Colorado General Assembly v. Lamm
| Decision Date | 06 May 1985 |
| Docket Number | No. 83SA381,83SA381 |
| Citation | 700 P.2d 508 |
| Parties | The COLORADO GENERAL ASSEMBLY, Plaintiff-Appellee, v. The Honorable Richard D. LAMM, Governor of the State of Colorado, Defendant- Appellant, and The COLORADO GENERAL ASSEMBLY and the Colorado General Assembly on Behalf of the People of the State of Colorado, Plaintiff-Appellee and Cross-Appellant, v. The Honorable Richard D. LAMM, Governor of the State of Colorado, Defendant- Appellant and Cross-Appellee, and Roy Romer, Treasurer of the State of Colorado, James A. Stroup, Controller of the State of Colorado, R. Garrett Mitchell, Executive Director of the Department of Administration of the State of Colorado, and Lumbermens Mutual Casualty Company, Defendants. |
| Court | Colorado Supreme Court |
Duane Woodard, Atty. Gen., Charles B. Howe, Deputy Atty. Gen., Richard Forman, Sol. Gen., Denver, Colo., for defendant-appellant and cross-appellee.
Welborn, Dufford & Brown, Philip G. Dufford, Gregory A. Ruegsegger, Denver, Colo., for plaintiff-appellee and cross-appellant.
This appeal involves questions concerning the authority of the chief executive of the State of Colorado to transfer funds from the departments of the executive branch of government for which the funds were appropriated to other executive departments. Specifically, the appeal is brought by the Honorable Richard D. Lamm, as Governor of the State of Colorado, from a judgment of the trial court in two consolidated civil actions originally filed against the Governor and others by the Colorado General Assembly seeking a judicial declaration that certain transactions undertaken by the Governor were not authorized. The trial court concluded that one of the transactions was authorized and that the others were not. The General Assembly has filed a cross-appeal in one of the cases. We affirm in part, reverse in part and remand for further proceedings.
The basic facts giving rise to the filing of the two suits are not in dispute, although the parties are in sharp conflict with regard to the significance of those facts. On August 28 and September 18, 1980, the Governor, by executive orders, authorized the transfer of $2,475,000 to various accounts of the Department of Corrections from accounts in other executive departments. 1 The transferred sums represented "reversions," i.e., appropriated funds not spent during the fiscal year for the purposes for which they were appropriated. These funds had been appropriated by the General Assembly for the state fiscal year ending June 30, 1980. Had they not been expended, the funds would have been returned ("reverted") to the state general fund or a special fund by the executive branch departments for whose programs the original appropriations had been made.
These transfers were deemed essential by the Governor because the General Assembly was not in session and, under a decision of the United States District Court for the District of Colorado, Ramos v. Lamm, 485 F.Supp. 122 (D.Colo.1979), aff'd in part, 639 F.2d 559 (10th Cir.1980), cert. denied, 450 U.S. 1041, 101 S.Ct. 1759, 68 L.Ed.2d 239 (1981), it was essential that the Division of Correctional Industries of the Department of Corrections complete construction of a new maximum security prison facility by December 30, 1980. The Department of Corrections was unable to finance completion of that project by the end of the year from its appropriated funds. The Governor consulted with the Joint Budget Committee of the General Assembly concerning this situation and informed that body of his decision to meet the perceived fiscal crisis by means of these transfers.
In Civil Action No. 81CV10058, filed November 19, 1981, the General Assembly alleged that these 1980 transfers violated article III of the Colorado Constitution and sections 32 and 33 of article V of the Colorado Constitution. 2 The General Assembly also asserted that the transfers violated section 24-75-102, 10 C.R.S. (1973), 3 sections 24-75-201.1, 4 -201.2, 5 -302 6 and -303, 7 10 C.R.S. (1982), and certain administrative regulations. The suit was instituted subsequent to the adoption of Senate Joint Resolution No. 12 of the Fifty-third General Assembly. Sen. Joint Res. No. 12, 1981 Colo.Sess.Laws 2066. In his answer, the Governor argued that the transfers were authorized by article III of the Colorado Constitution and by sections 24-30-201(1)(b) and 24-37-405(1)(k), 10 C.R.S. (1982). 8 The Governor, who was the sole defendant in this action, asked for a declaratory judgment that the transfers were authorized.
On June 16, 1982, Civil Action No. 82CV5005 was commenced by the General Assembly against the Governor, the Treasurer of the State of Colorado, the Controller of the State of Colorado, the Executive Director of the Department of Administration of the State of Colorado and two private parties. 9 This action challenged certain transactions which occurred in November 1981 and May 1982.
On October 26, 1981, the State of Colorado received the sum of $306,783 from Standard Oil Company of California (Chevron), a private corporation. This sum represented Colorado's share of a special fund created pursuant to a consent order which terminated Chevron's involvement in federal administrative and judicial proceedings arising from allegations by the United States Department of Energy that Chevron had violated federal price-control legislation in sales of petroleum and natural gas products. In response to a letter from Chevron to the State Office of Energy Conservation, an office of the executive branch, indicating that Colorado was required by the consent order to indicate the purpose for which its share would be spent, the Governor had determined that the sum should be allocated to that office for energy conservation purposes. Accordingly, on November 12, 1981, the sum of $306,783 was allotted to the account of the Office of Energy Conservation.
In May of 1982, the Governor approved four sets of transfers of appropriated funds and cash funds spending authorities among several executive departments. 10 The first transaction involved the transfer of $649,000 of appropriated funds from fifty-two accounts in various executive departments to an account in the Office of the State Controller and a re-allocation of this sum to three different accounts. The Central Pots account 11 of the Office of State Planning and Budgeting (O.S.P.B.) received $627,879, which sum was allocated by O.S.P.B. to several executive departments for personnel expenses. The second transaction involved the transfer of $300,000 in appropriated funds from Central Pots accounts and line item accounts of seven executive departments to the general funds account of the Governor's Office, which funds were ultimately expended for operations of the Executive Office, the Executive Residence and the Office of the Lieutenant Governor. The third transaction involved the transfer of $312,315 of the cash funds spending authority appropriated to O.S.P.B. for Central Pots to accounts of three executive departments. Finally, $1,179,000 of the cash funds spending authority appropriated to Correctional Industries was transferred to the personal services budgets of other agencies which were cash funded in part and which had generated cash revenues in excess of their appropriated cash funds spending authorities.
The complaint in Civil Action No. 82CV5005 alleged that the 1981 and 1982 transactions violated the following provisions of the Colorado Constitution: article III; article IV, section 2; and article V, sections 17, 32 and 33. 12 The complaint also alleged that the transactions violated sections 24-75-102, 24-30-202 and 24-50-110(1)(c), 10 C.R.S. (1982), and certain administrative regulations. 13
The defendants filed an answer and two counterclaims to this complaint. The answer asserted that all of the challenged transfers were authorized by the Colorado Constitution and by sections 24-30-201(1)(b) and 24-37-405(1)(k), 10 C.R.S. (1982). It also asserted that the Chevron funds received by the executive branch in October of 1981 were not subject to legislative appropriation. The first counterclaim alleged that the passage of House Bill 1261 14 in 1982, a supplemental appropriations bill for the Department of Administration, violated the separation of powers provision of article III of the Colorado Constitution and constituted legislative interference with the executive power to administer appropriated funds, as vested by section 2 of article IV of the Colorado Constitution, because it retroactively decreased Central Pots appropriations for the executive branch for that fiscal year. The second counterclaim alleged that the General Assembly had arbitrarily refused to appropriate sufficient funds to ensure minimal levels of operation for the Office of the Governor for fiscal year 1981-82. It also alleged that such under-funding was part of a continuing course of conduct designed to reduce the effectiveness of the executive branch of government, in violation of article III of the Colorado Constitution.
The trial court concluded that the Governor's treatment of the Chevron funds was authorized because those funds in essence constituted a gift to the State of Colorado and were not subject to the appropriation power of the General Assembly. With respect to the transfers to the Department of Corrections in 1980 and all of the transfers in May 1982, the trial court concluded that they were authorized by sections 24-30-201(1)(b) and 24-37-405(1)(k), 10 C.R.S. (1982), but that those statutes violated constitutional provisions vesting the General Assembly with sole authority over appropriations. Reasoning that the expenditure of such funds constituted in effect a reappropriation by executive order, the trial court concluded that the two statutes constituted "an unlawful delegation of the legislative function." Given this resolution, the trial court...
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