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Colorado Union of Taxpayers Foundation v. City of Aspen

Supreme Court of Colorado, En Banc

May 21, 2018

Colorado Union of Taxpayers Foundation, Petitioner
City of Aspen; Steve Skadron, Adam Frisch, Art Daily, Ann Mullins, and Bert Myrin, all in their official capacities as members of the Aspen City Council, Respondents

          Certiorari to the Colorado Court of Appeals Court of Appeals Case No. 14CA1869

          Attorneys for Petitioner: Mountain States Legal Foundation Steven J. Lechner Lakewood, Colorado

          Attorneys for Respondents: City of Aspen James R. True, City Attorney Andrea S. Bryan, Assistant City Attorney Aspen, Colorado

          Attorneys for Amicus Curiae Colorado Municipal League: Butler Snow LLP Terrance Carroll Martina Hinojosa Dee P. Wisor Denver, Colorado

          Attorney for Amicus Curiae The TABOR Foundation: Rebecca R. Sopkin Lakewood, Colorado



          ¶1 This case presents the question of whether Aspen's $0.20 paper bag charge is a tax subject to voter approval under the Taxpayer's Bill of Rights ("TABOR").[1] The trial court held that this charge is not subject to TABOR because it is not a tax, but a fee, as did the court of appeals.

         ¶2 Colorado voters enacted TABOR in 1992. In so doing, voters specifically limited the legislative taxing power of the state and local governments by requiring that any new tax must receive voter approval prior to implementation. However, when a government exercises its authority pursuant to its police power to regulate for health and safety, and imposes a charge as part of a regulatory regime, and the charge is reasonably related to the direct or indirect cost of regulating the activity, such a charge is not a tax subject to voter approval.

         ¶3 The primary purpose of a tax is to raise revenue for general governmental expenses. But, the primary purpose behind Aspen's charge is not to raise revenue; the primary purpose of the charge is to defray some of the costs of a comprehensive regulatory scheme aimed at improving environmental health and safety through a waste-reduction program. Because the bag charge is not a tax, TABOR's election requirements do not apply. Accordingly, we affirm the judgment of the court of appeals.

         I. Facts and Procedural History

         ¶4 In 2011, the City of Aspen adopted ordinance 13.24, which took effect May 1, 2012. Aspen, Colo., Municipal Code § 13.24 (2017). This ordinance purported to impose a regulatory scheme designed to meet the city council's "duty to protect the natural environment and the health of its citizens and visitors." Under the ordinance, grocery stores within Aspen's city limits are prohibited from providing disposable plastic bags to customers. § 13.24.020(a).[2] Grocery stores may still provide paper bags to customers, but each bag is subject to a $0.20 "waste reduction fee, " § 13.24.030(a), unless the customer is a participant in a "Colorado Food Assistance Program, " § 13.24.070.

         ¶5 It is undisputed at the trial court that Aspen set the fee at $0.20 after considering a San Francisco study showing that the cost of subsidizing the recycling, collection, and disposal of plastic and paper bags in that market was $0.17 per bag. Aspen adjusted the cost to $0.20 based on its distance to recycling markets, the smaller size of its waste stream, and community input.

         ¶6 Through a system established by the ordinance, the grocers collect the $0.20 charge for each non-reusable bag a customer chooses to use, and Aspen then collects the charge from the grocers. Grocers are permitted to retain a portion of the charge to provide information about the charge to customers, to train staff, and to improve or alter infrastructure to allow for the implementation, collection, and administration of the charge. § 13.24.050(b). Grocers remit the remainder of the charge to Aspen on a form separate from their sales tax form. § 13.24.050(e). The grocers pay this remainder to the City of Aspen Finance Department, and the department deposits it into the "Waste Reduction and Recycling Account." § 13.24.050(d). The funds may not be used to supplant funds from the annual budget, and the funds never revert to the general fund. § 13.24.050(h)-(i). The payment covers the following, in order of priority:

(1) Campaigns conducted by the City of Aspen and begun within 365 days of the effective date of this act, to:
(A) Provide reusable carryout bags to residents and visitors; and
(B) Educate residents, businesses, and visitors about the impact of trash on the City's environmental health, the importance of reducing the number of disposable carryout bags entering the waste stream, and the impact of disposable carryout bags on the waterways and the environment.
(2) Ongoing campaigns conducted by the City of Aspen to:
(A) Provide reusable bags to both residents and visitors; and
(B) Create public educational campaigns to raise awareness about waste reduction and recycling;
(C) Funding programs and infrastructure that allows the Aspen community to reduce waste and recycle.
(D) Purchasing and installing equipment designed to minimize trash pollution, including, recycling containers, and waste receptacles;
(E) Funding community cleanup events and other activities that reduce trash;
(F) Maintaining a public website that educates residents on the progress of waste reduction efforts; and
(G) Paying for the administration of this program. § 13.24.050(g)(1)-(2).

         ¶7 In its first year the bag charge was not sufficient to cover the overall program expenditures, and so Aspen has since allocated general funds to cover the remaining expenses of the program. Aspen provided some of the services outlined in the ordinance prior to instituting this charge, and some of the services funded in part by the bag charge are provided to both city residents and visitors, regardless of whether the resident or visitor uses a paper bag and thus pays the charge.

         ¶8 Petitioner, the Colorado Union of Taxpayers Foundation ("CUT"), is a nonprofit whose goal is to "educate the public as to the dangers of excessive taxation, regulation, and government spending." After two of its members paid Aspen's bag charge, CUT sued the City of Aspen and several members of the Aspen city council in their official capacities. CUT asserts that Aspen's bag charge is a tax that was never subject to voter approval, and thus violates TABOR.

         ¶9 At the trial court, both Aspen and CUT moved for summary judgment. The trial court concluded that the charge is a fee, not a tax, and therefore not subject to TABOR; it thus granted Aspen's motion for summary judgment. The court of appeals, in a unanimous published opinion, affirmed. Colorado Union of Taxpayers Found. v. City of Aspen, 2015 COA 162, ¶ 27, 410 P.3d 625, 630. We granted certiorari, and we now affirm.

         II. Standing

         ¶10 While the trial court found that CUT has standing, and Aspen does not dispute this finding, standing is still a threshold issue that we review de novo. Barber v. Ritter, 196 P.3d 238, 245 (Colo. 2008). We have briefly mentioned associational standing in our prior cases, but we now explicitly hold that an organization has associational standing when: (1) its members would otherwise have standing to sue in their own right; (2) the interests it seeks to protect are germane to the organization's purpose; and (3) neither the claim asserted, nor the relief requested, requires the participation of individual members of the lawsuit. See Buffalo Park Dev. Co. v. Mountain Mut. Reservoir Co., 195 P.3d 674, 687-88 (Colo. 2008), as modified on denial of reh'g (Nov. 24, 2008); see also Hunt v. Wash. State Apple Advert. Comm'n, 432 U.S. 333, 344 (1977).

         ¶11 So, in order for CUT to bring a claim, CUT must first show that its individual members have standing to sue. We have established that a plaintiff-taxpayer will have taxpayer standing when the plaintiff "demonstrate[s] a clear nexus between his status as a taxpayer and the challenged government action." Hickenlooper v. Freedom from Religion Found., Inc., 2014 CO 77, ¶ 12, 338 P.3d 1002, 1008. Here, two of CUT's members are Aspen residents who paid the required bag charge; these two members have taxpayer standing. Therefore, because two of CUT's members have taxpayer standing and could have brought suit themselves, CUT satisfies part one of the test.

         ¶12 Additionally, CUT satisfies parts two and three of the test. The organization was formed to educate the public as to the dangers of excessive taxation, regulation, and government spending, so the interests it seeks to protect-preventing governmental districts from circumventing TABOR-are germane to its purpose. Thus, the association has "a stake in the resolution of the dispute." United Food & Commercial Workers Union Local 751 v. Brown Grp., Inc., 517 U.S. 544, 555-56 (1996). Finally, the relief CUT requests in this case is a court order that Aspen's bag charge is unconstitutional, which does not require the participation of its individual members. See Warth v. Seldin, 422 U.S. 490, 515 (1975). Thus, CUT has associational standing in this case.

         III. Standard of Review

         ¶13 A trial court may enter summary judgment when there is "no genuine issue as to any material fact" such that a moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c). We review a trial court's decision regarding summary judgment de novo. Huber v. Colo. Mining Ass'n, 264 P.3d 884, 889 (Colo. 2011). When reviewing constitutional issues, we presume that statutes are constitutional. Barber, 196 P.3d at 248. Further, we have previously held that to be unconstitutional, these statutes must be shown to be unconstitutional beyond a reasonable doubt. Id. The same presumptions and burdens of proof apply when a court construes a municipal ordinance. Town of Dillon v. Yacht Club Condo. Home Owners Ass'n, 2014 CO 37, ¶ 22, 325 P.3d 1032, 1038.

         ¶14 In this case, we granted certiorari to determine whether we should modify the standard of review that a court should apply when deciding if an ordinance is unconstitutional. However, we conclude that this ordinance is constitutional under either the "beyond a reasonable doubt" or the "preponderance of evidence" standard. Because we hold that Aspen's bag charge is constitutional, we do not decide-and express no opinion about-whether we should change the standard a court should use when it holds an ordinance is unconstitutional.

          IV. Analysis

         ¶15 We begin with a brief background of TABOR and detail the differences between a government's legislative taxation power and its regulatory police power. We then analyze this charge and conclude it is not a tax.

         A. ...

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