Americans for Prosperity v. State of Colorado.
2025 COA 46. No. 24CA1066. Taxation—Taxpayer Bill of Rights—Creation of a New Fee-Based Enterprise—SB 21-260—Single-Subject Requirement—State Revenues Cap.
May 1, 2025
In 1992, Colorado voters adopted the Taxpayer Bill of Rights (TABOR), which, among other things, limits the ability of governmental entities to impose new taxes or increase tax revenue without obtaining advance voter approval. In 2005, Colorado voters adopted Referendum C, which paused TABOR’s spending limits from 2005 to 2010 and allowed the state to “retain and spend all state revenues in excess of the limitation on state fiscal year spending,” CRS § 24-77-103.6(1)(a), and established a new cap on state spending beginning in 2010 that exceeded the limit that TABOR would have otherwise set. After 2010, the excess state revenues cap was to be adjusted each fiscal year for certain enumerated factors. The state spent its revenue this way until the 2017–18 fiscal year, when the General Assembly voluntarily reduced the excess state revenues cap for that fiscal year by $200 million. In 2020, Colorado voters adopted Proposition 117, codified at CRS § 24-77-108(1), which mandated statewide voter approval for any newly qualified or created enterprise that receives in excess of $100 million in revenue from fees and surcharges during its first five fiscal years. When determining whether voter approval is necessary, Proposition 117 required aggregation of revenues collected for enterprises created simultaneously or within the five preceding years that serve primarily the same purpose. In 2021, the General Assembly passed SB 21-260, which created and funded four enterprises (the Community Access Enterprise, the Clean Fleet Enterprise, the Clean Transit Enterprise, and the Nonattainment Area Air Pollution Mitigation Enterprise) and expanded the scope of the Statewide Bridge Enterprise to become the Statewide Bridge and Tunnel Enterprise.
In 2022, Americans for Prosperity (AFP) commenced this action, asserting that the General Assembly violated TABOR when it created several enterprises as part of a transportation sustainability bill in SB 21-260. AFP alleged that, by creating the enterprises 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 district court granted summary judgment in favor of defendants, the State of Colorado, Governor Polis, the Colorado Department of Revenue, Colorado Controller 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.
On appeal, AFP argued that the district court erred by granting summary judgment to defendants when genuine issues of material fact remained that warranted a trial. However, AFP incorrectly characterized questions of law involving issues of statutory and constitutional interpretation as questions of fact. Accordingly, the district court properly entered summary judgment.
AFP also contended that the passage of SB 21-260 violated TABOR by simultaneously creating five enterprises that would generate revenue exceeding $100 million in their first five years of existence and violated the Colorado Constitution’s single-subject requirement because the enterprises serve different purposes. However, it is undisputed that the enterprises at issue were created for different purposes, and no individual enterprise had a projected five-year revenue exceeding $100 million, so the General Assembly was not required to seek voter approval before establishing them.
AFP also challenged the district court’s determination that SB 21-260’s addition of $224,957,602 to the excess state revenues cap did not violate TABOR. AFP asserted that once the legislature reduced the cap by $200 million, it could only thereafter raise the cap consistent with the Referendum C variables. However, the General Assembly’s determination that for three fiscal years it did not need to spend all of the money that it was authorized to spend had no impact on the excess state revenue cap approved by voters when they adopted Referendum C. Accordingly, SB 21-260’s restoration of $224,957,602 to the 2020–21 fiscal year budget did not violate TABOR.
Lastly, AFP argued that SB 21-260 violated the single-subject requirement by creating five enterprises that serve different purposes and by adjusting the excess state revenues cap in a bill intended instead to ensure the sustainability of Colorado’s transportation system. First, the fact that the enterprises may serve various different purposes is not enough to violate the single-subject requirement; rather, the enterprises’ different purposes must concern more than one subject. Here, the enterprises all concern the sustainability of Colorado’s transportation system. Second, the increase to the excess state revenues cap was encompassed by the single subject expressed in SB 21-260’s title.
The judgment was affirmed.