June 18, 2019

e-Legislative Report: February 22, 2016

Welcome e-leg report readers to this week’s installment of the world under the Gold Dome. As always, we welcome your feedback, thoughts, comments and questions. This news report is designed to keep you up-to-date on activities at the capitol that are of interest to the bar association and to lawyers across practice areas.

Feel free to drop me a line on how we are doing or raise an issue on a piece of legislation. Contact me at jschupbach@cobar.org.

CBA Legislative Policy Committee

For followers who are new to CBA legislative activity, the Legislative Policy Committee (LPC) is the CBA’s legislative policy making arm during the legislative session. The LPC meets weekly during the legislative session to determine CBA positions from requests from the various sections and committees of the Bar Association. Members are welcome to attend the meetings; please RSVP if you are interested.

LPC Meeting Update

The following bills were discussed by the LPC on 2.19.16. Other bills of interest from that agenda are tracked and updated below.

HB 16-1191 Bill Of Rights For Persons Who Are Homeless
The bill creates the “Colorado Right to Rest Act,” which establishes basic rights for persons experiencing homelessness, including, but not limited to, the right to use and move freely in public spaces without discrimination, to rest in public spaces without discrimination, to eat or accept food in any public space where food is not prohibited, to occupy a legally parked vehicle, and to have a reasonable expectation of privacy of one’s property. The bill does not create an obligation for a provider of services for persons experiencing homelessness to provide shelter or services when none are available.
The LPC considered this bill at the request of the Civil Rights Committee, but took no position on the bill.

HB 16-1110 Parent’s Bill Of Rights
The bill establishes a liberty interest and fundamental right for parents in the care, custody, and control of a parent’s child, restricting governmental entities from infringing on such interests and rights without demonstrating a compelling governmental interest that cannot be accomplished through less restrictive means.
The LPC voted to oppose this bill because it reverses the long-standing policy position of the Colorado Judicial system to act in the best interest of the child.

HB 16-1235 Commissions Evaluating State Judicial Performance
The bill makes revisions to various functions of the state commission on judicial performance (state commission) and the district commissions on judicial performance (district commission), referred to collectively as the “commissions.” The revisions include: changing the makeup of the state commission to include one representative from each judicial district to ensure representation from the entire state; establishing guidelines for when attorneys and nonattorneys are appointed to the state commission by a district commission; not allowing the chief justice to select individuals for the state commission, which reviews the chief justice’s performance; mandating annual public meetings at which the public is invited to attend and confidentially comment on justices and judges; requiring the state commission to obtain and verify required financial disclosures, criminal histories, and driving histories for each justice or judge reviewed by the commissions; requiring judicial evaluations to take place every two years and to be made public at that time; mandating that the commissions make a “do not retain” recommendation when a majority of commissioners determine that it is more probable than not that a justice or judge knowingly committed a dishonest act during the performance of judicial duties, knowingly made inaccurate or insufficient public financial disclosures, or was improperly influenced by a conflict of interest in performing a judicial act; and mandating that the commissions make a “do not retain” recommendation when two-thirds of the attorneys who complete a questionnaire or survey for the commission recommend that the justice or judge not be retained. The bill is funded from any fees and cost recoveries for electronic filings, network access and searches of court databases, electronic searches of court records, and any other information technology services performed pursuant to statute.
The LPC voted to oppose this bill based on the consideration that this is a longstanding and fundamental change that is not in the best interest of the administration of justice in Colorado.

SB 16-085 Uniform Trust Decanting Act
Colorado Commission on Uniform State Laws. “Decanting” is a term used to describe the distribution of assets from one trust into a second trust. The bill enacts the “Colorado Uniform Trust Decanting Act” (Act), which allows a trustee to reform an irrevocable trust document within reasonable limits that ensure the trust will achieve the settlor’s original intent. The Act prevents decanting when it would defeat a charitable or tax-related purpose of the settlor.
The LPC voted to support this Uniform Bill as modified to meet the considerations of Family Law, Trust & Estate and Elder Law sections.

Updates regarding bills the CBA is currently focused on:

SB 16-013 Clean-up Office Of The Child Protection Ombudsman
Senator Newell has pulled the language of concern from the bill.  SB 13 was passed out of committee on Monday.

SB 16-043 Student Loans Consumer Protections
The CBA testified in favor of this bill, at the request of the Colorado Young Lawyers Division. The bill failed to pass out of committee.

SB 16-047 No Detention For Juveniles Who Are Truant
The CBA testified that while detention for truancy is not something the Bar supports as policy, the bill was fundamentally flawed by prohibiting the judicial branch from effecting its own valid orders. Case law from Colorado in the 1990s is directly on point to the Bar’s constitutional concerns.

SB 16-084 Uniform Substitute Health Care Decision-making Documents
The Bar remains neutral on this bill, while the Health Law Section has some concerns and opposition to the language. The bill was heard in committee, but was not voted on. We are waiting for the Senate to take action on the bill.

SB 16-071 Revised Uniform Athlete Agents Act 2015
The CBA has not taken a position on this bill. The Department of Regulatory Affairs has some outstanding concerns that they are addressing with the Uniform Law Commission.

SB 16-088 Revised Uniform Fiduciary Access To Digital Asset
This bill, as amended to accommodate both the Trust & Estate and Business Law Sections, is moving through the legislature as anticipated.

SB 16-115 Electronic Recording Technology Board
The bill, which is supported by the Bar and the Real Estate Section, has passed its first two committee hearings and now heads to Senate Appropriations.

HB 16-1051 Forms To Transfer Vehicle Ownership Upon Death
The CBA is working with the sponsors on some amendments for this bill. The bill is now in its second chamber.

HB 16-1078 Local Government Employee Whistleblower Protection
The CBA is working on this bill, which was amended and is now headed to appropriations in the House.

New Bills of Interest

These are a few new bills recently introduced. They have been sent to CBA sections for review and comment. If you have any questions about these or any other bills, please drop me a line. I’m happy to help you however I can.

HB 16-1270 Security Interest Owner’s Interest In Business Entity
Under current law, the “Uniform Commercial Code” (Code) invalidates contractual limits on the transferability of some assets that can be subject to a security interest. In 2006, the “Colorado Corporations and Associations Act” (Act) was amended to clearly and broadly exempt an owner’s interest in a business entity from these Code provisions to effectuate the “pick your partner” principle that allows small businesses to control their ownership. Section 3 of the bill narrows the exemption in the Act to that necessary for “pick your partner,” and sections 1 and 2 codify this narrowed exemption in the Code.

HB 16-1275 Taxation Of Corporate Income Sheltered In Tax Haven
The bill pertains to an affiliated group of corporations filing a combined report. In a combined report filing, the tax is based on a percentage of the entire taxable income of all of the includable corporations, but the tax is assessed only against the corporation or corporations doing business in Colorado. Including more affiliated corporations in the combined report may result in an increase in income subject to tax. There are jurisdictions located outside of the United States with no tax or very low rates of taxation, strict bank secrecy provisions, a lack of transparency in the operation of their tax system, and a lack of effective exchange of information with other countries. There are several common legal strategies for sheltering corporate income in such jurisdictions, often called “tax havens.” Notwithstanding a current requirement in state law that those corporations with 80% or more of their property and payroll assigned to locations outside of the United States be excluded from a combined report, the bill makes a corporation that is incorporated in a foreign jurisdiction for the purpose of tax avoidance an includable C corporation for purposes of the combined report. The bill defines a corporation incorporated in a foreign jurisdiction for the purpose of tax avoidance to mean any C corporation that is incorporated in a jurisdiction that has no or nominal effective tax on the relevant income and that meets one or more of five factors listed in the bill, unless it is proven to the satisfaction of the executive director of the department of revenue that such corporation is incorporated in that jurisdiction for a legitimate business purpose. The bill requires the state controller to credit a specified amount per fiscal year to the state education fund to be used to help fund public school education. The bill requires the secretary of state to submit a ballot question, to be treated as a proposition, at the statewide election to be held in November 2016 asking the voters to: increase taxes annually by the taxation of a corporation’s state income that is sheltered in a foreign jurisdiction for the purpose of tax avoidance; provide that the resulting tax revenue be used to help fund elementary and secondary public school education; and allow an estimate of the resulting tax revenue to be collected and spent notwithstanding any limitations in section 20 of article X of the state constitution (TABOR).

SB 16-131 Overseeing Fiduciaries’ Management Of Assets
The bill clarifies statutory language concerning the removal of a fiduciary to ensure that a fiduciary’s authority is suspended as soon as a petition to remove the fiduciary is filed. The bill adds a provision to the conservatorship statutes stating that an adult ward or protected person has a right to be represented by a lawyer of their choosing unless the trial court finds that the person lacks sufficient capacity to provide informed consent for representation by a lawyer. The bill states that after a fiduciary receives notice of proceedings for his, her, or its removal, the fiduciary shall not pay compensation or attorney fees and costs from the estate without an order of the court.

SB 16-133 Transfer Of Property Rights At Death
Under current law, a certificate of death, a verification of death document, or a certified copy thereof, of a person who is a joint tenant may be placed of record with the county clerk and recorder of the county in which the real property affected by the joint tenancy is located, together with a supplementary affidavit. The bill removes the requirement that the person who swears to and affirms the supplementary affidavit have no record interest in the real property. The bill includes inherited individual retirement accounts and inherited Roth individual retirement accounts as property exempt from levy and sale under writ of attachment or writ of execution. The bill, which amends provisions concerning determination-of-heirship proceedings, clarifies the definition of “interested person,” so that anyone affected by the ownership of property may commence a proceeding; describes when an unprobated will may be used as part of a proceeding; clarifies notice requirements; and ensures that a judgment and decree will convey legal title as opposed to equitable title. The bill enacts portions of section 5 of the “Uniform Power of Appointment Act,” with amendments.

e-Legislative Report: February 16, 2016

Welcome e-leg report readers to this week’s installment of the world under the Gold Dome. As always, we welcome your feedback, thoughts, comments and questions. This news report is designed to keep you up to date on activities at the capitol that are of interest to the bar association and to lawyers across practice areas.

Feel free to drop me a line on how we are doing or raise an issue on a piece of legislation. Contact me at jschupbach@cobar.org.

CBA Legislative Policy Committee

For followers who are new to CBA legislative activity, the Legislative Policy Committee (LPC) is the CBA’s legislative policy making arm during the legislative session. The LPC meets weekly during the legislative session to determine CBA positions from requests from the various sections and committees of the Bar Association. Members are welcome to attend the meetings; please RSVP if you are interested.

LPC Meeting Update

The following bills were discussed by the LPC. Other bills of interest from that agenda are tracked and updated below.

HB 16-1078 Local Government Employee Whistleblower Protection
The bill prohibits a county, municipality, or local education provider from imposing any disciplinary action against an employee on account of the employee’s statements to any person about the local government that the employee reasonably believes to show: a violation of a state or federal law, a local ordinance or resolution, or a local education provider policy; a waste or misuse of public funds; fraud; an abuse of authority; mismanagement; or a danger to the health or safety of students, employees, or the public. The bill permits an employee to file a written complaint with the office of administrative courts, for referral to an administrative law judge, alleging that a local government has imposed disciplinary action that violates this prohibition and seeking injunctive relief and damages. Employees who lose the administrative hearing may file a civil action in district court. The employee protection does not apply if the disclosure was false or made with reckless disregard for the truth or falsity thereof, or if it was of a protected public record or confidential information that was not reasonably necessary to show one or more of the identified circumstances. Administrative law judges are given jurisdiction to hear, determine, and make findings and awards on all these whistleblower cases. The director of the office of administrative courts is required to establish rules to govern these proceedings and hearings.
The LPC voted on the recommendation and request of the Government Counsel and Labor & Employment Law sections to oppose the bill.

HB 16-1154 Employer Definition Clarify Franchisee Status
The bill clarifies that the definition of “employer” only includes a person who possesses authority to control an employee’s terms and conditions of employment and actually exercises that authority directly. The bill specifies that a franchisor is not considered an employer of a franchisee’s employees unless a court finds that a franchisor exercises a type or degree of control over the franchisee or the franchisee’s employees not customarily exercised by a franchisor for the purpose of protecting the franchisor’s trademarks and brand.
The LPC voted to support the bill on the recommendation and presentation of the Franchise subsection of Business Law section.

HB 16-1232 Sunset DOR Private Letter Ruling & General Information Letter
Currently, the executive director of the department of revenue (department), or the executive director’s designee, is charged with issuing, on written request from a taxpayer, private letter rulings (binding determinations regarding the tax consequences of a proposed or completed transaction), and Information letters (nonbinding statements providing general information regarding any tax administered by the department). This duty is currently scheduled to sunset on September 1, 2016. The bill continues the requirement of the department to issue these letters until September 1, 2023. The bill also specifies that the department must track the total state full-time equivalent (FTE) personnel positions necessary and the hours dedicated by each FTE for the issuance, declination, modification, or revocation of all information letters or private letter rulings.
The LPC voted to support the bill and testify in favor of continuing the practice. The bill will be heard in committee next week.

SB 16-115 Electronic Recording Technology Board
The bill creates the electronic recording technology board (board) in the department of state. The board, which is authorized to issue revenue bonds, is established as an enterprise. So long as it constitutes an enterprise, the board is not subject to any provisions of section 20 of article X of the state constitution. The board sunsets in 6 years, but prior to that sunset, it is subject to a sunset review. The board is authorized to impose a surcharge of up to $2 on all documents that a clerk and recorder receives for recording or filing. If imposed, counties are required to collect the surcharge on behalf of the board and transmit it to the state treasurer for deposit in the newly created electronic recording technology fund (fund). The board is required to: develop a strategic plan incorporating the core goals of security, accuracy, sequencing, online public access, standardization, and preservation of public records; determine functionality standards for an electronic filing system that support the core goals; issue a request for proposal for electronic filing system equipment and software that will be available to counties on an optional basis; develop best practices for an electronic filing system; provide training to clerks and recorders related to electronic filing systems; and make grants to counties to establish, maintain, improve, or replace electronic filing systems for documents that are recorded with a clerk and recorder. In awarding grants, the board is required to give priority for grants to counties that do not have sufficient revenue from the surcharge proceeds to maintain their existing electronic filing systems. The money in the fund is continuously appropriated to the board to be used for these purposes. The bill repeals the secretary of state’s powers to ensure uniformity related to electronic filing systems, which powers become the board’s responsibility, and requires the department of state to prepare an annual report that is published online about the grants that the board made in the prior fiscal year. The bill also extends the one-dollar surcharge that a county clerk and recorder is currently required to collect and use for the county’s core or electronic filing system for 9.5 years. The definition of “electronic filing system” is expanded to include elements of the “core filing system,” which term is repealed.
The LPC voted on the recommendation of the Real Estate Section, which has been involved with the creation and drafting of the bill, to support the bill and testify in favor of its passage in committee.

SB 16-043 Student Loans Consumer Protections
The bill prohibits a private educational lender, as defined in the bill, from offering gifts to a covered educational institution, as defined in the bill, including public and private institutions of higher education, in exchange for any advantage or consideration related to loan activities or from engaging in revenue sharing. Further, the bill prohibits persons employed at covered educational institutions from receiving anything of  value from private educational lenders. The bill makes it unlawful for a private educational lender to impose a fee or penalty on a borrower for early repayment or prepayment of a private education loan and requires a lender to disclose any agreements made with a card issuer or creditor for purposes of marketing a credit card. The bill requires private educational lenders to disclose information to a potential borrower or borrower both at the time of application for a private education loan and at the time of consummation of the loan. The required disclosures are described in the bill and include, among other disclosures, the interest rate for the loan and adjustments to the rate, potential finance charges and penalties, payment options, an estimate of the total amount for repayment at the interest rate, the possibility of qualifying for federal loans, the terms and conditions of the loan, and that the borrower may cancel the loan, without penalty, within 3 business days after the date on which the loan is consummated.
The LPC voted to support this bill and to authorize the Juvenile Law section to testify in its favor in committee. This bill would help graduating lawyers, and future graduates, with the debt burden of school.

SB 16-084 Uniform Substitute Health Care Decision-making Documents
Colorado Commission on Uniform State Laws. The bill adopts, with amendments, the “Uniform Recognition of Substitute Health Care Decision-making Documents Act” as Colorado law. The bill establishes the circumstances under which a substitute health care decision-making document (document) is valid in this state. A person may assume in good faith that a document is genuine, valid, and still in effect and that the decision-maker’s authority is genuine, valid, and still in effect. A person who is asked to accept a document shall do so within a reasonable amount of time. The person may not require an additional or different form of document for authority granted in the document presented. A person who refuses to accept a document is subject to a court order mandating acceptance of the document and liability for reasonable attorney’s fees and costs incurred in an action or proceeding that mandates acceptance of the document. A person is not required to accept a document under certain described conditions.
The LPC voted to remain neutral on the bill, while authorizing the Health Law section to testify as to the specific concerns it raised in the context of medical practices.

SB 16-047 No Detention For Juveniles Who Are Truant
The bill prohibits a juvenile detention facility from receiving or providing care for a juvenile who violates a court order to attend school unless the juvenile is also adjudicated for a delinquent act and remains under the jurisdiction of the juvenile court for committing the delinquent act.
The LPC is concerned that the bill, by precluding a court from enforcing its own orders, is likely unconstitutional, and does not allow the judicial branch to complete the requirements and reports that were created by SB 15-184.

SB 16-103 Canadian Domestic Violence Protection Order Enforcement
Colorado Commission on Uniform State Laws. The bill enacts the “Uniform Recognition and Enforcement of Canadian Domestic Violence Protection Orders Act” as recommended by the national conference of commissioners on uniform state laws. The bill allows a peace officer to enforce a Canadian domestic violence protection order. The bill allows a court to enter an order enforcing or refusing to enforce a Canadian domestic violence protection order. The bill provides immunity for a person who enforces a Canadian domestic violence protection order.
The LPC voted to support this bill on the recommendation of the Family Law section.

Updates regarding bills the CBA is currently focused on:

HB 16-1145 Documentary Fee For Residential Real Property
The CBA was able to propose an amendment to the bill that moved us to “neutral” on this bill. It will be heard in committee this week.

SB 16-013 Clean-up Office Of The Child Protection Ombudsman
This sponsor has agreed to remove the language that the CBA was concerned about. With this amendment, the CBA can officially monitor the bill going forward.

SB 16-071 Revised Uniform Athlete Agents Act 2015
The LPC asked that this bill be reviewed for comment by the Lawyers Professional Liability Committee. Once that review is complete, the LPC will revisit the act.

SB 16-088 Revised Uniform Fiduciary Access To Digital Asset Act
The CBA voted to support the bill as written and is monitoring the bill for any additional amendments that may impact it.

New Bills of Interest

These are a few new bills recently introduced. They have been sent to CBA sections for review and comment. If you have any questions about these or any other bills, please drop me a line. I’m happy to help you however I can.

SB 16-120 Review By Medicaid Client For Billing Fraud
The bill requires the department of health care policy and financing (department), by a certain date, to develop and implement an explanation of benefits for medicaid recipients. The purpose of the explanation of benefits is to inform a medicaid client of a claim for reimbursement made for services provided to the client or on his or her behalf, so that the client may discover and report administrative or provider errors or fraudulent claims for reimbursement. The bill specifies certain information that must be included in the explanation of benefits. Specifically, the explanation of benefits must include information regarding at least one method for a medicaid client to report errors in the explanation of benefits. The department shall work with medicaid clients and medicaid advocates to develop an explanation of benefits and educational materials that are understandable to medicaid clients. The explanation of benefits must be sent to clients not less than bimonthly, and the department shall determine the most cost-effective means for producing and distributing the explanation of benefits, which means may include e-mail or distribution with existing communications to clients.

HB 16-1258 Court Clerks Posting Of Service
Under current law, if a respondent in a domestic relations action cannot be personally served and is served by publication, the clerk of the court is required to post a copy of the process on a bulletin board in his or her office for 35 days after the date of publication. The bill gives the clerk the option of posting the service online on the court’s website rather than on a bulletin board.

HB 16-1261 Retail Marijuana Sunset
Sunset Process—House Finance Committee. The bill implements the following recommendations from the sunset report for the retail marijuana program: extending the retail marijuana code until September 1, 2019; stating that regulation of labeling, packaging, and testing is a matter of statewide concern; and repealing the following provisions from the retail marijuana code: the requirement that a licensee post a surety bond as condition of licensure; the requirement that the executive director deny a license based on a previous denial at the same location; the proscription on the placement and sale of marijuana-themed magazines; and the authority to promulgate rules prohibiting misrepresentation and unfair practices. The bill creates two new retail marijuana licenses, a retail marijuana transport license and a retail marijuana operator license, and gives the state licensing authority rulemaking authority over those licenses. The bill conforms language in the retail marijuana code to language in the medical marijuana code related to mandatory testing, the confidentiality of licensee information, and limited access areas.