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TC Res. No. 1985-05RESOLUTION NO-:'#85=5 SERIES OF 1985 A RESOLUTION SUPPORTING HOUSE BILL 1134 - LOCAL GOVERNMENT ANTITRUST LIABILITY WHEREAS, the State of Colorado relies upon local governments to carry out many licensing and regulatory activities and, should provide local governments and their taxpayers with sufficient protection to excerise that responsibility without the fear of expensive antitrust litigation and liability; and WHEREAS,,the exposure~of municipalities in Colorado and throughout the country .to antitrust lawsuits has been expanded as a result of recent decisions of the United States Supreme Court; and WHEREAS, the-potential for damage awards and the substantial expense of defending antitrust litigation, even if successful, rtiay - 'i:nhibit municipalities from -,enactingcor - enforcing ih4l-regiil at ions which protect-the public health, safety and welfare, but which also may be deemed.to restrict competition; and WHEREAS, at least five Colorado municipalities already have been sued under the antitrust laws; and WHEREAS, other Colorado municipalities have been threatened with antitrust lawsuits for licensing or regulatory decisions; and WHEREAS, the cost to-the taxpayers.of'Boulder, Colorado, in defending one federal antitrust lawsuit, which was settled prior to trial, was an estimated one=quarter::_milliori `_ldollars,..--and WHEREAS, municipalitiesc differ---from'pri:vat.e :enterprise in that private enterprise is not charged with protecting the public health, safety.and welfare through licensing and regular tion; and • • WHEREAS, numerous protections from municipal licensing and regulatory actions, other than damages under the antitrust laws, are available such as, public notice, public hearing, public meeting and public record requirements, court review of actions, periodic elections and the rights of initiative, referendum and recall, and the continuing authority of the General Assembly or the people of Colorado to modify the statutory or constitutional authority of Colorado's municipalities; NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO, that the Colorado General Assembly should act as quickly as possible to adopt H.B. 1134 in order to protect local governments and their taxpayers from expensive antitrust litigation and liability for local licensing and regulatory activity and that the Town support efforts of the Colorado Municipal League in this regard. INTRODUCED, READ, PASSED, AND ADOPTED at a regular meeting of the Town Council of the Town of Avon, Colorado, held on February 12, 1985. TOWN OF AVON, COLORADO Allan R. Nottingh , Mayor tri.cia J. Do e, Town C rk -2- LOCAL GOVE T ANTITRUST LIABILITY HOUSE BILL 1134 The League solicits your help in urging the passage of H.B. 1134 by the Colorado General Assembly. On September 25, 1984, the federal Local Government Antitrust Act of 1984 became effective. The Act grants an exemption from damages to local governments from federal antitrust laws. It is widely believed that this federal legislation has solved antitrust liability problems for local governments in Colorado. Unfortunately, that is not the case. Local governments remain liable under the federal antitrust laws for injunctive actions (where the relief requested is not damages, but rather a court order prohibiting the local government from doing something, i.e., approving a rezoning request). In addition, attorney's fees may still be requested in connection with these injunction actions. In past years, most antitrust cases were filed in federal court. With the recent federal amendments,- however, it becomes much more attractive to file under the state antitrust act, which has not been changed. While the state act does not allow for triple damages, single damages and attorney's fees alone can be significant. For example, the City of Boulder reportedly incurred a quarter-million dollars in costs merely in defending the Community Communications lawsuit. In cooperation with Colorado Counties, Inc., the Colorado Municipal League has drafted legislation to expand upon the immunity granted local governments by the recent federal amendment and to amend the state antitrust law to eliminate damage claims under that statute. Representative Richard Mutzebaugh and Senator Ralph Cole have agreed to sponsor the measure. The bill has been introduced in the House as H.B. 1134. House Bill 1134 does two things: 1. Complete immunity from any antitrust action, federal or state, and whether for damages or merely for injunction, is provided to local governments when they engage in regulatory and licensing activities. This would include matters such as land use, zoning, and franchising. That immunity does not extend to non-governmental activities. 2. The bill amends the state antiturst act at § 6-4-108, to conform to the changes made in the federal statute, by eliminating actions against local governments for damages, costs, interest on costs and attorney's fees. Significantly, as with the federal amendments, ;;injunctive actions are preserved under the state act. Despite the recent federal legislation, local governments continue to- be subject to significant antitrust liability, particularly fore their regulatory and licensing activities. We urge that you make your support of H:B. 1134 actively known by adopting the enclosed resolution of support and sending it to your- senators. and representatives in the Colorado General Assembly (with a'copy to Jerry Dahl at the League office). 0 First Regular Session • LDO NO. 85 0455/1 Fifty-fifth General Assembly HOUSE BILL NO. STATE OF COLORADO 1134 State Affairs BY REPRESENTATIVES Mutzebaugh, Allison, and Wright; also SENATORS Cole and Glass. A BILL FOR AN ACT 1 CONCERNING EXEMPTION OF LOCAL GOVERNMENTS FROM LIABILITY UNDER 2 ANTITRUST LAWS. Bill Summary (Note: This summary applies to this bill as introduced and does not necessaril reflect any amendments whicT subsequently ado ted. Provides that units of local government and their officials, agents, and employees are exempt from liability under antitrust laws when exercising powers granted to such governments by law. Requires local governments to file copies of regulatory measures with the division of local government. Authorizes the collection of a fee by such division for its services. Creates the antitrust regulatory measures cash fund as a depository for such fees. 3- Be it enacted the General Assembly of the State of Colorado: 4 SECTION 1. Title 29, Colorado Revised Statutes, 1977 5 Repl. Vol., as amended, is amended BY THE ADDITION OF A NEW 6 ARTICLE to read: 7 ARTICLE 15 8 Local Governments - Exemption from Antitrust Laws 9 29-15-101. Legislative declaration. The state of 10 Colorado has long recognized the essential role of units of Capital letters indicate new material to be added to existing statute. Dashes through the words indicate deletions from existing statute. • 0 1 local government in regulatory and licensing activities. The 2 Colorado constitution and statutes have charged and authorized 3 local governments to undertake such activities to protect the 4 public health, safety, and welfare. To enable local 5 governments to accomplish these important public purposes, the 6 general assembly hereby determines that local governments 7 should be exempt from any antitrust law, including the 8 provisions of article 4 of title 6, C.R.S., when carrying out 9 their regulatory and licensing activities. Therefore, the 10 general assembly hereby finds and declares that it is the 11 policy of this state that local governments shall be immune 12 from liability whenever local governments or their officials, 13 agents, or employees displace competition by licensing and 14 regulatory activity pursuant to the powers and authorities 15 granted to them in the constitution and statutes of this 16 state. 17 29-15-102. Definition. As used in this article, unless 18 the context otherwise requires: 19 (1) "Local government" means a government as defined in 20 section 29-1-602. 21 29-15-103. Exemption. Whenever any local government 22 acts to displace competition by licensing and regulatory 23 activity pursuant to the powers and authorities granted to 24 local governments in article XX of the Colorado constitution, 25 and in articles 18, 46, 47, 48, 48.5, and 51 of title 12, 26 C.R.S.; articles 65.1 and 67 of title 24, C.R.S.; part 2 of -2 1134 • • 1 article 15 of title 25,,C.R.S.;this title and titles 30, 31, 2% '32,.-.-and 33, C.R.S.; articles 1 to 48, 85, and 93 of title 37, 3 C.R.S.; and any other statutory or constitutional provision 4 enabling regulatory or licensing activity by local 5 governments, such local government and its officials, agents, 6 .and employees shall partake of the exemption and immunity of 7 the state of Colorado from any antitrust law. 8 29-15-104. Local discretion. When acting to displace 9`-' competition by ;regulatory and. licensing activities as 10 authorized by the state constitution-or statutes, each local .11 government shall, proceed according to the judgment of'its 12 governing body, authorized boards, commissions, or officers, 13 or electors as to the type and degree., of regulatory-,or 14 licensing activity deemed to be in the best interests of its 15 citizens. 16 29-15-105. State supervision - fil.ing of regulatory 17 measures - fees. (1) Sufficient,state.supervision of local 18 government regulatory and licensing activities shall be 19. provided by the availability of judicial review, the 20 availability of the initiative and referendum, the 21 availability of election and recall,, the -authority of the 22 general assembly to enact and amend statutes, the authority of 23 the people of Colorado to amend the state constitution, and 24 the continuing administrative structure 'and ,quasi-judicial 25 procedures available by statute, charter, ordinance, or -26 resolution to implement and review- regulatory and licensing -3- 1134 0 1 activities of local governments. 2 (2) (a) To further insure an effective state ability to 3 supervise local government regulatory and ' licensing 4 activities, a copy of each such measure' of 'general 5 applicability enacted by a ,local government shall' be filed 6 with the division of local government in the department of 7 local affairs not later than thirty days after the effective 8 date 'of''the measure or after the effective date of this 9 article,, whichever is later. The provisions of section 10 29-2-110 shall govern the timing and methods of filing 11 required by this subsection (2). Failure to file a copy of a 12 regulatory 'or licensing measure shall not effect the validity 13 of the measure. 14 (b)' The director of the 'division of local government 15 shall establish fees sufficient to cover the actual and 16 reasonable costs of compliance with this subsection (2). Such 17 fees shall be credited to the antitrust 'regulatory measures 18, cash fund, created in'section 29-15-106. 19 29-15-106. Fee adjustments - antitrust regulatory 20 measures cash fund - created. (1) The director of the 21 division of the local government shall propose, as part of the ,22 division's annual budget request, an adjustment in the amount 23 of the fee which the division of local government is 24 authorized by section 29-15-105 (2) (b) to collect. The 25 budget request and the adjusted fees for the division of local 26 government shall reflect direct and indirect costs. _4 1 1 3 4 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 (2) Based upon the appropriation made by the general assembly and subject to the approval of the executive director of the department of local affairs, the division of local government shall adjust its fees so that the revenue generated from said fees approximates its direct and indirect costs. Such fees shall remain in effect for the fiscal year for which the budget request applies. All fees collected by the division of local government shall be transmitted to the state treasurer, who shall credit the same to the antitrust regulatory measures cash fund, which fund is hereby created. All moneys credited to the antitrust regulatory measures cash fund and all interest earned thereon shall be subject to appropriation by the general assembly to be used as provided in this section and shall not be deposited in or transferred to the general fund of this state or any other fund. (3) Beginning July 1, 1986, and each July 1 thereafter, whenever moneys appropriated to the division of local government for its activities for the prior fiscal year are unexpended, said moneys shall be made a part of the appropriation to the division of local government for the next fiscal year, and such amount shall not be raised from fees collected by the division of local government. If a supplemental appropriation is made to the division of local government for its activities, the fees of the division of local government, when adjusted for the fiscal year next following that in which the supplemental appropriation was -5 1134 1 made, shall be adjusted by an additional amount which is 2 sufficient to compensate for such supplemental appropriation. 3 Moneys appropriated to the division of local government in the 4 annual general appropriation act shall be designated as cash 5 funds and shall not exceed the amount anticipated to be raised 6 from fees collected by the division of local government. 7 29-15-107. Scope of article. The antitrust exemption 8 from liability provided in this article shall be in addition 9 to, and shall not be construed to limit, any local government 10 exemption or immunity from antitrust liability which might 11 otherwise exist and shall neither increase nor restrict the 12 regulatory and licensing authority of local governments. 13 29-15-108. Applicability to public utilities. This 14 article applies only to the exemption and immunity of local 15 governments from antitrust liability. Except for the grant of 16 antitrust immunity, nothing in this article shall be construed 17 to interfere with, restrict, limit, or otherwise infringe upon 18 the rights, obligations, duties, and powers granted by law to 19 public utilities to furnish, establish, maintain, or expand 20 facilities or services to public utility customers. 21 29-15-109. Prior regulatory and licensing activities. 22 All regulatory and licensing measures previously adopted and 23 in effect on the effective date of this article that have 24 been taken by local governments under the state constitution 25 and statutes are confirmed as being consisten t with the 26 purpose and intent of this article and are to have the same -6- 1134 • • 1 exemption and immunity as''that provided in section 29-15-103. 2 SECTION 2. 6-4-108, Colorado Revised Statutes, is 3 amended to read: 4 6-4-108. Damages. Any person, corporation, 5 copartnership, trustee, or association shall also be liable to 6 any person transacting or doing business in this state for any 7 damages he may sustain by reason of the doing of anything 8 declared unlawful in this article. NO DAMAGES, INTEREST ON 9 DAMAGES, COSTS, OR ATTORNEY FEES MAY BE RECOVERED UNDER THIS 10 ARTICLE FROM ANY LOCAL GOVERNMENT, AS DEFINED IN SECTION 11 . 29-1-602, C.R.S., OR ANY OFFICIAL, AGENT, OR EMPLOYEE,THEREOF 12 ACTING IN AN OFFICIAL,CAPACITY, OR IN ANY CLAIM AGAINST' A 13 PERSON, CORPORATION, COPARTNERSHIP, TRUSTEE, OR ASSOCIATION 14 BASED ON ANY OFFICIAL ACTION DIRECTED BY A LOCAL GOVERNMENT, 15 '':OR OFFICIAL, AGENT, OR EMPLOYEE THEREOF ACTING IN AN OFFICIAL 16 CAPACITY. 17 SECTION 3. Safety clause. The general assembly. hereby 18 finds, determines, and, declares that this act is necessary 19 for the immediate preservation of the public peace, health, 20 and safety. -7- 1134 0 0 TO: The Honorable Mayor and Town Council FROM: William D. James, Town Manager DATE: February 6, 1985 SUBJECT: House Bill 1134 - Local Government Antitrust Liability Please find attached information regarding House Bill 1134. The information attached is self explanatory. I would recommend that the Council pass the attached resolution in support of this Bill.