Matter of Proposed Initiated Const. Amend.

873 P.2d 733
Supreme Court of Colorado·Decided May 16, 1994·No. 94SA49·Published

Opinion

873 P.2d 733 (1994)

In the Matter of the Title, Ballot Title, and Submission Clause Approved February 2, 1994, Respecting the PROPOSED INITIATED CONSTITUTIONAL AMENDMENT CONCERNING LIMITED GAMING IN the CITY OF ANTONITO (Limited Gaming IV), as Determined on Motion for Rehearing.
Angela Wheeler, Robert Fabec, Ray A. Covi, Jr., George S. Shady and Michael T. Giarratano, Petitioners,
and Freda Poundstone, Respondent,
and Natalie Meyer, Rebecca Lennahan and Steve Erkenbrack, Title Setting Board.

No. 94SA49.

Supreme Court of Colorado, En Banc.

May 2, 1994.
As Modified on Denial of Rehearing May 16, 1994.

*736 James E. Klodzinski, Trinidad, Craig A. Murdock, San Francisco, CA, for petitioners.

Joseph Stern, Denver, for respondent.

Gale A. Norton, Atty. Gen., Steven K. ErkenBrack, Chief Deputy Atty. Gen., Timothy K. Tymkovich, Sol. Gen., Maurice G. Knaizer, Deputy Atty. Gen., General Legal Services Section, Denver, for Title Setting Bd.

Justice MULLARKEY delivered the Opinion of the Court.

Petitioners Angela Wheeler, Robert Fabec, Ray A. Covi, Jr., George S. Shady and Michael T. Giarratano, registered electors of the State of Colorado, brought this original proceeding pursuant to section 1-40-107(2), 1B C.R.S. (1993 Supp.), to challenge the action taken by the Initiative Title Setting Board (Board) in setting a title, submission clause,[1] and summary for a proposed constitutional amendment (the Initiative). Denominated *737 "Limited Gaming IV," the Initiative would add a new Section 11 to Article XVIII of the Colorado Constitution. The Initiative would permit limited gaming in Antonito, Colorado, subject to a future local vote; would require that the location and size of gaming premises in Antonito be determined under the Antonito city ordinances in effect on November 25, 1993; and would provide for distribution of revenue from limited gaming in Antonito by the General Assembly. Regardless of the outcome of the local election in Antonito, the Initiative also would make several changes in the procedures presently governing limited gaming. Specifically, the games of craps and roulette, and any other games permitted by the gaming commission, would be added to those presently authorized; the maximum allowable tax rate on limited gaming would be changed from 40% of adjusted gross proceeds to 20% of adjusted net proceeds; and commercial property would be appraised based only on its actual use in areas where limited gaming is lawful.

The petitioners contend that the Board lacked jurisdiction to set a title, submission clause, and summary because the Initiative's proponents failed to comply with section 1-40-104, 1B C.R.S. (1993 Supp.). They further argue that the title, submission clause, and summary are unfair and do not fairly express the true meaning and intent of the proposed constitutional amendment. In her answer brief, Respondent Freda Poundstone also asks this court to declare the signatures collected for the Initiative during the pendency of this appeal to be validly collected, and requests that we award her all reasonable and necessary attorney fees and costs pursuant to section 13-17-102, 6A C.R.S. (1987).[2] For the reasons set forth below, we affirm the ruling of the Board in part, reverse in part, and remand the matter to the Board with instructions.

I

On December 14, 1993, the Initiative's proponents submitted a draft of the Initiative to the legislative council and the office of legislative legal services (legislative offices) for review and comment. After comments were received and a public meeting was held, the proponents modified the Initiative. A final draft of the Initiative was then submitted to the secretary of state.[3]

The Board convened on January 19, 1994, to set the title, submission clause, and summary for the Initiative. After the Board's initial hearing, the petitioners filed separate motions for rehearing contesting the validity of the title, submission clause, and summary fixed by the Board. At the rehearing held on February 2, 1994, the Board made a minor change in the Initiative's fiscal impact statement, but otherwise denied the petitioners' motions. The title, submission clause, and summary as set by the Board on February 2nd read as follows:

Title

AN AMENDMENT TO THE COLORADO CONSTITUTION TO PERMIT LIMITED GAMING, SUBJECT TO A FUTURE LOCAL VOTE, IN THE CITY OF ANTONITO; REGARDLESS OF THE OUTCOME OF THAT VOTE, TO EXPAND THE GAMES WHICH MAY BE CONDUCTED WHEREVER LIMITED GAMING IS LAWFUL, TO REDUCE THE MAXIMUM ALLOWABLE TAX RATE FOR LIMITED GAMING TO TWENTY PERCENT OF ADJUSTED NET PROCEEDS, AND TO REQUIRE THAT COMMERCIAL PROPERTY IN AREAS WHERE LIMITED GAMING IS LAWFUL BE APPRAISED BY THE COUNTY ASSESSOR ON THE BASIS OF ITS ACTUAL USE; AND TO ALLOCATE TAX AND FEE REVENUES FROM LIMITED GAMING IN ANTONITO.

*738 Submission Clause

SHALL THERE BE AN AMENDMENT TO THE COLORADO CONSTITUTION TO PERMIT LIMITED GAMING, SUBJECT TO A FUTURE LOCAL VOTE, IN THE CITY OF ANTONITO; REGARDLESS OF THE OUTCOME OF THAT VOTE, TO EXPAND THE GAMES WHICH MAY BE CONDUCTED WHEREVER LIMITED GAMING IS LAWFUL, TO REDUCE THE MAXIMUM ALLOWABLE TAX RATE FOR LIMITED GAMING TO TWENTY PERCENT OF ADJUSTED NET PROCEEDS, AND TO REQUIRE THAT COMMERCIAL PROPERTY IN AREAS WHERE LIMITED GAMING IS LAWFUL BE APPRAISED BY THE COUNTY ASSESSOR ON THE BASIS OF ITS ACTUAL USE; AND TO ALLOCATE TAX AND FEE REVENUES FROM LIMITED GAMING IN ANTONITO?

Summary

This measure authorizes limited gaming in the city of Antonito, subject to a future local vote held in accordance with section 9(6) of article XVIII of the Colorado [C]onstitution. All gaming under this measure is subject to regulation by the Colorado limited gaming control commission and is confined to areas of the city determined under city ordinances that were in effect on November 25, 1993. Revenues from limited gaming in Antonito are allocated as follows: 50% for senior-citizen health, 20% for education, 15% to Antonito, 10% to Conejos County, and 5% to counties adjacent to Conejos County.

In addition, and regardless of the outcome of the local vote in Antonito, the following changes would take effect wherever limited gaming is lawful within the state:

—The definition of "limited gaming" would include craps and roulette and any other games authorized by the gaming commission as well as poker, blackjack, and slot machines, which are now authorized;
—The maximum allowable tax on limited gaming activity would be changed from 40% of adjusted gross proceeds to 20% of adjusted net proceeds; and
—Commercial property within a city would be appraised, for property tax assessment purposes, only according to its actual use.
The measure is expected to have significant fiscal impact, although the amount is indeterminate. The effect on state revenues from limited gaming would depend on the meaning of "adjusted net proceeds" and the tax rate actually set. In any event, adjusted net proceeds would be a smaller tax base than is currently in place and would likely produce a state tax revenue loss.

Subsequently, the petitioners jointly filed this original proceeding for review of the Board's action. See § 1-40-107(2), 1B C.R.S. (1993 Supp.).

II

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