June 20, 2019

Uniform Trust Decanting Act, Governing Law for LLCs, Funding Marijuana Research, and More Bills Signed

On Monday, June 6, 2016, Governor Hickenlooper signed 34 bills into law. Governor Hickenlooper vetoed a bill on Thursday, HB 16-1231, “Concerning the Limited Use of Automated Vehicle Identification Systems Designed to Detect Disobedience to a Traffic Signal.” To date, the governor has signed 251 bills and vetoed one bill this legislative session.

The bills signed Monday include a bill enacting the Uniform Trust Decanting Act, a bill amending requirements for limited liability companies, a bill limiting the applicability of the statute of frauds to partnerships, a bill allowing appropriations from the marijuana cash fund to finance marijuana research, and more. The bills signed Monday are summarized here.

  • HB 16-1040 – Concerning Auxiliary Emergency Communications in the State, and, in Connection Therewith, Establishing the Auxiliary Emergency Communications Unit in the Office Of Emergency Management in the Department of Public Safety, and Making an Appropriation, by Rep. Jonathan Singer and Sen. Chris Holbert. The bill creates the Auxiliary Emergency Communications Unit, which can establish programs for training auxiliary emergency communications across the state.
  • HB 16-1142 – Concerning the Creation of a Credit Against the State Income Tax for Rural Primary Care Preceptors Training Students Matriculating at Colorado Institutions of Higher Education, by Reps. Perry Buck & Joann Ginal and Sens. Larry Crowder & John Cooke. The bill creates a state income tax credit for licensed Colorado health care professionals who provide uncompensated personalized instruction, training, and supervision to one or more graduate students seeking a medical degree at a Colorado institution for higher education.
  • HB 16-1177 – Concerning the Continuation of the Council of Higher Education Representatives, by Rep. Janet Buckner & Brittany Pettersen and Sen. Owen Hill. The bill extends the sunset of the Council of Higher Education Representatives until September 1, 2021.
  • HB 16-1186 – Concerning the Allocation of a Portion of Fee Revenues Collected from Public Utilities to Meet Colorado’s Grant Match Obligations Under Federal Law Governing the Funding of Fixed Rail Guideway Safety Oversight Programs, and, in Connection Therewith, Making an Appropriation, by Rep. Max Tyler and Sen. Randy Baumgardner. The bill diverts $150,000 of the public utility fees from the General Fund to the Fixed Utility Fund.
  • HB 16-1287 – Concerning a Requirement that the Department of Labor and Employment Study the Integration of Alternative Training by Colorado Businesses, by Reps. Paul Rosenthal & Jim Wilson and Sens. John Cooke & Andy Kefalas. The bill requires the Department of Labor and Employment to review its regulations that may impact the availability of apprenticeship and pre-apprenticeship programs in Colorado businesses by July 1, 2017.
  • HB 16-1329 – Concerning Laws Governing Limited Liability Companies Codified in Article 80 of Title 7 of the Colorado Revised Statutes, by Rep. Pete Lee and Sens. Mark Scheffel & Rollie Heath. The bill changes state law regarding limited liability companies, including removing the requirement that a partner’s contribution to the LLC is a prerequisite to becoming a member of the company, limits the statute of frauds, and reconciles various partnership and LLC acts.
  • HB 16-1330 – Concerning Authority to File a Correction Statement with the Secretary of State if a Document Previously Filed was Delivered to the Secretary of State for Filing in Error, by Rep. Pete Lee and Sens. Mark Scheffel & Rollie Heath. Under current law, an entity may file a statement of correction with the Secretary of State’s Office to revoke a previously filed document under certain conditions. This bill allows statements of correction to also be filed for a document that was delivered and filed in error.
  • HB 16-1332 – Concerning Modifications to the Income Tax Credits for Alternative Fuel Motor Vehicles, and, in Connection Therewith, Fixing Specified Dollar Amounts for the Credits, Allowing the Credit to be Assigned to a Financing Entity, Requiring Vehicle Identification Number Tracking of the Motor Vehicle for which the Credit is Claimed, and Making an Appropriation, by Reps. Crisanta Duran & Daneya Esgar and Sens. Ray Scott & Michael Johnston. The bill changes two refundable income tax credits in current law: the innovative motor vehicle credit and the innovative truck credit.
  • HB 16-1333 – Concerning Laws Governing Partnerships Codified in Title 7 of the Colorado Revised Statutes, by Rep. Pete Lee and Sens. Mark Scheffel & Rollie Heath. The bill limits the applicability of the statute of frauds to partnerships and specifies which laws govern limited partnerships.
  • HB 16-1348 – Concerning a Specific Crime of Cruelty to a Certified Police Working Dog, by Rep. Su Ryden and Sen. Nancy Todd. The bill creates the crime of cruelty to a law enforcement service animal as a class 6 felony for a first offense and a class 5 felony for subsequent offenses.
  • HB 16-1349 – Concerning Continuation of the Voluntary Contribution to the Military Family Relief Fund, by Reps. Su Ryden & Dan Nordberg and Sen. Morgan Carroll. The bill extends the voluntary contribution designation benefitting the Military Family Relief Fund through tax year 2020.
  • HB 16-1368 – Concerning the Codification of Current Practice for the Management of Records of Governmental Agencies, by Rep. Max Tyler and Sen. Beth Martinez Humenik. The bill clarifies and codifies the current practices of the state archivist in the Department of Personnel and Administration related to the storage and retention of state archives and public records.
  • HB 16-1373 – Concerning Requiring School Districts to Adopt a Policy Permitting the Use of Medical Marijuana by Students Authorized to Use Medical Marijuana, by Rep. Jonathan Singer and Sens. Chris Holbert & Vicki Marble. The bill allows school districts to adopt policies allowing medical marijuana use by students authorized to use medical marijuana.
  • HB 16-1375 – Concerning Changes to Dates for Submitting Reports that Involve the Department of Higher Education, by Reps. Jeni James Arndt & Jim Wilson and Sens. Nancy Todd & Owen Hill. Under current law, the Department of Higher Education and Department of Education are required to submit a joint report on February 1 annually. The bill changes the due date to April 1.
  • HB 16-1458 – Concerning Measures to Effectuate the Conservation of Nature Species in Colorado, and, in Connection Therewith, Making Appropriations from the Species Conservation Trust Fund for Purposes Recommended by the Department of Natural Resources, by Reps. Ed Vigil & Don Coram and Sens. Jerry Sonnenberg & Leroy Garcia. The bill appropriates $3.0 million from the Species Conservation Trust Fund for programs that are designed to conserve native species that have been listed as threatened or endangered under state or federal law, or are likely to become candidate species.
  • HB 16-1465 – Concerning Modifications to the Colorado Low-Income Housing Tax Credit, and, in Connection Therewith, Extending the Period During which the Colorado Housing and Finance Authority may Allocate Low-Income Housing Tax Credits, by Reps. Crisanta Duran & Jon Becker and Sens. Jessie Ulibarri & John Cooke. The bill extends the number of years, from two to five years, in which the Colorado Housing and Finance Authority may allocate low-income housing income tax credits.
  • SB 16-003 – Concerning Increased Methods to Reduce Wildfire Risk, by Sens. Ellen Roberts & Matt Jones and Rep. KC Becker. The bill adds broadcast burning to the types of projects and methods for which the Department of Natural Resources may award grants from the Wildfire Risk Reduction Cash Fund, and authorizes the transfer of a total of $3.0 million into the cash fund.
  • SB 16-041 – Concerning Data Collected by the Division of Criminal Justice in the Department of Public Safety Concerning the Study of Marijuana Implementation, by Sen. Randy Baumgardner and Rep. Dan Pabon. Currently, the Department of Criminal Justice is required to study law enforcement activities and costs related to the personal use and regulation of marijuana. This bill repeals the section of statute that requires the study to examine law enforcement costs and repeals the requirement that the study contain information concerning marijuana-initiated contacts by law enforcement, broken down by judicial district and by race and ethnicity.
  • SB 16-085 – Concerning the “Colorado Uniform Trust Decanting Act,” by Sen. Pat Steadman and Rep. Yeulin Willett. The bill enacts the Uniform Trust Decanting Act in Colorado, 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—a term to describe the distribution of assets from one trust into a second trust—when it would defeat a charitable or tax-related purpose of the settlor.
  • SB 16-087 – Concerning Funding for the Highway-Rail Crossing Signalization Fund, and, in Connection Therewith, Making an Appropriation, by Sen. Randy Baumgardner and Rep. Max Tyler. The bill creates a one-time state transfer of $240,000 from off-the-top Highway Users Tax Fund (HUTF) revenue to the Highway-Rail Crossing Signalization Fund in FY 2016-17. In FY 2017-18 and each year thereafter, the bill creates a state diversion from the General Fund.
  • SB 16-104 – Concerning Incentives to Become a Teacher in a Rural School District in Colorado, and, in Connection Therewith, Making an Appropriation, by Sens. Nancy Todd & Jerry Sonnenberg and Rep. Jon Becker. The bill creates several new programs to provide incentives for individuals to become teachers in rural school districts, and to support the needs of professional educators in rural school districts.
  • SB 16-132 – Concerning Clarifying that Test Results Relating to Certain DUI Offenses are Not Public Information, by Sen. John Cooke and Rep. Mike Foote. The bill requires the Colorado Department of Public Health and Environment to keep all personal identifying information related to blood alcohol content test results confidential, and specifies that the test results may only be released to the individual who is the subject of the test, his or her attorney, a named party in a civil or criminal case to which the test results are directly related, or a prosecuting attorney, law enforcement officer, state agency, or state and local public official legally authorized to use such information to carry out his or her duties.
  • SB 16-135 – Concerning a Pharmacist’s Provision of Health Care Services that have been Delegated by Another Health Care Provider, by Sen. Irene Aguilar and Rep. Joann Ginal. The bill allows health insurance plans to provide coverage for health care services provided by a pharmacist as part of a collaborative pharmacy practice agreement if certain conditions are met. Specifically, the health plan must provide coverage for the same service if it is provided by a licensed physician or an advanced practice nurse and the pharmacist must be included in the insurers network of participating providers.
  • SB 16-146 – Concerning Modernizing Statutes Relating to Sexually Transmitted Infections, by Sen. Pat Steadman and Rep. Daneya Esgar. The bill updates state law concerning sexually transmitted infections (STIs) and allows for all STIs to be treated uniformly. It removes language specifically criminalizing HIV infection.
  • SB 16-171 – Concerning Modification and Clarification of the Statutes Pertaining to the New Energy Improvement District, by Sens. Beth Martinez Humenik & Mark Scheffel and Reps. Max Tyler & Jon Becker. The bill requires treasurers of counties that have authorized the New Energy Improvement District program to retain a 1 percent collection fee for each NEID special assessment that it collects. The bill also requires such treasurers to distribute NEID special assessments to the NEID in the same manner, less the collection fee, as property taxes are distributed.
  • SB 16-189 – Concerning the Nonsubstantive Revision of Statutes in the Colorado Revised Statutes, as Amended, and, in Connection Therewith, Amending or Repealing Obsolete, Imperfect, and Inoperative Law to Preserve the Legislative Intent, Effect, and Meaning of the Law, by Sen. Ray Scott and Rep. Mike Foote. The bill amends or repeals obsolete, unclear, or conflicting laws. The bill also clarifies statutory language, but does not change the intent or meaning of existing statute. The bill’s appendix explains the reasons for each amendment.
  • SB 16-191 – Concerning Marijuana Research Funded by the Marijuana Tax Cash Fund, and, in Connection Therewith, Making an Appropriation, by Sen. Pat Steadman and Rep. Bob Rankin. The bill authorizes the General Assembly to appropriate money from the Marijuana Tax Cash Fund to the Board of Governors of the Colorado State University System to fund scientific and social science research at CSU-Pueblo concerning marijuana and other matters that impact the state and its regions.
  • SB 16-193 – Concerning the Duties of the Safe2Tell Program, and, in Connection Therewith, Making an Appropriation, by Sens. Bill Cadman & Mark Scheffel and Reps. Dickey Lee Hullinghorst & Crisanta Duran. The bill requires the Department of Law to provide Safe2Tell program materials to Colorado preschools, elementary schools, middle schools, high schools, 4-H extension offices, and boys and girls clubs by August 1 of each year, beginning on June 30, 2017.
  • SB 16-195 – Concerning the Annual Appropriation of Money in the Central Fund for Veterans Centers to the State Department of Human Services, by Sen. Kevin Grantham and Rep. Bob Rankin. The bill grants the Department of Human Services continuous spending authority from the central fund for the direct costs of the operation and administration of veterans centers, and for capital construction in connection with the centers.
  • SB 16-196 – Concerning the Creation of a Pilot Program for Inclusive Higher Education for Persons with Intellectual and Developmental Disabilities, and, in Connection Therewith, Making an Appropriation, by Sens. John Cooke & Bill Cadman and Reps. Lois Landgraf & Dave Young. The bill creates a pilot program aimed at establishing higher education programs for students with intellectual and developmental disabilities. The program will operate from FY 2016-17 through FY 2020-21 at three institutions: the University of Northern Colorado, the University of Colorado-Colorado Springs, and Arapahoe Community College.
  • SB 16-203 – Concerning the Evaluation of State Tax Expenditures, and, in Connection Therewith, Making an Appropriation, by Sen. Kent Lambert and Reps. Millie Hamner & Bob Rankin. The bill directs the Office of the State Auditor to conduct evaluations of all state tax expenditures, and requires the evaluations to include descriptions of the expenditure’s purpose and intended beneficiaries, whether it is accomplishing its goal, costs and benefits of the expenditure, similar expenditures in other states, other businesses or programs accomplishing the expenditure’s goals, recommended changes, and performance measures used in the evaluation.
  • SB 16-204 – Concerning the Higher Education Revenue Bond Intercept Program, by Sen. Kent Lambert and Rep. Bob Rankin. The bill modifies the legislative and executive branch review and conditions of participation in the higher education revenue bond intercept program.
  • SB 16-205 – Concerning Payment for Expenses of Indigent Parents, by Sen. Kent Lambert and Rep. Millie Hamner. Under current law, the Office of the State Court Administrator receives funding to pay for an indigent parent to retain one expert witness and to obtain a transcript of the trial during a parent-child termination proceeding. Given that responsibility for retaining counsel for indigent parents in such cases is now managed by the Office of the Respondent Parents’ Counsel (ORPC), this bill clarifies that funding for these expenses are to be appropriated to the ORPC.
  • SB 16-209 – Concerning Authorizing a School District Board of Education to Construct a Building for Lease to a State Institution of Higher Education, by Sens. Nancy Todd & Chris Holbert and Reps. Janet Buckner & Kevin Priola. The bill authorizes a school district board of education to lease school district property to a state institution of higher education and to accept in-kind services (such as tuition reduction or scholarships for their students) from the institution as all or part of the lease payments.

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

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.