May 27, 2016

Colorado Court of Appeals: Choice of Law Provision Unambiguously Governs Contract

The Colorado Court of Appeals issued its opinion in Mountain States Adjustment v. Cooke on Thursday, May 19, 2016.

Summary Judgment—Debt Collection—Choice of Law Provision.

In August 2004, Cooke signed a note (Note) with Commercial Federal Bank (CFB) for a home equity loan. Cooke resided in Colorado and the home that was collateral for the Note (subject property) was in Colorado. CFB was headquartered in Nebraska and the Note stated that it was “governed by federal law, and to the extent applicable, the laws of Nebraska.”

CFB merged into Bank of the West, a California bank, in December 2005. Cooke’s  repayment terms under the Note didn’t change as a result nor was he asked to sign a new agreement. In April 2009, the company holding the first mortgage on the subject property commenced foreclosure proceedings. Bank of the West did not participate, but on June 19, 2009, Bank of the West sent a “30 Day Notice of Demand and Intent to Accelerate” letter to Cooke.

On February 14, 2014, Bank of the West assigned Cooke’s note to Mountain States Adjustment (MSA). On July 15, 2014, MSA filed this collection action against Cooke in Denver District Court. Cooke answered and alleged an affirmative defense that MSA’s claim was barred by the applicable statute of limitations.

In January 2015, MSA filed a motion for summary judgment alleging that Cooke admitted to being the signatory under the Note and that the facts were undisputed that he was in default. Cooke filed a cross-motion for summary judgment asserting that MSA’s claim was barred by the five-year statute of limitations set forth in Nebraska law. The district court decided that Colorado law and its six-year statute of limitations applied and entered summary judgment in MSA’s favor. The sole issue on appeal was whether it was error to hold that Colorado law applied.

The Court of Appeals found the choice of law terms in the Note were clear, express, and unambiguous. As a matter of law, Nebraska law governs the statute of limitations issue because the undisputed record shows both that Nebraska had a substantial relationship to the parties or the transaction and that there was a reasonable basis for the contracting parties’ choice of law. Because it was undisputed that MSA filed its complaint outside of the applicable Nebraska limitations period, MSA’s claim was barred and Cooke was entitled to entry of judgment in his favor.

The judgment was reversed and the case was remanded.

Summary provided courtesy of The Colorado Lawyer.

Nancy Elkind Honored with Colorado Lawyers Committee Outstanding Sustained Contribution Award

NancyElkindOn Monday, May 23, 2016, the Colorado Lawyers Committee held its annual awards luncheon at the Marriott Denver City Center. Nancy B. Elkind, founding partner of Elkind Alterman Harston PC, received the organization’s Outstanding Sustained Contribution Award. Ms. Elkind is on the Board of Directors for the Colorado Lawyers Committee, and she was chair of the committee from 2011 to 2013. She contributes extensively to her community through her work with the Colorado Lawyers Committee, helping the organization provide high-impact pro bono work while advocating, negotiating, and litigating for children, the poor, and other disadvantaged groups. She has practiced immigration law for over 30 years, and has provided counsel and guidance to hundreds of immigrant families and individuals, as well as to employers that are seeking to hire the “best and the brightest.” Ms. Elkind is also the managing editor of CBA-CLE’s treatise, Immigration Law for the Colorado Practitioner, and she also lectures frequently on topics related to immigration law.

AaronBoscheeAaron A. Boschee, senior associate at Squire Patton Boggs, received the Colorado Lawyers Committee’s Individual of the Year Award. Mr. Boschee is the Colorado Lawyers Committee Task Force Chair, and lead class counsel for the Taylor Ranch Litigation, through which he coordinates the pro bono efforts of over 30 lawyers at numerous law firms throughout the region. Mr. Boschee practices in the areas of commercial litigation, arbitration, and debt restructuring, focusing on debtor-creditor disputes, asset recovery and loss mitigation, real estate-based lending and litigation, creditor-lien priority, shareholder and director disputes, and fraud. He received his undergraduate degree from Minnesota State University and his law degree from the University of Denver Sturm College of Law.

SchmidtLaurenEBrownstein Hyatt Farber Schreck, LLP, received the Committee’s Law Firm of the Year Award. The Law Firm of the Year Award is given to firms whose attorneys and staff made significant pro bono contributions to Lawyers Committee projects during 2015. Lauren Schmidt, BHFS’s pro bono partner, and Martha Fitzgerald are members of the Colorado Lawyers Committee’s Board of Directors and Schmidt serves on the Executive Committee. Tenley Oldak serves on the Leadership Board of the Colorado Lawyers Committee Young Lawyers Division. Under Ms. Schmidt’s leadership, BHFS’s pro bono program has increased dramatically, and the firm is a signatory to the national Pro Bono Institute’s Law Firm Pro Bono Challenge. The firm has pledged to average 50 hours of pro bono work per lawyer per year.

Congratulations to all the honorees of the Colorado Lawyers Committee Awards.

Bills Concerning Depositions for At-Risk Persons, Immunity for Reported Overdoses, and More Signed

On Thursday, May 19, 2016, Governor Hickenlooper signed six bills into law. To date, he has signed 192 bills this legislative session. The bills signed Thursday include a bill to allow depositions of at-risk persons in criminal trials in which the at risk persons may not be available to testify, a bill repealing certain mandatory terms of incarceration, and more. The bills signed Thursday are summarized here.

  • HB 16-1027 – Concerning Depositions in Criminal Cases in Which an At-Risk Person May Not Be Available for Trial, by Rep. Jessie Danielson and Sens. Nancy Todd & Jerry Sonnenberg. The bill expands and streamlines the allowable use of recorded depositions for at-risk elders. Under the bill, upon receipt of a motion the court must schedule a recorded deposition within 14 days without further findings if the victim is an at-risk elder, defined as any person 70 years of age or older; however, the bill allows the defense to challenge the motion for recorded depositions of other at-risk adults.
  • HB 16-1227 – Concerning Exemptions from Child Support Enforcement Requirements as a Condition of Receipt of Child Care Assistance Under the Colorado Child Care Assistance Program, and, in Connection Therewith, Making an Appropriation, by Reps. Daniel Kagan & Brian DelGrosso and Sens. Owen Hill & Larry Crowder. The bill specifies that a teen parent is not required to submit an application for child support establishment as a condition of receiving child care assistance. However, the county can require the parent to submit an application for child support establishment in order to receive child care assistance once they no longer qualify as a teen parent.
  • HB 16-1302 – Concerning the Alignment of the Colorado Statutes with the Federal “Workforce Innovation and Opportunity Act” Through the “Colorado Career Advancement Act,” by Reps. Crisanta Duran & Brian DelGrosso and Sen. Linda Newell. The bill changes the title of the “Colorado Workforce Investment Act” to the “Colorado Career Advancement Act.” It also clarifies the roles of specific entities in workforce development programs and removes statutory requirements made inapplicable by the federal act.
  • HB 16-1390 – Concerning Immunity for Certain Persons who Are Involved with a Reported Overdose Event, by Rep. Dominick Moreno and Sen. Lucia Guzman. The bill provides immunity from arrest for underage persons reporting alcohol or marijuana overdoses and extends immunity from arrest and prosecution to the underage person requiring medical assistance.
  • SB 16-072 – Concerning an Increase in the Maximum Total Amount of Annual Lease Payments Authorized for Lease-Purchase Agreements Entered into Under the “Building Excellent Schools Today Act”, and, in Connection Therewith, Making an Appropriation, by Sen. Andy Kerr and Reps. Alec Garnett & Jim Wilson. Currently under the Building Excellent Schools Today Act (BEST), the state may enter into lease-purchase agreements for public school facility capital construction projects, subject to the limitation that the maximum total annual amount of lease payments payable under these agreements does not exceed $80 million in a fiscal year. This bill establishes incremental caps on these lease payments.
  • SB 16-102 Concerning the Elimination of Mandatory Sentences to Incarceration for Certain Crimes, and, in Connection Therewith, Making and Reducing an Appropriation, by Sen. Andy Kerr and Rep. Dominick Moreno. The bill  removes the mandatory term of incarceration that must accompany convictions of certain types of second degree assault or violations of bail bond conditions.

For a complete list of Governor Hickenlooper’s 2016 legislative decisions, click here.

Bills Updating Election Laws, Clarifying Tax Exemptions for Housing Authorities, and More Signed

On Wednesday, May 18, 2016, Governor Hickenlooper signed nine bills into law. To date, he has signed 186 bills into law this legislative session. The bills signed Wednesday include a bill to clarify the scope of tax exemption for housing authorities, a bill providing an exception to the prohibition against disclosing confidential mental health information when school safety is at risk, and more. The bills signed Wednesday are summarized here.

  • HB 16-1006 – Concerning Clarification of the Scope of the Exemption from Government Charges for Property Owned by or Leased to a Housing Authority or Owned by, Leased to, or Under Construction by an Entity that is Wholly Owned by an Authority, an Entity in Which an Authority has an Ownership Interest, or an Entity in Which an Entity Wholly Owned by an Authority or of Which an Authority is the Sole Member has an Ownership Interest, by Reps. KC Becker & Alec Garnett and Sen. Owen Hill. The bill clarifies that sales, use, and property tax exemptions apply to low-income housing property owned by or leased to any subsidiary of a housing authority.
  • HB 16-1063 – Concerning an Exception to the Prohibition Against Disclosing Confidential Communications with a Mental Health Professional when School Safety is at Risk, by Reps. Mike Foote & Crisanta Duran and Sens. Mark Scheffel & Bill Cadman. The bill allows a specified mental health professional tomake a disclosure if his or her client makes an articulable and significant threat to a school or its occupants or exhibits behavior that the professional deems to jeopardize the safety of students, teachers, administrators, or other school personnel.
  • HB 16-1101 – Concerning Medical Decisions for Unrepresented Patients, by Rep. Dave Young and Sen. Kevin Lundberg. The bill allows an attending physician to designate another willing physician to act as a patient’s proxy decision-maker for health care treatment under certain conditions. The attending physician cannot act as the proxy decision-maker.
  • HB 16-1228 – Concerning an Alternative Transfer Mechanism for Water Rights that Protects the Agricultural Use for which a Water Right was Originally Decreed while Permitting Renewable One-Year Transfers of a Portion of the Water Subject to the Water Right, by Reps. Jeni James Arndt & Jon Becker and Sens. Kerry Donovan & Jerry Sonnenberg. The bill allows the owner of an absolute decreed irrigation water right used for agricultural purposes to apply in water court to change the use of the water right to an agricultural water protection water right which is created by this bill.
  • HB 16-1394 – Concerning Clarifying Definitions Related to At-Risk Persons, by Rep. Dave Young and Sen. Kevin Grantham. The bill implements the recommendations of the at-risk adults with intellectual and developmental disabilities (IDD) mandatory reporting implementation task force, including changing definitions related to at-risk persons, expanding penalties for mistreatment of at-risk persons, and more.
  • SB 16-142 – Concerning Modernization of Election Law Provisions, and, in Connection Therewith, Correcting Statutory Citations, Updating Terms and Procedures to Reflect Modern Elections Administration, Conforming State Law to Federal Law, Eliminating Redundancies and Obsolete References and Practices, Harmonizing Durational Residency Requirements for Certain Local Government Elections, and Making an Appropriation, by Sen. Ray Scott and Rep. Su Ryden. The bill makes various changes and updates to election statutes.
  • SB 16-177 – Concerning Technical Modifications to Legislation Enacted in 2015 to Promote an Equitable Financial Contribution Among Affected Public Bodies in Connection with Urban Redevelopment Projects Allocating Tax Revenues, by Sens. Beth Martinez Humenik & Rollie Heath and Reps. Dickey Lee Hullinghorst & Polly Lawrence. The bill makes technical adjustments and clarifies recent legislation concerning urban renewal, urban renewal plans, and provisions for sharing tax increment financing among affected taxing entities.
  • SB 16-201 – Concerning Revising the Child Welfare Funding Mechanism, by Sen. Kevin Grantham and Rep. Dave Young. The bill requires the Department of Human Services to work with county departments of human services, residential treatment providers, the Department of Health Care Policy and Financing, and the Joint Budget Committee to review the rate-setting process for residential treatment programs serving youth in the child welfare system.
  • SB 16-211 – Concerning Contests to Specified Special District Elections that are Made on Grounds Relating to Elector Qualifications, and, in Connection Therewith, Imposing a Jurisdictional Bar on Contests of Certain Elections and Validating the Qualifications of Certain Actors when Timely Contests Challenging Those Qualifications Have Not Been Filed, by Sens. Bill Cadman & Mark Scheffel and Reps. Dickey Lee Hullinghorst & Crisanta Duran. For special district elections conducted prior to April 21, 2016, and on May 3, 2016, this bill prohibits contesting the results of the election on the grounds that any person voting at the election was not eligible to vote, except in limited circumstances, and the qualification of any person elected or appointed to a special district is validated and may not be contested.

For a complete list of Governor Hickenlooper’s 2016 legislative decisions, click here.

Colorado Supreme Court: Holder-in-Due-Course Status Does Not Preclude Forgery Defense

The Colorado Supreme Court issued its opinion in Liberty Mortgage Corp. v. Fiscus on Monday, May 16, 2016.

Negotiable Instruments—Holders in Due Course—Forgery—Ratification—Negligent Contribution.

Respondent Fiscus’s wife forged his name on three powers of attorney and used them to procure a promissory note that was ultimately assigned to petitioner Branch Banking and Trust Company. The note was secured by a deed of trust purporting to encumber property held in Fiscus’s name alone. Branch Banking and Trust claimed holder-in-due-course status under Article 3 of Colorado’s Uniform Commercial Code, and Fiscus raised a forgery defense. The Court of Appeals held that Article 3 does not apply to deeds of trust because they are not “negotiable instruments” as defined in the Code. The Supreme Court held that, even assuming Article 3 applies to such deeds of trust, holder-in-due-course status does not preclude a purported maker from asserting a forgery defense. Thus, because Fiscus had a valid forgery defense, not barred by any negligence or ratification on his part, the Court affirmed the judgment of the Court of Appeals but on different grounds. The Court did not address the negotiability of deeds of trust that secure promissory notes under Article 3.

Summary provided courtesy of The Colorado Lawyer.

Governor Signs Rain Barrel and Rule Review Bills

This week, Governor Hickenlooper signed two bills into law. To date, the governor has signed 169 bills this legislative session.

On Monday, May 9, he signed HB 16-1257, “Concerning Implementation of Recommendations of the Committee on Legal Services in Connection With Legislative Review of Rules and Regulations of State Agencies,” by Rep. Beth McCann and Sen. Mark Scheffel. The bill provides for the continuation of certain state agency rules and regulations and the expiration of others, reflecting a review of state agency rules and regulations that were adopted or amended on or after November 1, 2014, and before November 1, 2015.

On Thursday, May 12, the governor signed HB 16-1005, “Concerning the Use of Rain Barrels to Collect Precipitation from a Residential Rooftop for Nonpotable Outdoor Uses,” by Reps. Daneya Esgar & Jessie Danielson and Sen. Michael Merrifield. The bill allows the collection of precipitation from the roof of a home in up to two rain barrels subject to certain conditions, including that the building is a single-family residence or a multi-family residence with up to four units; the precipitation collected is used for outdoor purposes on the residential property where the precipitation is collected, including irrigation of lawns and gardens; the precipitation must not be used for drinking water or indoor household purposes; and the State Engineer may curtail rain barrel usage if the diversion of water is causing or will cause material injury to senior water rights.

For a complete list of Governor Hickenlooper’s 2016 legislative decisions, click here.

Tenth Circuit: Bankruptcy Creditor Has Standing to Object to Potentially Fraudulent Conveyance of Real Property

The Tenth Circuit Court of Appeals issued its opinion in In re Lavenhar: Lavenhar v. First American Title Insurance Co. on Thursday, December 17, 2015.

On October 28, 2010, First American Title Insurance Company (“First American”) earned a judgment and damages award in its favor in the amount of $434,913.39, plus interest, in Colorado state court against Jeffrey Lavenhar. During the pendency of this litigation, Jeffrey and his then-wife Laurie initiated dissolution proceedings, resulting in the issuance of a divorce decree in November 2010, which incorporated a separation agreement dated October 26, 2010. The separation agreement required Jeffrey pay Laurie $4,400 per month in spousal maintenance, and also contained a provision stating the property located on Antelope Ridge Trial is and always has been the sole property of the Laurie H. Lavenhar Living Trust.

In seeking to collect its damages, First American filed suit against the Lavenhars and the Laurie H. Lavenhar Living Trust, asserting the transfer of Jeffrey’s interest in the Antelope Ridge Trail property to the Laurie H. Lavenhar Living Trust was a fraudulent conveyance. In addition to that independent lawsuit, First American sought to intervene in the Lavenhars’ divorce, seeking a declaration that the Lavenhars’ divorce proceeding was a fraud upon the court designed to hinder its ability to collect on the judgment against Jeffrey. The state divorce court granted First American’s motion to intervene.

Before the resolution of the various legal proceedings instituted by First American against the Lavenhars, Jeffrey filed a Chapter 7 bankruptcy petition. In response, First American filed a motion to lift the automatic stay as to the Antelope Ridge Trail property, asserting it should be able to litigate its state-court fraudulent conveyance action. The bankruptcy court denied the motion, concluding only the Chapter 7 Trustee had standing to bring such an action. Shortly thereafter, Laurie filed in the bankruptcy court a priority unsecured claim for domestic support obligations in the amount of $347,400. First American then filed a new motion to lift the automatic stay, seeking permission to litigate its complain in intervention of the Lavenhars’ divorce proceeding, which was granted in part by the bankruptcy court such that both First American and the Chapter 7 Trustee could litigate the complaint in intervention as to the single issue that would affect the validity of Laurie’s proof of claim, but not as to any other issues resolved in the divorce decree.

The district court affirmed the bankruptcy court’s partial lifting of the automatic stay, and Laurie appealed, asserting the bankruptcy and district courts erred in concluding First American has standing to litigate the validity of the component of the divorce decree addressing domestic support obligations via its state-court complaint in intervention.

On appeal, the Tenth Circuit Court of Appeals determined First American has standing to object to Laurie’s potentially fraudulent proof of claim for domestic support obligations. Next, the Tenth Circuit affirmed the order of the bankruptcy court partially lifting the automatic stay to allow the state divorce court to declare whether or not the Lavenhars’ divorce decree was obtained through fraud on the court. In so ruling, the Tenth Circuit reasoned there is no indication that the state divorce court cannot or will not comply with the limited scope of the bankruptcy court’s order lifting the stay. In rejecting Laurie’s argument that the validity of the property division is not separable from the validly of the spousal maintenance provision, both of which are contained in the separation agreement, the Tenth Circuit noted the Antelope Ride Trial property is and always has been the sole property of the Laurie H. Lavenhar Living Trust. Thus, the court reasoned it is simply not true that the issue the bankruptcy court allowed to proceed in the motion in intervention is inseparably intertwined with the property-transfer issues to be litigated by the Chapter 7 Trustee in the fraudulent conveyance action. Lastly, the court noted a ruling on First American’s behalf on the limited issue the bankruptcy court allowed to be litigated in the complaint in intervention would benefit all creditors equally, such that there exists no danger of intrusion on the exclusive prerogatives of the Chapter 7 Trustee.

Max Montag is a 2016 J.D. Candidate at the University of Denver Sturm College of Law.

Tenth Circuit: Declaratory Judgment Action Moot where Business Interests Sold During Litigation

The Tenth Circuit Court of Appeals issued its opinion in Schell v. OXY USA, Inc. on Monday, December 14, 2015, and modified the opinion on February 9, 2016.

The plaintiff class (appellees and cross-appellants in the Tenth Circuit) consists of approximately 2200 surface owners of Kansas land burdened by oil and gas leases held or operated by OXY, the appellant and cross-appellee. The leases contained a “free gas” clause that, in substance, purported to grant the lessor access to free gas for domestic use. In August 2007, OXY sent letters warning free gas users that their gas may become unsafe to use, either because of high hydrogen sulfide content or low pressure at the wellhead, as a result of the well reaching the end of their productive life.

On August 31, 2007, leaseholders David Schell, Donna Schell, Howard Pickens, and Ron Oliver filed this action on behalf of themselves and others similarly situated, seeking a permanent injunction and a declaratory judgment based on alleged breaches of mineral leases entered into with OXY for failure to supply free usable gas. The district court certified a class of all surface owners of Kansas land burdened by oil and gas leases held or operated by OXY which contain a free gas clause. Plaintiffs and OXY then filed cross-motions for summary judgment. The district court denied OXY’s motion for summary judgment and granted the plaintiffs’ motion for summary judgment. The district court granted the plaintiffs declaratory relief requiring OXY to provide free useable gas under the contract; however, the district court denied the plaintiffs’ motion for a permanent injunction.

Because the district court found that the free gas clauses were ambiguous and interpreted them according to principles of Kansas law, OXY moved to vacate the judgment to permit it to discover extrinsic evidence of the clauses’ meaning. The district court agreed and vacated its judgment. The district court subsequently granted plaintiffs’ resubmitted motion for summary judgment. It also denied plaintiffs’ motion for attorneys’ fees, expenses, and incentive awards. OXY then filed this appeal, and the plaintiffs cross-appealed. After the appeal and cross-appeal were filed, OXY sold all of its interests in the Kansas leases to Merit Hugoton, L.P. (“Merit”). The plaintiff class filed a motion to dismiss the appeal as moot based on this sale. The Tenth Circuit Court of Appeals permitted the appeal to proceed to briefing and oral argument. One week after oral argument, Merit filed a motion to intervene as an appellant and cross-appellee, which was denied by the Tenth Circuit.

The Tenth Circuit concluded the appeal is moot, thereby granting the motion of the plaintiff class to dismiss the appeal, reasoning OXY’s sale of the leases to Merit leads to the conclusion that its conduct cannot be affected by a declaratory judgment concerning the same leases. The Tenth Circuit dismissed OXY’s argument that the leaseholders could sue OXY over its prior conduct during the time when it was operating the wells, considering the fact that allowing OXY to continue the present litigation in order to protect itself from hypothetical unfiled future litigation would render the instant declaratory judgment action a prohibited advisory opinion. Further, the court stated Merit’s request to intervene does not change the conclusion that the declaratory judgment action is moot, in that the record is devoid of any evidence suggesting that a judgment against OXY would bind Merit with respect to the plaintiff class.

Next, the Tenth Circuit determined it was appropriate to dismiss the appeal without vacating the district court’s granting of the plaintiff class’s declaratory judgment action. Although the general rule is to vacate the judgment below when the case becomes moot on appeal, the court found OXY’s intentional conduct (i.e., selling of the leases to Merit) caused the issue over the free gas clauses of the leases to be moot, and that no other entity was more responsible for mooting the controversy, thereby justifying the equitable resolution of leaving in place the district court’s judgment granting the plaintiffs declaratory relief. To act otherwise, the court noted, would permit OXY to benefit from its voluntary act by wiping away a loss.

Lastly, with respect to plaintiffs’ cross-appeal challenging the district court’s denial of their motion for attorneys’ fees, expenses, and an incentive award, the Tenth Circuit determined it had jurisdiction over the matter, as the issue of attorneys’ fees (and related issues) was not moot, despite the mootness of the merits of the appeal. The Tenth Circuit then affirmed the district court’s holding that the plaintiff class has not shown a legally sound basis for an award of attorneys’ fees and other related relief. In so holding, the court found that neither the common-benefit exception to the American Rule nor 28 U.S.C. § 2202 was applicable. Because OXY sold all of the leases to Merit, the common benefit exception does not apply, as an award of attorneys’ fees under the exception would be an impermissible penalty on OXY. The Tenth Circuit affirmed the district court’s statement that there is no independent statutory or contractual basis for attorneys’ fees under § 2202.

Max Montag is a 2016 J.D. Candidate at the University of Denver Sturm College of Law.

Colorado Supreme Court: Municipal Fracking Ban Preempted by State Law

The Colorado Supreme Court issued its opinion in City of Fort Collins v. Colorado Oil and Gas Association on Monday, May 2, 2016.

Moratoria—Preemption.

The Colorado Supreme Court concluded that Fort Collins’s five-year moratorium on fracking and the storage of fracking waste within the city is a matter of mixed state and local concern and, therefore, is subject to preemption by state law. Applying well-established preemption principles, the court further concluded that the moratorium operationally conflicts with the effectuation of state law. Accordingly, the court held that the moratorium is preempted by state law and, therefore, is invalid and unenforceable. The court thus affirmed the district court’s order invalidating the moratorium and remanded the case for further proceedings.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: Constitutional Inalienable Rights Provision Does Not Save Fracking Ban from Preemption

The Colorado Supreme Court issued its opinion in City of Longmont v. Colorado Oil and Gas Association on Monday, May 2, 2016.

Preemption—Inalienable Rights Provision.

Applying well-established preemption principles, the Colorado Supreme Court concluded that the City of Longmont’s ban on fracking and the storage and disposal of fracking wastes within its city limits operationally conflicts with applicable state law. Accordingly, the court held that Longmont’s fracking ban is preempted by state law and, therefore, is invalid and unenforceable. The court further held that the inalienable rights provision of the Colorado Constitution does not save the fracking ban from preemption by state law. The court thus affirmed the district court’s order enjoining Longmont from enforcing the fracking ban and remanded the case for further proceedings.

Summary provided courtesy of The Colorado Lawyer.

SB 16-171: Enacting Modifications to New Energy Improvement District Program

On March 22, 2016, Sen. Martinez and Rep. Tyler introduced SB 16-171Concerning Modification and Clarification of the Statutes Pertaining to the New Energy Improvement District. The bill was assigned to the Senate Local Government Committee, where it was referred, unamended, to the Senate Committee of the Whole for Second Reading. The bill passed Second and Third Readings in the Senate with no amendments and was referred to the House Committee on Transportation & Energy. The bill passed through the House with no amendments and is awaiting signature.

The New Energy Improvement District (“NEID”) is a statewide district operating a program to facilitate private financing of energy and water improvements to eligible real property. This bill modifies and clarifies the statutes that pertain to the NEID as follows:

Section 2 of the bill, C.R.S. § 32-20-105, requires the county treasurer of a county that has authorized the operation of the NEID Program (“Program”) to retain a one percent collection fee for each NEID special assessment that is collected. The bill also authorizes such a county to revoke its authorization for the operation of the program so long as the county meets all of its program financing obligations existing on the effective date of the deauthorization until all fees have been paid in full to the NEID.

Section 3 of the bill, C.R.S. § 32-20-106, does three things. First, it repeals the authority of the NEID to reduce the amount of any special assessment with the consent of the owner of the property where the special assessment is levied. Second, it clarifies that delinquent special assessment installments incur interest charges at the same rate as delinquent property taxes. Third, it requires the county treasurer to distribute NEID special assessments to the NEID in the same manner, less the collection fee, as property taxes are distributed.

Section 4, C.R.S. § 32-20-107, repeals an existing prohibition against county assessors that prohibited them from taking into account, when valuing real property, an increase in market value resulting from an energy or water improvement financed through the NEID program. Section 4 also repeals the existing authority for the NEID to initiate a civil action for foreclosure.

Mark Proust is a 2016 J.D. Candidate at the University of Denver Sturm College of Law.

Long Appropriations Bill, SCFD Bill, and Many More Signed by Governor

On Wednesday, May 4, 2016, Governor Hickenlooper signed 24 bills into law. Many of the bills signed Wednesday addressed transfers of moneys and financing. Some of the other bills signed Wednesday include a bill addressing the location where competency evaluations should be completed, a bill enacting statutory changes recommended by the Child Support Commission, and a bill regarding transfers of property rights on death.

Additionally, on May 3, Governor Hickenlooper signed the Long Appropriations Bill for 2016-17, HB 16-1405, and on April 29, Governor Hickenlooper signed SB 16-016, which will allow the submission of a ballot question to voters regarding extending the funding for the Scientific and Cultural Facilities District for twelve more years. To date, the governor has signed 167 bills this legislative session. The bills signed by Governor Hickenlooper this past week are summarized here.

April 29, 2016

  • SB 16-016 – Concerning the Scientific and Cultural Facilities District, and, in Connection Therewith, Amending the Ballot Question Concerning the Extension of the District to be Submitted to the Voters and Modifying Statutory Provisions Concerning the Administration of the District, by Sens. Pat Steadman & Bill Cadman and Reps. Dickey Lee Hullinghorst & Polly Lawrence. The bill allows the SCFD to submit a ballot question to district voters at the 2016 or 2017 November election authorizing the extension of the tax for 12 years through June 30, 2030, and changes the SCFD funding formula.

May 2, 2016

  • HB 16-1405 – The 2016-17 Long Appropriations Bill, by Rep. Millie Hamner and Sen. Kent Lambert. The bill sets forth the budget for the 2016-17 fiscal year.

May 3, 2016

  • HB 16-1048 – Concerning Modifications to the Business Enterprise Program to be Administered by the Department of Labor and Employment Under its Authority to Administer Vocational Rehabilitation Programs, by Rep. Dianne Primavera and Sen. Kevin Lundberg. The bill establishes a working group in the Colorado Department of Labor and Employment to study ways to expand opportunities for Business Enterprise Program vendors.
  • HB 16-1158 – Concerning Continuation Under the Sunset Law of the Identity Theft and Financial Fraud Board, by Rep. Pete Lee and Sen. Chris Holbert. The bill extends the sunset of the Identity Theft and Financial Fraud Board until September 1, 2025.
  • HB 16-1159 – Concerning Continuation Under the Sunset Law of the Colorado Fraud Investigators Unit, by Rep. Pete Lee and Sen. Chris Holbert. The bill extends the sunset of the Colorado Fraud Investigators Unit until September 1, 2025.
  • HB 16-1165 – Concerning Statutory Changes Based on the Recommendations in the Report of the 2013-2015 Colorado Child Support Commission, by Reps. KC Becker & Lois Landgraf and Sen. Larry Crowder. The bill amends child support guidelines and related statutes based on the findings of the Colorado Child Support Commission, including allowing discovery of insurance claims, requiring an annual exchange of financial information between parents, changing the formula to determine gross income, limiting the period in which a party can seek retroactive child support, and more.
  • HB 16-1268 – Concerning District Attorney’s Representation in Certain Hearings Arising from Interstate Supervision Contracts, by Rep. Mike Foote and Sen. John Cooke. The bill clarifies that a district attorney must appear on behalf of the state and counties of his or her district in any probable cause hearing for a matter under the Interstate Compact for Adult Offender Supervision or the Interstate Compact for Juveniles.
  • HB 16-1298 – Concerning Changes in Permissible Vehicle Dimensions, by Rep. Jovan Melton and Sen. John Cooke. The bill changes the maximum permissible vehicle dimensions.
  • HB 16-1317 – Concerning Clarifying the Types of Transactions that May Be Included in a Motor Vehicle Service Contract, by Rep. Angela Williams and Sen. Chris Holbert. The bill authorizes certain services to be included in a motor vehicle service contract, including tire and windshield repair, key fob repair, and more.
  • HB 16-1379 – Concerning the Criteria Under Which the State Board of Psychologist Examiners May Award Professional Development Credit for Specific Activities Currently Included in the Continuing Professional Development Program for Licensed Psychologists, by Rep. Tracy Kraft-Tharp and Sen. Beth Martinez Humenik. The bill clarifies and amends portions of the continuing professional development program for licensed psychologists, including allowing credit hours for teaching or giving presentations; allowing credit hours for writing, editing, or reviewing psychology publications; and limiting the award of credit hours to review of peer review journal articles.
  • HB 16-1406 – Concerning Department of Corrections Reimbursement of Expenses of County Coroners, and, in Connection Therewith, Making an Appropriation, by Rep. Dave Young and Sen. Kevin Grantham. The bill requires the Department of Corrections (DOC) to reimburse a county for reasonable and necessary costs related to investigations or autopsies for persons who were in the custody of the DOC at the time of their death. Costs may include transportation, refrigeration, and body bags.
  • HB 16-1407 – Concerning the Continuation of the Medicaid Payment Reform and Innovation Pilot Program, and, in Connection Therewith, Changing the Time Frames, Eliminating the Repeal Date of the Pilot Program, Enhancing the Reporting Requirements of the Department of Health Care Policy and Financing, and Making an Appropriation, by Rep. Dave Young and Sen. Kevin Grantham. The bill removes the July 1, 2013, deadline for HCPF to review and select payment projects for inclusion in the Medicaid Payment Reform and Innovation Pilot Program, and removes the June 30, 2016, deadline by which payment projects must be completed.
  • HB 16-1408 – Concerning the Allocation of Cash Fund Revenues to Health-Related Programs, and, in Connection Therewith, Modifying and Streamlining the Allocation of Tobacco Litigation Settlement Moneys by Replacing the Current Two-Tier Allocation System that Includes Both Percentage-Based and Fixed Amount Allocations of Settlement Moneys with a Single Set of Exclusively Percentage-Based Allocations and Replacing Settlement Moneys Funding for Specified Programs with Marijuana Tax Cash Fund Funding; Allocating Additional Settlement Moneys to the University of Colorado Health Sciences Center for Cancer Research Only; Transferring a Specified Amount from the Children’s Basic Health Plan Trust to a Newly Created Primary Care Provider Sustainability Fund on July 1, 2016; and Making and Reducing Appropriations, by Rep. Bob Rankin and Sen. Pat Steadman. The bill establishes a new formula for the allocation of the annual payment received by the state as part of the Tobacco Master Settlement Agreement, allocating revenue by percentage shares, rather than the hybrid scheme of fixed dollar amounts and capped percentage shares in multiple tiers.
  • HB 16-1409 – Concerning the Transfer of Forty-Two Million Eight Hundred Thousand Dollars on June 30, 2016, from the Unclaimed Property Trust Fund for State Programs, by Rep. Bob Rankin and Sen. Pat Steadman. The bill transfers $42,800,000 out of the Unclaimed Property Trust Fund and places it in the General Fund and the Adult Dental Fund.
  • HB 16-1410 – Concerning Matters Related to the Location Where a Competency Evaluation is Conducted, and, in Connection Therewith, Making and Reducing Appropriations, by Rep. Dave Young and Sen. Kevin Grantham. The bill changes procedures around competency evaluations in criminal proceedings, including requiring the court to order the evaluation to take place on an outpatient basis or, if the defendant is in custody, at the place where the defendant is in custody.
  • HB 16-1411 – Concerning the Supportive Residential Community Program Operated at the Fort Lyon Property, and, in Connection Therewith, Requiring a Longitudinal Evaluation of the Program; and Making an Appropriation, by Rep. Bob Rankin and Sen. Pat Steadman. The bill repeals the supportive residential community for individuals who are homeless at the Fort Lyon property in Bent County, and requires a longitudinal study of the program prior to its repeal.
  • HB 16-1413 – Concerning the Financing of the Water Pollution Control Program, and, in Connection Therewith, Making an Appropriation, by Rep. Bob Rankin and Sen. Kevin Grantham. The bill repeals the Water Quality Control Fund and creates a separate cash fund for each of the six clean water sectors, which will receive the fees specific to its sector.
  • HB 16-1415 – Concerning the Manner in which the State Funds Driver and Vehicle Services by the Division of Motor Vehicles in the Department of Revenue, and, in Connection Therewith, Making and Reducing an Appropriation, by Rep. Millie Hamner and Sen. Pat Steadman. The bill changes the way the state funds driver and vehicle services in the DMV, by increasing the fees charged for services, allowing for funding through the Highway Users Tax Fund, eliminating the end of the year transfer of the excess reserve from the Licensing Services Cash Fund to the HUTF, and exempting the LCSF from the limit on cash reserves.
  • HB 16-1417 – Concerning Capital-Related Transfers of Moneys, by Rep. Millie Hamner and Sen. Kent Lambert. The bill makes three FY 2016-17 transfers to the Capital Construction Fund from several sources.
  • HB 16-1418 – Concerning a Transfer from the Marijuana Tax Cash Fund to the General Fund, by Rep. Bob Rankin and Sen. Pat Steadman. The bill transfers $26,277,661 from the Marijuana Tax Cash Fund (MTCF) to the General Fund.
  • HB 16-1419 – Concerning a Reduction in the Amount of the General Fund Reserve Required for the Fiscal Year 2015-16, by Rep. Millie Hamner and Sen. Kent Lambert. The bill reduces the FY 2015-16 statutory General Fund reserve from 6.5 percent to 5.6 percent.
  • SB 16-058 – Concerning the Regulation of Certain Foods, and, in Connection Therewith, Exempting Certain Food Producers from Licensure, Inspection, and Other Regulation, and Making an Appropriation, by Sen. Owen Hill and Rep. KC Becker. The bill modifies the “Colorado Cottage Foods Act,” which allows homemade food producers to sell certain food products directly to consumers, by eliminating the tiered system and the State Board of Health’s authority to make rules governing the production of tier two foods, which currently consist of pickled vegetables, and by expanding the type of foods that may be sold by producers under the Cottage Foods Act to include other nonpotentially hazardous foods and encouraging, rather than mandating, a producer to take a food safety course.
  • SB 16-126 – Concerning Parity of State-Chartered Banks with Federally Chartered Banks Regarding Frequency of Meeting, by Sen. Ellen Roberts and Reps. Alec Garnett & Dan Nordberg. Under current law, the board of directors for a state bank is required to meet monthly. This bill requires those meetings to be held at least quarterly unless the board specifies a different schedule.
  • SB 16-133 – Concerning the Transfer of Property Rights Upon the Death of a Person, and, in Connection Therewith, Clarifying Determination-of-Heirship Proceedings in Probate, by Sen. Jack Tate and Reps. Dan Pabon & Yeulin Willett. The bill changes procedures for affirming the death of a decedent with shared ownership of real property, and makes changes to probate law for determining heirs, devisees, and property interests. It changes the definition of “interested person” to include an owner by descent or succession and to exclude any person holding a non-ownership interest in a decedent’s property. The bill also enacts portions of the “Uniform Power of Appointment Act.”
  • SB 16-137 – Concerning a Clarification of the Authority of the Parks and Wildlife Commission to Enter Into an Agreement with a Private Landowner, by Sens. Mike Johnston & Jerry Sonnenberg and Rep. Timothy Dore. The bill clarifies that the preference program does not limit the Colorado Parks and Wildlife Commission from entering into an agreement with a private landowner for public hunting and fishing and including the issuance of a hunting license in that agreement.

For a complete list of Governor Hickenlooper’s 2016 legislative decisions, click here.