Every court decision further refines Colorado’s body of law. Recently, the Colorado Supreme Court issued two opinions that I found both interesting and relevant.
The first concerns the city of Aspen’s “waste reduction fee.” And the second is on Coors Brewing Company’s practice of leasing the water it discharges from its wastewater-treatment plant.
“Paper or plastic?” The most common question at the checkout stand. Use of disposable bags to transport our groceries from the market creates waste, even when the bags are recycled. I realize that many shoppers bring their own reusable bags and I commend that practice. The majority of shoppers, however, do not.
In 2011, the city of Aspen banned grocery stores within its city limits from providing disposable plastic bags to customers, and it imposed a “waste reduction fee” of 20 cents for every paper bag provided to customers.
The grocery store collected the per-bag fee and it retained a portion to provide information about the charge to customers, to train staff and provide for the infrastructure for the implementation and administration of the charge. Grocers remitted the remainder of the charge to the city, which deposited the funds into a “Waste Reduction and Recycling Account.”
The account provided funding for waste-reduction programs, such as education on the impacts of trash and purchasing recycling containers. None of the funds were used to augment the annual budget or the city’s general fund.
The Colorado Union of Taxpayers Foundation (CUT) brought a legal action against the city, claiming that the “waste-reduction fee” was a tax that violated TABOR because it was not approved by voters. The trial court found the charge was not a tax but instead was a fee. The Court of Appeals agreed. And on May 21, the Colorado Supreme Court affirmed that Aspen’s imposition of a “waste-reduction fee” does not require voter approval.
The Supreme Court’s opinion focused on the distinction between a municipal entity’s power to tax and its authority to regulate. Taxation is subject to TABOR but regulatory charges are not.
Put simply, a tax is an assessment “to raise revenue for the general expenses of the government.” When the charge is narrowly tailored and reasonably related to a specific government expenditure, it is not a tax. Instead, it is a permissible regulation.
This recent decision confirms that smart regulations, when appropriately crafted, can be an efficient and effective mechanism for improving our communities.
Water, however, is governed by the Colorado Constitution, not local regulations. On June 25, the Colorado Supreme Court issued an opinion in Coors Brewing Company v. City of Golden that rejected Coors’ longstanding practice of leasing the water it discharges from its wastewater-treatment plant to third parties. Although the State and Division Engineer recognized and administered this leasing program since the 1970s, the Supreme Court found that it unlawfully circumvented the prior appropriation system.
The Court applied fundamental principles of Colorado water law to hold that Coors is limited to one use of the water it diverts; it cannot lease the water that it discharges into Clear Creek to a third party.
This is because the right to use water in Colorado arises by an appropriation that is confirmed by a court decree with a designated priority date. Unless the terms of the decree provide otherwise, an appropriation of native water is limited to one use.
Coors, like all water right owners, does not actually “own” the water it diverts. It has only a right to beneficially use the amount of water necessary for its decreed use. Consequently, any water that Coors discharges into the stream reverts to the state and belongs to other prior appropriators.
Please note that the foregoing opinion has not yet been released for publication in the permanent law reports, and until it is, it is subject to revision or withdrawal.
Amy Novak Huff has been practicing water and real property law for over 15 years. She established Colorado Water & Land Law, LLC, in 2008. Contact her at firstname.lastname@example.org or by office phone at (970) 403-1770.