by Duane Gall and Patti Dahlberg

Colorado may have been born out of the Wild West, but when the good citizens of the state approved the original state constitution in 1876, they wanted no part of any “lotteries or gift enterprises for any purpose.” Article XVIII, section 2 of the Colorado Constitution of 1876 required the General Assembly to pass laws prohibiting the sale of lottery or gift enterprise tickets in the state.

Since that time, the state has softened its stance on lotteries and “gift enterprises”, and this November 2, the voters will have the opportunity to loosen the restrictions on charitable gaming even more when they vote on Amendment C.

Evolution of charitable gaming in Colorado.

In 1958, some citizens circulated a petition to put an initiative on the ballot to amend article XVIII, section 2 to permit the operation of certain games of chance by nonprofit organizations as a way to raise funds to support their charitable activities. Under that exception, the Secretary of State could license nonprofit organizations that had operated continuously in Colorado for at least five years to conduct raffles or bingo games. The organizations had to meet three specific conditions: (1) The proceeds of a game had to be exclusively devoted to the purposes of the nonprofit organization conducting the game; (2) Only members of the organization could be involved in managing and operating the game; and (3) The organization could not pay bingo or raffle managers or workers any wages.  The voters approved the amendment 51% to 49%. These provisions remain in place today.[1]

Since article XVIII, section 2 was last amended, Colorado voters have legalized several gambling options in addition to those involving charities. In 1980, voters approved state-run lotteries; in 1990, they approved limited gaming in casinos in three areas of the state; and just last year, they approved sports betting in Colorado. As the gambling market has grown more crowded since 1958, it’s likely the market share enjoyed by charitable gaming has dwindled significantly.

Changes proposed by Amendment C

Amendment C offers Colorado voters the first chance to change article XVIII, section 2 in almost 40 years. On June 15, the last day of the 2020 legislative session, the General Assembly adopted House Concurrent Resolution 20-1001, which places Amendment C on the ballot.

As explained in the 2020 Bluebook, Amendment C:

• Decreases from five to three the number of years that a nonprofit organization must operate in Colorado to qualify for a bingo-raffle license. The measure further authorizes the General Assembly, after January 1, 2024, to change the years of operation by enacting a statute. Thus, future changes to the required number of operating years would not require a constitutional amendment and so would not be subject to a statewide vote.
• Eliminates the requirement that persons who manage or work a raffle or bingo game be members of the nonprofit organization that hosts the game; and
• Permits people who manage or operate raffles and bingo games to receive compensation, such as meals or payment. But the compensation paid to these managers and operators cannot exceed the minimum wage.

Amendment C is a constitutional amendment that does more than just repeal existing language. As such, under article XIX, section 2 (1)(b) of the Colorado Constitution, the amendment requires a 55% majority vote to pass.

2020 State Ballot Information Booklet, Legislative Council of the Colorado General Assembly, Research Publication No. 748-1.

 

Visit the General Assembly’s website for more information on the initiative process and for a history of election results for ballot issues.

 

For more information on the ballot measure process, see:

• https://legisource.net/2020/09/02/legislative-council-staff-wraps-up-the-2020-blue-book/
• https://legisource.net/2012/08/23/the-power-of-the-people-reservation-of-the-initiative-and-referendum-powers/
• https://legisource.net/2018/10/11/an-introduction-to-initiatives/ and https://legisource.net/2018/10/19/an-introduction-to-initiatives-continued/

 

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[1] Art. XVIII, section 2 of the Colorado Constitution was amended again in 1980 to authorize the General Assembly to establish state-supervised lotteries, some of the proceeds of which go to municipalities and counties for park, recreation, and open space purposes. That amendment passed by a whopping 59.8% to 40.2%.

 

by Ed DeCecco

The year was 1982. Michael Jackson released Thriller, ET was phoning home and charming audiences the world over, and the Denver Broncos finished last in the AFC West. More notably for Colorado taxpayers, voters also approved Amendment 1, which was passed by the General Assembly as House Concurrent Resolution No. 1005.

Amendment 1 was a constitutional amendment and it was first. (Note: My editor has informed me that wasn’t quite enough backstory.) Amendment 1 was a comprehensive restructuring of article X, section 3 of the Colorado Constitution that made a number of changes to the property tax system. Prior to its introduction, a Citizen’s Panel reviewed and made recommendations for changing the property tax system, and then a House Ad Hoc Committee synthesized those recommendations into a concurrent resolution. Amendment 1 exempted some properties; established penalties for counties that failed to value property correctly; made a number of changes to the State Board of Equalization; and last but not least, amended how actual property value is determined and how property is valued for assessment.

Now, if you are a county assessor, you would read this last item and think to yourself “Everyone knows how to value and assess property. On with it, you buffoon!” But for everyone else, a brief explanation of the property tax system is probably helpful. First, the actual value of property is determined for each assessment cycle, which for most property begins every odd-numbered year. The assessed valuation of the property is then determined by multiplying the actual value by the applicable assessment rate. Finally, the assessed valuation is multiplied by a local government’s mill levy, which is the property tax rate expressed in one one-thousandths, to determine the amount of tax owed.

Prior to Amendment 1, the assessment rates were fixed in statute at 30% for residential and nonresidential property, although there were also a number of subclasses of property that had lower assessment rates established in law. With the exception of producing mines and lands or leaseholds producing oil or gas, Amendment 1 required nonresidential property to be assessed at 29% of its actual value, and residential property to be initially assessed at 21% of its actual value.

But as a result of the conference committee report for House Concurrent Resolution No. 1005 that both chambers adopted, article X, section 3 (1)(b) of the Colorado Constitution requires the General Assembly to determine the percentage of aggregate statewide assessed property that is attributable to residential real property for the 1985 property tax year and to recalculate that percentage each year thereafter based on certain adjustments (called the “target percentage” in statute).[1] Each property tax year when there is a change in the level of value, which is the biennial reassessment cycle, the General Assembly must adjust the residential assessment rate with the goal of keeping the target percentage the same as it was in the year immediately preceding the new assessment cycle. You probably know this provision by its common moniker—the Gallagher Amendment.[2]

As a result of the Gallagher Amendment, the residential assessment rate has over time declined to 18%, 16%, 15%, 14.34%, 12.86%, 10.36%, 9.74%, 7.96%, 7.2%,[3] and finally to its current level of 7.15%. Those percentages remind me of the scores on my last 10 German tests in high school. And just as my scores alarmed my high school German teacher and parents, this trend of lowering residential assessment rates caught the attention of the General Assembly. Thus, it convened the Alternatives to the Gallagher Amendment Interim Study Committee during the interim after the 2018 legislative session. As part of this committee, the legislators heard testimony about the declining residential assessment rate and the effect on local governments and, as its name suggested, considered alternatives to the Gallagher Amendment.

While no proposals passed in 2018 as a result of the interim committee, perhaps a seed was planted, as two committee members—Senator Jack Tate, Arapahoe County, and Representative Daneya Esgar, Pueblo County—were prime sponsors of Senate Concurrent Resolution 20-001. Senate Concurrent Resolution 20-001. And if that happens, the assessment rates will remain constant—7.15% for residential property and 29% for nonresidential property—by operation of the existing statutory provisions. So if Amendment B passes, the state will be back where it started prior to the election in 1982. The assessment rates will be set in statute, and the Broncos will likely finish in last place again.[4]

 

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[1] This is often described as a 45%/55% split, which describes the first ratio of aggregate statewide valuation of assessment attributable to residential property to the aggregate statewide valuation of assessment attributable to nonresidential property, but the actual target percentage often varies a percentage point or two from 45%.

[2] No, it is not named after the 70s prop comedian known for smashing watermelons with oversized hammers, but rather for Dennis Gallagher, the legislator and later City and County of Denver Councilperson and Auditor, who championed the provision as a state Senator.

[3] These decreases were not in successive years. Sometimes the residential assessment rate stayed constant.

[4] For more information about Amendment B, see the Blue Book at http://leg.colorado.gov/sites/default/files/blue_book_english_for_web_2020_1.pdf

by Bob Lackner

During every presidential election, millions of Americans cast a ballot for a presidential candidate. Those votes, however, are actually cast not for the presidential candidates themselves, but for a slate of presidential electors: Members of the Electoral College, who actually select the President of the United States. From the first days of the Republic, the Electoral College has been a controversial mechanism for electing the president. The fact that in the past 20 years, there have been two elections (in 2000 and 2016) in which the winner of the national popular vote did not obtain a majority of votes in the Electoral College has helped fuel the controversy. This continuing debate over the continued utility of the Electoral College has led people to consider alternatives. One alternative that is before the voters of Colorado this year is the National Popular Vote Compact (Compact). Voters have the opportunity to support or oppose the Compact by voting on Proposition 113.

The issue of determining how to select the nation’s chief executive was described as the most difficult of all the issues the Constitutional Convention had to decide.[1] The Electoral College emerged as an 11^th hour compromise.[2] The United States Constitution specifies that each state has a number of presidential electors (or members of the Electoral College) equal to the whole number of its senators and representatives in Congress.[3] Colorado has two senators and currently seven representatives, which means our state has a total of nine electoral votes. The full membership of the Electoral College is 538 electors, representing 100 senators, 435 members of the House, and three electors from the District of Columbia.

Currently, individual voters in all the states and the District of Columbia vote for a ticket consisting of a presidential and vice presidential candidate. The tally of individual votes is known as the popular vote. With the exception of Maine and Nebraska, every state appoints a slate of presidential electors selected by the political party whose candidate wins the state’s popular vote in the general election.[4] In this manner, for all but those two states, the Electoral College operates as a winner-take-all system in which the winner of the statewide popular vote receives all of that state’s Electoral College votes.

Each December, after a presidential election, the presidential electors meet (typically in their state capitols) to cast their votes to elect the president and vice president. A candidate must receive at least 270 Electoral College votes to be elected president. If no candidate receives enough votes, the House of Representatives chooses the president and the Senate selects the vice president, although this scenario has not occurred since 1824. There have been five elections in the United States in which the winner of the national popular vote was not the winner of the Electoral College vote.[5]

The idea of the Compact came from those supporting direct election of the president or who otherwise object to the Electoral College. Essentially, the Compact is an agreement among participating states to ensure that the presidential candidate who receives the most votes nationwide is elected president. Under the Compact, each member state designates the presidential slate with the largest national popular vote total as the “national popular vote winner” for that state. Once the Compact goes into effect, a participating state commits to awarding all of its electoral votes to the national popular vote winner.[6] This would mean, for example, that if the voters of Colorado give a majority of their votes to Candidate A but Candidate B is the winner of the national popular vote, all of Colorado’s electoral votes would be awarded to Candidate B, the national popular vote winner, notwithstanding the fact that Candidate B did not win the statewide popular vote in Colorado. Under the current system, by comparison, the candidate who wins a majority of Colorado’s votes gets all of Colorado’s votes in the Electoral College – regardless of how well that candidate performs nationally.

The Compact ensures that the candidate who wins the most nationwide votes also wins a majority of the votes in the Electoral College, since a majority of electoral votes will be automatically awarded to the winner of the national popular vote. In this way, the Compact will preclude future controversies in which the winner of the national popular vote is not the candidate who wins a majority of the votes in the Electoral College.

By its terms, the Compact takes effect on July 20 of any presidential election year in which states representing 270 or more electoral votes have enacted the Compact. If Proposition 113 passes, the Compact will include 15 states and the District of Columbia, representing 196 electoral votes. This is 74 votes short of the 270 electoral votes necessary for the agreement to take effect. Because the Compact was not in effect as of July 20, 2020, it will not apply to the 2020 presidential election, which means that it can take effect no earlier than the 2024 presidential election. Until the Compact becomes law, Colorado will continue to award its Electoral College votes to the winner of the state’s popular vote.

The Compact is designed to implement what amounts to direct election of the president without having to formally amend the U.S. Constitution to eliminate the Electoral College. Getting states representing 270 electoral votes to enact the Compact is arguably much easier than undertaking the arduous and time-consuming process of amending the Constitution.

In 2019, during the regular legislative session of the General Assembly, the General Assembly passed, and the Governor signed into law, Senate Bill 19-042. The bill makes Colorado a party to the Compact. After the bill was passed, opponents initiated a referendum petition as allowed in article V, section 3 of the Colorado Constitution. The text of Proposition 113 consists of the full text of Senate Bill 19-042.

A “yes” vote on Proposition 113 is a vote to approve Senate Bill 19-042 and award all of Colorado’s electoral votes in presidential elections to the winner of the national popular vote once the Compact takes effect. A “no” vote on Proposition 113 is a vote to reject Senate Bill 19-042 and retain the current system of awarding the state’s Electoral College votes to the candidate who wins the Colorado popular vote.[7]

 

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[1] Chiafalo v. Washington, No. 19-465, slip. op. at 2 (U.S. July 6, 2020)

[2] Id.

[3] Article II, §1, Cl. 1. The number of members of the U.S. House of Representatives that is allocated to a state is based on the total population of the state as adjusted after the last census.

[4] In Maine and Nebraska, the candidate who wins the popular vote in each congressional district get the electoral vote for that district and the remaining two electoral votes go to the candidate who wins the statewide popular vote.

[5] As noted above, this has happened twice in the past 20 years (2000 and 2016) while the other three instances occurred in the 1800s. Such an event did not happen between the 1888 and 2000 presidential elections.

[6] Most of the substantive provisions of the Compact are contained in Article III. That article specifies in relevant part that “[t]he presidential elector certifying official of each member state shall certify the appointment in that official’s own state of the elector slate nominated in that state in association with the national popular vote winner.” Most of the other provisions contained in the Compact address requirements that are more of a procedural and administrative nature.

[7] The author wishes to acknowledge reliance on the 2020 State Ballot Information Book, Legislative Council of the Colorado General Assembly, Research Publication No. 748-1A (“Blue Book”) for general background relating to the Electoral College and the Compact as part of the Blue Book’s discussion of Proposition 113 on the 2020 general election ballot.

by Julie Pelegrin

This year’s statewide ballot promises to be action-packed with initiatives and referred measures—11 in all. But only one of the ballot measures is actually historic: Proposition 113 (aka Senate Bill 19-042), an act concerning adoption of an agreement among the states to elect the President of the United States by national popular vote. It’s not historic because of its content (although changing how we elect presidents and vice presidents would arguably be significant), it’s historic because of the path it took to get on the ballot.

Long-time LegiSource readers will remember that in 1911, the people of Colorado amended article V, section 1 of the state constitution to reserve to themselves the power of referendum. This means that, if a bill passes without a safety clause, an individual may collect signatures[1] on a petition to place all or a portion of the bill on the ballot for voter approval. Senate Bill 19-042 passed February 21, 2019, without a safety clause. The governor signed the bill, and by August 1, 2019, two citizens submitted a petition to the Secretary of State’s office with enough signatures to put the entire act on the ballot. The last time the people referred an act to the ballot was 1931—and therein lies a tale.

The Twenty-eighth Colorado General Assembly convened its regular legislative session Wednesday, January 7, 1931. The state and the nation were still in the early years of what’s now known as the Great Depression. About a week into the session, Representative Joe Plummer, a farmer representing Morgan and Washington counties, introduced House Bill 10 (HB10), “A Bill for an Act Regulating the Manufacturing, Selling, Handling or Dealing in Oleomargarine, Imitation or Filled Cheese, or Any Substitute for Any Dairy Products, Requiring Licenses Therefor, ….”

These days the concept of “oleomargarine” requires some explanation. Margarine was created in France in 1869. Emperor Louis Napoleon III offered a prize to whomever could invent a “cheap edible fat” to feed the military and the lower classes. Although it started as a mix of animal fats, by the early 20^th century, oleomargarine was mainly made from vegetable oils (oleo comes from the Latin oleum, “oil”) and soon it was widely available as a low-cost alternative to butter. And that caught the attention of the dairy industry.

The industry supported several state and federal laws against oleomargarine, mainly to tax it and prohibit the addition of coloring. (Oleomargarine is naturally colored an unappetizing white; margarine comes from the Greek word for “pearl.”) HB10 as introduced would have made selling oleomargarine without a license unlawful, and the licensing fees weren’t cheap. The bill also prohibited making or selling oleomargarine that was colored and flavored in imitation of real butter. According to Western Farm Life magazine, the “obvious” object of the bill was to “benefit and protect the dairy farmer,” and the magazine urged the agricultural interests of the state to support the bill by writing to their legislators.[2]

But not everyone was so pleased. According to the Steamboat Pilot, the bill ignited a “vigorous fight” between the range cattlemen and dairy cattlemen. The oleomargarine made in Colorado included beef tallow. The range cattlemen claimed the licensing requirements would reduce the market for oleomargarine, and thus tallow, thereby reducing the price of cattle by about six dollars per head.[3]

Despite the vigorous fight, the bill enjoyed a pretty smooth ride in the House. HB10 passed on third reading February 24 with 52 aye votes. Fifty members of the House then voted to add a safety clause.[4]

The ride was much bumpier in the Senate. First, the bill stalled in committee for over a month. When a motion to move the bill out of committee was tabled, one newspaper columnist reported, “That just about kills it.”[5] Eventually a deal was cut, and on April 2, the committee recommended the bill to the Committee of the Whole with significant amendments, including adding an excise tax on oleomargarine of 15 cents per pound. The Committee of the Whole rejected the committee report and instead adopted an amendment replacing the text of the entire bill, retaining the 15 cent tax, but exempting oleomargarine that contained more than 30% of animal fats. The bill weathered several additional attempts to amend and kill the bill, finally passing third reading in the Senate with 28 ayes. But the safety clause was removed.

The House promptly rejected the Senate amendments. The conference committee again rewrote the entire bill, and both houses finally passed the bill on the last day of session. In its final form, the bill, included a 15 cent per pound tax on oleomargarine containing less than 45% animal fat, required manufacturers and wholesalers to pay an annual $25 license fee, required restaurants that served oleomargarine to post a sign to that effect, and did not have a safety clause.

But all was not well. According to some news reports, the “nut oil interests” (the other oil used in oleomargarine) were not happy about the tax.[6] But one columnist continued to claim that it was the dairy farmers and cattlemen who were still at odds.[7] By July 22, the citizens had referred HB10 to the ballot. And, despite endorsements by several agricultural interests and recommendations for passage in several rural newspapers, HB10 failed with 217,671 no votes to 134,313 yes votes.

And one would think that was the end of it. But it wasn’t.

About two weeks after the Twenty-ninth General Assembly convened in January 1933, Representative Joe Jankovsky[8] introduced House Bill 337 (HB337), “A Bill for an Act Defining Oleomargarine and Relating to the Sale and Distribution Thereof and Providing for an Excise Tax Thereon.”[9] Before it passed the Senate, at least one newspaper editorial referred to the General Assembly’s action on the bill as “discouraging and disgusting.” The editorial went on to ask, “How in the world can we have decent, efficient government when legislators, elected to represent the people turn right around and deliberately do the thing the people have said shall not be done.”[10]

HB337 as introduced looked a lot like HB10, but by the time it passed there were three important differences: 1) The excise tax was reduced to ten cents per pound; 2) the tax exemption applied to oleomargarine made from any of a variety of listed fats (all of which appear to be domestic in origin); and 3) the bill had a safety clause. And the final interesting twist to this story: The only reference in the journals to a vote on the safety clause is in the House, where it failed. There is no other indication in the House or Senate Journals that the safety clause was approved by a two-thirds vote, which appears to have been the practice at the time.

So, November 3, 2020, Colorado voters will decide the fate of Senate Bill 19-042. If the measure fails at the ballot, history demonstrates that the question of Colorado’s participation in the national popular vote compact could be revived for consideration by a later General Assembly.

 

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[1] This year the minimum required number of signatures is 124,632.

[2] “Legislation in Interest of Farmers,” The Western Farm Life (for Irrigation, High Altitude, Plains Farmers), as reproduced in the Record Journal of Douglas County, February 20, 1931.

[3] Alva A. Swain, Under the Capitol Dome, the Steamboat Pilot, February 6, 1931.

[4] Based on a review of the House and Senate journals from that time, it appears that once a bill passed third reading, the body – House or Senate – would consider a motion to add a safety clause to a bill. The motion required at least a two-thirds majority to pass.

[5] Alva A. Swain, Under the Capitol Dome, the Steamboat Pilot, March 27, 1931.

[6] “Dairy Interests Contend Margarine Bill Should Pass,” the Independent, Vol. XLV, No. 48, Oct. 28, 1932.

[7] Alva A. Swain, Under the Capitol Dome, the Wray Gazette, Vol. 30, No. 42, Oct. 13, 1932.

[8] Rep. Plummer was not reelected in 1932.

[9] The final title of HB10 was “An Act Defining Oleomargarine and Relating to the Sale thereof and Providing for an Excise Tax Thereon.”

[10] Oak Creek Times, reprinting from the Lamar Register, page 4, March 30, 1933.