The bill repeals these limitations and substitutes a requirement that a majority of the directors to be residents of this state.

The bill has passed both houses of the legislature on March 31 and is headed to Gov. John Hickenlooper’s desk for action.

Since this summary, the bill was signed into law by Governor Hickenlooper.

Victims’ Rights Act Cleanup, Passive Surveillance, and More Bills Signed by Governor

On Friday, April 4, 2014, Governor Hickenlooper signed six bills into law. To date, he has signed 119 bills into law and vetoed two bills. Summaries of the six bills signed Friday are here.

  • HB 14-1148Concerning Guidelines for Ensuring the Rights of Victims of Crime to Participate in the Criminal Justice System, by Rep. Rhonda Fields and Sen. Cheri Jahn. The bill adds violations of civil protection orders in sex offense cases, coercion of involuntary servitude, and all child prostitution offenses to the list of crimes to which the Victims Rights Act (VRA) applies, and also amends the VRA regarding certain victim rights and notifications, among other things.
  • HB 14-1152Concerning Passive Surveillance Records of Governmental Entities, by Rep. Polly Lawrence and Sen. Mark Scheffel. The bill codifies the current practice of several governmental entities that use passive surveillance by specifying dates by which the passive surveillance content be destroyed.
  • HB 14-1160Concerning Overweight Vehicle Permits for Divisible Loads, by Reps. Diane Mitsch Bush & Don Coram and Sens. Nancy Todd & Bernie Herpin. The bill exempts waste water vehicles operated by a city from maximum load restrictions and authorized a fleet fee for overweight vehicles.
  • HB 14-1182Concerning Changes for the 2015-16 School Year to Certain Public Education Accountability Measures Specified in the “Education Accountability Act of 2009″ to Accommodate the Transition to Administering New Statewide Assessments, by Rep. Millie Hamner and Sen. Andy Kerr. The bill authorizes the Colorado Department of Education to assign accreditation ratings and recommend performance plans that fall outside specific actions recommended by statute.
  • HB 14-1184Concerning Conservancy Districts that are Organized for the Purpose of Preventing Floods, by Rep. Edward Vigil and Sen. Kevin Grantham. The bill makes changes to the Pueblo Conservancy District, including increasing the number of board members and specifying election procedures, and also clarifies that a vacancy is created on a water conservancy district board when a board member no longer lives in the district.
  • HB 14-1265Concerning the Regulation of Games of Chance, by Rep. Dominick Moreno and Sen. Ellen Roberts. The bill makes several changes to statutes regarding games of chance (such as bingo and raffles), including exempting food eaten by volunteer workers from prohibition on remuneration for volunteers, allowing progressive bingo jackpots to carry over to the next event at the same location, allowing bingo or raffle licensees to maintain a bank account specifically for the proceeds of progressive games, and more.

For a list of Governor Hickenlooper’s 2014 legislative decisions, click here.

SB 14-166: Directing Office of Economic Development to Develop an App that Identifies Local Businesses

On March 21, 2014, Sen. Morgan Carroll introduced SB 14-166 – Concerning the Development of Mobile Application Software in the Colorado Office of Economic Development that Users May Access to Identify Local Businesses. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The bill directs the Colorado office of economic development (office) to contract for the creation of mobile application software (app) that identifies local businesses in Colorado. Local businesses, which are defined as businesses that are owned, located, or headquartered in, or that manufacture in, the state, may elect to participate in the app.

The bill is assigned to the Business, Labor, and Technology Committee.

HB 14-1269: Expanding Nexus of Business Relationships for Sales Tax Collection Purposes

On February 4, 2014, Rep. Lois Court and Sen. Mike Johnston introduced HB 14-1269 - Concerning the Circumstances Under Which a Person who Sells Items Subject to Sales Tax Must Collect such Sales Tax on Behalf of the StateThis summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The state imposes a sales tax collection obligation on every retailer or vendor, and the terms “retailer” and “vendor” are defined to include every person doing business in this state and selling to the user or consumer, and not for resale. The state also imposes a use tax collection obligation on every person in this state for the privilege of storing, using, or consuming in the state any tangible personal property purchased at retail. By operation of law, the definition of the term “doing business in this state” establishes which retailers must collect sales and use tax on behalf of the state from its customers. What qualifies as “doing business in this state” is what is understood as “nexus” among sales tax experts.

The bill modifies and expands the state’s sales and use tax nexus provisions by:

  • Expanding the types of activities that will create nexus with the state if conducted by any person that already has a physical presence in this state, other than a common carrier acting in its capacity as such, pursuant to an agreement or arrangement with an out-of-state retailer;
  • Clarifying that the expanded nexus provisions create a rebuttable presumption that the specified activities create substantial nexus for the out-of-state retailer;
  • Requiring an out-of-state retailer to collect and remit sales and use taxes if that retailer contracts with the state for the sale of tangible personal property or taxable services; and
  • Limiting the effect of the expanded nexus provisions to sales and use tax by specifying that the nexus does not apply to franchise, income, or other taxes.

The bill is assigned to the Finance Committee. The Finance Committee has held two sessions where testimony was taken and the committee discussed the bill. The bill is scheduled for “action only” on April 2 at 1:30 p.m.

HB 14-1270: Continuing the Pet Animal Care and Facilities Act

On February 4, 2014, Rep. Steve Lebsock and Sen. Lois Tochtrop introduced HB 14-1270 - Concerning the Sunset Review of the Licensing of Pet Animal Facilities, and, in Connection Therewith, Continuing the Licensing Functions of the Commissioner of Agriculture and Making Substantive Changes to the Regulatory StatutesThis summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

Sunset Process—House Agriculture, Livestock, and Natural Resources Committee

An introduced, the bill continues the licensure of pet animal facilities by the commissioner of agriculture (commissioner) for 5 years, until 2019. It also:

  • Authorizes the commissioner to deny, revoke, or refuse to renew the license of any entity if any officer, principal owner, or other person in a position of control over the entity has been convicted of animal cruelty or animal fighting, and requires denial or revocation of a license after a second offense;
  • Directs the commissioner or the commissioner’s designees to report to law enforcement agencies and the bureau of animal protection any instance of suspected animal abuse that is discovered in the course of an investigation, and grants qualified immunity for a report made in good faith;
  • Allows the commissioner to specify, by rule, written disclosures that must be given concerning rabies vaccinations and the origin and medical history of a dog, cat, ferret, or bird;
  • Amends definitions related to small canine breeding operations to resolve potential conflicts;
  • Repeals certain existing exemptions for nonhuman primates; and
  • Increases the existing cap on license fees from $350 to $700.

On February 24 the Agriculture, Livestock, & Natural Resources Committee amended the bill and referred it to the Finance Committee. On March 13, the Finance Committee approved the bill and sent it to the Appropriations Committee. The bill is on the Appropriations Committee calendar for Wednesday, April 2 at 7:30 a.m.

e-Legislative Report: March 31, 2014

CBA Legislative Policy Committee

For readers who are new to CBA legislative activity, the Legislative Policy Committee (LPC) is the CBA’s legislative policy-making arm during the legislative session. The LPC meets weekly during the legislative session to determine CBA positions on requests from the various sections and committees of the Bar Association.

The LPC met on Friday, March 28, and voted to support HB 14-1032. Concerning the provision of defense counsel to juvenile offenders—with necessary amendments.

At the Capitol—Week of March 24

A scorecard of the committee and floor work follows.

In the House

Monday, March 24

Passed 3rd Reading:

  • SB 14-98. Concerning clarifications to statutory language on crimes against at-risk elders. Vote: 55 yes, 6 no, and 4 excused.
  • HB 14-1288. Concerning personal belief exemptions to immunization requirements for children prior to attending school. Vote: 42 yes, 19 no, and 4 excused.
  • SB 14-54. Concerning the ability of an alcohol beverage licensee to petition the licensing authority to pay a fine in lieu of a license suspension ordered by the licensing authority. Vote: 61 yes, 0 no, and 4 excused.
  • SB 14-28. Concerning an expansion of eligibility for the receipt of disbursements from the electric vehicle grant fund for the installation of electric vehicle charging stations. Vote: 38 yes, 23 no, and 4 excused.

Tuesday, March 25

Passed 3rd Reading:

  • HB 14-1295. Concerning residential mortgage foreclosures, and, in connection therewith, requiring a single point of contact and prohibiting dual tracking. Vote: 38 yes and 27 no.
  • HB 14-1312. Concerning efforts to reduce the number of foreclosures in Colorado, and, in connection therewith, continuing the foreclosure deferment program. Vote: 46 yes and 19 no.
  • SB 14-22. Concerning certified community development financial institutions, and, in connection therewith, authorizing such institutions to serve as a qualified holder and to present a request for full or partial release of collateral pledged without presentation of the original promissory note. Vote: 38 yes and 27 no.

Wednesday, March 26

Passed on 3rd Reading:

  • SB 14-131. Concerning the removal of certain identifying information from a motor vehicle registration card. Vote: 65 yes and 0 no.
  • HB 14-1187. Concerning consumer protection from excess damages for repair of rental vehicles. Vote: 65 yes and 0 no.
  • HB 14-1289. Concerning the reinvestment of unused governmental moneys held by a financial institution that are in excess of the amount insured by the federal deposit insurance corporation in accounts of other financial institutions. Vote: 65 yes and 0 no.

Thursday, March 27

Passed 3rd Reading:

  • The House spent 10 hours debating various 2nd Reading amendments to HB 14-1336. Concerning the provision for payment of the expenses of the executive, legislative, and judicial departments of the state of Colorado, and of its agencies and institutions, for and during the fiscal year beginning July 1, 2014, except as otherwise noted—“the Budget bill.”

Friday, March 28

Passed on 3rd Reading:

  • HB 14-1336. Concerning the provision for payment of the expenses of the executive, legislative, and judicial departments of the state of Colorado, and of its agencies and institutions, for and during the fiscal year beginning July 1, 2014, except as otherwise noted—“the Budget bill.” Vote: 37 yes, 27 no, and 1 excused.
  • HB 14-1337. Concerning an increase in the general fund reserve. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1339. Concerning the creation of the hazardous substance site response fund. Vote: 49 yes, 15 no, and 1 excused.
  • HB 14-1340. Concerning the state toxicology laboratory, and, in connection therewith, making an appropriation. Vote: 63 yes, 1 no, and 1 excused.

In the Senate

Monday, March 24

Passed on 3rd Reading:

  • HB 14-1254. Concerning a requirement to disclose fees charged to a unit owners’ association by a community association manager. Vote: 32 yes and 3 no.

Tuesday, March 25

Passed on 3rd Reading:

  • HB 14-1193. Concerning requirements governing the imposition of a fee for the research and retrieval of public records under the “Colorado Open Records Act.” Vote: 32 yes, 1 no, and 1 excused.
  • HB 14-1047. Concerning restrictions on the publishing of basic identification information on commercial web sites. Vote: 23 yes, 11 no, and 1 excused.
  • HB 14-1274. Concerning the modification of certain limitations on the managers of a bank chartered by Colorado. Vote: 34 yes, 0 no, and 1 excused.

Wednesday, March 26

Passed on 3rd Reading:

  • HB 14-1136. Concerning exempting a continuing professional education program that is approved by a state professional licensing board from regulation by the division of private occupational schools in the department of higher education. Vote: 32 yes, 0 no, and 3 excused.
  • HB 14-1271. Concerning extending a mental health provider’s duty to warn to include specific entities that, if purposefully damaged or attacked as a result of a mental health patient’s violent behavior, would jeopardize public health and safety. Vote: 32 yes, 0 no, and 3 excused.

Thursday, March 27

Passed on 3rd Reading:

  • SB 14-156. Concerning a requirement that a public benefit corporation file an annual report. Vote: 25 yes and 10 no.
  • HB 14-1186. Concerning the release of medical records to a person other than the patient, and, in connection therewith, setting reasonable fees to be paid for the release of the medical records. Vote: 24 yes and 11 no.
  • HB 14-1277. Concerning eligibility requirements for recipients of grants from the military family relief fund. Vote: 35 yes and 0 no.

Friday, March 28

Passed on 3rd Reading:

  • SB 14-158. Concerning the harmonization of statutory recall election provisions with the recall provisions in the state constitution to reflect the manner in which contemporary elections are conducted, and, in connection therewith, aligning circulator regulation and petition requirements with initiative and referendum circulator and petition requirements. Vote: 18 yes and 17 no.
  • HB 14-1149. Concerning making acts related to the advertisement of children for the purposes of transferring their care to others trafficking in children. Vote: 35 yes and 0 no.
  • HB 14-1100. Concerning the use of title documents to give notice of characteristics of motor vehicles that affect a vehicle’s value, and, in connection therewith, making an appropriation. Vote: 35 yes and 0 no.
  • SB 14-115. Concerning procedural requirements applicable to state water plans, and, in connection therewith, making and reducing an appropriation. Vote: 28 yes and 7 no.
  • SB 14-161. Concerning the modernization of provisions of the “Uniform Election Code of 1992” that ensure voter access for eligible electors, and, in connection therewith, reducing the deadline by which a voter registration application must be submitted via certain methods, altering procedures pertaining to national change-of-address searches, allowing emergency ballots to be obtained for nonmedical reasons, amending provisions relating to military and overseas voters, increasing the penalty for providing false residential information, making the aiding or abetting the provision of false residential information a new felony offense, and making and reducing an appropriation. Vote: 22 yes and 13 no.

Stay tuned for 10 Bills of Interest.

Bills Regarding Mineral Estates, Parent-Child Relationships, Property Valuation, and More Signed by Governor

On Tuesday, March 25, and Thursday, March 27, 2014, Governor Hickenlooper signed 31 more bills into law. Some of these are summarized here.

  • SB 14-009Concerning a Disclosure of Possible Separate Ownership of the Mineral Estate in the Sale of Real Property, by Sen. Mary Hodge and Rep. Dominick Moreno. The bill requires the disclosure of possible separate ownership of mineral estates in the sale of real property.
  • SB 14-062Concerning Reinstatement of the Parent-Child Legal Relationship, by Sens. Lucia Guzman & Ellen Roberts and Reps. Mike Foote & Bob Gardner. The bill allows parents whose parental rights have been terminated to have those rights reinstated in certain circumstances.
  • SB 14-080Concerning the Elimination of the List of Certain Additional Qualifications that Apply to Property Valuation Appeal Arbitrators, by Sen. Kevin Grantham and Rep. Rhonda Fields. The bill simplifies qualifications for arbitrators in property valuation appeals by mandating only that the arbitrator be experienced in property taxation and hold a Colorado real estate appraiser license.
  • SB 14-102Concerning the Addition of Employment Positions Held at Financial Institutions to the Circumstances Under Which an Employer May Use Consumer Credit Information for Employment Purposes, by Sen. Jessie Ulibarri and Reps. Bob Gardner and Paul Rosenthal. The bill allows bank to use consumer credit information during or before employment for employment purposes.
  • HB 14-1060Concerning the Authority of a Municipality to Compensate Members of a Municipal Planning Commission, by Rep. Diane Mitsch Bush and Sen. Gail Schwartz. The bill allows municipalities to compensate members of planning commissions.
  • HB 14-1079Concerning an Increase in the Monetary Amount Allowed for the Limited Offering Registration Procedure Under the “Colorado Securities Act,” by Rep. Pete Lee and Sen. Rachel Zenzinger. The bill increases the limited offering cap for small public offerings from $1 million to $5 million per year.
  • HB 14-1082Concerning a Requirement for Written Notice of Cancellation of Individual Life Insurance Policies, and, in Connection Therewith, Requiring Written Notice Prior to the Lapse of Individual Life Insurance Policies, by Rep. Pete Lee and Sen. Lois Tochtrop. The bill clarifies that life insurance policies can only be cancelled for reasons specified by statute, and written notice must be sent to the last known address of the insured prior to cancellation.
  • HB 14-1125Concerning the Circumstances Under which a Unit Owners’ Association May Disclose Contact Information for Members and Residents Under the “Colorado Common Interest Ownership Act,” by Rep. Diane Mitsch Bush and Sen. David Balmer. The bill allows owners’ associations to publish contact information for consenting members.
  • HB 14-1171Concerning Rules on Forensic Medical Evidence in Sexual Assault Cases, by Rep. Frank McNulty and Sen. Ellen Roberts. The bill eliminates the need for further rule-making regarding sexual assault examination consent forms.
  • HB 14-1183Concerning the Reinstatement of the Authority for Active Military Personnel to Practice Professionally, by Rep. Rhonda Fields and Sen. Matt Jones. The bill exempts active military personnel from automatic expiration of professional licenses.
  • HB 14-1223Concerning the Reclassification of Dolores County for the Purpose of Statutory Provisions Fixing the Salaries of County Officers, by Rep. Don Coram and Sen. Ellen Roberts. The bill reclassifies Dolores County as a Category V county.

To date, the governor has signed 113 bills into law. Click here for a list of the governor’s 2014 legislative decisions.

Complexity of Mission and the Power of Form

joe_yockeyBy Joseph Yockey
Associate Professor of Law, University of Iowa

Consider two different social enterprises: Blue River Technology and Greyston Bakery.

Blue River applies expertise in robotics to develop new agricultural technologies. Recognizing that $25 billion is spent annually on herbicides that pose environmental risks, the company offers farmers the option to reduce their chemical usage by switching to robots pulled behind tractors that can quickly identify and kill weeds with a rotating blade.

Greyston sells brownies (including some found in Ben & Jerry’s ice cream), but it also adheres to a strict workforce development program. The company staffs its operations with hard-to-employ individuals and teaches them skills that they can use when looking for jobs across the wider foodservices industry. As Greyston’s slogan says, “We don’t hire people to bake brownies, we bake brownies to hire people.”

Greyston is organized as a benefit corporation; Blue River is not. That probably makes sense.

Blue River approaches what some call “the hybrid ideal” – a situation where everything a company does generates social value and revenue. The company’s social objectives are market driven. There is little tension between profits and impact. Mission drift is relatively easy to monitor. I wouldn’t think Blue River has much to gain by becoming a benefit corporation. Indeed, it seems to be doing just fine.

Greyston is different. It can’t align profits with public good quite as neatly. Its social mission is broader and open to greater interpretation. What does it mean for someone to be “hard-to-employ?” How should we measure something as fuzzy as workforce development? Even if we say that Greyston is near the hybrid ideal, can we be sure it won’t move toward greater pursuit of profits at the expense of public benefit? This might follow from something as simple as a change in ownership or leadership, and it could be hard to detect. Blue River’s products strike me as easily observable, but if Greyston makes discrete changes to its hiring policies, those decisions seem easier to keep under wraps.

The provisions found in benefit corporation statutes do not fully resolve these issues. However, I’m not ready to say that benefit corporation statutes are a mistake, or that becoming a benefit corporation is only about greenwashing. Instead, I argue that the benefit corporation’s best opportunity for influence is to be seen as a new institutional structure—one that can motivate the development of self-regulatory standards and provide a normative framework for social entrepreneurs and pro-social investors. This framework, in turn, can be particularly helpful to companies like Greyston that pursue more complex social missions.

First, the benefit corporation form offers a rallying or focal point that ought to make it easier for like-minded private actors to come together and collaborate on issues ranging from corporate governance practices to the development of social impact metrics. Seeing benefit corporation laws as focal in this way does not mean they will dictate particular standards. Rather, they simply incentivize firms and stakeholders to participate in a self-regulatory process by providing an archetype and hub that can facilitate communication and standards development. The form’s mandate to consider multiple interests should make such cooperation more palatable. Firms that prioritize profits above other objectives often lack the incentive to share information with their competitors. In that case, first-movers will see their profits slip if information sharing allows others to easily replicate their strategies. However, by definition, the benefit corporation form means that profits are not the overriding focus. It thus creates more room for cooperation and coordination—and as Haskell Murray reports, this already appears to be happening.

Additionally, a key step in addressing issues like mission drift is to recognize that, just as they send broader signals about values to the market, legal forms also influence corporate behavior. The people within an organization are the most significant determinants of its commitment to mission. With respect to the benefit corporation, forms that reflect a specific ideological commitment can influence internal culture by signaling the values that should inform employee decision-making.Patagonia cited this belief as a motivating factor in its decision to become a benefit corporation.

Finally, establishing a culture that leads to the internalization of values is easier when organizational goals match employees’ personal beliefs. The benefit corporation’s emphasis on dual objectives should attract socially minded employees by signaling that they will find a supportive structure in place. When employees then enter organizations that reflect their own values, they often exhibit greater motivation to act consistently with those values.

There is obviously much more to say about these points, and for anyone looking to wade deeper into them, I offer a fuller explanation here.

Unless the rapid spread of benefit corporation laws is evidence of an enthusiastic or cynical mistake (which I think is possible but unlikely), then there must be some underlying logic to unpack. My aim is to keep working to explain the social enterprise phenomenon, to put it into a clear theoretical framework, and to distill the best justifications for offering special organizational options for social entrepreneurs.

Joseph W. Yockey joined the faculty of the University of Iowa as an Associate Professor of Law in 2010 and was voted Professor of the Year by the law school student body for 2011-12.  He is also a two-time nominee for the University of Iowa’s campus-wide President and Provost Award for Teaching Excellence.  He teaches Business Associations, Securities Regulation, and a seminar on Securities Litigation.  His writing interests are in the areas of corporate governance, securities regulation, and corporate crime.

Before coming to Iowa, Professor Yockey taught as a Visiting Assistant Professor at the University of Illinois College of Law.  He is also a summa cum laude graduate of the University of Illinois College of Law, where he served as articles editor for the University of Illinois Law Review and was elected to the Order of the Coif.  After graduating from law school, he clerked for Judge John D. Tinder (presently of the U.S. Court of Appeals for the Seventh Circuit) in Indianapolis and practiced corporate and securities litigation at Sidley Austin LLP in Chicago.  He is a member of the Illinois Bar.

Professor Yockey is also a guest blogger for The Conglomerate, where this post originally appeared on March 20, 2014.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

 

CLE Homestudy: Public Benefit Corporation Act, Effective April 1, 2014

This CLE presentation took place on February 12, 2014. Click here to order the Video On Demand and watch the entire presentation online, click here for the MP3 Audio Download homestudy, click here for the CD homestudy, or call (303) 860-0608 to order by phone.

 

HB 14-1231: Requiring Colorado Office of Economic Development to Purchase Talent Analytics Tool

On January 30, 2014, Rep. John Buckner introduced HB 14-1231 - Concerning the Acquisition of a Talent Analytics Tool by the Colorado Office of Economic Development to Assess the Strength of the State’s Market IntelligenceThis summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The bill requires the Colorado office of economic development (office) to enter into a contract to obtain access to a talent analytics tool.

The office is required to use the talent analytics tool to conduct a study of the state’s talent base, including several specified factors. For the 2014–15 fiscal year, the bill requires the general assembly to appropriate specified amounts to the office to acquire access to the talent analytics tool and to conduct the study of the state’s talent base.

The office is required to include the results of the study in its annual report to the general assembly.

On February 18, the Business, Labor, Economic, & Workforce Development Committee approved the bill and sent it to the Appropriations Committee.