J_LS_2018A 02/01/2018 07:38:05 AM Committee Summary

Christy Chase, Assistant Director, Office of Legislative Legal Services, and Sharon Eubanks, Director, Office of Legislative Legal Services, testified before the Committee. Ms. Chase presented the Office's 2018-19 FY budget proposal based on the current direction from the Joint Budget Committee and the Governor's office.

Representative Willett and Ms. Chase discussed the Office's FTE and the requested budget for two additional attorneys.

Representative Lee and Ms. Chase discussed the budget for legal fees included in operating expenses.

Senator Guzman and Ms. Eubanks discussed costs related to the new HR administrator, the sexual harassment training, and the study of the workplace harassment policy and culture of the legislative workplace being conducted and how those are being paid from the legislative department cash fund.

Senator Holbert and Ms. Eubanks discussed the possibility of the budget proposal being amended to include funding for a HR director.

Senator Kagan and Ms. Chase discussed the increase in the budget request for Colorado Commission on Uniform State Laws commissioner travel.

Ms. Eubanks requested that any motion made include the ability for the Office to adjust the budget request to reflect upcoming Joint Budget Committee common policy decisions.

Esther van Mourik, Senior Attorney, Office of Legislative Legal Services, testified before the Committee. Ms. van Mourik presented the Office's rule memorandum concerning the contested rules of the Taxpayer Service Division and requested that the rules not be extended. There are reporting requirements in statute that assess a penalty against retailers that do not collect Colorado sales tax. The statute allows for waiver of the penalty if there is reasonable cause. The rule of the department of revenue provides that the penalty will not be assessed for a de minimis noncollecting retailer and de minimis purchasers, thereby creating a conflict between the rule and the statute.

Senator Kagan and Ms. van Mourik discussed court cases that held that de minimis exceptions to a statutory scheme are within the authority of an agency and how those cases are different from the conflict between the statute and the rule in this rule issue.

Representative Willett and Ms. van Mourik discussed how the statute is structured in the cases that were discussed and how it is different from the statute discussed in the rule issue.

Brendan Reese, Deputy Director of Tax Policy and Legal Analysis for the Department of Revenue, testified before the Committee.

Claudia Brett Goldin, First Assistant Attorney General with the Revenue and Utilities Section, testified before the Committee. Ms. Brett Goldin discussed the historical context of the rule.

Representative Willett and Ms. Brett Goldin discussed how the rule establishes de minimis amounts and that doing so is outside the rule-making authority of the department.

Ms. van Mourik responded to Ms. Brett Goldin's testimony and discussed that the letters sent from the Office approving rules do not preclude later review and that, though the department does have broad rule-making authority, it is limited by the requirement that the rules and statute cannot be inconsistent.

Senator Kagan and Ms. van Mourik discussed whether the particular threshold carve out in the rule is outside of the department's rule-making authority or whether any de minimis exception is outside the department's authority.

Ms. Brett Goldin responded to Ms. van Mourik's response.

The Committee took a recess.

The Committee returned from recess.

Senator Holbert discussed how the department has attempted to make the rule workable but has gone outside of its rule-making authority. He also discussed the self-reporting requirements in statute.

Senator Gardner discussed the Office's review of sales tax rules of the department of revenue.

Senator Kagan discussed whether a de minimis exception is inconsistent with statute.