Jena Griswold, in her official capacity as Secretary of State; Colorado Department of State; and State of Colorado, v. National Federation of Independent Business.
No. 17SC368
The Supreme Court of the State of Colorado
September 23, 2019
2019 CO 79
Certiorari to the Colorado Court of Appeals, Court of Appeals Case No. 15CA2017. Judgment Reversed, en banc. JUSTICE HOOD delivered the Opinion of the Court.
ADVANCE SHEET HEADNOTE
September 23, 2019
2019 CO 79
No. 17SC368, Griswold v. Nat‘l Fed‘n of Indep. Bus.—Taxpayer‘s Bill of Rights—Summary Judgment.
The supreme court considers the constitutionality of
The supreme court concludes that the trial court properly granted the petitioners’ motion for summary judgment. Based on the record presented, there
The supreme court reverses the judgment of the court of appeals, reinstates the trial court‘s summary judgment order in favor of the petitioners, and remands for further proceedings consistent with this opinion.
Phillip J. Weiser, Attorney General
Grant T. Sullivan, Assistant Solicitor General
Emily Buckley, Assistant Attorney General
Denver, Colorado
Attorneys for Respondent/Cross-Petitioner:
Brownstein Hyatt Farber Schreck, LLP
Christopher O. Murray
Van Aaron Hughes
Emily R. Garnett
Denver, Colorado
City and County of Denver
Kristin M. Bronson, Denver City Attorney
David W. Broadwell
Denver, Colorado
Attorneys for Amici Curiae Pacific Legal Foundation, Goldwater Institute, TABOR Foundation, and Colorado Union of Taxpayers Foundation:
Pacific Legal Foundation
James M. Manley
Phoenix, Arizona
Pacific Legal Foundation
Jeffrey W. McCoy
Sacramento, California
JUSTICE HOOD delivered the Opinion of the Court.
¶2 TABOR requires advance voter approval for any new tax, tax rate increase, or tax policy change directly causing a net tax revenue gain to any district. It applies prospectively. Therefore, to establish that a charge violates TABOR, NFIB must show: (1) that the charge is a tax; and (2) that the charge post-TABOR constituted a new tax, tax rate increase, or tax policy change.
¶3 Through this TABOR lens, we examine the statute in question.
¶4 NFIB contends that these adjustments violate TABOR. First, NFIB argues that the charges are really taxes because there is no reasonable relationship between the Department‘s charges and the government functions funded by the
¶5 Beсause we disagree with NFIB‘s second contention, we need not address its first. Based on the stipulated facts, we conclude that there was no evidence to establish that any post-TABOR adjustments resulted in a new tax, tax rate increase, or tax policy change directly causing a net revenue gain. Thus, the trial court properly granted summary judgment. Consequently, we need not, and therefore do not, reach the issue of whether the charges authorized by
I. Facts and Procedural History
A. The Department and Section 24-21-104
¶6 Almost since statehood, the Department has been responsible for many of the most vital administrative functions of the government, including registering and licensing businesses. For over fifty years, the Department has also been responsible for overseeing state elections. Ch. 334, sec. 2, § 49-1-11, 1967 Colo. Sess. Laws 687, 687.
¶7 Since the Department‘s inception, the Secretary of State (“the Secretary“) has collected charges for its services. See Ch. 34, 1877 Colo. Gen. Laws 425, 427. In 1877, the General Assembly directed the Secretary to collect “fees” for military
¶8 In the 1980s, the General Assembly began tinkering with the Department‘s funding scheme. See, e.g., Ch. 76, sеc. 7, § 24-21-104, 1981 Colo. Sess. Laws 429, 430–31. Though the General Assembly continued to set the amount of the Department‘s charges, it directed the Department to “propose, as part of its annual budget request, an adjustment in the amount of each fee which the secretary . . . is authorized . . . to collect.” Id. at 431. The General Assembly also specified that the budget request should “reflect [the] direct and indirect costs” of the Department. Id.
¶9 In 1983, the General Assembly settled on a funding mechanism for the Department—the same mechanism in effect today. Ch. 256, sec. 1, § 24-21-104, 1983 Colo. Sess. Laws 861, 861–62; see also
¶10 So, as it stands now, the Secretary has the discretion to set, increase, decrease, or temporarily suspend the Department‘s chаrges without legislative oversight. See
B. TABOR
¶11 In 1992, nine years after the legislature created the current funding scheme for the Department, Colorado voters adopted TABOR. See
¶12 TABOR requires voter approvаl before the imposition of “any new tax, tax rate increase, . . . or . . . tax policy change directly causing a net tax revenue gain to any district.”
¶13 TABOR “also limits the growth of state revenues, usually met by tax increases, by restricting the incrеase . . . unless voter approval for an increase in spending is obtained.” In re Submission of Interrogatories on Senate Bill 93-74, 852 P.2d 1, 4 (Colo. 1993) (citing
¶14 TABOR only applies prospectively to statutes imposing new taxes, tax rate increases, or tax policy changes enacted after November 4, 1992. See id. at 891. However, a pre-TABOR statute can still violate TABOR if the statute constitutes a new tax, tax rate increase, or tax policy change resulting in a net revenue gain. See id.
C. NFIB‘s Lawsuit
¶15 NFIB is a nonprofit corporation that represents the interests of small business owners nationwide. The Colorado branch of NFIB filed this lawsuit against the Secretary, the Department, and the State of Colorado (“the
¶16 The petitioners filed a motion to dismiss, but later withdrew the motion after the parties agreed to file cross-motions for summary judgment. Rather than conduct formal discovery, the parties stipulated to what they deemed the relevant facts.
¶17 The trial court granted summary judgment in favor of the petitioners. Because the parties stipulated to all material facts, the court only addressed whether the funding scheme was unconstitutional. In doing so, it declined to determine whether the charges were taxes because it concluded the funding statute wasn‘t subject to TABOR at all. The trial court focused on whether the post-TABOR adjustments to the charges constituted an increase in a tax rate or a change in tax policy directly causing a net tax revenue gain. The trial court decided that periodic adjustments to the charges didn‘t constitute a change to the tаx policy
¶18 NFIB appealed the order granting the petitioners’ motion for summary judgment, and a division of the court of appeals reversed and remanded for further development of the record. Nat‘l Fed‘n of Indep. Bus. v. Williams, No. 15CA2017, ¶ 1 (Mar. 2, 2017). Like the trial court, the division declined to address whether the charges were taxes and instead analyzed whether the post-TABOR adjustments to the charges implicated TABOR. Id. at ¶ 11. Unlike the trial court, however, the division declined to determine whether TABOR applied to the adjustments to the business and licensing charges, because “the present record [did] not allow [the division] to conclude, as a matter of law, whether TABOR applies here.” Id. at ¶ 16. The division then concluded that there was a genuine issue of material fact to resolve and, therefore, the trial court erred in granting summary judgment. Id. at ¶ 17. The division thus remanded for further development of the record, specifically “to determine whether the Business and Licensing charges have been adjusted or increased since the passage of TABOR in 1992, such that voter approval was required for these adjustments or increases.” Id. at ¶ 21.
II. Analysis
¶20 After reviewing familiar authority governing summary judgment, we conclude that the division erred by mistaking the absence of evidence in the record to support NFIB‘s case for a genuine dispute of material fact. We then consider whether any post-TABOR adjustments to the business and licensing charges authorized by
¶21 The parties agree that the division erred in remanding the case to the trial court for further development of the factual record. The petitioners contend that NFIB failed to satisfy its burden at the summary judgment stage of establishing that there wаs a material issue of fact, and it was error to remand and allow NFIB to have a second opportunity to conduct discovery. NFIB counters that the division erred because the parties’ stipulated facts established that the Secretary‘s post-TABOR adjustments constituted new taxes, tax rate increases, or tax policy changes.
1. Standard of Review
¶22 We review a trial court‘s decision to grant or deny a motion for summary judgment de novo. See State v. Medved, 2019 CO 1, ¶ 13, 433 P.3d 33, 36. Therefore, we review de novo here.
2. Summary Judgment
¶23 Summary judgment is proper only if the “pleadings, depositions, answers to interrogatories, and admissions on file, together with [supporting and opposing] affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”
¶24 Once the moving party clears this initial evidentiary hurdle, the burden shifts to the nonmoving party to show a “triable issue of fact.” Cont‘l Air Lines, Inc. v. Keenan, 731 P.2d 708, 713 (Colo. 1987). “[T]he nonmoving party may not rest on mere allegations or demands in its pleadings but must provide specific facts demonstrating a genuine issue for trial.” Rocky Mountain Expl., Inc. v. Davis Graham & Stubbs LLP, 2018 CO 54, ¶ 27, 420 P.3d 223, 229. “In determining whether summary judgment is рroper, the nonmoving party is entitled to the benefit of all favorable inferences that may reasonably be drawn from the undisputed facts, and all doubts must be resolved against the moving party.” Peterson v. Halsted, 829 P.2d 373, 376 (Colo. 1992).
¶25 Here, the parties agreed to forego discovery, opting instead to stipulate to the facts. In their motions for summary judgment, both NFIB and the petitioners stated that there was no material dispute of fact. Nonetheless, the division concluded that the record failed to resolve whether the post-TABOR increase in revenues collected by the Depаrtment resulted from any government action, and thus it remanded for further development of the factual record. Nat‘l Fed‘n of Indep. Bus., ¶ 21.
¶27 Reviewing courts should not reverse a trial court‘s grant of summary judgment, and remand for further development of the record, when the moving party establishes an absence of evidence to support the nonmoving party‘s case and the nonmoving party fails to establish a genuine issue of material fact. Cf. id. (“An affirmative showing of specific facts, uncontradicted by any counter affidavits, leaves a trial court with no alternative but to cоnclude that no genuine
¶28 On the record presented, then, we next consider whether TABOR applies to
B. TABOR Doesn‘t Apply to the Adjustments
¶29 The petitioners urge us to conclude that the post-TABOR adjustments to the charges are not subject to TABOR‘s voter aрproval requirements because “government action implementing a preexisting funding statute complies with TABOR so long as the implementing agency refrains from exercising discretionary ‘tax making or tax policy change’ functions.” NFIB argues that the business and licensing charges are “discretionary and non-ministerial” adjustments and that the stipulated facts establish that the post-TABOR adjustments constituted new taxes, tax rate increases, or tax policy changes. Because the petitioners established that there was an absence of evidence in the rеcord to support NFIB‘s case, see Pinder, 812 P.2d at 649, and NFIB failed to carry its burden of establishing that there was a triable issue of fact, we conclude that the trial court correctly granted the petitioners’ motion for summary judgment.
¶30 “We review questions of constitutional and statutory interpretation de novo.” Campaign Integrity Watchdog v. All. for a Safe & Indep. Woodmen Hills, 2018 CO 7, ¶ 19, 409 P.3d 357, 361.
2. New Tax, Tax Rate Increase, or Tax Policy Change?
¶31 TABOR was enacted to “limit the discretion of government[] officials to take certain taxing, revenue and spending actions in the absence of voter approval.” Havens v. Bd. of Cty. Comm‘rs of Archuleta, 924 P.2d 517, 522 (Colo. 1996) (emphasis omitted). But TABOR doesn‘t apply to all taxing, revenue, and spending actions—because it is prosрective, it only applies to any “new taxes,” “tax rate increases,” or “tax policy changes” directly causing a net revenue gain implemented after 1992. See Huber, 264 P.3d at 890–92.
¶32 TABOR does not, however, define these key terms, nor have we. See TABOR Found. v. Reg‘l Transp. Dist., 2018 CO 29, ¶ 21, 416 P.3d 101, 105 (“This court has never decided what constitutes a ‘new tax’ or a ‘tax policy change’ under TABOR section 4(a) . . . .“).
¶33 But we have provided some guidance. In Huber, for example, we suggested that there may not be one all-encompassing definition of either “tax” or “tax rate.” 264 P.3d at 892 (“The terms ‘tax’ and ‘tax rate’ . . . are not specifically defined. Taxing statutes can take many forms.“). We noted that a taxing statute could
¶34 We recently clarified the meaning of the terms “new tax” and “tax policy change” in TABOR Foundation. While we didn‘t explicitly define either term, we looked closely at the language of both phrases and reasoned that both “include[] a word that implies more than mere change.” TABOR Found., ¶ 24, 416 P.3d at 106. And, we observed that a “tax policy change” “suggests a significant change.” Id. We also examined the purpose of section 4 of TABOR—to “constrain[] tax hikes“—and concluded that “a legislative change causing only an incidental and de minimis revenue increase” was “not a ‘new tax’ or a ‘tax policy change.‘” Id. at ¶¶ 25–26, 416 P.3d at 106.
¶35 We‘ve also considered the constitutionality of pre-TABOR statutes that authorized a taxing, revenue, or spending action after TABOR took effect. In Nicholl v. E-470 Public Highway Authority, 896 P.2d 859, 862–65 (Colo. 1995), we examined the constitutionality of a plan to remarket revenue bonds thаt were originally issued in 1986 to finance the construction of a highway. Because “[t]he bond remarketing scheme [did] not create any new obligation, it merely remarket[ed] debt that was authorized before the enactment of [TABOR] under
¶36 Shortly after Nicholl, in Bolt v. Arapahoe County School District Number Six, 898 P.2d 525, 534 (Colo. 1995), we addressed whether a school district‘s pre-TABOR authorization for mill levy increases allowed the district to increase the levy without a vote even after TABOR (and its voter approval requiremеnt) went into effect. We held that the increased mill levy didn‘t violate TABOR‘s voter approval requirement because it was a “purely ministerial act“—the district was merely implementing what it had been statutorily required to do. Id. at 538–39. The Board of County Commissioners, which was responsible for implementing the levy, had no discretion to alter the amount of the levy. Id. Thus, we allowed the levy increase without requiring voter approval because it was authorized by a pre-TABOR statute and its implementation was a purely ministerial, nondiscretionary function. Id.; accord Huber, 264 P.3d at 891–92 (applying this holding to determine that post-TABOR adjustments to Colorado‘s coal severance tax were likewise valid because the “adjustments to the coal severance tax rate [were] a non-discretionary, ministerial duty of the Department [of Revenue], and involve[d] no legislative or governmental act beyond that specified in the statute“).
¶38 In applying these principles, we turn to the parties’ stipulations concerning the post-TABOR adjustments:
- “From 1983 to the present, the Business and Licensing Charges have been authorized by statute, but have not been enumerated by statute.”
- “[Section] 24-21-104 also requires the Secretary to set the Business and Licensing Charges so that the revenue generated from those Charges, along with the Department‘s charges for non-Business and Licensing-related services, aрproximates the Department‘s direct and indirect costs.”
- “The Secretary has discretion to set, increase, decrease, and/or temporarily suspend the Department‘s various fees, including the Business and Licensing Charges, without legislative or other executive oversight.”
- “There is no law that ties the Business and Licensing Charges to any pre-set statutory rate adjustment formula, base rate, adjustment factor, or inflation-adjusted index.”
- “Between FY 1990-91 and FY 2013-14, the number of documents and reports filed with the Department increased by slightly more than fourfold.”
- “Between FY 1990-91 ($4.19 million) and FY 2013-14 ($18.69 million), the amount of revenues credited to the Department increased by slightly more than fourfold.”
“The increase in the collected revenue from FY 2010-11 to FY 2013-14 is generally attributable to the significant increase in the total number of filings.”
Thus, the parties agree that, since 1983, the Secretary has had authority to set the charges so that the revenue generated from these charges approximates the Department‘s direct and indirect costs. There is no formula beyond that statutorily mandated limit. The parties further agree that over nearly three dеcades, the number of filings increased slightly more than fourfold. And over that same time period, the amount of collected revenue also increased slightly more than fourfold.
¶39 But the stipulations don‘t reveal whether the amount of collected revenue increased because of the increased filings or because the Department increased the charges for individual filings. The record is silent on this point. The most we can glean from the stipulated facts is that the collected revenue increased throughout the same time period as the number of business filings in Colorado increased. And at least for the period between FY 2010–11 and FY 2013–14, the parties agreed that the increase in collected revenue was “generally attributable” to the increase in filings. Implicit in this stipulation is that, at least for those few years, the increase in collected revenue was not due to post-TABOR adjustments.
¶40 Here, any increase in governmental revenue resulting simply from an increase in filings would have been only incidental and de minimis because there is no evidence that the Secretary‘s adjustments to chаrges caused the revenue gain.
¶41 Even so, NFIB argues that the record contains evidence of “repeated increases and policy changes” to the Department‘s business and licensing charges. They point to three examples.
¶42 First, NFIB contends that the Department implemented a new tax or a new tax policy in 1996 (and again in 2000) by using revenue from the charges to fund county elections. It also makes reference to other “expansions,” such as the new all-mail-ballot election system. Still, even if using the revenue from the charges to fund county elections and oversee the mail-ballot system constituted a policy change, there isn‘t any evidence suggesting this use resulted in a net revenue gain in violation of TABOR‘s limitations. Similarly, the record doesn‘t establish how the use of the collected revenue to fund county elections and mail ballots could constitute a new tax or a tax rate increase. The record says nothing about whether the Seсretary increased charges, or created new charges, to fund the county elections and mail ballots.
¶43 Second, NFIB argues that the parties’ stipulation includes examples of the Department repeatedly changing the business and licensing charges. But the Secretary is directed under
¶44 Third, NFIB cites the resumption of charges after “fee holidays” as violating TABOR. The Secretary has authority to provide a temporary reprieve from its charges if need be—in fact, the Secretary explains that these “fee holidays” are often used to secure TABOR compliance by ensuring the government does not exceed TABOR‘s revenue limits. The mere existence of these fee holidays doesn‘t prоve that the reestablishment of the (previously charged) charges resulted in a new tax, tax rate increase, or tax policy change. NFIB failed to offer any evidence establishing that reinstatement of these charges violated TABOR.
¶45 With only the stipulated facts, we cannot say that these post-TABOR adjustments violated TABOR. Because NFIB failed to establish that there was a triable issue of fact, the trial court properly granted summary judgment in the petitioners’ favor.
¶46 Because the business and licensing exactions authorized by
III. Conclusion
¶47 We reverse the judgment of the court of appeals and remand for reinstatement of the trial court‘s summary judgment order and further proceedings consistent with this opinion.
Notes
- [REFRAMED] Whether the court of appeals erred in finding that the existence of a disputеd issue of material fact precluded summary judgment.
- [REFRAMED] Whether the business and licensing exactions authorized by section 24-21-104 are fees or taxes within the contemplation of TABOR.
- [REFRAMED] Whether the business and licensing exactions authorized by section 24-21-104 are dictated by a mechanism or formula that pre-dated TABOR, as to which TABOR therefore does not apply.