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TCL > July 2005 Issue > Highlights of the 2005 Legislative Session

July 2005       Vol. 34, No. 7       Page  15
In and Around the Bar

Highlights of the 2005 Legislative Session
by Michael Valdez

Michael Valdez is the Director of Legislative Relations for the Colorado Bar Association--(303) 824-5309;

This article highlights some of the legislation that the Colorado Bar Association ("CBA") was active in addressing during the 2004–2005 legislative session. A more comprehensive review of legislation from the 2005 session can be found in the August 2005 issue of The Colorado Lawyer. This update will feature the traditional summary of legislation that impacts the practice of law by area of practice.

Unlike many previous end-of-session reports, this one will not attempt to characterize the previous session as being more shocking than any that preceded it. As a mater of fact, the legislature’s finishing "ahead of schedule" and the "big compromise" are featured pieces to this story.

Finishing Ahead of Schedule

From the "never thought that it would happen in my lifetime" files, the legislature adjourned two full days ahead of schedule and the legislators went home. The first regular session of the 65th General Assembly was scheduled to end no later than midnight on Wednesday, May 11, 2005. Instead, both houses adjourned by 8:05 p.m. on Monday, May 9. With about a month to go in the session, rumors had begun to circulate that there was a good chance the legislature could wrap up business early. Then it happened. For the first time since the Colorado Constitution was amended in 1989, the session ended before the 120-day constitutional maximum.

A partial explanation for the early finish is the reduced number of "late bills" that were allowed by leadership in both Houses. In the House of Representatives, a total of 353 bills were introduced (112 fewer than the 2004 session); in the Senate, 249 bills were introduced (twelve fewer than the 2004 session). Some say the reason for the early finish was legislative leadership’s restraint in handing out late bills. In the end, it translated into two additional days of freedom from legislation.

The Big Compromise on TABOR Reform

In a somewhat startling announcement, Governor Bill Owens and the legislature reached an accord to support a statutory measure that will go to the voters in November to address certain parts of the TABOR Amendment. Governor Owens joined legislative leaders in mid-March in endorsing the Colorado Economic Recovery Act, a proposal to restore state services to close to their pre-recessionary levels. House Bill ("H.B.") 05-1194 is entitled "Stable Means of Funding Budgetary Needs." This bipartisan agreement brought an end to several months of often-testy negotiations between the first (Governor) and second floors (House and Senate leadership) of the State Capitol.

November 2005 Election and Campaign

The CBA is taking an active role in the campaign for the passage of two referred measures. Some of the important provisions are listed below. Updates and suggestions on how you can get involved will be forthcoming as the launch of the campaign for votes grows near.

Referendum C

• Allows state government to keep and spend all revenues collected from existing state taxes for the next five years

• Sets a new revenue cap at the highest level of state tax revenue reached between now and 2011

• Allows the state to keep and spend revenues up to that new limit, and adjusts the limit upward for population growth and inflation from that year on

• Requires extra revenues kept under the new cap to be spent for the following: health care; public schools and state colleges and universities; and transportation projects

• Beginning in 2011, adds another $100 million a year to the new state revenue cap, if voters approve Referendum D (see below); tax revenues would cover bond payments for the Referendum D spending plan

• Requires legislative staff to post on the state website an annual report on the amount of revenues retained and how they were spent.

Referendum D

Referendum D is the companion piece that will join Referendum C on the ballot in November. It would do the following:

• Authorize the state to issue up to $2.07 billion in new multi-year bonds to speed up funding statewide for:

1) roads, bridges, and other strategic transportation projects: up to $1.7 billion;

2) pension funds for firefighters and police officers: up to $175 million;

3) crucial repairs and maintenance in public school buildings, meeting the state’s obligation in the settlement of a lawsuit: up to $147 million; and

4) repairs at state university, college, and community college buildings: up to $50 million

• Depending on voter approval of Referendum C, cover the bond payments by adding an extra $100 million a year to the new state revenue limit

• Take effect only if Colorado voters also approve Referendum C.

2005 CBA-Sponsored Legislation

A few highlights of the bills sponsored by the CBA are presented below. More detailed information will be published in the "Legislative Update" in the August 2005 issue of The Colorado Lawyer.

H.B. 1017—Conform State Medicaid
To Federal Referral Laws

Written by the CBA Health Law Section, this technical act eliminates the differences between the federal law and the Colorado Medicaid Statute with respect to hospitals, physicians, and other health-care providers participating in Colorado’s Medicaid Program. Prior to the enactment of the bill, the Colorado Medicaid Statute did not track federal statutes and regulations regarding permissible and impermissible activities and relationships by health-care providers participating in Colorado’s Medicaid Program.

Numerous inconsistencies that existed between the Colorado Medicaid Statute and federal law created two different regulatory systems that hospitals, physicians, and other health-care providers (and other entities that provide "designated health services") must follow. These inconsistencies unnecessarily complicate legal compliance and administration, thus adding to the cost of providing health care to Colorado residents. The new bill reconciles those inconsistencies and was effective on the day the Governor signed it into law: April 7, 2005.

H.B. 1149—Corporate Delinquency
Instead of Administrative Dissolution

Present law provides that corporations, nonprofit corporations, limited liability companies, and cooperatives are administratively dissolved if they fail to file annual reports with the Secretary of State or maintain a registered agent. Administrative dissolution causes an entity to lose its statutory authority to carry on its business in the ordinary course. Dissolution is often an event of default under leases, loan agreements, and the like. The CBA Business Law Section identified this problem and put together a solution. The new act deletes the administrative dissolution provisions from CRS Title 7 and replaces them with provisions in Article 90 that will cause an entity to be declared delinquent if it fails to file annual reports with the Secretary of State or maintain a registered agent.

A delinquent entity may still carry on its business, but may not maintain an action in any Colorado court to collect its debts, unless it cures its delinquency. A delinquent entity may cure its delinquency at any time by correcting the ground for its being declared delinquent. The new delinquency provisions will also be applied to foreign entities in lieu of the present system of revoking their statements of foreign entity authority. The act also:

1) centralizes provisions in Article 90, relating to the dissolution of an entity because of the expiration of its term;

2) provides for consistent usage of the term "operating agreement" in the Colorado Limited Liability Company Act;

3) makes changes to further facilitate the Secretary of State’s online filing system; and

4) makes conforming changes.

The bill becomes effective on October 1, 2005, to provide time for necessary changes to the Secretary of State’s electronic filing system.

SCR 008—Recall of Justices and Judges

Although the 2005 session did have some variety, there was one consistent effort regarding the judiciary that is worth mentioning. Senate Concurrent Resolution ("SCR") 008 would have sent a referred question to voters in November 2006 to ask them to approve a constitutional amendment that would prescribe a procedure to recall a Supreme Court justice or Colorado judge. Because the proposal was a concurrent resolution, it needed a two-thirds majority in both houses to go to the voters. The Senate State, Veterans, and Military Committee heard testimony on the proposal on April 27. Only the prime sponsor testified in support; he said the resolution would create a recall procedure for the Judicial Branch, and provide "accountability" to the current system.

Cathy Hazouri ("ACLU"), Jerry Marroney (State Court Administrator), Denver District Court Judge Cathy Lemon, and CBA President Steve Briggs testified in opposition. Their testimony was a chorus of the need to maintain the independence of the judiciary and that a process for recall would have a chilling effect on that independence. The legislative committee defeated the proposal by a 4–3 vote.

Judicial Branch Budget Update

• The legislature approved six district court judges and the accompanying staff. This is the third installment of the twenty-four judgeships approved in 2001 in H.B. 01-1075. The districts slated for the new judges are: 4th J.D., El Paso and Teller Counties; 7th J.D., Delta, Gunnison, Hinsdale, Montrose, Ouray, and San Miguel Counties; 17th J.D., Adams and Broomfield Counties; 18th J.D., Arapahoe, Douglas, Elbert, and Lincoln Counties; 19th J.D., Weld County; and 20th J.D., Boulder County. The CBA is hopeful that the final allocation of judgeships will be delivered in the next legislative session.

• The legislature returned probation officer staffing to the 2003 Fiscal Year level by adding forty officers and supporting staff. A total of 56.1 staff members were added in the budget process; however, the increase in probation officers and staff members does not include the needs occasioned by caseload growth.

• The legislature approved $1.4 million for much-needed courthouse furnishings. The original request by State Judicial was for $2 million. However, because funds in this line item had been zeroed out since the 2003 budget, the $1.4 million allocation looks pretty good.

• The Joint Budget Committee ("JBC") recommended and the legislature approved adding a full-time Interstate Compact Coordinator.

• State Judicial made a request for an additional $1.2 million for a court-appointed counsel rate increase, but it was not approved by the legislature. However, the JBC will keep close tabs on this issue and will most likely look favorably on an increase to the rate if state spending caps are relaxed.

• The legislature returned the General Fund appropriation for the Family Violence Justice Fund in the amount of the 2003 fiscal-year levels—$500,000! (The funds for legal services for victims of family violence had been axed by the legislature in last year’s budget as a savings measure.)

• Overall, the Judicial Branch was approved for ninety-three new employees and will see an increase of $6.7 million to the budget, which is a $6.87 percent increase over last year. Although this looks promising, let’s not forget that these gains put us back to where we should have been two years ago.

If you need to know something in the state legislative arena in advance of the August issue of The Colorado Lawyer, do not hesitate to contact Michael Valdez at the Bar Association offices: (303) 824-5309 or (800) 332-6736; e-mail: He will do his best to assist you.

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