Court Opinion: Colorado Supreme Court Opinion for Aug. 21

Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.

Ward et al. v. State of Colorado

The Colorado Supreme Court unanimously affirmed a judgment in part and vacated in part a case involving a ballot question on property taxes.

According to the Colorado Supreme Court opinion, during the 2023 legislative session, the Colorado General Assembly passed Senate Bill 23-303 and Gov. Jared Polis signed it into law. SB 303 was enacted in response to Coloradans facing possible substantial increases in property taxes during the 2023 property tax cycle and SB 303’s main purpose was to provide property tax relief to those that would be impacted by the property tax increases.

The General Assembly recognized SB 303 would impact not only property owners, but also those who rent properties as property tax increases would be passed onto them through increased rental rates, according to the Colorado Supreme Court opinion. The General Assembly also noted a property tax measure like this would impact school districts, special districts, cities, counties and local governments that depend on property tax revenues which allow them to provide services to Coloradans. 

Due to this, the General Assembly put forward in SB 303 a plan that would provide at least 10 years of property tax relief while creating a framework aimed at mitigating the revenue impacts that such relief would have on entities and institutions that rely on property tax revenues. 

SB 303’s title was framed with the following: “Concerning a reduction in property taxes, and, in connection therewith, creating a limit on annual property tax increases for certain local governments; temporarily reducing the valuation for assessment of certain residential and nonresidential property; creating new subclasses of property; permitting the state to retain and spend revenue up to the Proposition HH cap; requiring the retained revenue to be used to reimburse certain local governments for lost property tax revenue and to be deposited in the state education fund to backfill the reduction in school district property tax revenue; transferring general fund money to the state public school fund and to a cash fund to also be used for the reimbursements; eliminating the cap on the amount of excess state revenues that may be used for the reimbursements for the 2023 property tax year; referring a ballot issue; and making an appropriation.”

The Colorado Supreme Court noted few of SB 303’s provisions went into effect immediately upon the governor’s signature but instead, most of SB 303 is a referred measure: Proposition HH, that is contained within SB 303 and is contingent on voter approval in the 2023 general election.

In that election, voters will be presented with Proposition HH’S ballot title which asks: “Shall the state reduce property taxes for homes and businesses, including expanding property tax relief for seniors, and backfill counties, water districts, fire districts, ambulance and hospital districts, and other local governments and fund school districts by using a portion of the state surplus up to the Proposition HH cap as defined in this measure?”

On the last day of the 2023 legislative session, the general assembly also passed House Bill 23-1311. The bill alters the method for calculating refunds under Colorado’s Taxpayer’s Bill of Rights, mandating in fiscal year 2022–23, taxpayers eligible for a refund would receive a refund in the same flat amount, rather than an amount that would be calculated as otherwise required by law. HB 1311 stated the change to the TABOR refund calculation will take effect only if a majority of voters approved Proposition HH. Neither SB 303 nor Proposition HH refers to HB 1311, according to the Colorado Supreme Court opinion.

In the current appeal taken under Colorado Revised Statute 1-11-203.5(4), the petitioners, which include a number of Colorado residents, local officials, voters, counties, county commissioners, a nonprofit corporation and a metropolitan district, contend SB 303 and its embedded referred measure, Proposition HH, violate the Colorado Constitution’s single subject requirement and Proposition HH violates the constitution’s clear expression requirement. 

The Colorado Supreme Court concluded, under long-settled precedent of the court, Colorado courts don’t have subject matter jurisdiction to review either SB 303 or Proposition HH for compliance with the single subject requirement unless and until those measures have been approved by Colorado voters. 

The Colorado Supreme Court also found that although it has jurisdiction to consider the petitioners’ clear expression challenges to Proposition HH, at least to the extent that any defects in the title are amenable to reformation by the courts, the petitioners haven’t established that Proposition HH violates the clear expression requirement.

The Colorado Supreme Court affirmed the portions of the district court’s conclusion that the court lacked jurisdiction to consider the petitioners’ single subject claims and the denial of the petitioners’ requested relief on their clear expression claims. The Colorado Supreme Court vacated the portions of the district court’s judgment conditionally deciding the merits of petitioners’ single subject claims. 

The Colorado Supreme Court didn’t express an opinion on the merits of the petitioners’ single subject claims. 

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