May 23, 2019

HB 14-1361: Requiring the Department of Revenue to Promulgate Rules Regarding Equivalency of Marijuana Flowers and Edibles

On April 7, 2014, Rep. Frank McNulty and Sen. Lucia Guzman introduced HB 14-1361 – Concerning the Authority of the State Licensing Authority to Establish Equivalencies for Retail Marijuana Products, and, in Connection Therewith, Making an Appropriation. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The bill directs the department of revenue (department) to promulgate rules establishing the equivalent of one ounce of retail marijuana flower in various retail marijuana products. The bill authorizes the department to contract for a scientific study of the equivalency of marijuana flower in marijuana products.

The bill prohibits a retail marijuana store from selling more than one ounce of retail marijuana or the equivalent in retail marijuana products during any single transaction to a Colorado resident. Current law prohibits the sale of more than one-quarter ounce of retail marijuana to a person who is not a resident of Colorado. The bill expands this prohibition to include the equivalent of one-quarter ounce in retail marijuana products.

The bill passed out of the house on April 21. The bill has been approved by the senate health & human services and appropriations committees and cleared 2nd reading in the Senate on May 2.

Since this summary, the bill passed 3rd Reading in the Senate with no amendments. It is on its way to the governor’s desk.

College Affordability Act, Budget Bill, and Other Bills Signed by Governor

As the legislature winds down the 2014 legislative session, Governor Hickenlooper continues to sign legislation that passes both houses. To date, the governor has signed 165 bills and vetoed two. He signed seven bills into law on April 25, 2014, he signed the Long Bill (budget bill) on April 30, he signed the College Affordability Act on May 1, and he signed nine bills on May 2. These are summarized here.

April 25, 2014

  • HB 14-1092 – Concerning the Voluntary Contribution Designation Benefitting the Colorado Youth Conservation Corps Fund that Appears on the State Individual Income Tax Return Forms, by Rep. Edward Vigil and Sen. John Kefalas. The bill creates a new income tax donation checkoff to benefit the Colorado Youth Conservation Corps.
  • HB 14-1107 – Concerning the Authority of the Department of Revenue to Offer Taxpayers the Option to Receive Electronic Notices, by Rep. Max Tyler and Sen. Linda Newell. The bill allows the Department of Revenue to transmit taxpayer notices electronically.
  • HB 14-1176 – Concerning the State Audit Cycle of the Emissions Program for Motor Vehicles, by Rep. Su Ryden and Sen. Lois Tochtrop. The bill changes the state audit cycle of the emissions program from once every three years to once every five years.
  • HB 14-1277 – Concerning Eligibility Requirements for Recipients of Grants from the Military Family Relief Fund, by Rep. Jovan Melton and Sen. Nancy Todd. The bill opens eligibility for grants from the Military Family Relief Fund to families of Colorado National Guard members and families of military personnel called to duty by executive order of the governor.
  • HB 14-1286 – Concerning Authorization for the State Treasurer to Loan to the State Historical Society for Public Display Items Presented to the Governor as Gifts to the State, by Rep. Jovan Melton and Sen. Pat Steadman. The bill allows the treasurer to loan items that were gifts to the state to the History Colorado and museums for display.
  • 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 in Other Financial Institutions, by Rep. Frank McNulty and Sen. Mike Johnston. The bill specifies that monies in excess of the amount protected by the FDIC may be deposited in other accounts rather than used for Certificates of Deposit.
  • 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, by Rep. Max Tyler and Sen. Nancy Todd. The bill removes the requirement that a vehicle be under six years old when the damage occurs in order to be considered a salvage vehicle.

April 30, 2014

  • HB 14-1336 – Long Appropriations Bill, by the Joint Budget Committee. This bill presents the budget for fiscal year 2014-2015.

May 1, 2014

  • SB 14-001Concerning Making College Education More Affordable by Imposing Further Restrictions on Tuition Increases, Increasing Financial Aid, and Increasing Operating Support for Each Governing Board of a State-Supported Institution of Higher Education by Eleven Percent and, In Connection Therewith, Making an Appropriation, by Sens. Cheri Jahn & Andy Kerr and Reps. Leroy Garcia & Mike McLachlan. The bill caps the annual increase in the rate of undergraduate in-state tuition for state supported institutions of higher education and appropriates $100,050,000 to the Department of Higher Education to support various financial aid programs and for the College Opportunity Fund and fee-for-service contracts.

May 2, 2014

  • SB 14-027 – Concerning Criminal History Background Checks for Professionals who Have the Authority to Appear in Court, and, in Connection Therewith, Making an Appropriation, by Sen. Lucia Guzman and Rep. Pete Lee. The bill authorizes the Colorado Supreme Court to request CBI criminal background checks as part of the licensing process for attorneys.
  • SB 14-114 – Concerning Expanding Access for All Students to Colorado State University – Global Campus, by Sen. Nancy Todd and Reps. Millie Hamner & Chris Holbert. The bill allows CSU Global Campus to offer complete degree programs online.
  • SB 14-135 – Concerning the Repeal of Certain Provisions Concerning the Purchasing of Firearms in States that are Contiguous to Colorado, by Sen. Greg Brophy and Rep. Jared Wright. The bill generally allows purchases of firearms in states contiguous to Colorado and generally allows gun sales to residents of contiguous states.
  • SB 14-146 – Concerning Information that the Department of Transportation May Consider when Conducting a Traffic Investigation for the Purpose of Determining the Appropriate Speed Limit for a Portion of a State Highway for which a Municipality has Proposed a Speed Limit Alteration, by Sen. Gail Schwartz and Rep. Jim Wilson. The bill allows a local government that is proposing a speed limit adjustment to submit its own traffic data and  engineering reports.
  • 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,” by Rep. Joseph Salazar and Sen. John Kefalas. The bill imposes certain restrictions on fees charged for the retrieval of records under the Colorado Open Records Act.
  • HB 14-1203 – Concerning Funding to Maintain the Infrastructure for the Digital Trunked Radio System, and, in Connection Therewith, Making an Appropriation, by the Joint Budget Committee. The bill makes a budget appropriation to replace legacy radio equipment and hardware at radio tower sites.
  • HB 14-1302 – Concerning the Addition of a Judgment Against a Debtor or Transferee who Acts with Actual Intent as an Available Remedy for a Creditor in a Fraudulent Transfer Action, by Rep. John Buckner and Sen. Mike Johnston. The bill provides an additional remedy for creditors when a debtor fraudulently transfers property with the intent to hinder, delay, or defraud the creditor.
  • HB 14-1335 – Concerning Campaign Contribution Limits that are Applicable to Candidate Committees for Candidates who are not Affiliated with a Major Political Party, by Rep. Dominick Moreno and Sen. Matt Jones. The bill allows write-in, unaffiliated, or minor party candidates to accept contributions up to the aggregate contribute limit for the election cycle.
  • HB 14-1342 – Concerning Transfers of Moneys Related to Capital Construction, by the Joint Budget Committee. The bill makes three transfers to the capital construction fund in fiscal year 2014-15.

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

HB 14-1323: Restricting Access of the Department of Revenue to Personal Medical Information

On March 18, 2014, Rep. Dianne Primavera and Sen. Kevin Lundberg introduced HB 14-1323 – Concerning Restrictions on the Ability of a Government Entity to Access an Individual’s Personal Medical InformationThis summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The bill prohibits the department of revenue from accessing an individual’s personal medical information or medical record without the individual’s consent. If a department employee authorizes the department, in its role as an employer, to access his or her personal medical information or medical record in connection with an employment-related request, occurrence, or claim, such as a request for a workplace accommodation or for family medical leave, the employee’s consent applies for the duration of the request, occurrence, or claim.

The bill does not preclude the department from accessing an invoice, receipt, or other documentation of a sale of a prescription drug or other item exempt from sales tax as long as:

  • Personal medical information or a medical record is not contained in the documentation; and
  • Any information that identifies or could be used to identify an individual patient or that indicates a patient’s diagnosis or treatment plan is redacted from the documentation.

Additionally, the department is not precluded from obtaining and using a written medical opinion in determining physical or mental fitness to operate a motor vehicle in accordance with procedures authorized by law.

The bill creates the government access to personal medical information task force to review, analyze, and make recommendations regarding the ability of state and local government departments and agencies to access, use, and distribute personal medical information. The governor appoints representatives from impacted state departments and universities and representatives from or of quasi-governmental entities, local governments, health care providers, health plans, mental health care consumers, consumer advocacy groups, consumers with chronic illnesses, consumers with cancer, and patient privacy rights groups to serve on the task force and is to invite the state auditor or his or her designee to participate. The task force is to meet no more than 4 times between July 15, 2014, and November 1, 2014, and is to submit its report and recommendations to specified legislative committees by November 1, 2014. Additionally, the task force is to present its report to the legislative committees during hearings held under the “State Measurements for Accountable, Responsive, and Transparent (SMART) Government Act.”

The bill passed out of the House on April 14. It is assigned to the Senate Health & Human Services Committee.

Colorado Court of Appeals: Interlocutory Review of Trial Court Proceedings in Order to Determine Whether All Necessary Parties were Participating in Trial Court Action

The Colorado Court of Appeals issued its opinion in Kowalchik v. Brohl, Executive Director, Colorado Department of Revenue on March 15, 2012.

Conservative Easement—Tax Credits—Transferees—Taxpayer—Tax Liability—Tax Matters Representative—Joinder of Parties—Due Process.

In this dispute involving conservation easement (CE) tax credits, defendant Barbara Brohl, Executive Director of the Colorado Department of Revenue (Department), petitioned for interlocutory review of the trial court’s orders in favor of plaintiffs. The orders were affirmed in part and reversed in part, and the case was remanded.

Plaintiffs donated CEs purportedly generating several million dollars of CE tax credits. They sold these credits to transferees, who claimed the credits on their state income tax returns or retained them for use against future tax liability. The Department disallowed all of the claimed tax credits. The trial court held that people who purchased CE tax credits from plaintiffs (1) are not within the statutory definition of “taxpayer” under CRS § 39-22-522(1); (2) have no tax liability for deficiencies, interest, and penalties for the improper claim of a tax credit; (3) need not be joined as necessary parties to this action under C.R.C.P. 19(a); and (4) may be given notice of this proceeding by mail rather than being personally served under C.R.C.P. 4.

The Department argued that the General Assembly intended to require transferees to be parties. The General Assembly added CRS § 39-22-522.5, which provided detailed court procedures as an alternative to administrative review, but did not require participation by transferees. Instead, the new section provided transferees with an absolute right to intervene. By acquiring a CE credit and claiming it as a deduction, a transferee agrees to be represented by its “tax matters representatives” (TMRs) under CRS § 39-22-522(7)(i). The sale of CE tax credits creates a sufficient alignment of interests between transferees and TMRs, who understand that they are acting in a representative capacity. Therefore, due process does not require joinder of transferees under C.R.C.P. 19(a) in litigation where the transferee is represented by its TMR. Further, mailing notice of this proceeding to all transferees and allowing this action to proceed without service of a summons and complaint on each transferee who chooses not to intervene satisfies due process. Finally, the court’s holding that a transferee is not a “taxpayer,” subject to deficiencies, interest, and penalties, was reversed.

This summary is published here courtesy of The Colorado Lawyer. Other summaries for the Colorado Court of Appeals on March 15, 2012, can be found here.

Colorado Supreme Court: Statewide Voter Approval Not Required when Making Adjustments to the Tax Due on Coal Extracted from Colorado Lands

The Colorado Supreme Court issued its opinion in Huber, Exec. Dir., Colorado Dep’t of Revenue v. Colorado Mining Assoc. on October 31, 2011.

CRS § 39-29-106—Amendement 1—Colo. Const. art. X, § 20—Taxation—Prospective Application of Constitutional Amendment.

The Supreme Court held that statewide voter approval is not required when the Department of Revenue implements quarterly adjustments to the tax due per ton of coal extracted from Colorado lands as required by CRS § 39-29-106. The court of appeals’ judgment was reversed.

The General Assembly adopted the coal severance tax of CRS § 39-29-106 in 1988, before approval of Amendment 1, Colo. Const. art. X, § 20. Amendment 1 requires advance voter approval for new taxes, tax rate increases, and tax policy changes that directly cause net revenue gains. CRS § 39-29-106 establishes a tax rate with two components to calculate the severance tax owed: (1) a base rate of $0.36 per ton of coal extracted; and (2) a quarterly 1% increase or decrease to the base rate calculated by changes to the index of producers’ prices, a federally prepared economic index that roughly tracks inflation.

After Amendment 1 became effective, the Department of Revenue suspended implementation of the statutorily required quarterly adjustments to the tax due, leaving in place a tax of $0.54 per ton of coal extracted. In 2007, the Department of Revenue concluded that implementation of the two-part tax rate formula was non-discretionary and did not conflict with Amendment 1, and it adjusted the tax due to $0.76 per ton. The court of appeals concluded that each time the Department of Revenue calculates an upward adjustment in the tax due, Amendment 1 requires statewide voter approval.

The Supreme Court concluded that Amendment 1 is prospective in application and that implementation of the two-part tax rate formula in CRS § 39-29-106 (the base rate plus the non-discretionary adjustment factor) is not a “tax rate increase.” Instead, collection of the tax as prescribed is a non-discretionary duty required of the Department of Revenue by a taxing statute that is not subject to Amendment 1’s voter approval requirements. Because the Department of Revenue has no discretion to increase or alter the tax rate formula of CRS § 39-29-106, Amendment 1’s prospective check on the legislature does not apply.

Summary and full case available here.

Governor Hickenlooper Names Brohl as Executive Director of the Department of Revenue

On Thursday, June 30, 2011, Governor John Hickenlooper announced that Barbara J. Brohl will become Executive Director of the Department of Revenue. She will replace the interim director of the department, Roxy Huber.

Brohl is an attorney with more than twenty-four years of experience in business; she served as Corporate Counsel for Qwest Corporation in Denver since 2003 and had previously worked for US WEST since 1983.

In 2005, Brohl was elected to the Regional Transportation District Board, responsible for overseeing multi-billion dollar budgets, setting policy on all transit issues, and matters for the metropolitan area, meeting with the Colorado Delegation to obtain support and funding for transit projects.

Brohl was also a law clerk for Colorado Supreme Court Justices Gregory J. Hobbs, Jr. and William H. Erickson.

As Executive Director, Brohl will be the principal officer for Colorado’s Tax Division and the Division of Motor Vehicles. Included under her oversight and responsibility are the Divisions of Gaming, Tobacco and Alcoholic Beverages, Lottery, Racing, Hearings, and the recently added Division of Medical Marijuana.

The entire Department has more than 1,500 employees and brings in more than $11 billion in fees and taxes for the state on an annual basis.

Brohl earned a bachelor’s degree from Regis University and her law degree from the University of Denver College of Law.

The full press release from the Governor’s Office concerning Brohl’s appointment can be found here.

Department of Revenue Amends Rule Regarding Colorado Lottery’s “Raffle Draw #3”

The Department of Revenue has amended a rule regarding the Colorado Lottery Jackpot Game “Raffle Draw #3.” The revised rule, Rule 10.H, will provide the general rules and requirements for the Colorado Lottery Jackpot game known as Raffle Draw #3, such as the sale of tickets, method of selecting winning numbers, payment of prizes, and allocation of revenues.

The full release concerning the proposed rule and statutory authority can be found here.

A hearing on the amended rule will be held on Wednesday, August 10, 2011, at 212 W. 3rd Street, Suite 210, Pueblo, Colorado 81003, beginning at 8:00 am.

Further information about rule and hearing can be found here.