STATE OF COLORADO

Colorado General Assembly

Natalie Castle, Director

Legislative Council Staff

Colorado Legislative Council

200 E. Colfax Ave., Room 029

Denver, Colorado 80203-1716

Telephone 303-866-3521

Facsimile 303-866-3855

Email: [email protected]

Ed DeCecco, Director

Office of Legislative Legal Services

200 E. Colfax Ave., Room 091

Denver, Colorado 80203-1716

Telephone 303-866-2045

Email: olls.ga@coleg.gov

MEMORANDUM

TO: Steven Ward and Suzanne Taheri

FROM: Legislative Council Staff and Office of Legislative Legal Services

DATE: March 27, 2024

SUBJECT: Proposed initiative measure #259, concerning voter approval of legislation

with a negative effect on the gross domestic product of the state.

Section 1-40-105 (1), Colorado Revised Statutes, requires the directors of the Colorado

Legislative Council and the Office of Legislative Legal Services to "review and

comment" on initiative petitions for proposed laws and amendments to the Colorado

constitution. We hereby submit our comments to you regarding the appended

proposed initiative.

The purpose of this statutory requirement of the directors of Legislative Council and

the Office of Legislative Legal Services is to provide comments intended to aid

proponents in determining the language of their proposal and to avail the public of

knowledge of the contents of the proposal. Our first objective is to be sure we

understand your intent and your objective in proposing the amendment. We hope that

the statements and questions contained in this memorandum will provide a basis for

discussion and understanding of the proposal.

Purposes

The major purposes of the proposed amendment to the Colorado Revised Statutes

appear to be to:

1. Require voter approval of any legislation with a projected negative economic

impact to the state's "gross domestic product" ("GDP") greater than $100

million during the first five fiscal years after the legislation's enactment;

S:\PUBLIC\Ballot\2023-2024cycle\Review and Comment Memos\2023-2024 #259.docx

2. Allow any person, within five days of the passage of such legislation, to submit

to the chief economist of the General Assembly an economic impact statement

utilizing dynamic modeling to determine the legislation's impact on the state's

GDP;

3. Require the state chief economist to review any submitted economic impact

statement to determine whether the statement accurately models the impacts

of the legislation and determine the validity of its assumptions;

4. Provide that the district court has jurisdiction to hear a challenge regarding the

state chief economist's determination about the qualification of an economic

impact statement, and

5. Require the director of legislative council to certify the ballot content to the

secretary of state.

Substantive Comments and Questions

The substance of the proposed initiative raises the following comments and questions:

1. Article V, section 1 (5.5) of the Colorado constitution requires all proposed

initiatives to have a single subject. What is the single subject of the proposed

initiative?

2. Subsection (1) of the proposed initiative requires that "any legislation with a

projected negative economic impact to the state [GDP] of over $100 million in

the first five fiscal years must be approved at a statewide general election." This

provision of subsection (1) raises the following questions:

a. What does the term "legislation" mean? Does it include all legislation

that has been enacted by the General Assembly, and then either signed

by the Governor or allowed to become law without the Governor's

signature?

b. Does “legislation” include initiated measures? Will proponents of

initiated measures be required to use the ballot language prescribed in

subsection (1) of the proposed initiative when an initiated measure is

anticipated to have a negative economic impact of over $100 million in

the first five fiscal years? Is an initiated measure required to have an

economic impact statement if it is projected to have a negative economic

impact to the state GDP of over $100 million in the first five fiscal years?

S:\PUBLIC\Ballot\2023-2024cycle\Review and Comment Memos\2023-2024 #259.docx

c. What is “state gross domestic product”? Is this the same as the estimated

value of current-dollar gross domestic product by the state published by

the U.S. Bureau of Economic Analysis?

d. Legislation that accelerates inflation would increase current-dollar gross

domestic product, while legislation that decelerates inflation would

reduce current-dollar gross domestic product. Have the proponents

considered this effect?

e. Is the economic impact measured as an amount that is net of negative

and positive economic impacts or is the calculation based only on the

negative impact?

f. The U.S. Bureau of Economic Analysis estimates state gross domestic

product on a calendar year basis, annual basis, and quarterly basis. There

is no estimate of state gross domestic product that is produced on a state

fiscal year basis. How will an economist determine the amount by which

legislation will increase or decrease state gross domestic product on a

state fiscal year basis when there is no baseline estimate to which the

effects of legislation may be compared?

g. Legislation may be enacted in one fiscal year but become effective in

another fiscal year. Legislation may also be effective in one fiscal year

but is applicable in yet another fiscal year. When do the "first five fiscal

years" begin?

h. There is no published projection of state gross domestic product for five

future state fiscal years. What baseline amount should be assumed when

calculating increases or decreases in state gross domestic product?

i. Assume that state gross domestic product is expected to increase over

the next five fiscal years. If legislation reduces the amount by which

state gross domestic product is expected to increase, rather than causing

an expectation that gross state domestic product decrease over the five-

year period, does the voter approval requirement in the measure apply?

Is the ballot language accurate in this case?

j. If legislation is expected to decrease state gross domestic product in the

first two years by $100 million in each year and increase state gross

domestic product in the next three years by $100 million in each year,

does the voter approval requirement in the measure apply? Is the ballot

language accurate in this case?

S:\PUBLIC\Ballot\2023-2024cycle\Review and Comment Memos\2023-2024 #259.docx

3. Subsection (1) of the proposed initiative requires legislation with an impact to

state GDP of over $100 million to be approved at a "statewide general

election." Subsection (6) requires the legislation to be adopted at the "next

regular biennial election." Is the intent to reference the same type of election? If

so, consider using the same terminology throughout the proposed initiative.

4. What does “must be approved” mean in subsection (1) of the proposed

initiative? What if a majority of voters vote against the referred legislation?

5. Subsection (1) of the proposed initiative requires the ballot title for the

measures referred to the people to be set as "Shall the state economy be reduced

[full dollar amount for the first five fiscal years] in its first five years by the

adoption of [insert bill title]? To what does "its" refer?

6. Is the bill title to be inserted the full-form ballot title, including any trailer or

trailers?

7. Subsection (2) of the proposed initiative provides that legislation passed

"simultaneously or within the five preceding years that relate to a single or

similar subject shall be aggregated in calculating the applicability of this

section." Subsection (2) raises the following questions:

a. What does it mean to pass legislation "simultaneously"?

Do several measures need to be passed, signed, or become

effective at the exact same time?

b. When does the "five preceding years" begin? Does it begin when the

legislation is passed, signed, or becomes effective? Is the intent for the

examination period to be retroactive to before January 1, 2025?

c. What does it mean for legislation to "relate to a single subject"?

d. How will it be determined whether legislation has a "single" or "similar"

subject?

e. Is it contemplated that more than one piece of legislation will be

considered in the five-year examination period?

f. If the General Assembly enacts a bill that will have a negative economic

impact of $50 million in the first five fiscal years, it would not be subject

to the requirements of the proposed initiative. If the General Assembly

enacts another bill the next year that relates to a similar subject and that

also will have a negative economic impact of $50 million in the first five

S:\PUBLIC\Ballot\2023-2024cycle\Review and Comment Memos\2023-2024 #259.docx

fiscal years, what is the status of the first bill? Would the second bill be

subject to the requirements of the proposed initiative?

8. Subsection (3) of the proposed initiative provides that a person may submit an

economic impact statement within five days of "passage of legislation". This

provision of subsection (3) raises the following questions:

a. What does "passage" mean? Does it mean when both houses of the

General Assembly have adopted the legislation, when the Governor

signs the legislation, or upon expiration of the petition period?

b. How would this provision apply to legislation that the Governor does

not sign?

c. What does "legislation" mean? Is it any legislation subject to the

economic impact statement?

d. When is "within (five) days of the passage of legislation"?

9. At the time when legislation is being considered, the General Assembly will not

know whether the voter approval requirement applies. For example, legislation

considered during an odd-numbered year could implicate the budget for the

fiscal year that begins on July 1 of the odd-numbered year; however, application

of the voter approval requirement could cause the legislation not to take effect

until sometime during the fiscal year that begins on July 1 of the immediately

subsequent even-numbered year. This could cause the budget not to be balanced

for the fiscal year that begins on July 1 of the odd-numbered year in cases

where the legislation is being relied upon to balance the budget. Have the

proponents considered this potential consequence of the proposed initiative?

10. Does the measure apply to the long bill and the school finance act? What

happens if these constitutionally-required legislative items do not take effect

before commencement of the fiscal year for which they apply? What happens if

the long bill or the school finance act are not approved by the voters?

11. The General Assembly does not have a chief economist independent of the

chief economist of the Legislative Council Staff. Is the intent to reference the

chief economist of the Legislative Council Staff ? Regardless, consider using

consistent terminology in subsections (3), (5), and (7) of the proposed initiative.

12. May the chief economist designate someone else to review economic impact

statements for compliance with the requirements in the proposed initiative?

S:\PUBLIC\Ballot\2023-2024cycle\Review and Comment Memos\2023-2024 #259.docx

13. Subsection (3)(a) of the proposed initiative provides that a "qualifying

economic impact statement must utilize dynamic modeling." Subsection (3)(a)

raises the following questions:

a. What is “dynamic modeling”?

b. Commercially available dynamic models are often proprietary. How

would the chief economist verify that an economic impact statement

uses dynamic modeling, if the model itself cannot be provided because it

is proprietary?

c. Is there a difference between an "economic impact statement,' as

referenced in subsections (3) and (3)(b) of the proposed initiative, and a

"qualifying economic impact statement", referenced in subsection (3)(a)?

If not, consider using consistent terminology.

d. States that have used dynamic modeling to estimate the economic

impacts of legislation have found that policy changes generally result in

smaller dynamic impacts than expected. This may be because dynamic

models used to estimate the effects of a program fail to capture

opportunity costs, i.e., the way in which money used for a program

would otherwise be used in the program's absence. The proposed

initiative does not include any requirement that a dynamic model

account for opportunity costs, out-of-state leakages, or other common

sources of estimation error. Is it the proponents’ intent that the analyses

submitted pursuant to subsection (3)(a) of the proposed initiative be

evaluated for methodological soundness or flaws?

e. Commercially available dynamic models are complex and rely on the

correct calibration of hundreds or thousands of assumptions in order to

produce accurate results. Does the proposed initiative allow for anyone

to ensure that the model is correctly calibrated? If it is determined that

the model is calibrated incorrectly, does the economic impact statement

still satisfy the qualifications in the proposed initiative?

14. Subsection (3)(b) of the proposed initiative provides that "If no person submits

an economic impact statement within [five] days of passage of legislation, then

this section shall not take effect until approved by the people." Subsection (3)(b)

raises the following questions:

a. Which section would not become effective until approved by the people?

S:\PUBLIC\Ballot\2023-2024cycle\Review and Comment Memos\2023-2024 #259.docx

b. As written, the proposed initiative appears to state that the section it

creates in statute, section 24-77-108.5, C.R.S., would not become

effective. This appears to be a technical error.

c. Is it the proponents' intent that if an economic impact statement is not

submitted for a newly enacted law, that the law will automatically be

subject to a vote of the people to be effective, regardless of the economic

impact of the law?

d. May anyone, including the General Assembly or Legislative Council

Staff, submit an economic impact statement?

e. What is the meaning of "approved"? Is the approval requirement a

simple majority of voters?

f. When does "passage of legislation" occur?

g. Does the proposed initiative require that an economic impact statement

be filed for every bill in order for the bill to become law, or is there a

trigger to determine when the economic impact statement is required for

a newly enacted law?

15. Subsection (4) of the proposed initiative requires the analysis in an economic

impact statement to be conducted by an "economist." This provision of

subsection (4) raises the following questions:

a. Who is an "economist" for purposes of the proposed initiative?

b. Who determines whether a person is an "economist" for purposes of the

proposed initiative?

16. Subsection (4) of the proposed initiative requires an "expert in the field" to

validate the economist's analysis in the economic impact statement.

a. What is the "field" in which the expert must have experience?

i. Is expertise in economics required?

ii. Is expertise in the subject matter of the legislation required?

b. What are the qualifications of an "expert" for purposes of the proposed

initiative?

c. What happens if the expert and the economist reach different

conclusions about the impact to the state's GDP? Which conclusion

takes precedence?

S:\PUBLIC\Ballot\2023-2024cycle\Review and Comment Memos\2023-2024 #259.docx

d. Who determines whether a person is an "expert in the field"?

e. Will the expert have access to the dynamic model used to prepare the

economic impact statement? If not, how will the expert be able to verify

its methodological soundness?

f. What happens if multiple "experts in the field" attempt to validate or

invalidate an economic impact statement?

g. When must an expert validate the economic impact statement after

passage of the legislation?

h. What happens if an economic impact statement is invalidated?

i. Who is responsible for having the economic impact statement validated

by an "expert in the field"?

j. Who is notified when an "expert in the field" validates or does not

validate an economic impact statement?

17. Subsection (5) provides that the state's chief economist shall review the

economic impact statements for compliance with subsections (3) and (4) of the

proposed initiative. Subsection (5) raises the following questions:

a. Is it correct to interpret proposed subsection (5) as requiring the chief

economist to determine that any economic impact statement is qualified

regardless of its methodological value, bias, or conclusions if: it was

submitted within 5 days of the passage of the legislation; it utilizes

dynamic modeling; it includes the effect on state GDP; it was performed

by an economist; and the assumptions used were reviewed and the

methodological soundness validated by an expert in the field?

b. What if the chief economist believes that the modeling or assumptions

used in preparing the economic impact statement are not

methodologically sound or otherwise disagrees with the finding in the

analysis?

c. What if the economic impact statement is determined to be not qualified

by the state's chief economist?

d. The language contemplates the possibility of multiple economic impact

statements. What guidance does the state's chief economist have about

how to resolve discrepancies between impact statements for the same

legislation?

S:\PUBLIC\Ballot\2023-2024cycle\Review and Comment Memos\2023-2024 #259.docx

e. If one economic impact statement anticipates a $200 million decrease in

state GDP, and three more economic impact statements each anticipate

a $200 million increase in state GDP, does the voter approval

requirement apply? Will the ballot question in subsection (1) of the

proposed initiative be accurate in this case?

18. Legislation very often includes an effective date clause. If, for example, a bill

passes during the 2025 session and includes a July 1, 2025, effective date, can

the proposed initiative stop the legislation from taking effect on that date, even

if an economic impact statement is later submitted that determines that the bill

would reduce state GDP by at least $100 million? If so, how does this work

legally? Why does the proposed initiative supersede a bill’s effective date clause?

19. Subsection (7) of the proposed initiative provides that "within three days of the

determination of the state chief economist any interested party not satisfied

with the determination may file a challenge in the district court." Subsection (5)

of the proposed initiative provides that the state's chief economist is charged

with determining whether an economic impact statement complies with

subsections (3) and (4) of the proposed initiative. These provisions of

subsection (7) raise the following questions:

a. Is the intent to provide a cause of action to challenge the state chief

economist's determination of whether the statement complies with these

subsections?

b. If a person disagrees with the amount of GDP impact, may that be

challenged?

c. What is the difference between an "interested party" and an uninterested

party?

d. Who may be a "party" to the challenge?

e. Who may be a defendant in the challenge?

f. How would one win a challenge and what are the consequences?

20. Subsection (7) of the proposed initiative requires the court to "conduct a

summary proceeding on the record" which "shall be concluded within ten days

of the commencement" of the proceedings. These provisions of subsection (7)

raise the following questions:

a. What is a "summary proceeding on the record"?

S:\PUBLIC\Ballot\2023-2024cycle\Review and Comment Memos\2023-2024 #259.docx

b. What must a plaintiff prove?

c. What is the standard of proof for a plaintiff ?

d. What elements or standards must a court employ to issue a decision?

e. What remedy may a court impose?

f. Does a plaintiff or defendant have the right to appeal the district court's

decision?

g. What if the court has not made a determination within ten days of

commencement of the proceedings?

21. Subsection (8) of the proposed initiative provides that "upon the expiration of

any challenge in the district court, the director of legislative council shall certify

the ballot content to the secretary of state." Subsection (8) raises the following

questions:

a. When does a challenge in the district court "expire"?

b. What if an economic impact statement is not challenged in district

court? May the ballot content be certified?

c. What is included in the ballot content? What does certification of the

ballot content entail?

d. The proposed initiative references the "director of the legislative

council". Is the intent to reference the director of research of the

legislative council?

22. Subsection (9) of the proposed initiative provides that "This section shall not

apply to referred measures." The proposed initiative also provides that

legislation with an economic impact of more than $100 million to the state's

GDP must be referred to the people for approval. What is a "referred measure"

in the context of the proposed initiative?

23. Article V, section (1) of the Colorado constitution provides that the legislative

power is vested in the legislative branch. The proposed initiative would limit the

legislature's power because enacted legislation with a negative economic impact

of more than $100 million would not become law until a vote of the people.

However, the proposed initiative would be a statutory change, not a

constitutional change. How would a statutory requirement supersede the

constitutional process for lawmaking?

S:\PUBLIC\Ballot\2023-2024cycle\Review and Comment Memos\2023-2024 #259.docx

24. Can legislation exempt itself from the voter approval requirement in the

proposed initiative?

Technical Comments

1. The following comments address technical issues raised by the form of the

proposed initiative. These comments will be read aloud at the public meeting

only if the proponents so request. You will have the opportunity to ask

questions about these comments at the review and comment meeting. Please

consider revising the proposed initiative as suggested below.

2. The Colorado Revised Statutes are divided into sections, and each section may

contain subsections, paragraphs, subparagraphs, and sub-subparagraphs.

a. The following is a basic example of the organization of provisions of the

Colorado Revised Statutes:

X-X-XXXX. Headnote. (1) Subsection.

(a) Paragraph

(I) Subparagraph

(A) Sub-subparagraph

(B) Sub-subparagraph

(II) Subparagraph

(b) Paragraph

(2) Subsection

(3) Subsection

b. In terms of this organization, the proponents should consider the

following organizational adjustments:

i. (3) should be (3)(a), and the current (a) and (b) should be

relettered to (b) and (c) respectively;

3. It is standard drafting practice when referencing statutory sections to include

the word "section" before the number. For example, "section 24-35-204.5."

4. For purposes of this statutory initiative, the word "shall" is defined in section 2-

4-401 (13.7), Colorado Revised Statutes, and it means "that a person has a

S:\PUBLIC\Ballot\2023-2024cycle\Review and Comment Memos\2023-2024 #259.docx

duty." The related word "must," which is defined in section 2-4-401 (6.5),

Colorado Revised Statutes, "means that a person or thing is required to meet a

condition for a consequence to apply." Furthermore, "'must' does not mean that

a person has a duty." Consider reviewing each use of "shall" and "must" in the

proposed initiative to ensure that they comply with the statutory definitions of

those terms.

5. It is standard drafting practice to use commas to connect two independent

clauses connected by a conjunction. As such, the proponents should consider:

a. Whether both uses of "and" in subsection (4) of the proposed initiative

are conjunctions.