SUPREME COURT

DATE FILED: April 8, 2021 4:18 PM

FILING ID: 83209C7625B22
STATE OF COLORADO CASE NUMBER: 2021SA97

2 East 14th Avenue

Denver, CO 80203
Original Proceeding Pursuant to Article VI,
Section 3 of the Constitution of the State of
Colorado
In Re: Interrogatory on House Joint
Resolution 21-1164 Submitted by the
Colorado General Assembly
PHILIP J. WEISER, Attorney General
NATALIE HANLON LEH, Chief Deputy
Attorney General, 18824*
ERIC R. OLSON, Solicitor General, 36414* COURT USE ONLY
KURTIS T. MORRISON, Deputy Attorney Case No. 2021SA97
General, 45760*
NOAH C. PATTERSON, Assistant Solicitor
General, 42339*
Ralph L. Carr Colorado Judicial Center
1300 Broadway, 10th Floor
Denver, CO 80203
Telephone: (720) 508-6361
E-Mail: Natalie.HanlonLeh@coag.gov;
Eric.Olson@coag.gov;
Kurtis.Morrison@coag.gov;
Noah.Patterson@coag.gov
*Counsel of Record
THE ATTORNEY GENERAL’S INTERROGATORY ANSWER
BRIEF
 CERTIFICATE OF COMPLIANCE

I hereby certify that this brief complies with all requirements of

C.A.R. 28 and C.A.R. 32, as reasonably applicable to a brief submitted in

a matter arising under article VI, section 3, including all formatting

requirements set forth in these rules. Specifically, the undersigned

certifies that:

The brief complies with the word limits set forth in the

Court’s March 25, 2021 Order. It contains 6,248 words (of the 9,500

permitted under the March 25, 2021 Order).

I acknowledge that my brief may be stricken if it fails to

comply with any of the requirements of C.A.R. 28 or 28.1, and

C.A.R. 32.

Noah C. Patterson___________
Signature of attorney or party
 TABLE OF CONTENTS

PAGE
INTERROGATORY PRESENTED ........................................................... 1
INTRODUCTION ...................................................................................... 1
STATEMENT OF THE CASE AND FACTS ............................................ 3
I. TABOR requires advance voter approval in several specified
circumstances that are not applicable here. .................................... 6
II. After TABOR was adopted, the General Assembly
incorporated each school district’s TABOR property tax
revenue limit (or waiver) into the public education funding
system. .............................................................................................. 7
III. TABOR’s property tax revenue limit was applied even after
school districts’ voters had waived it. ............................................ 10
IV. In 2007, the General Assembly prevented further
unauthorized decreases in school district mill levies. ................... 12
V. HB 20-1418 and HB 21-1164 complete the correction of the
unauthorized decreases in school district mill levies that
occurred between 1994 and 2006. .................................................. 13
A. HB 20-1418 required school districts to reset their mill
levies to where they would have been had the 1994 Act
been properly applied but enacted temporary tax credits to
offset the immediate impact on taxpayers. ................................. 13
B. HB 21-1164 requires school districts to gradually phase out
the temporary tax credits. ............................................................ 17
APPLICABLE LEGAL STANDARDS .................................................... 18
SUMMARY OF THE ARGUMENT ........................................................ 20
ARGUMENT ........................................................................................... 22
I. TABOR does not require the State to seek advance voter
approval for the enactment of HB 21-1164’s phasing out of
the temporary property tax credits. ............................................... 23

i
 TABLE OF CONTENTS

PAGE
II. TABOR does not require the school districts to seek advance
voter approval to put the proper mill levies required by the
1994 Act into place by phasing out the temporary tax credits. .... 24
A. The school districts do not need to obtain advance voter
approval to reduce the temporary property tax credits as
contemplated by HB 21-1164. ...................................................... 25
1. The 1994 Act’s plain language was violated......................... 26
2. Addressing the statutory violations here does not
require a second wave of school district TABOR votes. ....... 29
B. TABOR does not require advance voter approval because
the mill levies set between 1994 and 2006 are void as ultra
vires acts. ...................................................................................... 31
CONCLUSION ........................................................................................ 33

ii
 TABLE OF AUTHORITIES

PAGE

CASES
Barber v. Ritter, 196 P.3d 238 (Colo. 2008) ............................................ 19
Bickel v. City of Boulder, 885 P.2d 215 (Colo. 1994)......................... 19, 30
Bolt v. Arapahoe County Sch. Dist. No. Six, 898 P.2d 525 (Colo.
1995) ..................................................................................................... 18
Colo. Dep’t of Revenue v. Woodmen of the World, 919 P.2d 806
(Colo. 1996) ........................................................................................... 37
Glendinning v. Denver, 114 P. 652 (Colo. 1911) ..................................... 31
Havens v. Bd. of County Comm’rs, 924 P.2d 517 (Colo. 1996) ........... 7, 19
Martin v. People, 27 P.3d 846 (Colo. 2001) ............................................. 19
Mesa County Bd. of County Comm’rs v. State, 203 P.3d 519 (Colo.
2009) ............................................................................................. passim
People v. Hyde, 393 P.3d 962 (Colo. 2017) .............................................. 28
Resolution Tr. Corp. v. Heiserman, 898 P.2d 1049 (Colo. 1995) ............ 19
Ryan Ranch Cmty. Ass’n. v. Kelley, 380 P.3d 137 (Colo. 2016) .............. 28
TABOR Found. v. Reg’l Transp. Dist., 416 P.3d 101 (Colo. 2018) ......... 19
Town of Superior v. Midcities Co., 933 P.2d 596 (Colo. 1997) ................ 31
Zaner v. City of Brighton, 917 P.2d 280 (Colo. 1996) ............................. 18

CONSTITUTIONS
COLO. CONST. art. IX, § 2 ........................................................................... 3
COLO. CONST. art. X, § 20 .......................................................................... 6
COLO. CONST. art. X, § 20(4)(a)................................................ 6, 24, 29, 32
COLO. CONST. art. X, § 20(7)(c) .............................................................. 7, 8

STATUTES
§ 2-4-401(13.7)(a), C.R.S.......................................................................... 28
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 TABLE OF AUTHORITIES

PAGE
§ 22-54-104(1)(a), C.R.S............................................................................. 8
§ 22-54-106(1)(a)(I), C.R.S. ........................................................................ 8
§ 22-54-106(1)(b)(I), C.R.S. ........................................................................ 8
§ 22-54-106(2.1)(a), C.R.S.................................................................. 11, 31
§ 22-54-106(2.1)(c), C.R.S. ....................................................................... 16
§ 22-54-106(2.1)(d), C.R.S.................................................................. 16, 24
§ 22-54-106(3), C.R.S. .............................................................................. 17
Ch. 154, sec. 2, § 22-54-106, 1994 COLO. SESS. LAWS 791–92 .. …9, 10, 27,
28
Ch. 154, sec. 2, § 22-54-106(2)(a), 1994 COLO. SESS. LAWS 791–92 .. 11, 30
Ch. 196, sec. 4, § 22-53-114(2)(c.7)(I)(A), 1993 COLO. SESS. LAWS
881 ........................................................................................................ 29
Ch. 196, sec. 4, § 22-53-114, 1993 COLO. SESS. LAWS 881–82 ................... 9
Ch. 197, sec. 33, § 22-54-106(2.1)(a), 2020 COLO. SESS. LAWS 950–
51 .......................................................................................... …14, 15, 29
Ch. 197, sec. 33, § 22-54-106(2.1)(b)(I), 2020 COLO. SESS. LAWS 951 ..... 15
Ch. 197, sec. 33, § 22-54-106(2.1)(c), 2020 COLO. SESS. LAWS 951–
52 .......................................................................................................... 16
Ch. 199, sec. 5, § 22-54-106(2)(a)(I), 2007 COLO. SESS. LAWS 736 .......... 30
Ch. 199, sec. 5, § 22-54-106(2)(a)(III), 2007 COLO. SESS. LAWS 736 ....... 16

OTHER AUTHORITIES
18 MCQUILLIN MUN. CORP. § 53:77.28 (3d ed.) ....................................... 31
House Bill 20-1418 .......................................................................... passim
House Bill 21-1164 .......................................................................... passim
Senate Bill 07-199 ................................................................. 12, 13, 14, 29

iv
 Philip J. Weiser, in his capacity as the Attorney General for the

State of Colorado, submits this Answer Brief concerning the below

Interrogatory submitted by the General Assembly.

INTERROGATORY PRESENTED

Given that most school districts obtained voter approval to retain

all excess property tax revenue but were required, without legal

authority, to then reduce their total program mill levies, can the General

Assembly, having already mandated that those school districts reset

their total program mill levies to the levels that would have been in effect

for the unauthorized reductions, now require such school districts to:

(a) gradually eliminate the temporary property tax credits as provided in

House Bill 21-1164; and (b) do so without again obtaining voter approval?

INTRODUCTION

This Interrogatory attempts to resolve a difficult situation. For over

a decade (1994–2006), Colorado school districts calculated mill levies

inconsistent with the governing statutory language. The school districts

did so because the State—the Colorado Department of Education

(“CDE”)—incorrectly applied the law and directed them to do so. This

misapplication disrupted the delicate balance between the State share

and local share of public-school funding, resulting in major impacts to the

State budget.

In 2007, the General Assembly stopped the incorrect calculation of

mill levies for future years by freezing the school districts’ mill levies. But

because the calculation of each new mill levy is based in part on the

calculation of the mill levy in the previous year, the impact caused by the

incorrect mill levy calculations from 1994 to 2006 remained.

House Bill 20-1418 (“HB 20-1418”) and House Bill 21-1164 (“HB 21-

1164”) seek to address and resolve the misapplication of Colorado law

from 1994 to 2006 by resetting the school district’s mill levies to what

they would be today if the CDE had not provided incorrect guidance

during those twelve years.1

1 This Answer Brief submitted by the Attorney General is limited to

the question of the constitutionality of HB 21-1164. The Attorney
General’s brief does not address the specific public policy merits or need
for the legislation. Such matters are reserved to the General Assembly
and the legislative process.
2
 STATEMENT OF THE CASE AND FACTS

Since 1935, Colorado has funded its system of public education

through a combination of local property tax levies and direct State

contributions. In recent decades, the State has required school districts

to collect funding through set property tax mill levies—known as the

“local share”—with additional State contributions—known as the “State

share”—to each district. This funding system is designed to satisfy the

Colorado Constitution’s requirement for a “thorough and uniform”

education system. COLO. CONST. art. IX, § 2.

In 1992, Colorado voters approved the Taxpayer’s Bill of Rights

(“TABOR”) as an amendment to Colorado’s Constitution. As applicable

here, TABOR limits the revenue that a taxing authority—such as the

State or local school districts—may collect and retain or spend. However,

TABOR authorizes voters to waive a district’s revenue limit for a given

taxing authority. The vast majority of Colorado’s 178 school districts

sought and received voter approval to waive their property tax revenue

limits.

3
 To give effect to TABOR’s revenue limit, the General Assembly

amended school finance law in 1993 and later enacted the 1994 Public

School Finance Act (“the 1994 Act”). The 1994 Act incorporated TABOR’s

revenue limit into its text. However, the 1994 Act did not add any

revenue limit requirement separate from TABOR’s revenue limit. Under

the plain text of the 1994 Act, school districts that held successful waiver

elections were thus no longer subject to TABOR’s property tax revenue

limit.

Unfortunately, the CDE erroneously directed school districts to set

mill levies that did not account for the voters’ approval to waive their

property tax revenue limits.2 As a result, between 1994 and 2006, this

incorrect guidance caused the local share to decrease (in violation of the

1994 Act) and the State share to increase.

In 2007, the General Assembly froze the mill levies at their then-

existing levels. That action was challenged under TABOR and upheld in

Mesa County Bd. of County Comm’rs v. State, 203 P.3d 519 (Colo. 2009).

2 This brief does not evaluate the basis for this incorrect calculation
as it is not relevant to the statutory question before the Court.
4
What the 2007 legislation did not do, however, was address the

unauthorized mill levy reductions that occurred before the enactment of

the 2007 legislation.

In 2020, the General Assembly addressed that issue by enacting

HB 20-1418. This legislation acknowledged the misapplication of statute

between 1994 and 2006, declaring the mill levy reductions void for

establishing each school district’s accurate mill levy in future tax years.

However, HB 20-1418 did not immediately impact any property tax

liability because it required school districts to provide temporary tax

credits to offset additional property tax amounts that would have

otherwise been due.

The legislation at issue here, HB 21-1164, takes a final step to

correct the results of the incorrect application of the 1994 Act that

occurred between 1994 and 2006. The Interrogatory asks whether the

General Assembly can require the school districts to gradually remove

the temporary tax credits required by HB 20-1418, resulting in mill levies

being reset to what they would have been but for the CDE’s

misapplication of the 1994 Act, without again obtaining voter approval

5
from the districts’ voters. It can. TABOR does not require advance voter

approval for implementation of HB 21-1164. This Court should answer

the Interrogatory affirmatively.

I. TABOR requires advance voter approval in several

specified circumstances that are not applicable here.

TABOR imposes requirements on “districts,” including the State

and school districts. See COLO. CONST. art. X, § 20 (applying certain

provisions to “districts” and defining a “district” as “the state or any local

government”). The Interrogatory focuses on TABOR’s requirement for

advance voter approval. That requirement only applies in certain

circumstances stated in TABOR.

Subsection (4) of TABOR requires advance voter approval for,

among other things, any “mill levy above that for the prior year” or “a tax

policy change directly causing a net tax revenue gain to any [taxing

authority].” COLO. CONST. art. X, § 20(4)(a). For the reasons explained in

the Argument Section below, none of the advance voting requirements

apply here.

6
 Subsection (7) of TABOR imposes what is known as TABOR’s

“revenue limit.” As applicable here, it imposes a “maximum annual

percentage change” to each school district’s property tax revenue equal

to “inflation in the prior calendar year plus annual local growth, adjusted

for property tax revenue changes approved by voters ….” COLO. CONST. art.

X, § 20(7)(c) (emphasis added). As demonstrated by the emphasized

language, voters have the authority to waive the TABOR property tax

revenue limit. Id.; see also Havens v. Bd. of County Comm’rs, 924 P.2d

517, 523–24 (Colo. 1996) (describing a vote to retain revenue in excess of

a revenue limit as a “revenue change”). As discussed below, voters in the

vast majority of Colorado school districts already voted, successfully, to

waive the TABOR property tax revenue limit.

II. After TABOR was adopted, the General Assembly

incorporated each school district’s TABOR property tax
revenue limit (or waiver) into the public education funding
system.

Since 1935, Colorado has funded its public education system

through a combination of local property tax levies and direct State

contributions. Mesa County, 203 P.3d at 523. To calculate the State and

7
local shares of public-school funding, the State first determines a

district’s “total program,” which represents the amount of money the

State deems necessary to fund the district’s schools. § 22-54-104(1)(a),

C.R.S. School districts then apply a statutory formula to determine how

much of their total program they must raise through their property tax

mill levies, with the State share providing the balance of the funds. § 22-

54-106(1)(a)(I) & (b)(I), C.R.S.

After TABOR’s enactment in 1992, the General Assembly modified

the then-existing school finance formula several times. First, in 1993, the

General Assembly modified the formula to incorporate some of TABOR’s

requirements, including TABOR’s property tax revenue limit. Compare

Ch. 196, sec. 4, § 22-53-114, 1993 COLO. SESS. LAWS 881–82, with COLO.

CONST. art. X, § 20(7)(c); see also Mesa County, 203 P.3d at 524 (“After

the voters adopted [TABOR], the General Assembly amended the School

Finance Act in 1993 to incorporate by reference [TABOR’s] property tax

revenue limit.”). As discussed above, the TABOR property tax revenue

limit restricts the year-over-year increase in property tax revenue a

district can receive. COLO. CONST. art. X, § 20(7)(c).

8
 In 1994, the General Assembly overhauled the school finance

system. But as with the 1993 changes, the 1994 Act again incorporated

TABOR’s property tax revenue limit as well as “the capacity for

adjustments authorized by waiver election.” Ch. 154, sec. 2, § 22-54-106,

1994 COLO. SESS. LAWS 791–92; Mesa County, 203 P.3d at 524. The

applicable provisions read:

For the 1994 property tax year and property tax years
thereafter, each district shall levy the lesser of:

(a) The number of mills levied by the district for

the immediately preceding property tax
year;

(b) The number of mills that will generate

property tax revenue in an amount equal to
the district’s total program for the applicable
budget year minus the district’s minimum
state aid and minus the amount of specific
ownership tax revenue paid to the district; or

(c) The number of mills that may be levied by the

district under the property tax revenue
limitation imposed on the district by section
20 of article X of the state constitution [i.e.,
TABOR]. ….

Ch. 154, sec. 2, § 22-54-106(2), 1994 COLO. SESS. LAWS 791–92 (emphasis

added). The plain language of the 1994 Act incorporated TABOR’s

9
property tax revenue limit. Id. And by referring to “[t]he number of mills

that may be levied by the district under the property tax revenue

limitation imposed” by TABOR, the 1994 Act also incorporated the

results of successful waiver elections as well. Id. (emphasis added). So,

following a successful waiver election, subsection (c) above would no

longer qualify as “the lesser of” the three options in the 1994 Act. That

was so because following a successful waiver election, TABOR no longer

“imposed” a “property tax revenue limitation.” See id.

Since the 1994 Act framed the mill levy as “the lesser of” three

options, an incorrect application of any of them could subvert the entire

formula. As it turned out, that misapplication occurred.

III. TABOR’s property tax revenue limit was applied even after
school districts’ voters had waived it.

Nearly every one of Colorado’s 178 school districts sought and

received voter approval between 1995 and 2006 to waive TABOR’s

property tax revenue limit. Mesa County, 203 P.3d at 524. As a result,

the revenue limit—which the 1994 Act incorporated by reference—no

longer applied to those districts.

10
 Despite the plain language of the 1994 Act incorporating the results

of successful waiver elections under TABOR, that language “was wrongly

interpreted and applied to reduce several districts’ property tax mill

levies to the number of mills that a district could levy under the property

tax revenue limitation imposed by” TABOR. § 22-54-106(2.1)(a), C.R.S. 3

And since the 1994 Act limited each school district’s levy to the number

of mills levied in the preceding year, the misapplication of the statutory

formula in one year affected the district for future years as well. See Ch.

154, sec. 2, § 22-54-106(2)(a), 1994 COLO. SESS. LAWS 791–92. By

disregarding the school districts’ successful waiver elections, the

calculation established by the CDE caused a steady decrease in school

district mill levies, resulting in lower local shares. This, in turn, required

the State to increase its funding of local schools via the State share. Mesa

County, 203 P.3d at 525.

3 The General Assembly made this finding when it enacted HB 20-

1418, as discussed further below.

11
IV. In 2007, the General Assembly prevented further
unauthorized decreases in school district mill levies.

In 2007, the General Assembly enacted Senate Bill 07-199 (“SB 07-

199”). This legislation amended the 1994 Act to: (1) state that the TABOR

property tax revenue limit only applied to districts that still had such a

limit in effect (i.e., districts that had not held a successful waiver

election); and (2) impose an upper limit of 27 mills on school district mill

levies. See Mesa County, 203 P.3d at 525–26.

SB 07-199 was challenged as violating TABOR in the Mesa County

litigation. Id. at 526. Rejecting that challenge, this Court upheld SB 07-

199, finding that the original 1994 Act incorporated TABOR’s property

tax revenue limit by reference, including TABOR’s express allowance for

waiver elections. Id. at 524. Instead of being a tax policy change, as

referred to in TABOR, the Court held that SB 07-199 merely required the

State and school districts to give effect to the voters’ pre-existing waiver

of the property tax revenue limit. Id. at 535. Therefore, there was no need

for additional voter approval before SB 07-199 could be implemented, and

none of TABOR’s provisions were implicated. Id. If anything, the Court

12
stated, the incorrect application of the 1994 Act “may have caused harm

to the state, or to the school districts” while benefiting local property

taxpayers at the expense of State taxpayers. Id.

V. HB 20-1418 and HB 21-1164 complete the correction of the

unauthorized decreases in school district mill levies that
occurred between 1994 and 2006.

Although SB 07-199 halted the misapplication of the 1994 Act for

future years, it did not address that misapplication’s effect—that, for over

a decade, the mill levies were set improperly and out of alignment with

the 1994 Act, which has caused a continuing ripple effect. Only recently,

the General Assembly fixed these violations through HB 20-1418 and

HB 21-1164 (the latter is currently pending before the General

Assembly). These bills form the basis of the General Assembly’s

Interrogatory.

A. HB 20-1418 required school districts to reset their

mill levies to where they would have been had the
1994 Act been properly applied but enacted
temporary tax credits to offset the immediate
impact on taxpayers.

In 2020, the General Assembly took the first step to remedy the

improper mill levy reductions with the passage of HB 20-1418. This

13
legislation specifically recognized that the mill levy reductions that

occurred between 1994 and 2006 notwithstanding the school districts’

waiver elections misapplied the 1994 Act. Ch. 197, sec. 33, § 22-54-

106(2.1)(a), 2020 COLO. SESS. LAWS 950. Since those reductions were

inconsistent with the 1994 Act, HB 20-1418 voided their use when

determining a school district’s correct mill levy for future tax years. Id.

HB 20-1418 then reset the mill levies in school districts, beginning

in tax year 2020, that had previously waived their revenue limits by

requiring them to adopt a mill levy equal to the lesser of:

• “The number of mills that the district would have been

required to levy under [the prior funding formula] for the
2020 property tax year if not for the unauthorized
reductions in the district’s mill levy in property tax years
following the property tax year in which the district
[waived its property tax revenue limit], which reductions
resulted from the unauthorized application of [the property
tax revenue limit in the 1994 Act] as it existed before May
9, 2007”;

• The number of mills necessary to equal the district’s total

program funding minus certain other tax revenue the
district received; or

14
 • 27 mills.4

Ch. 197, sec. 33, § 22-54-106(2.1)(b)(I), 2020 COLO. SESS. LAWS 951.

HB 20-1418 did not retroactively alter the mill levies for years prior to

2020. The General Assembly further noted that a school district must

certify the correct mill levy under the statute; no TABOR vote was

needed. Ch. 197, sec. 33, § 22-54-106(2.1)(a), 2020 COLO. SESS. LAWS 950–

51 (concluding that “the determination and levy of the correct number of

mills … does not require action by the district other than to certify the

mill levy”). Because HB 20-1418 merely clarified what the 1994 Act had

always required—that the TABOR revenue limit does not restrict

districts where voters had approved waivers of the limit—the mill levies

implemented by HB 20-1418 are those that were always required by the

1994 Act (with a ceiling of 27 mills).

For property tax year 2021, HB 20-1418 returns to the formula that

has been in effect since SB 07-199’s enactment. Compare Ch. 197, sec. 33,

4The 27-mill limit in HB 20-1418 is a continuation of the limit the

General Assembly enacted in SB 07-199.

15
§ 22-54-106(2.1)(c), 2020 COLO. SESS. LAWS 951–52 with Ch. 199, sec. 5,

§ 22-54-106(2)(a)(III), 2007 COLO. SESS. LAWS 736. So, going forward, all

school districts must levy the lesser of:

• The number of mills necessary to equal the district’s total

program funding minus certain other tax revenue the
district receives;

• For districts that have not waived their property tax

revenue limit, the number of mills that will generate
revenue that does not exceed the limit;

• The number of mills levied in the prior tax year; or

• 27 mills.

§ 22-54-106(2.1)(c), C.R.S.

Despite the one-time change in property tax year 2020, school

districts did not experience any movement in their effective mill levies

because the General Assembly also required them to enact temporary

property tax credits. § 22-54-106(2.1)(d), C.R.S. The temporary credits

were required to fully offset any increase in the property tax burden that

HB 20-1418 otherwise required. Id. Instead, HB 20-1418 effectively

required the State to include the amount of property tax revenue the

districts lost from the temporary credits in the State’s share of total

16
program funding. § 22-54-106(3), C.R.S. As a result, individual taxpayers

saw no adjustment in their property tax liability.

B. HB 21-1164 requires school districts to gradually

phase out the temporary tax credits.

Although the General Assembly expressed its intent that the tax

credits provided in HB 20-1418 were temporary, it did not provide a

specific date for their expiration. HB 21-1164—currently pending before

the General Assembly—begins a phase-out of the credits. H.B. 21-1164,

73rd Gen. Assem., 1st Reg. Sess. (Colo. 2021) (adding § 22-54-

106(2.1)(d)(II) & (III), C.R.S.).

For the tax credit phase-out, HB 21-1164 requires the

implementation of a correction plan. Id. (adding § 22-54-106(2.1)(d)(III),

C.R.S.). Under HB 21-1164, the correction plan must reduce the

temporary tax credits at a rate of no more than 1 mill per year for the

next 20 years until each district has fully eliminated the credits. Id.

The questions presented to the Court are whether the General

Assembly has the authority to gradually reduce those temporary tax

credits as required by HB 21-1164, and whether this reduction requires

17
advance voter approval under TABOR. The General Assembly has this

authority. And, for the reasons discussed below, HB 21-1164 does not

trigger TABOR’s advance voter approval requirement, neither at the

State nor school district levels. Rather, the decision as to how to address

this past mistake—and whether and how to change relevant property tax

contributions at the local level—is one for the General Assembly to make

in the first instance. This brief does not address that issue.

APPLICABLE LEGAL STANDARDS

Two sets of interpretive principles apply here: (1) the principles

applicable when interpreting TABOR; and (2) the principles of statutory

construction.

Interpretation of TABOR. When interpreting a constitutional

amendment, the Court’s goal is to give effect to the intent of the electorate

that adopted it. Zaner v. City of Brighton, 917 P.2d 280, 283 (Colo. 1996).

To do so, the Court gives TABOR’s terms their “ordinary and popular

meaning.” Bolt v. Arapahoe County Sch. Dist. No. Six, 898 P.2d 525, 532

(Colo. 1995); see also Zaner, 917 P.2d at 283.

18
 When interpreting the Constitution, the Court will also seek to

avoid “an unjust, absurd[,] or unreasonable result.” Bickel v. City of

Boulder, 885 P.2d 215, 229 (Colo. 1994). The Court has also “consistently

rejected readings of [TABOR] that would hinder basic government

functions or cripple the government’s ability to provide services.” Barber

v. Ritter, 196 P.3d 238, 248 (Colo. 2008) (citing Havens, 924 P.2d at 521).

Statutory Interpretation. The purpose of statutory interpretation is

“to give effect to the General Assembly’s purpose or intent in enacting the

statute.” Martin v. People, 27 P.3d 846, 851 (Colo. 2001). To do so, the

Court examines the statute’s language and, if the language is

unambiguous, applies it as written. Resolution Tr. Corp. v. Heiserman,

898 P.2d 1049, 1054 (Colo. 1995). Finally, the Court presumes that “a

statute is constitutional.” TABOR Found. v. Reg’l Transp. Dist., 416 P.3d

101, 104 (Colo. 2018). And this Court has “long required parties

challenging the constitutionality of statutes to prove unconstitutionality

beyond a reasonable doubt.” Id.

19
 SUMMARY OF THE ARGUMENT

The Interrogatory asks two questions: (1) whether the General

Assembly can require school districts to gradually eliminate the

temporary property tax credits as provided in HB 21-1164; and

(2) whether the General Assembly can do so without obtaining statewide

voter approval or requiring the school districts to again obtain approval

from their voters. This brief focuses solely on the second question.5

Addressing mill levies set in violation of the 1994 Act does not

require advance voter approval under TABOR. There are only two types

of electorates possibly implicated here: (1) the State; and (2) the school

districts. TABOR does not require either to obtain advance voter

approval to enact or implement HB 21-1164, which only corrects a

statutory violation.

No statewide TABOR vote is necessary because requiring school

districts to reduce temporary property tax credits at the local level does

5On the matter of the first question—whether the legislature has the
authority to require school districts to phase-out the temporary property
tax credits under the provisions of HB 21-1164—this brief leaves that
question to be answered by the General Assembly in its brief.
20
not implicate any of the State’s TABOR obligations. The State is simply

not the constitutionally relevant taxing authority.

As for the school districts, no election is necessary because the

HB 21-1164 tax credit reductions merely address the school districts’

prior mill levies that were inconsistent with statute. There is no question

that, when mill levies were calculated for over a decade without giving

effect to the school districts’ waiver elections, those levies violated the

1994 Act. Mesa County makes that clear. Because HB 20-1418 and

HB 21-1164 simply reset mill levies to what Colorado statute has

required for decades, there is no mill levy increase here that implicates

TABOR’s advance vote requirement.

Further, because the mill levies violated state statute for over a

decade, they are, from a TABOR perspective, void as ultra vires acts. As

such, when applying TABOR’s requirement that voters approve mill levy

increases, it is inappropriate for the mill levies set in violation of the 1994

Act (and future levies impacted by those statutory violations) to be used

to determine whether an increase that violates TABOR occurred.

Instead, the proper analysis must focus on the last time the mill levies
21
were set correctly. Returning the mill levies to the last time they were

properly set, as would occur here by the requirements of HB 21-1164 if

enacted, does not require a TABOR vote because there will be no revenue

change beyond what the voters already authorized.

Because the removal of the temporary tax credits required by

HB 21-1164 merely addresses the violations of the 1994 Act caused by

ignoring the school district waiver elections, it does not require advance

voter approval. The Interrogatory should be answered in the affirmative.

ARGUMENT

The General Assembly’s decision in HB 21-1164 to gradually phase-

out temporary tax credits does not require advance voter approval at

either the State or local level. HB 21-1164 addresses the incorrect setting

of mill levies between 1994 and 2006 by resetting certain school districts’

mill levies to where they should have been under the plain language of

the 1994 Act. TABOR does not require advance voter approval to correct

statutory misapplications.

22
I. TABOR does not require the State to seek advance voter
approval for the enactment of HB 21-1164’s phasing out of
the temporary property tax credits.

While the State has a variety of obligations under TABOR,

gradually reducing the local temporary property tax credits under HB 21-

1164 implicates none of them. In Colorado’s dual-funded school finance

scheme, the school districts are the relevant taxing authorities for the

local share of program funding under TABOR because the school districts

“are responsible for imposing, collecting[,] and expending local property

taxes.” Mesa County, 203 P.3d at 528. This is true even though the school

districts levy the tax at the State’s direction. Id.

So, even though State law directs school districts on how to set their

mill levies, the school districts—not the State—are the relevant taxing

authority on this issue for TABOR purposes. See id. at 530 (“Although

under the [1994 Act] the state dictates the overall scheme of school

funding and the county performs the ministerial function of collecting

taxes levied by the school district, the school district remains the relevant

taxing authority. As such, the school district is the only ‘district’ with the

authority to change tax policy within the meaning of [TABOR].”). The

23
State does not need advance voter approval to require school districts to

phase out the temporary property tax credits; therefore, HB 21-1164 does

not require statewide voter approval to take effect upon enactment by the

General Assembly.

II. TABOR does not require the school districts to seek advance
voter approval to put the proper mill levies required by the
1994 Act into place by phasing out the temporary tax
credits.

The gradual reduction of temporary tax credits at the school-district

level implicates only one TABOR provision: the requirement for advance

voter approval of a “mill levy above that for the prior year.” COLO. CONST.

art. X, § 20(4)(a).6 That requirement does not apply here.

6Because the tax credits are explicitly temporary, § 22-54-

106(2.1)(d), C.R.S. (district boards of education “shall grant a temporary
property tax credit”), their removal is not a “tax policy change” under
Subsection (4)(a) of TABOR; the credits were always intended to be
phased out. But even if viewed as a tax policy change directly resulting
in a net tax revenue gain under TABOR, the gradual reduction of the
temporary credits would not require advance voter approval for the same
reasons discussed in this Section II because phasing out the credits
remedies the prior statutory violations.

24
 Although HB 20-1418 already reset the mill levies to where they

would have been but for the unauthorized reductions, that action had no

practical effect because the temporary tax credits completely offset the

new mill levies. The phase-out of the credits called for in HB 21-1164,

however, means that the mill levy a property owner pays in some school

districts will be more than that actually set in the 2019 property tax year.

But, assuming the General Assembly elects to pursue this policy, it would

not constitute a mill levy increase requiring a TABOR vote—rather, the

mill levy will simply be what the plain language of the 1994 Act had

always required. TABOR does not require advance voter approval for

these credit reductions because their removal addresses the prior

misapplications of the 1994 Act. And, as outlined in the General

Assembly’s finding in HB 20-1418, those prior misapplications make the

unauthorized mill levies void.

A. The school districts do not need to obtain advance

voter approval to reduce the temporary property
tax credits as contemplated by HB 21-1164.

Two points are central to the conclusion that school districts do not

require advance voter approval to implement HB 21-1164: (1) the 1994

25
Act’s plain language was misapplied for over a decade; and (2) addressing

a statutory violation does not require a second round of school district

TABOR votes. At bottom, these points demonstrate that no mill levy

increase occurred that would require a TABOR vote because HB 21-1164

only corrects years of statutory violations.

1. The 1994 Act’s plain language was violated.

As discussed in Sections II and III of the Statement of the Case and

Facts above, the plain language of the 1994 Act incorporated the results

of successful waiver elections. See also Mesa County, 203 P.3d at 524

(explaining the 1994 Act “incorporated by reference the revenue limit,

which … includes the capacity for adjustments authorized by waiver

election.” (emphasis added)). However, the mill levies set by the school

districts at the CDE’s erroneous direction 7 between 1995 and 2006

disregarded the results of those elections.

7As noted above, this brief does not examine or explain the basis for
the CDE’s action leading to the questions before the Court.

26
 It merits emphasis that a mistake by a state agency does not

become immune from later re-examination and correction. In this case,

the CDE provided erroneous direction to the school districts for over a

decade, leading to additional burdens for State taxpayers. As this Court

explained in a different context (agency deference), the State should not

be prevented from correcting prior misapplications of the law because

“[t]o hold otherwise would preclude agencies from correcting mistakes

and would perpetuate a thwarting of the legislature’s will.” Colo. Dep’t of

Revenue v. Woodmen of the World, 919 P.2d 806, 817 (Colo. 1996).

The 1994 Act limited mill levies to the number “that may be levied

by the district under the property tax revenue limitation imposed on the

district by” TABOR. Ch. 154, sec. 2, § 22-54-106, 1994 COLO. SESS. LAWS

792. And TABOR expressly allows voters to waive the property tax

revenue limitation. See Section I of the Statement of the Case and Facts

above. Voters in the vast majority of Colorado’s school districts waived

that limitation. In the 1994 Act, the General Assembly automatically

incorporated each school district’s successful waiver election. Based on

the 1994 Act’s plain language, the waiver elections should have been
27
followed immediately after the voters granted their approval. See Mesa

County, 203 P.3d at 535 (“The waiver elections were effective

immediately and gave the school districts … the right to receive property

tax revenue above the subsection (7)(c) limit.”). But that did not happen.

In the 1994 Act, the General Assembly included strong mandatory

(i.e., non-discretionary) language requiring school districts to follow the

statutory formula when setting their mill levies. It commanded that

“each district shall levy the lesser of” one of three mill levy options. Ch.

154, sec. 2, § 22-54-106, 1994 COLO. SESS. LAWS 791–92 (emphasis added).

This Court has held that “shall” generally indicates that the legislature

intended the command to be mandatory. People v. Hyde, 393 P.3d 962,

969 (Colo. 2017); Ryan Ranch Cmty. Ass’n. v. Kelley, 380 P.3d 137, 146

(Colo. 2016) (“Like the word ‘shall,’ the word ‘must’ connotes a mandatory

requirement.”); see also § 2-4-401(13.7)(a), C.R.S. (“‘Shall’ means that a

person has a duty.”). Nothing in the 1994 Act suggests that its formula

was anything other than a mandatory provision prohibiting the school

districts from enacting a different mill levy.

28
 Because the 1994 Act imposed a non-discretionary formula for

setting school district mill levies and because that formula required

giving effect to the waiver elections, school districts that reduced their

mill levies to avoid exceeding their no-longer-applicable revenue limit

violated the 1994 Act. In HB 21-1164, the General Assembly is exercising

its lawful discretion to address that issue.

2. Addressing the statutory violations here

does not require a second wave of school
district TABOR votes.

TABOR requires advance voter approval for imposition of a “mill

levy above that for the prior year.” COLO. CONST. art. X, § 20(4)(a).

Colorado public education finance law has replicated that requirement

since 1993 by prohibiting a mill levy above that of the prior year. 8 Ch.

196, sec. 4, § 22-53-114(2)(c.7)(I)(A), 1993 COLO. SESS. LAWS 881; Ch. 154,

8 HB 20-1418 did not replicate that requirement for tax year 2020
because it reset the mill levies in school districts where the 1994 Act had
been misapplied between 1994 and 2006. See Ch. 197, sec. 33, § 22-54-
106(2.1)(a), 2020 COLO. SESS. LAWS 950. For property tax year 2021,
HB 20-1418 returns to the formula that has been in effect since SB 07-
199’s enactment. See Section V of the Statement of the Case and Facts
above.

29
sec. 2, § 22-54-106(2)(a), 1994 COLO. SESS. LAWS 791–92; Ch. 199, sec. 5,

§ 22-54-106(2)(a)(I), 2007 COLO. SESS. LAWS 736. Since that requirement

has been long enshrined in Colorado statute, once school districts applied

an incorrect levy in even a single year, that levy in turn affected the mill

calculation for years to come.

HB 21-1164 addresses a past determination that undermined the

mill levies required by the 1994 Act. The mill levies set by HB 20-1418

and implemented by HB 21-1164 are thus equal to the levies that

Colorado statute long required; the only reason these levies are not in

place is because Colorado statute was misapplied for over a decade. As a

result, there is no imposition of a mill levy above that for a prior year for

purposes of TABOR.9

9 Any contrary reading of TABOR would lead to illogical and

unreasonable results. For example, if a state agency misapplied an
income tax formula, instructing taxpayers to pay a lower rate than they
should, the General Assembly should not be powerless to correct the
misapplication of the law until it could put the correction before the
voters at the ballot box. Such a reading must be avoided. See Bickel, 885
P.2d at 229 (“[A]n unjust, absurd[,] or unreasonable result should be
avoided when construing a constitutional provision.”).

30
 B. TABOR does not require advance voter approval
because the mill levies set between 1994 and 2006
are void as ultra vires acts.

The General Assembly has already found that “the reductions in

district mill levies for property tax years 1994 through 2006 were not

authorized by statute and are void.” § 22-54-106(2.1)(a), C.R.S. (added to

statute as part of HB 20-1418). That finding is consistent with the

doctrine of ultra vires acts. An ultra vires act “is one that [a]

governmental agency lacks legal authority to perform.” 18 MCQUILLIN

MUN. CORP. § 53:77.28 (3d ed.). An ultra vires act is void. Glendinning v.

Denver, 114 P. 652, 652 (Colo. 1911) (“All municipal ordinances must be

in harmony with the general law of the state; if they are inconsistent or

repugnant to such general law, they are void, ultra vires, and no one can

be convicted for violating a void ordinance.”); see also Town of Superior v.

Midcities Co., 933 P.2d 596, 602 (Colo. 1997) (holding that municipal

annexation was void when the municipality failed to follow statutory

procedure).

Here, the mill levies set in violation of the 1994 Act are void as ultra

vires acts. As discussed above, the 1994 Act states that districts “shall
31
levy” the number of mills required by the 1994 Act’s formula. This is not

permissive, but mandatory, language. Consequently, the command that

school districts “shall levy” the lesser of one of several potential mill

levies was not optional and doing otherwise exceeded their legal

authority.

All mill levies set between 1994 and 2006 that disregarded the

school districts’ waiver elections were void as ultra vires acts because

they exceeded the legal authority provided by the 1994 Act. Since those

mill levies are void, the question becomes which year’s mill levy should

serve as the reference point to determine whether the school districts are

imposing a “mill levy above that for the prior year.” COLO. CONST. art. X,

§ 20(4)(a). The only reasonable answer is the last year in which the mill

levy was set correctly without consideration of the void mill levies that

were set in violation of the 1994 Act.

That is the exact same mill levy that HB 20-1418 and HB 21-1164

ultimately require the school districts to adopt. All that HB 20-1418 and

HB 21-1164 do is return the mill levies to their level at the time they

were correctly set under the 1994 Act’s mandatory formula. As such,
32
these bills do not result in a mill levy increase above that in the prior

year and do not require advance voter approval under TABOR.

The General Assembly faces a policy question above and beyond the

legal issue outlined in this brief: how to address the difference in payment

called for by the 1994 Act and the mill levy levels now in effect? The

General Assembly, in other words, must decide whether and for how long

to keep in place the temporary tax credits it adopted to substitute for the

miscalculated payment levels. This brief expresses no opinion on that

issue, or on any potential legal constraints that would guide this decision.

This issue, in short, is one that the General Assembly must decide how

to address in the first instance.

CONCLUSION

This Interrogatory is the result of a misapplication of the law and a

corresponding disregard of the will of school district voters. HB 20-1418

and HB 21-1164, together, address this issue. Nothing in TABOR

requires the General Assembly or the school districts to receive advance

voter approval before any legislative action on this issue.

33
 While this Answer Brief concludes that voter approval is not

required under TABOR for HB 21-1164 to take effect and be

administered by the school districts, this analysis is confined solely to the

constitutionality of the legislation at issue. This Brief does not address

any specific policy choices made in HB 21-1164, as such matters are

reserved to the General Assembly and the legislative process.

The Interrogatory should be answered in the affirmative.

34
Dated April 8, 2021.

PHILIP J. WEISER
Attorney General

/s/ Noah C. Patterson

NATALIE HANLON LEH, 18824*
Chief Deputy Attorney General
ERIC R. OLSON, 36414*
Solicitor General
KURTIS T. MORRISON, 45760*
Deputy Attorney General
NOAH C. PATTERSON, 42339*
Assistant Solicitor General
Attorneys for the Attorney General
*Counsel of Record
 CERTIFICATE OF SERVICE

This is to certify that I have duly served the within THE

ATTORNEY GENERAL’S INTERROGATORY ANSWER BRIEF
upon all parties listed below by Colorado Courts E-Filing or electronic
mail at Golden, Colorado, this 8th day of April, 2021, addressed as
follows:

Daniel E. Burrows Suzanne Taheri

PUBLIC TRUST INSTITUTE George H. Brauchler
Attorney for Multiple Individual MAVEN LAW GROUP
Members of the Colo. Gen. Assem. Attorneys for Colorado Rising
State Action

Mark G. Grueskin
RECHT KORNFELD, P.C.
Terry Gill
Sharon L. Eubanks Russell D. Johnson
Julie A. Pelegrin COLORADO DEPARTMENT OF LAW
OFFICE OF LEGISLATIVE LEGAL Attorneys for Jared S. Polis, in his
SERVICES official capacity as the Governor of
Attorneys for the Colorado General the State of Colorado
Assembly

/s/ Jennifer Duran

Jennifer Duran