May 22, 2018

Bills Signed Changing Definition of “Similar Coverage” for Workers’ Compensation Coverage of Certain Commercial Vehicle Operators and More

On Friday, May 4, 2018, Governor Hickenlooper signed 12 bills into law. To date, he has signed 223 bills and sent two to the Secretary of State without a signature. The bills signed Friday include a bill changing procedures for recalls of directors of special districts, a bill changing the definition of “similar coverage” for workers’ compensation purposes for certain operators of commercial vehicles, and more. The bills signed Friday are summarized here.

  • SB 18-076 – “Concerning a Ban on Vote Trading,” by Sen. Kevin Lundberg and Rep. Jovan Melton. The bill makes it a misdemeanor criminal offense for a person to trade a vote or offer to trade a vote with another elector in this state or a person in another state in exchange for the other person’s vote for or against a particular candidate, ballot issue, or ballot question.
  • SB 18-143 – “Concerning Measures to Increase Revenue for the Parks and Wildlife Division, and, in Connection Therewith, Setting Certain Hunting, Fishing, Parks, and Recreation Fees,” by Sens. Steven Fenberg & Don Coram and Reps. Jeni James Arndt & James Wilson. The bill makes several changes to the statutes in the “Hunting, Fishing, and Parks for Future Generations Act.”
  • SB 18-178 – “Concerning the Definition of Similar Coverage for Workers’ Compensation for Certain Operators of Commercial Vehicles,” by Sen. Jim Smallwood and Rep. Tracy Kraft-Tharp. Current law requires independent operators of commercial vehicles to have workers’ compensation or a private insurance policy that provides similar coverage. The bill changes ‘private insurance policy’ to ‘occupational accident coverage insurance policy’ and specifies the requirements for when such a policy may be considered as providing similar coverage.
  • SB 18-207 – “Concerning Authority for the Department of Human Services to Retain Amounts from Certain Cash Funds for its Indirect Costs,” by Sen. Dominick Moreno and Rep. Bob Rankin. The bill authorizes the department of human services to retain money for its indirect costs, based on a federally approved cost allocation plan, from the older Coloradans cash fund and the nurse home visitor program fund.
  • HB 18-1040 – “Concerning Incentives for Provision of Sex Offender Services in the Department of Corrections,” by Rep. Adrienne Benavidez and Sen. Rhonda Fields. The bill requires the department of corrections to monitor the number of inmates who need sex offender treatment or services and the number who are not receiving such treatment or services, develop an incentive plan to contract for more mental health professionals to provide sex offender treatment or services in difficult-to-serve geographic areas, and report to the joint budget committee the number of inmates needing treatment or services, the number not receiving the treatment or services, and the impact of the incentive plan.
  • HB 18-1235 – “Concerning the Continuation of the Regulation of Custom Meat Processors, and, in Connection Therewith, Implementing the Recommendations of the 2017 Sunset Report of the Department of Regulatory Agencies,” by Reps. Chris Hansen & Hugh McKean and Sen. Ray Scott. The bill implements the recommendations of the Department of Regulatory Agencies in its sunset review and report on the ‘Custom Processing of Meat Animals Act.’
  • HB 18-1240 – “Concerning the Continuation of a Grant Program to Prevent Motor Vehicle Theft, and, in Connection Therewith, Implementing the Sunset Review Recommendations of the Department of Regulatory Agencies,” by Reps. Jeff Bridges & Jon Becker and Sen. John Cooke. The bill continues the automobile theft prevention authority and the automobile theft prevention board until 2029.
  • HB 18-1265 – “Concerning the Continuation of the Stroke Advisory Board in Accordance with the Recommendation in the Department of Regulatory Agencies’ 2017 Sunset Report,” by Reps. Susan Lontine & Susan Beckman and Sen. Larry Crowder. The Bill implements the recommendation in the department of regulatory agencies’ sunset review of the stroke advisory board by continuing the board but imposes a 10-year sunset period rather than continuing the board indefinitely, as was recommended.
  • HB 18-1268 – “Concerning the Procedures to Recall a Director of a Special District,” by Rep. Matt Gray and Sen. Bob Gardner. The bill requires the court as defined for the special district to appoint a designated election official to oversee the recall election. The director and the director’s spouse or civil union partner cannot serve as the DEO. The bill requires that recall petitions must be approved as to form by the DEO before being circulated.
  • HB 18-1305 – “Concerning a Voluntary Contribution Designation Benefiting the Young Americans Center for Financial Education Fund that Appears on the State Individual Tax Return Forms,” by Reps. James Coleman & Patrick Neville and Sen. Tim Neville. The bill creates the Young Americans Center for Financial Education fund in the state treasury. A voluntary contribution designation line for the fund will appear on the state individual income tax return form for the 5 income tax years following the year that the executive director of the Department of Revenue certifies to the revisor of statutes that there is space on the form and the fund is next in the queue.
  • HB 18-1329 – “Concerning a Supplemental State Payment to Qualified Providers of Durable Medical Equipment who Experienced a Decrease in Reimbursement in the 2017-18 State Fiscal Year as a Result of the Implementation of the Federal ’21st Century Cures Act,’ and, in Connection Therewith, Making an Appropriation,” by Rep. Bob Rankin and Sen. Dominick Moreno. The bill authorizes a supplemental payment of state-only money to qualified providers of durable medical equipment who experienced a decrease in reimbursement in the 2017-18 state fiscal year as a result of the implementation of the federal ’21st Century Cures Act.’
  • HB 18-1338 – “Concerning Transfers to Address the Reduction of Revenues in the Severance Tax Operational Fund,” by Rep. Bob Rankin and Sen. Kent Lambert. Under current law, money is transferred from the severance tax operational fund to certain cash funds to benefit programs that are commonly referred to as the tier 2 programs. On June 30, 2018, the bill requires the state treasurer to transfer money to the operational fund from specified cash funds to recoup money that was previously transferred in this fiscal year for tier 2 programs.

For a complete list of Governor Hickenlooper’s 2018 legislative decisions, click here.

Bills Regarding Notice of Medicaid Appeals, Special Respondents in Dependency and Neglect, and More Signed

On Thursday, April 6, 2o17, Governor Hickenlooper signed 15 bills into law. To date, the governor has signed 137 bills into law this legislative session. Some of the bills signed Thursday include a bill amending the definition of “special respondent” in the Colorado Children’s Code, a bill prohibiting a court from requiring a medical marijuana patient to abstain from marijuana use as a condition of bond, a bill codifying the presumption that a conveyance of land also includes the property interest in an adjacent vacated right-of-way, and a bill granting qualified immunity to persons performing land stewardship activities on public lands. These bills and the others signed Thursday are summarized here.

  • HB 17-1126: “Concerning the Review of Legal Sufficiency of Medicaid Appeals,” by Reps. Jessie Danielson & Dafna Michaelson Jenet and Sen. Larry Crowder. The bill requires an administrative law judge hearing Medicaid appeals to review the legal sufficiency of the notice of action from which the recipient is appealing at the commencement of the appeal hearing if the notice of action concerns the termination or reduction of an existing benefit, and to take appropriate action if the notice is insufficient.
  • HB 17-1173:“Concerning Medical Communications Regarding Disagreements in Health Care Decisions,” by Rep. Chris Hansen and Sen. Tim Neville. The bill requires a contract between a health insurance carrier and a health provider to include a provision that prohibits a carrier from taking an adverse action against the provider due to a provider’s disagreement with a carrier’s decision on the provision of health care services.
  • HB 17-1183: “Concerning the Repeal of the Condition Required to be Satisfied for a Provision of Law Governing the Disclosure of Communications with Mental Health Professionals to Take Effect,” by Rep. Mike Foote and Sen. Bob Gardner. The bill repeals the contingency provision contained in HB 16-1063 regarding the HIPAA privacy rule.
  • HB 17-1197: “Concerning the Exclusion of Marijuana from the Definition of ‘Farm Products’ with Regard to Regulation of Farm Products under the ‘Farm Products Act’,” by Rep. Joann Ginal and Sen. Don Coram. The bill excludes marijuana from the definition of ‘farm products’ requiring licensure under the Farm Products Act.
  • HB 17-1198“Concerning the Authority for a Special District to Increase the Number of Board Members from Five to Seven,” by Rep. Matt Gray and Sen. Bob Gardner. The bill allows a special district to increase the number of board members by adoption of a resolution by the board and the approval of the resolution by the board of county commissioners or the governing body of the municipality that approved the service plan of the special district.
  • SB 17-046: “Concerning the Modernization of Procedures Pertaining to Warrants and Checks not yet Presented to the State Treasurer for Payment,” by Sen. Jack Tate and Rep. Jeni Arndt. The bill modernizes current practices relating to warrants and checks not timely presented to the state treasurer for payment.
  • SB 17-065: “Concerning a Requirement that Health Care Providers Disclose the Charges they Impose for Common Health Care Services when Payment is made Directly Rather than by a Third Party,” by Sen. Kevin Lundberg and Rep. Susan Lontine. The bill creates the ‘Transparency in Health Care Prices Act’, which requires health care professionals and health care facilities to make available to the public the health care prices they assess directly for common health care services they provide.
  • SB 17-097“Concerning the Presumption that a Conveyance of an Interest in Land Also Conveys an Interest in Adjoining Property Consisting of a Vacated Right-of-Way,” by Sen. Beth Martinez Humenik and Rep. James Coleman. The bill broadens the application of the presumption of conveyance of an adjoining vacated right-of-way to include not only warranty deeds but also all forms of deeds, leases, and mortgages and other liens.
  • SB 17-100: “Concerning Qualified Immunity for Persons Performing Land Stewardship Activities on Public Lands,” by Sen. Jerry Sonnenberg and Reps. Jeni Arndt & Lois Landgraf. The bill strengthens existing legal protections under the federal ‘Volunteer Protection Act of 1997’ and Colorado’s ‘Volunteer Service Act’ for individual volunteers and nonprofit entities who build or maintain recreational trails and related facilities pursuant to grants received under Colorado’s ‘Recreational Trails System Act of 1971’.
  • SB 17-142: “Concerning the Requirement to Include Notification to a Patient Regarding the Patient’s Breast Tissue Classification with the Required Mammography Report,” by Sen. Angela Williams and Rep. Jessie Danielson. The bill requires that each mammography report provided to a patient include information that identifies the patient’s breast tissue classification based on the breast imaging reporting and data system established by the American College of Radiology.
  • SB 17-144: “Concerning the Recommended Continuation of the Education Data Advisory Committee by the Director of the Division of Professions and Occupations in the Department of Regulatory Agencies,” by Sens. Owen Hill & Rachel Zenzinger and Rep. Brittany Pettersen. The bill implements the recommendation of the Department of Regulatory Agencies to continue the education data advisory committee.
  • SB 17-146“Concerning Access to the Electronic Prescription Drug Monitoring Program,” by Sen. Cheri Jahn and Rep. Joann Ginal. The bill modifies provisions relating to licensed health professionals’ access to the electronic prescription drug monitoring program.
  • SB 17-177: “Concerning Amending the Definition of ‘Special Respondent’ in the Children’s Code to Allow a Person to be Voluntarily Joined in a Dependency or Neglect Proceeding,” by Sen. John Cooke and Rep. Paul Rosenthal. The bill amends the Children’s Code definition of “special respondent” to allow a party to be voluntarily joined in a dependency or neglect proceeding.
  • SB 17-178“Concerning Prohibiting a Court from Requiring a Medical-Marijuana Patient to Abstain from the Use of Marijuana as a Condition of Bond,” by Sen. Vicki Marble and Rep. Jovan Melton. The bill prohibits a court from imposing as a bond condition a ban on marijuana use if the person possesses a valid medical marijuana registry identification card.
  • SB 17-230“Concerning Payment of Expenses of the Legislative Department,” by Sens. Lucia Guzman & Chris Holbert and Reps. Patrick Neville & KC Becker. The bill makes appropriations for matters related to the legislative department for the 2017-18 state fiscal year.

For a list of the governor’s 2017 legislative actions, click here.

Colorado Court of Appeals: Town’s Special District Cannot Include Unincorporated Land Without County Approval

The Colorado Court of Appeals issued its opinion in Bill Barrett Corp. v. Sand Hills Metropolitan District on Thursday, October 6, 2016.

Summary Judgment—Special District Act—Altering District Boundaries and Service Plan—Material Modification Requiring Approval of County Commissioners.

In 2004, the town of Lochbuie approved a proposed service plan (2004 plan) and the district court issued an order and decree organizing the Altamira Metropolitan District No. 6 (the Altamira District). The Altamira District’s boundaries were entirely within Lochbuie. The Altamira development was to include single family homes and commercial space within Lochbuie’s boundaries, but it never occurred.

70 Ranch, LLC owns acreage approximately 30 miles northeast of Lochbuie in unincorporated Weld County. In 2009, the district purported to include the 70 Ranch property within its boundaries, and the district court granted the inclusion. In 2010, the district changed its name from Altamira District to the Sand Hills Metropolitan District. In 2011, the court entered an order granting the district’s exclusion from its boundaries of all the land in Lochbuie that originally comprised the Altamira District. Through this sequence of events, the district relocated itself from Lochbuie to encompass only the 70 Ranch property. No notice was given or approval obtained from the Board of County Commissioners of Weld County.

Bill Barrett Corporation and Bonanza Creek Energy (taxpayers) and Noble Energy, an involuntary plaintiff-appellee (Noble), are oil and natural gas exploration companies that lease mineral interests at 70 Ranch. In 2008, the district’s board of directors approved certification of a mill levy for the district’s general operating expenses. Taxpayers have paid millions of dollars since 2009 (when 70 Ranch was included) in ad valorem taxes to the district.

Despite its 2009 and 2011 actions, the district did not prepare a revised service plan to reflect its new location and adjusted purpose until 2013. Taxpayers sued Sand Hills (the district, United Water and Sanitation District, and Lochbuie (collectively Sand Hills))  in 2013, claiming it exceeded its authority and violated parts of the Special District Act, C.R.S. §§ 32-1-101 to -1807, and the Colorado Constitution. Cross-motions for summary judgment were filed and each was granted in part. The trial court found that (1) the district lost its legal authority to collect taxes after April 28, 2011 when it unilaterally removed itself entirely from Lochbuie, so taxpayers are entitled to a tax refund for taxes paid for tax years 2011, 2012, and 2013; and (2) the district had the authority to tax taxpayers from April 29, 2009 until April 28, 2011, when the District’s boundaries included the 70 Ranch property and the original Altamira District property.

On appeal, Sand Hills argued that it was error to find that the district lost its authority to tax when it relocated itself in 2011. On cross-appeal, taxpayers argued that it was error to find that the district had authority to impose taxes on their mineral interests from 2009 to 2011.

The Colorado Court of Appeals’ analysis of the case focused on applying the plain meaning of C.R.S. § 32-1-207(2)(a), which provides a nonexhaustive list of factors specifying when a district’s modification of its service plan is considered material and requires a petition to and approval from the board of county commissioners. The district court concluded, and the court of appeals agreed, that the district’s failure to comport with the purposes of the 2004 plan along with its complete geographic overhaul in 2011 constituted a material departure from the original service plan. The district was required to obtain approval from the board of county commissioners for such a change. Therefore, the court affirmed the trial court’s grant of taxpayers’ motions for summary judgment as to the time period after April 28, 2011.

The court also concluded that the district’s geographic shift in 2009 to include the 70 Ranch property was a material modification of the district’s 2004 plan that required, but did not receive, the approval of the board of county commissioners. Therefore, the district also did not have taxing authority after 2009. The court reversed the trial court’s judgment as it relates to Sand Hills’ motion for summary judgment for the time period from 2009 until 2011.

The court further concluded that the relief granted to taxpayers applies also to Noble.

The judgment was affirmed in part and reversed in part, and the case was remanded.

Summary provided courtesy of The Colorado Lawyer.

Tenth Circuit: Title Insurance Does Not Cover Loss of Property at Foreclosure Sale

The Tenth Circuit Court of Appeals issued its opinion in BV Jordanelle, LLC v. Old Republic National Title Insurance Co. on Tuesday, July 26, 2016.

In 2008, BV loaned $6.3 million to PWJ Holdings, which owned the Aspens Property in Wasatch, Utah. In exchange for the loan, BV received a mortgage for one parcel in the Aspens Property, and obtained a title insurance policy through Old Republic. PWJ defaulted on the loan, and BV foreclosed on the property in 2009, acquiring title to the property at a trustee’s sale. The property was located in an improvement district, but PWJ did not pay the assessments for the improvement district, and the district initiated foreclosure proceedings in 2010. BV sued the district in state court, seeking to stop the foreclosure and retain title, but the court issued a decree in 2012 allowing the district to complete the foreclosure. Because Utah law holds that improvement district liens are superior to all other liens, the improvement district obtained title to the insured property, extinguishing BV’s interest.

BV did not learn about the improvement district’s lien until 2010, after it had acquired title to the property. When it learned of the lien, BV sought compensation from Old Republic under the title insurance policy, but Old Republic denied coverage. BV sued Old Republic, contending Old Republic had breached the insurance policy by refusing to compensate it for the loss of the property and by failing to defend BV in the state court litigation with the improvement district. The district court granted judgment on the pleadings to Old Republic, concluding that the policy did not entitle BV to recovery for loss of the property or defense in the state court suit. BV appealed.

The Tenth Circuit applied Utah law in affirming the district court. BV contended it was entitled to coverage based on six different covered risks: loss caused by a defect in title, loss by encroachments that affect title, loss caused by unmarketable title, loss caused by enforcement of subdivision regulations, loss caused by a governmental taking, and loss caused by the imposition of a statutory lien for services, labor, or material used in construction. The Tenth Circuit found that none of the covered risks applied.

The Tenth Circuit specifically found that a Utah Supreme Court opinion precluded BV’s claims regarding the defect in title, as that case held the defect must be present at the time of acquisition of the property. BV argued that because the improvement district was contemplated before it acquired the property, the defect was present, but the Tenth Circuit disagreed. The Tenth Circuit also rejected BV’s claims due to loss caused by encroachment, noting those claims were not raised in BV’s complaint. Similarly, the Tenth Circuit refused to consider BV’s claim for loss caused by unmarketable title because it was not raised in district court. The Tenth Circuit disposed of the remaining claims by finding that the improvement district’s notice to enforce a subdivision regulation was not in effect at the time BV acquired title, any governmental taking would have happened after BV acquired title, and the improvement district’s lien was not for any services, labor, or materials used in construction.

The Tenth Circuit affirmed the district court.

Colorado Court of Appeals: Removal of Exemptions Did Not Create New Tax for TABOR Purposes

The Colorado Court of Appeals issued its opinion in TABOR Foundation v. Regional Transportation District on Thursday, June 30, 2016.

TABOR—Summary Judgment—H.B. 13-1272—Constitutionality and Beyond a Reasonable Doubt Standard.

In 2009 and 2010 the General Assembly removed the state sales tax exemption for certain items but the exemption remained in place for the Regional Transportation District (RTD) and the Scientific and Cultural Facilities District (SCFD) (collectively, the Districts). To conform these exemptions, in 2013 the General Assembly enacted HB 13-1272, granting the Districts “the power to levy uniformly throughout the district a sales tax at any rate that may be approved by the board, upon every transaction or other incident with respect to which a sales tax is now levied by the state.” In 2014 the Districts began collecting taxes on some previously exempted items. The TABOR Foundation and Penn Pfiffner (the Foundation) brought this action challenging the Districts’ collection of these taxes on the grounds that they were subject to TABOR’s “voter approval in advance” requirement because they constitute a new tax and a tax policy change. The trial court disagreed, applying the unconstitutional beyond a reasonable doubt standard, and granted the Districts’ motions for summary judgment.

The Court of Appeals first affirmed application of the “beyond a reasonable doubt” standard to the constitutionality of the house bill. The Court then concluded that HB 13-1272 does not impose a new tax, but, even if it did, the RTD had received prior voter approval because it was initially authorized to impose a sales tax on “every taxable transaction, now and in the future,” and the SCFD was granted the authority to impose taxes “currently, or in the future, levied and collected.” The Court also concluded that the house bill did not constitute a tax policy change because the Districts always had the authority to impose a broad sales tax.

The judgment was affirmed.

Summary provided courtesy of The Colorado Lawyer.

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 Court of Appeals: Excess Mill Levy Tax Illegal Under Special District Act

The Colorado Court of Appeals issued its opinion in Prospect 34, LLC v. Gunnison County Board of County Commissioners on Thursday, November 5, 2015.

Mill Levy—Abatement—Illegal—Abuse of Discretion.

Reserve Metropolitan District No. 2 (RMD2) is a special district located entirely within the town of Mt. Crested Butte (Town) in Gunnison County. RMD2’s service plan—a document statutorily required to organize a special district—states that RMD2’s mill levy “shall not exceed 50 mills, subject to Gallagher Adjustments,” and that any levy beyond 50 mills requires Town approval. By 2013, the mill levy totaled 52.676 mills, including the Gallagher Adjustment of 2.676 mills. The RMD2 board approved certifying to the Gunnison County Board of County Commissioners (BOCC) 55.676 mills, 3mills in excess of the cap in the 2000 service plan, which the Town counsel protested. When RMD2 taxed Prospect Development Company, Inc., and Prospect 34, LLC (collectively, Prospect) at a higher rate, Prospect petitioned the BOCC to abate the excess taxes. After the BOCC denied the petition, Prospect appealed to the Board of Assessment Appeals (BAA). Instead of reaching the merits of this issue, the BAA resolved it against Prospect on the basis of the court’s order denying a summary judgment motion on this issue in a parallel district court action involving RMD2 and Prospect.

On appeal, Prospect first contended that the BOCC must abate the excess mill levy under CRS § 39-10-114(1)(a)(I)(A). The four grounds for abatement provide relief from taxes “levied erroneously or illegally.” Here, the mill levy caps are enforceable. Because the stated procedure was not followed to increase those caps, the excess mill levy was illegal.

Prospect also contended that the BAA acted arbitrarily and capriciously and abused its discretion by relying on an order denying summary judgment as a final determination. Because such an order is not a final determination of the issue raised in the motion, the BAA abused its discretion by not exercising its authority to decide whether the excess mill levy was illegal. The order was reversed and the case was remanded with directions.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Special District May Regulate Use of Property It Owns

The Colorado Court of Appeals issued its opinion in Aspen Springs Metropolitan District v. Keno on Thursday, July 16, 2015.

Metropolitan District—Real Property—Trespass—Willful—Fence Law—Contempt—Remedial Sanctions—Purge Clause.

Keno maintained a flock of sheep and grazed it on a parcel of land known as the “Greenbelt.” The Greenbelt was owned by Aspen Springs Metropolitan District (Aspen Springs). In 2011, the Aspen Springs Board passed a resolution prohibiting the grazing or tethering of livestock on the Greenbelt without the Board’s prior written permission. Keno continued to graze his sheep on the Greenbelt, and Aspen Springs sought an injunction preventing the grazing. Keno nonetheless continued to pasture his sheep on the Greenbelt and had twice been found in contempt by the time the court issued its final judgment permanently enjoining Keno from allowing his animals to graze on the Greenbelt.

On appeal, Keno contended that, as a special district and creature of statute, Aspen Springs lacks authority to regulate the use of property it owns. Among the express powers granted to special districts are the powers “[t]o acquire, dispose of, and encumber real and personal property including, without limitation, rights and interests in property, leases, and easements necessary to the functions or the operation of the special district.” The right to own property is necessary to these express powers. Property ownership generally includes the power to exclude others. Therefore, a special or metropolitan district may regulate the use of and access to property it owns. Accordingly, the district court did not err in holding that Aspen Springs has the power to prohibit and limit grazing activities on the Greenbelt.

Keno also contended that the district court erred in concluding that the Fence Law protects Aspen Springs from a willful trespass onto the Greenbelt, despite the fact the Greenbelt is unenclosed by a lawful fence. The Fence Law does not protect livestock owners who deliberately pasture their livestock on unenclosed lands of another, particularly when done against the owner’s will. Accordingly, the district court did not err in concluding that the Fence Law protects Aspen Springs from willful trespass onto its property.

Keno further asserted that the court erred in awarding attorney fees and costs as a remedial sanction after finding him in contempt a second time for violating the preliminary injunction. A remedial sanction must include a purge clause. Because the sheep grazing activities that resulted in Keno’s contempt citation were not ongoing at the time of the contempt hearing, Keno could not purge his contempt because he could not undo what he had done. Therefore, remedial sanctions, such as the assessment of costs and attorney fees, could not be imposed against Keno under these circumstances, and the trial court erred in awarding them. Instead, the court could impose only punitive sanctions. The judgment was affirmed in part and the order was vacated in part.

Summary and full case available here, courtesy of The Colorado Lawyer.

Frederick Skillern: Real Estate Case Law — Zoning and Land Use Control (2)

Editor’s note: This is Part 23 of a series of posts in which Denver-area real estate attorney Frederick Skillern provides summaries of case law pertinent to real estate practitioners (click here for previous posts). These updates originally appeared as materials for the 32nd Annual Real Estate Symposium in July 2014.

By Frederick B. Skillernfrederick-b-skillern

Marin Metropolitan District v. Landmark Towers Assn., Inc.
Colorado Court of Appeals, March 27, 2014
2014 COA 40

Special Metropolitan District—CRS § 32-1-305(7).

In 2007, a developer and five affiliated individuals (organizers) commenced proceedings under C.R.S. §§ 32-1-101, et seq., to form a special metropolitan district within the boundaries of Greenwood Village. The organizers filed a service plan with the municipality, and the city council approved it.

On September 5, 2007, a petition for organization was filed with the Arapahoe County District Court pursuant to C.R.S. § 32-1-301, and a hearing was set for October 4, 2007. Notice was published in the local newspaper and the clerk of the court issued a notice of the hearing. At the hearing, the district court entered an order directing an organizational election be held on November 6, 2007. The election was held, and on December 6, 2007, the district court entered findings and an order and decree creating the special district. The order included within the special district the Landmark Towers condominiums, which were under construction. Approximately 130 people were under contract to purchase, but no sales had been completed.

The Landmark homeowners association alleged it was not until several years after the Marin Metropolitan District (District) was formed that the owners discovered facts indicating that the District had been organized through alleged misrepresentations and a “fraud on the court.” In 2012, Landmark intervened in the annexation case and moved pursuant to C.R.C.P. 60(b)(2), (3), and (5) to set aside the December 2007 order for alleged fraud on the court, a lack of subject matter jurisdiction to approve the special district, and invalidity of the order due to lack of due process. The court held a three-day evidentiary hearing and issued an order on December 17, 2012, dismissing Landmark’s motion pursuant to C.R.S. § a32-1-305(7).

The court of appeals reviews the pertinent provisions of the statutory scheme for creating a special district. Landmark argues that regardless of subsection (7), a court has inherent power to vacate a void judgment, notwithstanding a statutory time bar; has jurisdiction to set aside a previously entered order based on fraud on the court; and has a duty to provide constitutional due process, providing jurisdiction to set aside an order that is void for lack of notice and an opportunity to be heard. The Court disagrees.

C.R.S. § 32-1-305(7) states that once an order establishing a special district is entered, it “shall be deemed final, and no appeal or other remedy shall lie therefrom.” There is only one exception, which allows for an action in the nature of quo warranto commenced by the attorney general within thirty days after entry of the organizational order. Finally, the subsection mandates that the organization of the district “shall not be directly or collaterally questioned in any suit, action, or proceeding except as expressly authorized in this subsection (7).” The jurisdictional issue is dispositive. The order is affirmed.


Board of County Commissioners of Summit County v. Hazel

Petition for Writ of Certiorari GRANTED, January 27, 2014.

Summary of the Issue:

  • Whether the court of appeals erred by holding that under C.R.C.P. 50, a trial court cannot direct a verdict as to some but not all issues within a single claim against a single defendant.
Frederick B. Skillern, Esq., is a director and shareholder with Montgomery Little & Soran, P.C., practicing in real estate and related litigation and appeals. He serves as an expert witness in cases dealing with real estate, professional responsibility and attorney fees, and acts as a mediator and arbitrator in real estate cases. Before joining Montgomery Little in 2003, Fred was in private practice in Denver for 6 years with Carpenter & Klatskin and for 10 years with Isaacson Rosenbaum. He served as a district judge for Colorado’s Eighteenth Judicial District from 2000 through 2002. Fred is a graduate of Dartmouth College, and received his law degree at the University of Colorado in 1976, in another day and time in which the legal job market was simply awful.

Colorado Supreme Court: Special Districts May Assign Right to Receive Fees to Private Party

The Colorado Supreme Court issued its opinion in SDI, Inc. v. Pivotal Parker Commercial, LLC on Monday, December 8, 2014.

Powers of Local Governments.

In this case, the Supreme Court held that the Special District Act, CRS §§ 32-1-101 to -1807, gives special districts the power to assign to private parties the right to receive revenue from development fees. The Court found that the power to assign revenue falls within the express power given to districts to “dispose of . . . real and personal property.” CRS § 32-1-1001(1)(f). It also concluded that under CRS § 32-1-1001(1)(n), the Act should be interpreted as empowering a district to act, not as a limitation on powers found elsewhere in the statute. The court of appeals therefore erred in finding that the power to “pledge” under CRS § 32-1-1001(1)(j)(I) necessarily restricts the power to assign. Accordingly, the Court reversed the court of appeals’ holding and remanded the case to that court for consideration of the other issues respondent raised on appeal, including whether petitioner was entitled to increase the fees.

Summary and full case available here, courtesy of The Colorado Lawyer.

HB 13-1206: Modifying Cap on Incentive Payments or Credits as Business Incentive Agreements with Municipalities, Counties, and Special Districts

On February 1, 2013, Rep. Brian DelGrosso and Sen. Mark Scheffel introduced HB 13-1206 – Concerning the Expansion of a Local Government’s Ability to Enter Into a Business Incentive Agreement with a TaxpayerThis summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

A county, municipality, or special district (local government) is currently authorized to negotiate an incentive payment or credit with a taxpayer that establishes a new business facility or expands an existing business facility (business incentive agreement).

As amended in the House, the bill expands the authority for a local government to negotiate a business incentive agreement with a taxpayer that has an existing business facility in the local government if, based on verifiable documentation, the local government is satisfied that there is a substantial risk that the taxpayer will relocate the facility out of state. The verifiable documentation must include information that the taxpayer could reasonably and efficiently relocate the facility out of state and that at least one other state is being considered for the relocation.

A local government negotiating any type of business incentive agreement is not required to inform a school district of the negotiations because school districts are no longer authorized to enter into business incentive agreements. The bill was given final approval in the House on March 5.

SB 13-145: Reallocating Conservation Trust Funds to Certain Metropolitan Districts that Provide Parks and Recreation Services

On Tuesday, January 29, 2013, Sen. Angela Giron introduced SB 13-145 – Concerning the Reallocation of the Conservation Trust Fund to a Metropolitan District that Provides Parks and Recreation Services Within and Includes Territory Within the Unincorporated Area of a County Only. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

For a metropolitan district (district) that provides parks and recreation services and includes territory exclusively within the unincorporated area of a county that, as of January 1, 2013, has not pledged or otherwise used revenues from its share of conservation trust fund moneys to secure financing that has not yet been fully repaid for a specific project, the reallocation of conservation trust fund moneys is changed, over a 3-year phase-in period, from one-half of the percentage to the full percentage which the district’s population within the county is to the total population of the unincorporated area of the county if the district:

  • Has, as estimated in the July 1, 2012, special district total population estimate of the state demography office of the department of local affairs, 10,000 or more individuals residing within its territory;
  • Has only elected board members;
  • Provides only parks and recreation facilities that are open to the general public, including individuals who are not residents of the district; and
  • When providing its annual certification that it is an entity eligible to receive a conservation trust fund allocation to the division of local government in the department of local affairs (division), informs the division that it prefers to receive a full percentage share.

A county must notify the division when it has fully repaid any financing secured by conservation trust fund moneys. The division may accept gifts, grants, and donations for the purpose of implementing the bill.

The bill is assigned to the State, Veterans, & Military Affairs Committee.