May 23, 2019

Colorado Court of Appeals: ALJ Should Apply De Novo Review to State Personnel Board Evidentiary Hearing

The Colorado Court of Appeals issued its opinion in Stiles v. Department of Corrections on Thursday, January 24, 2019.

State Personnel Board—Disciplinary Proceedings—Standard of Review.

Stiles was selected for a random drug screening while serving as a full-time correctional officer for the Department of Corrections (DOC). The day after the test, Stiles submitted a confidential incident report to DOC admitting to marijuana use and explaining the extenuating circumstances that led to it, including a bout of insomnia and personal problems. The test results came back positive for THC, the main psychoactive chemical in marijuana. The warden issued a notice of disciplinary action terminating Stiles.

Stiles appealed his termination to the Colorado State Personnel Board (Board). An administrative law judge (ALJ) conducted a hearing and issued an initial decision finding that the warden’s decision was arbitrary, capricious, and contrary to rule or law. Specifically, the ALJ found that the warden had (1) failed to candidly and honestly consider all of the evidence he procured, particularly Stiles’s lack of prior disciplinary history and his extenuating mitigating circumstances; and (2) imposed discipline that was not within the range of reasonable alternatives by failing to consider the disciplinary alternatives set forth in the DOC regulation directed at marijuana use. The ALJ rescinded Stiles’s termination and modified his discipline. On review, the Board adopted the ALJ’s initial decision.

On appeal, the DOC contended that the ALJ employed an incorrect standard of review and improperly reweighed the evidence when he reviewed the disciplinary action. A C.R.S. § 24-50-125(4) hearing is a de novo hearing at which the ALJ makes credibility, factual, and legal findings without deference to the appointing authority. Therefore, the ALJ applied the correct standard of review.

The DOC next contended that the ALJ misapplied the arbitrary and capricious standard in modifying the warden’s decision. Here, the ALJ’s decision and the Board’s order adopting it were supported by the record, including the warden’s failure to properly weigh the mitigating evidence and the absence of any prior discipline and the imposition of the most severe form of discipline for Stiles’s misconduct.

The order was affirmed.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Denver Manager of Safety May Authorize a Designee to Hire, Terminate, and Discipline Employees

The Colorado Court of Appeals issued its opinion in Roybal v. City & County of Denver on Thursday, January 24, 2019.

Municipal Law—Termination—Charter of the City and County of Denver—Designated Authority.

Roybal was a deputy sheriff with the Denver Sheriff Department (DSD). After an investigation, the Department of Safety’s Civilian Review administrator (the administrator) determined that Roybal had violated multiple rules, which warranted disciplinary action, and terminated his employment. Roybal appealed the termination to a career service hearing officer, who affirmed the termination, and then to the City and County of Denver’s Career Service Authority Board (Board), which affirmed the hearing officer’s decision. Roybal appealed to the district court, which affirmed the Board’s order.

On appeal, Roybal contended that the district court erred in affirming the Board’s decision and order. He argued that under the Charter of the City and County of Denver (Charter), the authority to discipline and terminate DSD employees rests solely with the manager or the deputy, not the administrator, and therefore his termination was void as an ultra vires act. The safety manager may authorize a designee within the department, other than the deputy manager of safety, for the purposes of hiring, disciplining, and terminating DSD employees. Therefore, the Board did not err when it concluded that (1) the Charter and the Career Service Rules (CSR) do not limit the manager’s ability to designate authority solely to the deputy, and (2) the manager was permitted to delegate disciplinary authority to the administrator.

Roybal also argued that (1) two division chiefs were required to be at his hearing, and only one was present; and (2) the sheriff failed to initiate the discipline by written recommendation to the manager. Roybal claimed that in making these procedural errors, the Board effectively created a new CSR without engaging in rulemaking and applied the rule retroactively to his case to excuse the DSD’s violations of its own policies. Roybal asserted that these errors require reversal of his termination and that the Board erred in concluding otherwise. Here, the Board’s mention of existing CSR 16-72(D) was limited to explaining its reasoning in concluding that trivial deviations from pre-disciplinary regulations do not warrant the reversal of a termination decision. Simply discussing and implementing the policy behind the rule does not implicate quasi-legislative rulemaking by the Board. The Board did not err in finding that Roybal received a fair pre-disciplinary process, and any procedural irregularities are trivial.

The judgment was affirmed.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: Despite Probability of Ongoing Harm, Business Failed to Show Former Employee’s Solicitation Violated Business Agreement

The Tenth Circuit Court of Appeals issued its opinion in DTC Energy Group, Inc. v. Hirschfeld on Friday, December 28, 2018.

The district court denied plaintiff DTC Energy Group’s motion for preliminary injunctive relief. On appeal, the Tenth Circuit Court of Appeals affirmed.

DTC is a staffing and consulting firm, and has sued two of its former employees—Adam Hirschfeld and Joseph Galban—as well as a competing firm, Ally Consulting, LLC, for using DTC’s trade secrets to divert business from DTC to Ally.

Hirschfeld worked for DTC as a business development manager, and had signed an employment agreement that included confidentiality, non-solicitation, and non-interference provisions.  The confidentiality provision prohibited Hirschfeld from using DTC’s confidential information for his own benefit or the benefit of another company. The non-solicitation and non-interference provisions prohibited Hirschfeld from encouraging DTC’s current customers to take their business to a competitor and from recruiting DTC’s employees to work for a competitor, for the duration of his employment with DTC and for a period of 1-year thereafter, unless he resigned due to a change in ownership.

While employed by DTC, Hirschfeld used DTC’s resources to win business for Ally, allegedly in violation of his duty of loyalty to DTC and his employment agreement. Hirschfeld resigned from DTC in May 2017, citing a change in ownership. Upon his resignation, Hirschfeld took a flash drive containing DTC’s confidential information, and also kept his laptop logged into DTC’s Dropbox account so he could continue accessing DTC’s confidential information after his departure. The day after leaving DTC, Hirschfeld began working at Ally as its director of business development.

In September 2017, DTC filed its amended complaint and moved for preliminary injunction based on its claims for breach of contract, breach of duty of loyalty, misappropriation of trade secrets in violation of the federal Defend Trade Secrets Act and Colorado’s Uniform Trade Secrets Act, and unfair competition. The district court denied the motion, finding the duty of loyalty owed by defendants to DTC and the non-solicitation clause of Hirschfeld’s employment agreement had expired, and that DTC was unable to show a significant risk of future misappropriation of trade secrets and unfair competition. The district court reasoned that because a majority of the conduct at issue had occurred before DTC moved for a preliminary injunction, the resulting harm to DTC was therefore identifiable and could be remedied by an award of damages.

On appeal, DTC argued that the district court’s finding that DTC had established a significant risk of irreparable harm based on defendants’ past misconduct was erroneous because it failed to take into consideration the harm DTC continues to suffer as a result of defendants’ past misconduct—specifically the harm to DTC’s goodwill and competitive market position.

In its review of the district court’s decision, the Tenth Circuit focused on the showing of irreparable injury in the absence of the issuance of a preliminary injunction. The district court had found that DTC had shown a probability of irreparable harm from Hirschfeld’s ongoing breach of his employment agreement, but not with respect to DTC’s other claims.

DTC’s trade secret claims did not establish a probability of irreparable harm because there was no evidence in the record that defendants retained access to DTC’s confidential information or trade secrets. While the federal Defend Trade Secrets Act and Colorado’s Uniform Trade Secrets Act authorize preliminary injunctive relief to prevent actual or threated misappropriation of a trade secret, the Tenth Circuit concluded that DTC had not offered sufficient evidence that defendants currently possessed DTC’s trade secrets or would be likely to regain access to DTC’s trade secrets.

DTC’s unfair competition claim did not establish a probability of future irreparable harm because DTC had offered no evidence that Ally continues to appropriate DTC’s name or resources to solicit business, nor was there any evidence demonstrating ongoing confusion within the industry as to the relation between the two companies.

DTC’s breach of duty of loyalty claim also did not give rise to a future of irreparable harm. Because DTC identified the 12 contracts that Hirschfeld diverted from DTC to Ally and had previously hired experts to value the company during the change of ownership, the Court of Appeals reasoned that both the prior loss of DTC’s customers and consultants and the general decline of DTC’s value of a business could be quantified in money damages.

While DTC had shown a probability of future irreparable harm from Hirschfeld’s ongoing solicitation of DTC’s customers and consultants, the district court still denied injunctive relief as DTC had not shown a likelihood of success on the merits of the claim. The district court found that Hirschfeld was not bound by his employment’s non-solicitation provision as the change in ownership clause provision had been triggered.

On appeal, DTC argued that the prior breach doctrine prevented Hirschfeld from relying on the change in ownership clause, stating that Hirschfeld could not claim the benefit of the contract’s change in ownership clause after he had already violated the contract by improperly diverting business to Ally prior to his resignation. The Tenth Circuit agreed with the district court’s finding that the prior breach doctrine was inapplicable, as this was not an instance where DTC was defending against a demand specific performance, and the text of the employment agreement itself did not prevent Hirschfeld from relying on the provision in instances of prior breach. The Circuit went on to say that Hirschfeld’s present solicitation of DTC’s customers and consultants would not support issuing a preliminary injunction because the injunction would exceed the 1-year durational scope of the non-solicitation (the agreement’s provisions had expired prior to the time of the appeal).

In his concurrence, Judge McHugh wrote that in some circumstances an injunction can supported by the irreparable harm caused by defendants’ legal actions that would not have been possible but for their past breaches, as courts will sometimes enjoin future legal conduct because it was made possible by prior illegal conduct and will cause irreparable harm to the plaintiff. However, DTC had not pointed to any evidence of future irreparable harm stemming from defendants’ past misconduct (e.g., evidentiary support that DTC’s goodwill and competitive market position continues to be harmed) in the record that should have been considered by the district court, therefore the district court’s denial should be affirmed.

Colorado Supreme Court: Contract Provisions Ambiguous, So Pertinent Provisions Properly Submitted to Jury

The Colorado Supreme Court issued its opinion in School District No. 1 v. Denver Classroom Teachers Association on Monday, January 14, 2019.

Labor and Employment—Collective Bargaining—Contract Interpretation.

A dispute arose between a school district and a teachers’ association regarding whether, pursuant to the terms of several collective bargaining agreements, the school district was required to compensate teachers for attending English Learning Acquisition (ELA) training. The trial court found the agreements ambiguous and asked the jury to interpret them. The jury, in turn, returned a verdict for the teachers’ association. The school district appealed, and the court of appeals affirmed.

The supreme court affirmed the judgment of the court of appeals, albeit on slightly different grounds. The court acknowledged that the agreements contain a management rights clause, which grants the school district control over all lawful rights and authority not expressly addressed in the agreements. But because the “In-Service Education” provision in the agreements is fairly susceptible to being interpreted as expressly requiring payment for ELA training, the court cannot conclude that the management rights clause allows the school district to refuse to pay for such training. Therefore, the court agreed with the court of appeals that the pertinent contract provisions are ambiguous and that their interpretation was correctly submitted as a factual issue to the jury.

Summary provided courtesy ofColorado Lawyer.

Colorado Court of Appeals: Satisfaction of Statutory Criteria Qualifies Acquiring Employer as “Successor” for Unemployment Purposes

The Colorado Court of Appeals issued its opinion in Dos Almas LLC v. Industrial Claim Appeals Office on Thursday, September 20, 2018.

Unemployment Tax—C.R.S. § 8-76-104(1)(a)Successor Employer.

Dos Almas LLC began operating a restaurant after it acquired nearly all of the assets of WooPig LLC, which had operated a different restaurant at the same location. After the acquisition, Dos Almas applied for an unemployment compensation insurance account and a determination of employer liability by submitting a form along with a copy of the asset purchase agreement to the Department of Labor and Employment (Department).

A deputy ruled that Dos Almas was a successor employer to WooPig for unemployment compensation tax rate liability purposes because it met the requirements of C.R.S. § 8-76-104(1)(a) due to the acquisition. Dos Almas appealed more than eight months after the applicable 21-day time limit. Nevertheless, a hearing officer ruled that good cause was shown for the delay, and following a hearing the officer found that Dos Almas was not a successor entity to WooPig under the statutory criteria largely because it did not retain the employees as part of the asset sale. A panel of the Industrial Claims Appeal Office (the Panel) reversed. The Panel upheld the factual findings, but based on Dos Almas having acquired 90% of WooPig’s physical and intangible assets, ruled that it had acquired substantially all of WooPig’s assets and thereby met the statutory criteria to be considered a successor employer for unemployment compensation tax rate liability purposes.

On appeal, Dos Almas contended that the Panel erred in ruling that it is a successor to WooPig for unemployment tax rate liability purposes. The hearing officer’s factual findings support the conclusion that Dos Almas is a successor employer to WooPig for unemployment compensation tax rate liability purposes under the applicable statutory criteria in C.R.S. § 8-76-104(1)(a). Further, the lack of employee retention in the asset purchase transaction is irrelevant to the successor issues in this case. The Panel did not err.

The order was affirmed.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Amendment to C.R.S. § 30-10- 506 Largely Preserves At-Will Employment Doctrine for Deputy Sheriffs

The Colorado Court of Appeals issued its opinion in Arapahoe County Sheriff’s Office v. Cummings on Thursday, September 6, 2018.

Employment Termination—Wrongful Discharge—Implied Contract of Employment—Summary JudgmentInterlocutory AppealSheriff’s Policies—CRS § 30-10-506.

Cummings was a deputy sheriff in Arapahoe County. The Sheriff terminated Cummings’ employment, asserting that he violated the Sheriff’s employee manual (the Manual) and was dishonest during the investigation of the original charges against him. Cummings exhausted his remedies within the Sheriff’s department and sued for (1) wrongful discharge in violation of public policy, and (2) breach of an implied contract of employment, based on the policies in the Manual. The Sheriff moved to dismiss the wrongful termination claim based on governmental immunity, and the district court dismissed the claim with prejudice. The district court denied the Sheriff’s motion to dismiss the implied contract claim, and the Sheriff moved for summary judgment. The district court denied the motion for summary judgment, holding that there was an implied contract of employment and disputed issues of material fact existed. The Sheriff brought an interlocutory appeal under C.A.R. 42 challenging the denial of summary judgment.

On appeal, the Sheriff contended that the trial court erred in denying his motion for summary judgment. He argued that the at-will employment concept in C.R.S. § 30-10-506 requires the court to hold that all policies promulgated by a sheriff relating to termination of deputy sheriffs’ employment are only precatory, and to conclude otherwise would mean that the sheriff lacks the power to terminate at-will employees. C.R.S. § 30-10-506 requires a sheriff to promulgate written employment policies, and the sheriff must give deputies the rights of notice and opportunity to be heard. A sheriff’s other employment policies may be, but are not required to be, binding. If the sheriff elects to confer binding employment rights on his deputies, those rights are enforceable according to their terms.

The Sheriff next argued that even if C.R.S. § 30-10-506 allows sheriffs to promulgate binding personnel policies, the disclaimers in the Manual and the yearly disclaimers that Cummings signed preclude, as a matter of law, the formation of an implied contract of employment. Except with respect to the rights expressly granted to deputy sheriffs by statute, these clear and conspicuous disclaimers preclude, as a matter of law, Cummings’ implied contract claims. But here, material facts are disputed on whether Cummings received the required notice of the charges that led to his dismissal.

The part of the summary judgment order permitting Cummings to pursue an implied contract claim based on rights conferred in the Manual that effectuate the due process rights granted by C.R.S. § 30-10-506 was affirmed. In all other respects, the summary judgment order was reversed and the case was remanded.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: On Interlocutory Review, Class Certifications Were Not Abuse of Discretion by District Court

The Tenth Circuit Court of Appeals issued its opinion in Menocal, et al. v. The GEO Group, Inc. on February 9, 2018.

The appeal addresses whether or not immigration detainees housed in a private contract detention facility in Aurora, Colorado may bring claims as a class under 18 U.S.C. § 1589, a provision of the Trafficking Victims Protection Act (TVPA) that prohibits forced labor, and Colorado unjust enrichment law.

The GEO Group, Inc. (GEO) owns and operates the Aurora Facility under government contract. While there, the plaintiff detainees (Appellees) rendered mandatory and voluntary services to GEO. Under GEO’s mandatory policies, they cleaned their housing units’ common areas. They also performed various jobs through a voluntary work program, which paid them $1 a day.

The district court certified two separate classes: (1) all detainees housed at the Aurora Facility in the past ten years (TVPA class), and (2) all detainees who participated in the Aurora Facility’s voluntary work program in the past three years (unjust enrichment class). On interlocutory appeal, GEO argues that the district court abused its discretion in certifying each class under Rule 23(b)(3) of the Federal Rules of Civil Procedure. It primarily contended that the Appellees’ TVPA and Colorado unjust enrichment claims both require predominantly individualized determinations, making class treatment inappropriate.

At all times relevant to this appeal, GEO owned and operated the Aurora Facility under contract with the U.S. Immigration and Customs Enforcement (ICE). In operating this facility, GEO implemented two programs that form the basis for this case: (1) the Housing Unit Sanitation Policy, which required all detainees to clean their common living areas; and (2) the Voluntary Work Program, which compensated detainees $1 a day for performing various jobs.

The Aurora Facility’s Sanitation Policy had two components: (1) a mandatory housing unit sanitation program, and (2) a general disciplinary system for detainees who engaged in “prohibited acts,” including refusal to participate in the housing unit sanitation program. Under the mandatory housing unit sanitation program, GEO staff generated daily lists of detainees from each housing unit who were assigned to clean common areas after meal service. Upon arriving at the Aurora Facility, each detainee received a handbook notifying them of their obligation to participate in the program.

Under the disciplinary system, detainees who refused to perform their cleaning assignments faced a range of possible sanctions, including the initiation of criminal proceedings, disciplinary segregation—solitary confinement—for up to 72 hours, loss of commissary, loss of job, restriction to housing unit, reprimand, or warning. The Aurora Facility handbook included an explanation of the disciplinary system and the possible sanctions for refusing to clean. The Appellees alleged that the TVPA class members were all “forced to clean the housing units for no pay and under threat of solitary confinement as punishment for any refusal to work.”

Under the Aurora Facility’s Voluntary Work Program (VWP), participating detainees received $1 a day in compensation for voluntarily performing jobs such as painting, food services, laundry services, barbershop, and sanitation. Detainees who wished to participate in the VWP had to sign the “Detainee Voluntary Work Program Agreement,” which specified that “compensation shall be $1 per day.” Detainees had the additional option of working without pay if no paid positions were available. The complaint alleged that the VWP class members were all “paid one dollar $1 per day for their VWP labor.”

The Appellees filed a class action complaint against GEO in the U.S. District Court for the District of Colorado on behalf of current and former ICE detainees housed at the Aurora Facility. The complaint alleged a TVPA forced labor claim based on the Sanitation Policy, and an unjust enrichment claim under Colorado law based on the VWP. GEO moved to dismiss the complaint under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. Regarding the TVPA claim, GEO argued that the Thirteenth Amendment’s civic duty exception to the prohibition on involuntary servitude should also apply to the TVPA’s ban on forced labor. Regarding the unjust enrichment claim, GEO asserted sovereign immunity as a government contractor because ICE “specifically directed it to establish a voluntary detainee work program and pay the detainees who volunteer for that program $1 per day.” The district court rejected these arguments and denied GEO’s motion to dismiss the TVPA and unjust enrichment claims. GEO moved for reconsideration of the court’s rulings. The court denied the motion, finding that GEO “d[id] not identify any intervening change in controlling law or new evidence previously unavailable” to warrant reconsideration. After prevailing on the motion to dismiss, Appellees moved for certification of a separate class for each claim under Fed. R. Civ. P. 23(a) and (b)(3). GEO petitioned the Tenth Circuit for interlocutory review of the class certifications. Accordingly, only the district court’s order granting class certification—and not its rulings on whether the complaint stated TVPA and unjust enrichment claims—is before us.

The Tenth Circuit reviewed the district court’s decision to certify a class for an abuse of discretion. The Tenth Circuit affirmed the district court’s certification of the TVPA class. GEO contended that the district court abused its discretion in determining that the TVPA class satisfied commonality, typicality, predominance, and superiority. The court did not abuse its discretion as to any of these requirements in certifying the TVPA class.

The Tenth Circuit also affirmed the district court’s certification of unjust enrichment class. GEO argued the district court abused its discretion in determining that the unjust enrichment class satisfies commonality, typicality, predominance, and superiority. The district court reasonably determined that the class members shared the circumstances relevant to the unjustness question and that individual damage assessments would not predominate over the class’s common issues. Its findings on commonality, typicality, and superiority were likewise reasonable and fell within its discretion.

The Tenth Circuit Court of Appeals affirmed the district court’s certification of both classes.

Bills Requiring Elected Officials to Swear by “Everliving God,” Providing Representation to Indigent Defendants in Municipal Courts, and More Signed

On Friday, June 1, 2018, Governor Hickenlooper signed 10 bills into law and vetoed three bills. On Monday, June 4, the governor signed seven bills and vetoed two. To date, he has signed 367 bills into law, sent two to the Secretary of State without a signature, and vetoed five bills.

Some of the bills signed include a bill requiring elected officials who choose to swear their oath of office, rather than affirm, to do so by the “everliving God” while raising their hand, a bill allowing transportation services for foster children in order to improve high school graduation rates, a bill allowing independent representation for indigent defendants in municipal courts, and more. Some of the bills vetoed include a bill allowing out-of-state electors to participate in Colorado elections, a bill restricting parties able to receive autopsy reports for minors, and a bill allowing a credit for tobacco products shipped out of state. The bills signed and vetoed Friday are summarized here.

Signed

  • SB 18-003 – “Concerning the Colorado Energy Office,” by Sen. Ray Scott and Reps. Chris Hansen & Jon Becker. The bill repeals several programs providing energy grants for schools, and specifies several preferred energy methods.
  • SB 18-200 – “Concerning Modifications to the Public Employees’ Retirement Association Hybrid Defined Benefit Plan Necessary to Eliminate with a High Probability the Unfunded Liability of the Plan Within the Next Thirty Years,” by Sens. Jack Tate & Kevin Priola and Reps. KC Becker & Dan Pabon. The bill makes changes to the hybrid defined benefit plan administered by PERA with the goal of eliminating, with a high probability, the unfunded actuarial accrued liability of each of PERA’s divisions and thereby reach a 100% funded ratio for each division within the next 30 years.
  • SB 18-203 – “Concerning the Provision of Independent Counsel to Indigent Defendants in Municipal Courts, and, in Connection Therewith, Making an Appropriation,” by Sen. Vicki Marble and Rep. Susan Lontine. The bill requires each municipality, on and after January 1, 2020, to provide independent indigent defense for each indigent defendant facing a possible jail sentence for a violation of a municipal ordinance. Independent indigent defense requires, at minimum, that a nonpartisan entity independent of the municipal court and municipal officials oversee the provision of indigent defense counsel.
  • SB 18-219 – “Concerning the Rates a Motor Vehicle Dealer Charges a Motor Vehicle Manufacturer for Work Performed by the Dealer in Accordance with a Warranty Obligation,” by Sen. Jack Tate and Rep. Tracy Kraft-Tharp. The bill requires motor vehicle manufacturers to fulfill warranty obligations. A manufacturer must compensate each of its motor vehicle dealers in accordance with a set of standards designed to reflect the current market rate for labor and the profit margin on parts the dealer can expect to obtain. Dealers must submit certain repair orders to the manufacturer as required by the bill to establish compensation rates.
  • SB 18-230 – “Concerning Modification of the Laws Governing the Establishment of Drilling Units for Oil and Gas Wells, and, in Connection Therewith, Clarifying that a Drilling Unit may Include more than One Well, Providing Limited Immunity to Nonconsenting Owners Subject to Pooling Orders, Adjusting Cost Recovery from Nonconsenting Owners, and Modifying the Conditions upon which a Pooling Order may be Entered,” by Sen. Vicki Marble and Reps. Lori Saine & Matt Gray. Current law authorizes ‘forced’ or ‘statutory’ pooling, a process by which any interested person–typically an oil and gas operator–may apply to the Colorado oil and gas conservation commission for an order to pool oil and gas resources located within a particularly identified drilling unit. The bill clarifies that an order entered by the commission establishing a drilling unit may authorize more than one well.
  • SB 18-242 – “Concerning the Swearing of a Public Official Oath of Office,” by Sens. Vicki Marble and Reps. Timothy Leonard & Stephen Humphrey. The bill requires a person swearing an oath of office for a public office or position to do so by swearing by the everliving God. The bill also requires the person swearing the oath of office to do so with an uplifted hand.
  • SB 18-243 – “Concerning the Retail Sale of Alcohol Beverages, and, in Connection Therewith, Making an Appropriation,” by Sens. Chris Holbert & Lucia Guzman and Reps. Daneya Esgar & Hugh McKean. Under current law, effective January 1, 2019, the limitation on the maximum alcohol content of fermented malt beverages, also referred to as ‘3.2% beer’, is eliminated, thereby allowing grocery stores, convenience stores, and any other person currently licensed or licensed in the future to sell fermented malt beverages for consumption on or off the licensed premises to sell fermented malt beverages containing more than 3.2% alcohol by weight or 4% alcohol by volume, referred to as ‘malt liquor’. The bill modifies laws governing the retail sale of fermented malt beverages, which will be synonymous with malt liquor as of January 1, 2019.
  • SB 18-276 – “Concerning an Increase in the General Fund Reserve,” by Sens. Kevin Lundberg & Millie Hamner and Reps. Kent Lambert & Dave Young. For the fiscal year 2018-19, and each fiscal year thereafter, the bill increases the statutorily required general fund reserve from 6.5% to 7.25% of the amount appropriated for expenditure from the general fund.
  • HB 18-1006 – “Concerning Modifications to the Newborn Screening Program Administered by the Department of Public Health and Environment, and, in Connection Therewith, Making an Appropriation,” by Reps. Millie Hamner & Larry Liston and Sens. Bob Gardner & Dominick Moreno. The bill updates the current newborn screening program to require more timely newborn hearing screenings. The department of public health and environment (department) is authorized to assess a fee for newborn screening and necessary follow-up services. The bill creates the newborn hearing screening cash fund for the purpose of covering the costs of the program.
  • HB 18-1185 – “Concerning Changes to the State Income Tax Apportionment Statute Based on the Most Recent Multistate Tax Commission’s Uniform Model of the Uniform Division of Income for Tax Purposes Act,” by Reps. Tracy Kraft-Tharp & Cole Wist and Sens. Tim Neville & Dominick Moreno. For income tax years commencing on and after January 1, 2019, the bill generally replaces the method for sourcing of sales for purposes of apportioning the income of a taxpayer that has income from the sale of services or from the sale, lease, license, or rental of intangible property in both Colorado and other states from the cost-of-performance test in the case of services and the commercial domicile test in the case of intangible property to a market-based sourcing system.
  • HB 18-1187 – “Concerning the Lawful Use of a Prescription Drug that Contains Cannabidiol that is Approved by the United States Food and Drug Administration,” by Reps. Janet Buckner & Lois Landgraf and Sens. Dominick Moreno & John Cooke. The bill amends the definition of ‘marijuana’ to exclude prescription drug products approved by the federal food and drug administration and dispensed by a pharmacy or prescription drug outlet registered by the state of Colorado. The bill also specifies that the change does not restrict or otherwise affect regulation of or access to marijuana that is legal under Colorado’s statutory or constitutional scheme or industrial hemp and its derivatives.
  • HB 18-1244 – “Concerning the Creation of a Submarine Service License Plate to Honor the Service of Submarine Veterans, and, in Connection Therewith, Making an Appropriation,” by Rep. Jessie Danielson and Sens. Nancy Todd & Bob Gardner. The bill creates the submarine service license plate. In addition to the standard motor vehicle fees, the plate requires 2 one-time fees of $25. One fee is credited to the highway users tax fund and the other to a fund that provides licensing services.
  • HB 18-1270 – “Concerning Energy Storage, and, in Connection Therewith, Requiring the Public Utilities Commission to Establish Mechanisms for Investor-Owned Electric Utilities to Procure Energy Storage Systems if Certain Criteria are Satisfied,” by Reps. Chris Hansen & Jon Becker and Sen. Jack Tate. The bill directs the public utilities commission to adopt rules establishing mechanisms for the procurement of energy storage systems by investor-owned electric utilities, based on an analysis of costs and benefits as well as factors such as grid reliability and a reduction in the need for additional peak generation capacity.
  • HB 18-1271 – “Concerning the Authorization of Economic Development Rates to be Charged by Electric Utilities to Qualifying Nonresidential Customers,” by Reps. Matt Gray & Yeulin Willett and Sen. Jack Tate. The bill allows the public utilities commission to approve, and electric utilities to charge, economic development rates, which are lower rates for commercial and industrial users who locate or expand their operations in Colorado so as to increase the demand by at least 3 megawatts.
  • HB 18-1286 – “Concerning Allowing School Personnel to Give Medical Marijuana to a Student with a Medical Marijuana Registry Card while at School,” by Rep. Dylan Roberts and Sens. Irene Aguilar & Vicki Marble. Under current law, a primary caregiver may possess and administer medical marijuana in a nonsmokeable form to a student while the student is at school. The bill allows a school nurse or the school nurse’s designee, who may or may not be an employee of the school, or school personnel designated by a parent to also possess and administer medical marijuana to a student at school. The bill provides a school nurse or the school nurse’s designee or the school personnel designated by a parent protection from criminal prosecution if he or she possesses and administers medical marijuana to a student at school.
  • HB 18-1306 – “Concerning Ensuring Educational Stability for Students in Out-of-Home Placement, and, in Connection Therewith, Making an Appropriation,” by Rep. Dafna Michaelson Jenet and Sens. Don Coram & Dominick Moreno. The bill aligns state law with federal ‘Every Student Succeeds Act’ (ESSA) provisions relating to students in foster care, referred to in state statutes as ‘students in out-of-home placement’. ESSA permits students in out-of-home placement at any time during the school year to remain in their school of origin, as defined in the bill, rather than move to a different school upon placement outside of the home or changes in placement, unless the county department of human or social services determines that it is not in the child’s best interest to remain in his or her school of origin.
  • HB 18-1430 – “Concerning the Requirement that a State Agency Prepare a Long-Range Financial Plan,” by Reps. Kevin Van Winkle & Dave Young and Sen. Kevin Lundberg. The bill requires each state agency to develop a long-range financial plan on or before November 1, 2019, and to update the plan each of the next 4 years thereafter. The department of state, the department of treasury, the department of law, and the judicial branch shall each publish the required components of the plan for their respective state agencies. The office of state planning and budgeting shall publish the required components of the plan in its annual budget instructions for all other state agencies.

Vetoed

  • SB 18-179 – “Concerning Adjustments to Total Gross Purchases for Purposes of Calculating the Excise Tax on Tobacco Products, and, in Connection Therewith, Making an Appropriation,” by Sens. Owen Hill & Angela Williams and Reps. Edie Hooten & Dan Pabon. Currently and until September 1, 2018, a distributor can claim a credit for taxes paid on tobacco products that are shipped or transported by the distributor to a consumer outside of the state. The bill would have made the credit permanent and requires the distributor to maintain certain records related to the out-of-state sales to consumers. “While the bill’s economic benefits appear minimal, the negative health effects of cheaper tobacco are both significant and compelling,” said Governor John Hickenlooper in the veto letter. “These concerns remain from when we vetoed SB 17-139.”
  • SB 18-223 – “Concerning the Circumstances Under Which an Autopsy Report Prepared in Connection with the Death of a Minor may be Released to Certain Parties,” by Sen. Bob Gardner and Reps. Matt Gray & Terri Carver. The bill specified that an autopsy report prepared in connection with the death of a minor is confidential and may be disclosed by the county coroner to any other person or entity only in accordance with certain exceptions. “Transparency can lead to enhanced government protections, greater public and private resources, and heightened public understanding and demand for change,” wrote Governor John Hickenlooper in the veto letter. He went on to say, “An informed public has societal benefits for all at-risk children, present and future.”
  • HB 18-1181 – “Concerning Measures to Expand the Ability of Nonresident Electors to Participate in the Governance of Special Districts, and, in Connection Therewith, Allowing Nonresident Electors Who Own Taxable Property Within the Special District to Vote in Special District Elections And Allowing Such Electors to Serve on Special District Boards in a Nonvoting Capacity,” by Rep. Larry Liston and Sen. Jack Tate. The bill would have expanded the definition of ‘eligible elector’, as used in reference of persons voting in special district elections, to include a natural person who owns, or whose spouse or civil union partner owns, taxable real or personal property situated within the boundaries of the special district or the area to be included in the special district and who has satisfied all other requirements in the bill for registering to vote in an election of a special district but who is not a resident of the state. “Allowing non-Coloradans to vote in Colorado elections to select our elected representatives is poor public policy,” said Governor John Hickenlooper in the veto letter. “Out-of-state landowners enjoy Colorado’s great views, activities, and economy. While we are grateful to our out-of-state neighbors and their love of Colorado, we are unpersuaded that the State should allow those who spend days or weeks in Colorado to make decisions impacting those who make it their home each and every day.”
  • HB 18-1258 – “Concerning Authorization for an Endorsement to an Existing Marijuana License to Allow for a Marijuana Accessory Consumption Establishment for the Purposes of Consumer Education, and, in Connection Therewith, Making an Appropriation,” by Reps. Jovan Melton & Jonathan Singer and Sens. Tim Neville & Stephen Fenberg. The bill would have  authorized each licensed medical marijuana center or retail marijuana store to establish one retail marijuana accessory consumption establishment that may sell marijuana, marijuana concentrate, and marijuana-infused products for consumption, other than smoking, at the establishment. “Since Colorado approved Amendment 64 in 2012, this Administration implemented a robust regulatory system to carry out the intent of this voter-initiated measure,” said Governor John Hickenlooper in the veto letter. “Amendment 64 is clear: marijuana consumption may not be conducted ‘openly’ or ‘publicly’ on ‘in a manner that endangers others’ We find that HB 18-1258 directly conflicts with this constitutional requirement.”
  • HB 18-1427 – “Concerning a Prohibition on Conflicts of Interest of Members of the Sex Offender Management Board,” by Reps. Leslie Herod & Cole Wist and Sen. Jerry Sonnenberg. The bill would have prohibited members of the sex offender management board from receiving a direct financial benefit from the standards or guidelines adopted by the board. “We all support proper handling of conflicts. We veto this bill today, however, because it is redundant and overbroad,” wrote Governor John Hickenlooper in the veto letter. He went on to say, “Despite the issues with HB 18-1427, recent media reports raise important issues as to the need for better conflict of management interests.”

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

Bills Signed to Improve Employment Opportunities for Disabled People, Continuing Civil Rights Division and Commission, and More

Since Friday, May 18, 2018, Governor Hickenlooper has signed 22 bills into law. To date, he has signed 251 bills and sent two to the Secretary of State without a signature. Some of the bills signed this week include a bill to continue the Colorado Civil Rights Division and Commission, a bill to implement “employment first” recommendations regarding people with disabilities, a bill extending and renaming the affordable housing tax credit, a bill allowing for equipment grants for rural fire departments, and more. The bills signed since Friday are summarized here.

Friday, May 18

  • HB 18-1319 – “Concerning the Extension of Services for a Successful Adulthood for Former Foster Care Youth who are Between the Ages of Eighteen Years and Twenty-one Years, and, in Connection Therewith, Making an Appropriation,” by Reps. Jonathan Singer & Dave Young and Sen. Bob Gardner. The bill allows county departments of human or social services to extend the provision of certain services for a successful adulthood to foster care youth between the ages of 18 and 21 who have exited the foster care system, including assistance with employment, housing, education, financial management, mental health care, and substance abuse treatment.
  • HB 18-1400 – “Concerning an Increase in Fees Paid by Stationary Sources of Air Pollutants, and, in Connection Therewith, Prioritizing the Use of the Revenues Generated by the Fee Increases to Reduce Permit Processing Times and Making an Appropriation,” by Reps. KC Becker & Hugh McKean and Sens. Cheri Jahn & Ray Scott. The bill increases statutory caps on the fees paid by stationary sources of air pollutants.
  • SB 18-039 – “Concerning the Wildfire Matters Review Committee, and, in Connection Therewith, Deferring the Date on which the Committee is Scheduled to Repeal and Making an Appropriation,” by Sens. Matt Jones & John Cooke and Reps. Tony Exum & Dan Thurlow. The wildfire matters review committee (WMRC) is currently scheduled to repeal on July 1, 2018. The bill defers the repeal date to September 1, 2025.
  • SB 18-145 – “Concerning the Implementation of Employment First Advisory Partnership Recommendations to Advance Competitive Integrated Employment for Persons with Disabilities, and, in Connection Therewith, Making an Appropriation,” by Sen. John Kefalas and Rep. Joann Ginal. The bill requires the Department of Labor and Employment and the State Medical Services Board in the Department of Health Care Policy and Financing to promulgate rules that require all providers of supported employment services for persons with disabilities to obtain a nationally recognized supported employment training certificate or earn a nationally recognized supported employment certification relating to supported employment services.
  • SB 18-254 – “Concerning Reforms to Child Welfare Services, and, in Connection Therewith, Making and Reducing an Appropriation,” by Sens. Kent Lambert & Dominick Moreno and Reps. Dave Young & Bob Rankin. The bill addresses numerous reforms to the funding structure for the state’s child welfare services.

Monday, May 21

  • HB 18-1003 – “Concerning Measures to Prevent Opioid Misuse in Colorado, and, in Connection Therewith, Making an Appropriation,” by Rep. Brittany Pettersen and Sens. Cheri Jahn & Kevin Priola. The bill establishes in statute the opioid and other substance use disorders study committee, consisting of 5 senators and 5 representatives from the General Assembly, and provides for tasks for the committee to address.
  • HB 18-1007 – “Concerning Payment Issues Related to Substance Use Disorders,” by Reps. Chris Kennedy & Jonathan Singer and Sens. Kent Lambert & Cheri Jahn. The bill requires all individual and group health benefit plans to provide coverage without prior authorization for a five-day supply of at least one of the federal food and drug administration-approved drugs for the treatment of opioid dependence for a first request within a 12-month period.
  • HB 18-1360 – “Concerning the Expansion of the Number of Directors on the Board of Directors of the State Historical Society,” by Reps. Faith Winter & Polly Lawrence and Sens. Beth Martinez Humenik & Nancy Todd. The bill increases the number of directors of the Board of the State Historical Society from 9 to 13.
  • SB 18-022 – “Concerning Clinical Practice Measures for Safer Opioid Prescribing,” by Sens. Jack Tate & Irene Aguilar and Reps. Brittany Pettersen & Chris Kennedy. The bill restricts the number of opioid pills that a health care practitioner, including physicians, physician assistants, advanced practice nurses, dentists, optometrists, podiatrists, and veterinarians, may prescribe for an initial prescription to a seven-day supply and allows each health care practitioner to exercise discretion to include a second fill for a seven-day supply, with certain exceptions.
  • SB 18-024 – “Concerning Modifications to the Colorado Health Service Corps Program Administered by the Department of Public Health and Environment to Expand the Availability of Behavioral Health Care Providers in Shortage Areas in the State, and, in Connection Therewith, Making an Appropriation,” by Sens. Cheri Jahn & Jack Tate and Reps. Brittany Pettersen & Jonathan Singer. The bill modifies the Colorado health service corps program administered by the primary care office in the Department of Public Health and Environment.
  • SB 18-270 – “Concerning Establishing a Statewide Program to Coordinate Referrals of High-risk Individuals in Need of Behavioral Health Transition Services, and, in Connection Therewith, Making an Appropriation,” by Sens. Cheri Jahn & Tim Neville and Reps. Brittany Pettersen & Cole Wist. The bill establishes the community transition specialist program in the office of behavioral health in the Department of Human Services. The program coordinates referrals of high-risk individuals to transition specialists by certain behavioral health facilities and programs. High-risk individuals are under an emergency or involuntary hold, have a significant mental health or substance use disorder, and are not in consistent behavioral health treatment.

Tuesday, May 22

  • HB 18-1208 – “Concerning the Expansion of the Income Tax Credit for Child Care Expenses that is a Percentage of a Similar Federal Income Tax Credit,” by Reps. Crisanta Duran & Faith Winter and Sen. Beth Martinez Humenik. The bill expands the state child care income tax credit by allowing a resident individual with an AGI that is less than or equal to $150,000 to claim a credit that is equal to 80% of the individual’s federal credit.
  • HB 18-1255 – “Concerning the Creation of a Childhood Cancer Awareness License Plate, and, in Connection Therewith, Making an Appropriation,” by Reps. Crisanta Duran & Terri Carver and Sens. John Cooke & John Kefalas. The bill creates the childhood cancer awareness license plate. A person becomes eligible to use the plate by providing a certificate confirming that the person has made a donation to an organization chosen by the Department of Revenue based on the organization’s assistance to children with cancer.
  • HB 18-1256 – “Concerning Continuation of the Regulation of Civil Rights Issues, and, in Connection Therewith, Implementing the Recommendation in the Department of Regulatory Agencies’ 2017 Sunset Review and Report on the Colorado Civil Rights Division and the Colorado Civil Rights Commission to Continue the Division and Commission and Making an Appropriation,” by Reps. Crisanta Duran & Leslie Herod and Sen. Bob Gardner. The bill implements the recommendation of the Department of Regulatory Agencies in its sunset review of the Colorado Civil Rights Division and the Colorado Civil Rights Commission to continue the Commission and the Division and their respective functions for 9 years, through September 1, 2027.

Wednesday, May 23

  • HB 18-1008 – “Concerning the Financing of the Division of Parks and Wildlife’s Aquatic Nuisance Species Program, and, in Connection Therewith, Creating an Aquatic Nuisance Species Stamp for the Operation of Motorboats and Sailboats in Waters of the State, Increasing Penalties Related to the Introduction of Aquatic Nuisance Species into the Waters of the State, and Combining Two Separate Funds Related to the Aquatic Nuisance Species Program into One Fund,” by Reps. Daneya Esgar & Jeni James Arndt and Sens. Don Coram & Kerry Donovan. The bill updates a legislative declaration concerning aquatic nuisance species to encourage the federal government to dedicate sufficient funding and resources to the detection, prevention, control, and eradication of aquatic nuisance species for federally owned or managed aquatic resources and water infrastructure in Colorado, and makes other changes.
  • HB 18-1423 – “Concerning Grants to Provide Equipment to Rural Fire Protection Districts,” by Reps. Donald Valdez & Larry Liston and Sens. Leroy Garcia & Larry Crowder. The division of fire prevention and control in the department of public safety is currently authorized to use money in the local firefighter safety and disease prevention fund to provide grants for equipment and training to increase firefighter safety and prevent occupation-related diseases. The bill transfers $250,000 from the general fund to be used for these purposes.
  • 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. Stephen Fenberg & Don Coram and Reps. Jeni James Arndt & James Wilson. The bill makes several statutory changes concerning hunting and fishing, including raising the amount of residential and nonresidential license fees, stamp fees, and surcharges for certain hunting and fishing activities.

Thursday, May 24

  • SB 18-042 – “Concerning the Creation of the Agricultural Workforce Development Program, and, in Connection Therewith, Making an Appropriation,” by Sens. Kerry Donovan & Larry Crowder and Reps. Marc Catlin & Barbara McLachlin. The bill requires the commissioner of agriculture to create, by rule, the agricultural workforce development program to provide incentives to agricultural businesses to hire interns. Qualified agricultural businesses may be reimbursed an amount not to exceed 50% of the actual cost of hiring a qualified intern. The rules must include specified criteria for qualifying businesses and interns participating in the program. Qualified internships must include at least 130 hours of work experience and cannot exceed 6 months in duration. The program is repealed on July 1, 2024.
  • SB 18-066 – “Concerning an Extension of the Operation of the State Lottery Division Beyond July 1, 2024,” by Sens. Jerry Sonnenberg & Leroy Garcia and Reps. Jeni James Arndt & Cole Wist. The bill extends the scheduled termination on July 1, 2024, of the state lottery division in the Department of Revenue to July 1, 2049.
  • SB 18-085 – “Concerning Providing Financial Incentives for Educators to Work in Rural Areas, and, in Connection Therewith, Making an Appropriation,” by Sen. Nancy Todd and Rep. Barbara McLachlan. Current law allows the Department of Higher Education to provide up to 20 financial stipends annually, not to exceed $6,000 each, to teachers in rural schools or school districts who are seeking certification as a national board certified teacher, seeking certification as a concurrent enrollment teacher, or furthering their professional development plan through continuing education, and who commit to employment in a rural school for a minimum of 3 years. The bill increases the number of available stipends to 60 and expands it to include teachers completing an approved alternative licensure program leading to initial licensure and full-time employment in a rural school or school district that serves rural schools and individuals completing the required course work leading to certification and employment in a rural school or a rural school district that serves rural schools.
  • SB 18-229 – “Concerning Criminal History Record Checks for Educator Preparation Program Students Seeking Field Experiences in Schools, and, in Connection Therewith, Making an Appropriation,” by Sen. Beth Martinez Humenik and Reps. Kim Ransom & Barbara McLachlan.  The bill permits a student in an educator preparation program who is seeking field experiences in a school to submit his or her fingerprints to the Colorado Bureau of Investigation for the purpose of performing a fingerprint-based criminal history record check for the student. Upon completion of the fingerprint-based criminal history record check, the bureau must forward the results to the Department of Education. If the fingerprint-based criminal history record check of a student performed pursuant to this section reveals a record of arrest without a disposition, the department is required to perform a name-based criminal history record check of that student.

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

Bills Signed Allowing Out-of-State Workers in Colorado Access to Workers’ Compensation Benefits, Allowing Dispensary Employees to Sample Marijuana, and More

On Monday, April 30, 2018, Governor Hickenlooper signed 21 bills into law and sent one bill to the Secretary of State without a signature. To date, he has signed 204 bills and sent two to the Secretary of State without signature. Some of the bills signed Monday include the Long Appropriations Bill, a bill providing access to workers’ compensation benefits for out-of-state workers temporarily in Colorado, a bill requiring fingerprint-based background checks for employees with access to federal tax information, and more. The bills signed on Monday are summarized here.

  • HB 18-1069 – “Concerning the Allowable Uses of Reclaimed Domestic Wastewater, and, in Connection Therewith, Allowing Reclaimed Domestic Wastewater to Be Used for Toilet Flushing and Making an Appropriation,” by Reps. Jeni James Arndt & Dan Thurlow and Sen. Don Coram. The bill codifies rules promulgated by the water quality control commission of the Colorado Department of Public Health and Environment concerning allowable uses of reclaimed domestic wastewater, which is wastewater that has been treated for subsequent reuses other than drinking water.
  • HB 18-1186 – “Concerning the Continuation of the Colorado Youth Advisory Council, and, in Connection Therewith, Implementing the Sunset Review Recommendations of the Department of Regulatory Agencies and Making an Appropriation,” by Reps. James Wilson & Judy Reyhar and Sen. Vicki Marble. The bill implements the recommendation of the department of regulatory agencies to concerning the Colorado youth advisory council and extends the sunset date to September 1, 2023.
  • HB 18-1259 – “Concerning Providing Marijuana Samples to Employees for Business Purposes,” by Rep. Matt Gray and Sen. Vicki Marble. The bill permits a medical marijuana optional premises cultivation licensee, a medical marijuana-infused products manufacturing licensee, a retail marijuana cultivation facility licensee, and a retail marijuana products manufacturing licensee to provide samples to managers for quality control and product development purposes. The bill specifies limits on the amount that can be provided as a sample per batch.
  • HB 18-1284 – “Concerning the Cost of Prescription Drugs Purchased at a Pharmacy,” by Reps. Janet Buckner & James Wilson and Sens. Beth Martinez Humenik & John Kefalas. The bill enacts the ‘Patient Drug Costs Savings Act.’ The act prohibits a carrier that has a contract with a pharmacy or pharmacist, or a pharmacy benefit management firm acting on behalf of a carrier, from preventing a pharmacist from disclosing the cost of prescription drugs or requiring a pharmacy to collect a copay that exceeds the pharmacy’s costs.
  • HB 18-1308 – “Concerning an Exemption from the “Workers’ Compensation Act of Colorado” for Nonresident Employers whose Employees are Temporarily Working in Colorado,” by Reps. Tracy Kraft Tharp & Jon Becker and Sens. Owen Hill & Daniel Kagan. The bill establishes an exemption from the ‘Workers’ Compensation Act of Colorado’ for an out-of-state employer whose employees are working in Colorado on a temporary basis as long as the employer furnishes workers’ compensation coverage in the state in which the employee is regularly employed and the home state is contiguous to Colorado.
  • HB 18-1322 – “Concerning the Provision for Payment of the Expenses of the Executive, Legislative, and Judicial Departments of the State of Colorado, and of its Agencies and Institutions, For and During the Fiscal Year Beginning July 1, 2018, Except as Otherwise Noted,” by Rep. Millie Hamner and Sen. Kent Lambert. This is the Long Appropriations Bill, which budgets for various monies to be applied to different state agencies.
  • HB 18-1323 – “Concerning Transfers of Money to a Newly Created Office of State Planning and Budgeting Youth Pay for Success Initiatives Account within the Pay for Success Contracts Fund, and, in Connection Therewith, Making an Appropriation,” by Rep. Bob Rankin and Sen. Dominick Moreno. The bill requires the state treasurer to transfer specified amounts from the general fund and the marijuana tax cash fund to a newly created Office of State Planning and Budgeting Youth Pay for Success Initiatives account within the pay for success contracts fund for state fiscal years 2018-19 through 2021-22.
  • HB 18-1324 – “Concerning the Continuation of the Governor’s Commission on Community Service, and, in Connection Therewith, Making an Appropriation,” by Rep. Millie Hamner and Sen. Kent Lambert. The bill codifies the existing governor’s commission on community service, which was created through executive order.
  • HB 18-1325 – “Concerning Measures to Address Coverage Gaps in the Statewide Digital Trunked Radio System, and, in Connection Therewith, Making an Appropriation,” by Reps. Millie Hamner & Bob Rankin and Sen. Kent Lambert. The statewide digital trunked radio system (DTRS) provides interoperable radio communications that allow personnel from multiple agencies in different levels of government to rapidly share information and coordinate efforts in emergency situations. The General Assembly established the public safety communications trust fund for the acquisition and maintenance of public safety communications systems, including the DTRS.
  • HB 18-1326 – “Concerning Support for Persons Interested in Transitioning from an Institutional Setting, and, in Connection Therewith, Making and Reducing Appropriations,” by Rep. Dave Young and Sen. Kent Lambert. The bill directs the Department of Health Care Policy and Financing to provide community transition services and supports to persons who are in an institutional setting, who are eligible for Medicaid, and who desire to transition to a home- or community-based setting.
  • HB 18-1328 – “Concerning the Children’s Habilitation Residential Waiver Program, and, in Connection Therewith, Making and Reducing an Appropriation,” by Rep. Dave Young and Sens. Kent Lambert & Dominick Moreno. The bill directs the Department of Health Care Policy and Financing to initiate a stakeholder process for purposes of preparing and submitting a redesigned children’s habilitation residential program waiver for federal approval that allows for home- and community-based services for children with intellectual and developmental disabilities who have complex behavioral support needs.
  • HB 18-1331 – “Concerning Expanding the Use of Open Educational Resources at Public Institutions of Higher Education, and, in Connection Therewith, Creating the Colorado Open Educational Resources Council, Creating a Grant Program to Support the Creation and Use of Open Educational Resources, and Making an Appropriation,” by Reps. Dave Young & Bob Rankin and Sen. Kevin Lundberg. The bill creates the Colorado open educational resources council in the Department of Higher Education and assigns tasks to the new council.
  • HB 18-1332 – “Concerning Creation of a Grant Program to Support Collaborative Educator Preparation Initiatives to Address the Teacher Shortage in Colorado, and, in Connection Therewith, Making an Appropriation,” by Reps. Millie Hamner & Bob Rankin and Sen. Dominick Moreno. The bill creates in the Department of Higher Education the collaborative educator preparation grant program to support joint initiatives among educator preparation programs, alternative teacher programs, school districts, boards of cooperative services, and public schools for preparing and placing educators.
  • HB 18-1333 – “Concerning Part C Child Find Responsibilities of State Departments, and, in Connection Therewith, Making an Appropriation,” by Rep. Dave Young and Sen. Kent Lambert. The bill defines ‘early intervention evaluations’ as evaluations performed pursuant to part C child find. The bill requires the state Department of Human Services and the Department of Education to enter into an interagency agreement to study the administration of early intervention evaluations. The departments are required to enter into the agreement by October 1, 2018, and to report the results of the study performed pursuant to the agreement to the joint budget committee by June 30, 2019.
  • HB 18-1334 – “Concerning an Extension of the Transitional Jobs Program, and, in Connection Therewith, Making an Appropriation,” by Rep. Millie Hamner and Sen. Kent Lambert. The bill extends the transitional jobs program for five more years.
  • HB 18-1336 – “Concerning the Repeal of the Local Government Retail Marijuana Impact Grant Program,” by Rep. Dave Young and Sen. Kent Lambert. On July 1, 2019, the bill repeals the local government retail marijuana impact grant program, under which the Department of Local Affairs awards grants to eligible local governments for documented marijuana impacts.
  • HB 18-1337 – “Concerning a Veterans One-stop Center in Grand Junction, and, in Connection Therewith, Making an Appropriation,” by Reps. Millie Hamner & Bob Rankin and Sen. Kent Lambert. The bill provides that on and after November 1, 2018, the Division of Veterans Affairs in the Department of Military and Veterans Affairs may operate a veterans one-stop center in Grand Junction for the purpose of providing a central and accessible location where veterans, service members, and their family members in the western portion of the state may have access to assistance and resources.
  • HB 18-1339 – “Concerning a Requirement for Fingerprint-Based Criminal History Record Checks for Individuals with Access to Federal Tax Information, and, in Connection Therewith, Making an Appropriation,” by Rep. Bob Rankin and Sen. Kent Lambert. The bill requires fingerprint-based criminal history record checks for every applicant, contractor, employee, or other individual who has or may have access to federal tax information received from the federal government by a state agency in accordance with federal Internal Revenue Service Publication 1075.
  • SB 18-066 – “Concerning an Extension of the Operation of the State Lottery Division Beyond July 1, 2024,” by Sens. Jerry Sonnenberg & Leroy Garcia and Reps. Jeni James Arndt & Cole Wist. The bill extends the scheduled termination on July 1, 2024, of the state lottery division in the Department of Revenue to July 1, 2049.
  • SB 18-195 – “Concerning a Requirement that the Money in the Healthcare Affordability and Sustainability Fee Cash Fund be Appropriated Annually rather than Continuously Appropriated,” by Sen. Dominick Moreno and Rep. Bob Rankin. Current law specifies that money in the healthcare affordability and sustainability fee cash fund is continuously appropriated to the Colorado healthcare affordability and sustainability enterprise for specified healthcare related purposes. Beginning with state fiscal year 2018-19, the bill makes the expenditure of money from the fund by the enterprise subject to annual appropriation by the General Assembly.
  • SB 18-202 – “Concerning the Exemption of the Colorado Firefighting Air Corps Fund from the Maximum Reserve,” by Sen. Kent Lambert and Rep. Millie Hamner. The bill exempts the Colorado firefighting air corps fund from the maximum reserve, which currently limits the year-end uncommitted reserves in the cash fund to 16.5% of the amount expended from the cash fund during the fiscal year.

Additionally, on Monday, the Governor sent one bill to the Secretary of State without a signature. That bill was HB 18-1093, “Concerning the Allowable Uses of Reclaimed Domestic Wastewater, and, in Connection Therewith, Allowing Reclaimed Domestic Wastewater to Be Used for Food Crops and Making an Appropriation,” by Rep. Jeni James Arndt and Sen. Don Coram. The bill codifies rules promulgated by the water quality control commissio of the Colorado Department of Public Health and Environment concerning allowable uses of reclaimed domestic wastewater, which is wastewater that has been treated for subsequent reuses other than drinking water.

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

Colorado Court of Appeals: Colorado Wage Claim Act Does Not Categorically Bar Plaintiff from Piercing Corporate Veil

The Colorado Court of Appeals issued its opinion in Paradine v. Goei on Thursday, April 19, 2018.

Wage Claim Act—Corporations—Piercing the Corporate Veil.

Plaintiff served as the chief financial officer and vice president of administration for Aspect Technologies, Inc. (Aspect), a corporation. Defendant Goei was the chief executive officer. Plaintiff sued Goei and Aspect, raising a claim under the Colorado Wage Claim Act (the Act), for fraud, and for breach of contract. He alleged that defendants owed him unpaid wages. The trial court granted Goei’s motion for judgment on the pleadings and dismissed the three claims against him individually with prejudice.

On appeal, plaintiff asserted that he was not barred from piercing the corporate veil and holding Goei personally liable under the Act. The Act does not categorically bar a plaintiff from piercing the corporate veil to hold an individual liable for unpaid wages. Plaintiff’s fraud claim made allegations in support of his request that the trial court pierce the corporate veil to impose liability on Goei, and plaintiff’s breach of contract claim incorporated the allegations in the fraud claim. Because plaintiff pleaded sufficient facts to establish a plausible claim that plaintiff could pierce the corporate veil, the trial court erred when it granted Goei’s motion to dismiss on the pleadings.

The judgment was reversed and the case was remanded with directions.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Noncompetition Clause Unenforceable Against Dissenting Shareholder Doctor

The Colorado Court of Appeals issued its opinion in Crocker v. Greater Colorado Anesthesia, P.C. on Thursday, March 8, 2018.

Shareholder Employment Agreement—Merger—Dissenters’ Rights—Covenant Not to Compete—Judicial AppraisalLiquidated Damages.

Crocker, an anesthesiologist, was a shareholder in Metro Denver Anesthesia from 2001 until 2013, when that entity merged with Greater Colorado Anesthesia, P.C. (old GCA), now known as Greater Colorado Anesthesia, Inc. (new GCA). In conjunction with the merger, Crocker purchased one share of old GCA stock for $100. In April 2013 he signed a shareholder employment agreement (the Agreement), which contained a provision for liquidated damages to be paid to old GCA in the event that the former employee violated the “Damages Upon Competition” section within two years immediately following termination of the Agreement.

In 2014, old GCA began entertaining a merger with U.S. Anesthesia Partners (USAP) under which USAP would buy out GCA shares for a lump sum of cash plus USAP common stock. To receive that payment, shareholders of old GCA would be required to execute a new employment agreement reflecting a 21.3% reduction in pay and a five-year employment commitment. Old GCA would form an interim company (GCA Merger Sub, Inc.), file amended and restated articles of incorporation, and convert the company into a C-corporation, new GCA.

Crocker voted against the action and provided notice under C.R.S. § 7-113-202 that he would demand payment for his share of old GCA if the merger were approved, in exercise of his dissenter’s rights.

The merger was approved in 2015. Each approving shareholder would receive $626,000 in cash; $224,000 in USAP common stock, to fully vest in five years; and a signing/retention bonus. Old GCA sent Crocker $100 for his share. He refused it and later demanded $1,030,996.

Crocker communicated that he did not understand how the merger would affect his employment status and offered to work under a temporary contract, but GCA did not offer one. He did not return to work, but took a temporary position and then signed an employment agreement with Guardian Anesthesia Services and began providing services at a hospital within the noncompete area of the Agreement.

As relevant to this appeal, the district court held a trial to address (1) new CGA’s claim for damages resulting from Crocker’s alleged breach of the Agreement’s noncompete terms, and (2) new CGA’s request for a judicial appraisal of the fair value of Crocker’s 1.1% share of old GCA. The district court found that Crocker was no longer bound by the Agreement and the covenant not to compete could not be enforced against him. It also found that the fair value of Crocker’s share of old GCA was $56,044 plus interest.

On appeal, GCA argued that the district court erred in finding the noncompete provision unenforceable. The court of appeals stated, as a threshold matter, that generally a noncompete provision will survive a merger and the right to enforce the provision will vest in the surviving entity. But the court held that new GCA could not enforce the noncompete provision against Crocker because it is unreasonable to enforce the provision against a dissenting shareholder forced out of employment by the action of a merger. Here, it was undisputed that an anesthesiologist must reside within 30 minutes of where he works, and as a practical matter, enforcing the noncompete provision would have required Crocker to move or to pay GCA damages to continue to practice. Enforcement would thus further penalize Crocker’s exercise of his right to dissent rather than protect him from the conduct of the majority. Under these circumstances, the noncompete is unreasonable and imposes a hardship on Crocker. It is thus not enforceable against him as of the date the merger was finalized.

Further, C.R.S. § 8-2-113(3) directs that a damages term in a noncompete provision such as the one here is enforceable only if the amount is reasonably related to the injury suffered. Under the Agreement’s liquidated damages provision, Crocker would have to pay $207,755 in damages for the alleged violation of the noncompete provision. The district court determined, with record support, that the injury suffered by old GCA because of Crocker’s departure was zero. Here, there was no reasonable relationship between the actual injury suffered and the damages calculated per the formula, and the noncompete was not enforceable against Crocker.

Crocker cross-appealed the district court’s valuation of his share of old GCA, contending that the court erred in valuing his share by excluding evidence of the price USAP paid for old GCA. The district court did not refuse to consider the deal price, but properly rejected it because it found the price to be an unreliable starting point from which to determine fair value.

The judgment was affirmed.

Summary provided courtesy of Colorado Lawyer.