Americans for Prosperity v. State of Colorado

2025 COA 46
CourtColorado Court of Appeals
DecidedMay 1, 2025
Docket24CA1066
StatusPublished

This text of 2025 COA 46 (Americans for Prosperity v. State of Colorado) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Americans for Prosperity v. State of Colorado, 2025 COA 46 (Colo. Ct. App. 2025).

Opinion

The summaries of the Colorado Court of Appeals published opinions constitute no part of the opinion of the division but have been prepared by the division for the convenience of the reader. The summaries may not be cited or relied upon as they are not the official language of the division. Any discrepancy between the language in the summary and in the opinion should be resolved in favor of the language in the opinion.

SUMMARY May 1, 2025

2025COA46

No. 24CA1066, Americans for Prosperity v. State of Colorado — Taxation — TABOR — Creation of a New Fee-based Enterprise

A division of the court of appeals reviews a challenge to S.B.

21-260 alleging that, by creating the enterprises that it did and by

increasing the excess state revenues cap, the bill violated the

Colorado Constitution and state statutes concerning the collection

and spending of state revenue. The division concludes that S.B. 21-

260 runs afoul of neither the Taxpayer Bill of Rights (TABOR) nor

section 24-77-108, C.R.S. 2024. COLORADO COURT OF APPEALS 2025COA46

Court of Appeals No. 24CA1066 City and County of Denver District Court No. 22CV30971 Honorable Andrew J. Luxen, Judge

Americans for Prosperity, a Colorado nonprofit corporation,

Plaintiff-Appellant,

v.

State of Colorado; Jared Polis, in his official capacity as the Governor of the State of Colorado; Colorado Department of Revenue; Robert Jaros, in his official capacity as the Controller for the State of Colorado; Community Access Enterprise; Clean Fleet Enterprise; Clean Transit Enterprise; Nonattainment Area Air Pollution Mitigation Enterprise; and Statewide Bridge and Tunnel Enterprise,

Defendants-Appellees.

JUDGMENT AFFIRMED

Division IV Opinion by JUDGE GROVE Pawar and Berger*, JJ., concur

Announced May 1, 2025

West Group Law & Policy, Suzanne M. Taheri, Englewood, Colorado; Stinson LLP, Perry L. Glantz, Denver, Colorado, Charles W. Hatfield, Jefferson City, Missouri, for Plaintiff-Appellant

Philip J. Weiser, Attorney General, Ryann Hardman, Assistant Attorney General, Shelby A. Krantz, Assistant Attorney General, Denver, Colorado, for Defendants-Appellees

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S. 2024. ¶1 This appeal implicates provisions of the Colorado Constitution

and state statutes concerning the collection and spending of state

revenue. Plaintiff, Americans for Prosperity (AFP), asserts that the

General Assembly violated section 24-77-108, C.R.S. 2024, and the

Taxpayer Bill of Rights (TABOR), Colo. Const. art. X, § 20, when it

created several enterprises as part of a transportation sustainability

bill passed in 2022. The district court disagreed and granted

summary judgment in favor of defendants, the State of Colorado,

Governor Jared Polis, the Colorado Department of Revenue,

Colorado Controller Robert Jaros, the Community Access

Enterprise, the Clean Fleet Enterprise, the Clean Transit

Enterprise, the Nonattainment Area Air Pollution Mitigation

Enterprise, and the Statewide Bridge and Tunnel Enterprise. We

affirm.

I. Background

A. TABOR

¶2 In 1992, Colorado voters adopted TABOR, which, among other

things, limits governmental entities’ ability to impose new taxes or

increase tax revenue without obtaining advance voter approval. See

Colo. Const. art. X, § 20. TABOR states that its “preferred

1 interpretation shall reasonably restrain most the growth of

government,” Colo. Const. art. X, § 20(1), and, to that end, it sets

annual caps on governmental spending: “The maximum annual

percentage change in state fiscal year spending equals inflation plus

the percentage change in state population in the prior calendar

year, adjusted for revenue changes approved by voters after 1991.”

Colo. Const. art. X, § 20(7)(a). Absent exclusion from fiscal year

spending limits or voter approval to the contrary, districts must

refund to taxpayers revenue exceeding these limits. Colo. Const.

art. X, § 20(7)(d); see also Huber v. Colo. Mining Ass’n, 264 P.3d

884, 890-91 (Colo. 2011).

¶3 TABOR applies to “districts,” which it defines as “the state or

any local government, excluding enterprises.” Colo. Const. art. X,

§ 20(2)(b). TABOR defines an “enterprise,” meanwhile, as “a

government-owned business authorized to issue its own revenue

bonds and receiving under 10% of annual revenue in grants from

all Colorado state and local governments combined.” Colo. Const.

art. X, § 20(2)(d); see also Nicholl v. E-470 Pub. Highway Auth., 896

P.2d 859, 867-69 (Colo. 1995).

2 B. Referendum C

¶4 In 2005, Colorado voters adopted a referred measure known

as Referendum C. The measure paused TABOR’s spending limits

from 2005 to 2010, permitting the state to “retain and spend all

state revenues in excess of the limitation on state fiscal year

spending.” § 24-77-103.6(1)(a), C.R.S. 2024. Referendum C then

established a new cap on state spending beginning in 2010 that

exceeded the limit that TABOR would have otherwise set. This new

limit, dubbed the “excess state revenues cap,” was calculated using

“the highest total state revenues for a fiscal year” from the 2005-

2010 period during which TABOR’s spending limits were paused.

§ 24-77-103.6(6)(b)(I)(B). After 2010, the excess state revenues cap

was to be “adjusted each subsequent fiscal year for inflation, the

percentage change in state population, the qualification or

disqualification of enterprises, and debt service changes.” Id.

¶5 The state spent its revenue in this manner until the 2017-

2018 fiscal year, when the General Assembly, by statute,

voluntarily reduced the excess state revenues cap for that fiscal

year by $200 million. § 24-77-103.6(6)(b)(I)(C). During the

following two fiscal years, the legislature adjusted the excess state

3 revenues cap only for inflation, state population change, enterprise

qualification and disqualification, and debt service changes. § 24-

77-103.6(6)(b)(I)(D)-(E).

C. Proposition 117

¶6 In 2020, Colorado voters adopted a ballot initiative known as

Proposition 117, later codified at section 24-77-108(1), which

mandated statewide voter approval for any newly qualified or

created enterprise receiving more than $100 million in revenue from

fees and surcharges during its first five fiscal years. Proposition

117 also required that “[r]evenue collected for enterprises created

simultaneously or within the five preceding years serving primarily

the same purpose” be aggregated when determining whether voter

approval is necessary. § 24-77-108(2). Enterprises serving

primarily the same purpose are those that “provide the same

services in the same geographic area.” § 24-77-108(3)(a).

D. Transportation Sustainability Bill

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