TABOR Foundation v. Regional Transportation District
2016 COA 102
| Colo. Ct. App. | 2016Background
- TABOR (Colo. Const. art. X, § 20) requires voter approval for any "new tax" or "tax policy change directly causing a net tax revenue gain" to a district.
- RTD and SCFD historically have taxing authority coterminous with the state, but over time the General Assembly changed state exemptions creating mismatches between state and district taxable items.
- H.B. 13-1272 (2013) amended RTD and SCFD law to conform district taxation to state law, removing several district exemptions (candy, soft drinks, cigarettes, direct-mail advertising materials, food containers) and adding some other exemptions; the Districts began collecting tax on those categories in 2014 without a district election.
- TABOR Foundation (plaintiffs) sued, alleging H.B. 13-1272 violated TABOR because it imposed a new tax and effected a tax-policy change without voter approval; trial court granted summary judgment for defendants on stipulated facts.
- The court of appeals reviewed de novo, applied the beyond-a-reasonable-doubt standard for constitutional invalidation, and addressed (1) whether H.B. 13-1272 created a new tax, (2) whether it constituted a tax-policy change, and (3) whether prior ballot authorizations precluded an additional election.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether H.B. 13-1272 created a "new tax" under TABOR | Removing district exemptions authorized the Districts to tax items not previously taxed by them; that is a new tax requiring voter approval | Districts already had broad authority to tax coterminous with the state; conforming exemptions is administrative, not a new tax | Not a "new tax." Even if close, primary purpose was administrative simplification and not revenue-raising, so TABOR election not required |
| Whether H.B. 13-1272 constituted a "tax policy change" causing net revenue gain | Eliminating exemptions altered tax policy and increased district revenue, triggering TABOR | The bill did not alter the Districts' high-level funding plan (broad sales tax with some exemptions); it was administrative alignment | Not a tax-policy change; no change to the Districts' overarching taxing plan |
| Proper standard of review for TABOR challenge | Argued TABOR's interpretive rule should supplant beyond-a-reasonable-doubt or that the standard is flawed | Defendants relied on Colorado precedent requiring challengers to prove unconstitutionality beyond a reasonable doubt | Court applied de novo review of statute and reconfirmed the beyond-a-reasonable-doubt ("clear and unmistakable") standard |
| Whether prior voter approvals foreclosed need for a new election | H.B. 13-1272 imposes new taxable items so prior elections don't cover them | Earlier RTD/SCFD ballot measures authorized taxing "every taxable transaction" or taxes "currently levied and collected," which courts interpret to include future taxable items | Even if new tax, prior ballot language provided voter approval for future taxable transactions; so no new election required |
Key Cases Cited
- Mesa Cty. Bd. of Cty. Comm'rs v. State, 203 P.3d 519 (Colo. 2009) (TABOR should not be construed to cripple government functioning; interpretive limits)
- Barber v. Ritter, 196 P.3d 238 (Colo. 2008) (determine primary purpose to distinguish fees from taxes)
- Huber v. Colo. Mining Ass'n, 264 P.3d 884 (Colo. 2011) (applying beyond-a-reasonable-doubt standard to TABOR challenges)
- Bickel v. City of Boulder, 885 P.2d 215 (Colo. 1994) (TABOR interpretive guideline favoring restraints on government growth)
- Bruce v. Pikes Peak Library Dist., 155 P.3d 630 (Colo. App. 2007) (pre-TABOR elections can serve as voter approval in advance)
- Zaner v. City of Brighton, 917 P.2d 280 (Colo. 1996) (constitutional challenge burden: beyond a reasonable doubt)