staff budget briefing fy 2020-21 department of law · department budget: recent appropriations...

STAFF BUDGET BRIEFING FY 2020-21

DEPARTMENT OF LAW

JBC WORKING DOCUMENT - SUBJECT TO CHANGE STAFF RECOMMENDATION DOES NOT REPRESENT COMMITTEE DECISION

PREPARED BY: CHRISTINA BEISEL, JBC STAFF

NOVEMBER 18, 2019

JOINT BUDGET COMMITTEE STAFF 200 E. 14TH AVENUE, 3RD FLOOR · DENVER · COLORADO · 80203

TELEPHONE: (303) 866-2061 · TDD: (303) 866-3472 https://leg.colorado.gov/agencies/joint-budget-committee

CONTENTS Department Overview ...................................................................................................................................... 1

Department Budget: Recent Appropriations ................................................................................................ 2

Department Budget: Graphic Overview ....................................................................................................... 3

General Factors Driving the Budget ............................................................................................................... 5

Summary: FY 2020-21 Appropriation & FY 2020-21 Request ................................................................. 8

ISSUES Major Litigation Pending Against the State .................................................................................... 12

Opioid Litigation and Potential Settlement .................................................................................... 18

APPENDICES A. Numbers Pages .............................................................................................................................. 34

B. Recent Legislation Affecting Department Budget ................................................................... 48

C. Update on Long Bill Footnotes and Requests for Information ............................................. 53

D. Department Annual Performance Report ................................................................................ 58

DEPARTMENT OF LAW

DEPARTMENT OVERVIEW The Attorney General is one of five independently elected constitutional officers of the State, whose powers and duties are prescribed by the General Assembly1. As the chief executive officer of the Department of Law, the Attorney General represents and defends the legal interests of the people of the State of Colorado and, with the exception of the legislative branch2, serves as the legal counsel and advisor to all state agencies. The statutory responsibilities of the Department are summarized below. Legal Counsel and Advice to the State

Provide state agencies and elected officials with legal services such as legal representation, legal advice and opinions, contract review, and rule writing assistance.

Civil Enforcement Protect Colorado consumers against fraud and enforce state and federal consumer protection,

antitrust, charitable solicitation, consumer lending, and fair debt collection laws.

Represent the State’s interests in interstate and federal water cases.

Lead enforcement actions at sites contaminated with hazardous substances under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

Pursue civil recoveries and damages from Medicaid providers for fraud and over billing.

Enforce provisions of the tobacco master settlement agreements and protect the State's interests under the settlement payment calculation provision.

Criminal Enforcement Investigate and prosecute certain complex and multi-jurisdictional cases, environmental crimes,

election fraud, and foreign fugitives.

Provide investigative and prosecutorial support to district attorneys in complex homicides, cold cases, human trafficking cases, and large-scale drug conspiracies.

Investigate and prosecute securities, insurance, and workers' compensation fraud.

Represent the State in criminal appeal cases in state and federal courts.

Investigate and prosecute Medicaid provider fraud and patient abuse.

Oversee the Peace Officers Standards and Training (P.O.S.T.) Board, which manages the training and certification of peace officers.

Assure that the constitutional and statutory rights of victims are preserved in criminal cases being prosecuted or defended by the Department.

1 See Article IV, Section 1 of the Colorado Constitution and Article 31 of Title 24, C.R.S. 2 Under certain circumstances the Legislative Branch does purchase legal services from the Department of

Law, including requests for a legal opinion from the Attorney General or for legal representation when the

interests of the Executive Branch and the Legislative Branch are consistent.

18-Nov-2019 1 LAW-brf

DEPARTMENT BUDGET: RECENT APPROPRIATIONS

FUNDING SOURCE FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 *

General Fund $16,214,183 $16,593,918 $18,717,773 $19,280,523

Cash Funds 17,314,175 17,747,080 17,688,477 19,129,482

Reappropriated Funds 45,720,252 47,855,062 53,606,154 56,664,832

Federal Funds 1,828,471 2,002,322 2,354,094 2,404,730

TOTAL FUNDS $81,077,081 $84,198,382 $92,366,498 $97,479,567

Full Time Equiv. Staff 473.4 483.5 513.5 525.6

*Requested appropriation.


DEPARTMENT BUDGET: GRAPHIC OVERVIEW

All charts are based on the FY 2019-20 appropriation.


All charts are based on the FY 2019-20 appropriation.


GENERAL FACTORS DRIVING THE BUDGET

LEGAL SERVICES TO STATE AGENCIES Prior to 1973, most state agencies were represented by "assistant solicitors" who were housed within and paid by the agencies they represented. The system became problematic as there were serious differences in legal policy between agencies, resulting in an inconsistent legal policy for the State in the courts. In 1973, the General Assembly passed legislation that moved all the assistant solicitors into the Department of Law, and prohibited any state agency from employing a person to perform legal services. As a trade-off, the Department of Law became subject to the "Oregon Plan," whereby the General Assembly appropriates money for legal services to the various state agencies, who in turn purchase services from the Department of Law at hourly rates (one rate for attorneys and one rate for legal assistants). The General Assembly provides spending authority to the Department of Law to spend money received from other state agencies. Prior to FY 2017-18, the Department billed client agencies each month for the hours of legal services actually provided to the client during the previous month. For FY 2017-18, the General Assembly approved a departmental request to change the appropriation and billing system. Similar to other common policies, each client agency’s annual appropriation is now based the client’s prior years’ usage of legal services. The Department is now billing each agency in twelve equal monthly installments rather than monthly bills based on actual usage. For FY 2019-20, the General Assembly has authorized the Department of Law to spend up to $44.4 million providing legal services to state agencies (including associated central appropriations for items such as employee benefits, leased space, and information technology costs). This amount represents 49.2 percent of the Department's total appropriation. The table below details the total number of hours of legal services provided and the blended hourly rate charged by the Department. As shown in the table, eight agencies account for 83.4 percent of these services.

ACTUAL LEGAL SERVICES TO STATE AGENCIES (BY HOUR)

FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

THREE YEAR

AVERAGE % OF

TOTAL

Regulatory Agencies 88,489 94,332 93,589 95,822 94,581 24.2%

Natural Resources 51,176 49,985 49,184 51,130 50,099 12.8%

Revenue 39,888 42,495 46,799 48,018 45,771 11.7%

Personnel 47,784 49,202 43,698 42,458 45,119 11.5%

Public Health and Environment 31,567 31,254 29,485 29,326 30,022 7.7%

Human Services 21,510 23,388 24,321 29,427 25,712 6.6%

Corrections 18,472 18,996 20,206 21,929 20,377 5.2%

Transportation 15,516 14,014 14,380 15,300 14,565 3.7%

Other agencies 1/ 59,790 61,495 70,490 61,569 64,717 16.6%

Total 374,193 385,162 392,152 394,979 390,963 100.0%

Blended Legal Rate $95.01 $95.05 $106.56 $103.63 $106.60

1/ Actual hours are provided by the Department of Law. Other agencies includes legal services provided to institutions of higher education and to the Public Employees' Retirement Association (PERA).

Fluctuations in legal services expenditures are due to: (1) changes in the Department’s hourly rates; and (2) changes in the number of hours of legal services provided to state agencies by attorneys and legal assistants. The hourly rates fluctuate based on the costs of employee salaries and benefits as well as operating expenses.


Following approval of the new billing methodology, the Department was requested to conduct a survey of client agencies and report back to the Joint Budget Committee on the implementation of the changes. The Department reports that, for the most part, the change in methodology has had a positive reception. 69.0 percent of responses (“yes” or “no change”) demonstrate that the change in methodology has had a positive, or no, impact in ensuring legal advice and representation needs were met and that fee setting and budget management decisions are more predictable. The Department will conduct another survey in 2020.

CRIMINAL JUSTICE AND APPELLATE The largest allocation of General Fund in the Department is for the Criminal Justice and Appellate section, which accounts for 35.3 percent of General Fund appropriations to the Department for FY 2019-20. More than half of the General Fund in this section is devoted to the Appellate Unit, which represents the State in criminal appeals, and about one-third is devoted to the Special Prosecutions Unit, which investigates and prosecutes a variety of crimes. The following table provides expenditure and workload data for the Appellate Unit.

APPELLATE UNIT DATA: FY 2014-15 TO FY 2019-20

FY 14-15

ACTUAL FY 15-16

ACTUAL FY 16-17

ACTUAL FY 17-18

ACTUAL FY 18-19

ACTUAL FY 19-20

APPROP./EST.

Expenditures/Appropriations (excluding central appropriations) $3,692,658 $3,498,574 $3,854,792 $3,664,404 $4,006,102 $4,319,481

FTE 37.7 36.2 35.8 36.5 37.6 42.2

Opening briefs received 952 1,056 968 971 1,002 1,000

Answer briefs filed 1,017 911 931 943 1,034 1,095

Case backlog 264 428 466 494 463 345

DISTRICT ATTORNEYS’ SALARIES The Colorado Constitution requires each judicial district to elect a district attorney. Similar to the Attorney General, district attorneys (DAs) are part of the executive branch of government and their powers and duties are prescribed by the General Assembly. Each DA is responsible for representing the legal interests of the people of the State of Colorado and prosecuting criminal cases for crimes committed within his or her judicial district on behalf of the people. Upon request, DAs provide legal advice and legal representation to county officers and employees, and render legal advice to peace officers pertaining to affidavits and warrants for arrests, searches, seizures, and court orders for the production of records. While DAs’ office budgets are primarily set and provided by their respective boards of county commissioners within each judicial district, the State provides direct funding for DAs, via state agencies, for certain purposes. The Department of Law's budget includes an annual appropriation for DA salaries. Pursuant to Section 20-1-306, C.R.S., the State contributes 80.0 percent of the funding for a minimum DA salary that is established in statute (including the associated costs of employer Public Employees’ Retirement Association contributions). In 2007 (H.B. 07-1170), the General Assembly raised the statutory minimum salary for DAs over a four-year period. A judicial district may choose to pay a salary that exceeds the statutory minimum using local funds. The appropriation to the Department of Law for the State’s contribution for DA salaries currently accounts for 14.7 percent of total General Fund appropriations to the Department. The following table details recent expenditures/appropriations for this purpose.


STATE EXPENDITURES FOR DISTRICT ATTORNEY SALARIES: FY 2007-08 TO FY 2019-20

FISCAL YEAR EXPENDITURES/ APPROPRIATIONS ANNUAL INCREASE CUMULATIVE INCREASE

2007-08 $1,315,985 n/a n/a

2008-09 1,654,605 $338,620 $338,620

2009-10 2,096,027 441,422 780,042

2010-11 2,263,229 167,202 947,244

2011-12 2,479,847 216,618 1,163,862

2012-13 2,656,471 176,624 1,340,486

2013-14 2,676,960 20,489 1,360,975

2014-15 2,697,640 20,680 1,381,655

2015-16 2,718,249 20,609 1,402,264

2016-17 2,738,841 20,592 1,422,856

2017-18 2,749,138 10,297 1,433,153

2018-19 2,749,138 0 1,433,153

2019-20 appropriation 2,754,858 5,720 1,438,873


SUMMARY: FY 2019-20 APPROPRIATION & FY 2020-21 REQUEST

DEPARTMENT OF LAW TOTAL

FUNDS GENERAL

FUND CASH

FUNDS REAPPROPRIATED

FUNDS FEDERAL

FUNDS

FTE

FY 2019-20 APPROPRIATION:

SB 19-207 (Long Bill) 90,145,714 18,497,361 17,626,348 51,667,911 2,354,094 500.4

Other legislation 2,220,784 220,412 62,129 1,938,243 0 13.1

TOTAL $92,366,498 $18,717,773 $17,688,477 $53,606,154 $2,354,094 513.5

FY 2020-21 REQUESTED APPROPRIATION:

FY 2019-20 Appropriation $92,366,498 18,717,773 $17,688,477 $53,606,154 $2,354,094 513.5

R1 Safe2Tell 129,906 129,906 0 0 0 0.0

R2 Administration section support 353,274 0 0 353,274 0 3.0

R3 Data security and privacy 300,552 148,116 152,436 0 0 1.9

Annualize prior year budget actions 2,692,646 689,725 223,501 1,724,920 54,500 0.7

Annualize prior year legislation 898,715 (118,841) 575,967 435,873 5,716 3.9

Indirect cost assessment 609,228 (58,791) 718,314 (59,717) 9,422 0.0

Non-prioritized request items 305,860 (1,443) (3,504) 310,558 249 1.6

Technical adjustments 9,168 (174,152) (221,645) 404,984 (19) 1.0

Centrally appropriated line items (186,280) (51,770) (4,064) (111,214) (19,232) 0.0

TOTAL $97,479,567 $19,280,523 $19,129,482 $56,664,832 $2,404,730 525.6

INCREASE/(DECREASE) $5,113,069 $562,750 $1,441,005 $3,058,678 $50,636 12.1

Percentage Change 5.5% 3.0% 8.1% 5.7% 2.2% 2.4%

R1 SAFE2TELL: The request includes $129,906 General Fund in FY 2020-21 for the Safe2Tell program. This is based on two prior year budget actions. First, the request includes an increase of $46,756 General Fund to backfill a reduction made in FY 2019-20 as part of the transfer of Safe2Tell dispatch services from the DOL to the Department of Public Safety. Second, the request includes an increase of $83,150 General Fund related to S.B. 16-193 (Safe2Tell Program New Duties and Annual Report), which included a final appropriation that was lower than the expected costs identified in the fiscal note. R2 ADMINISTRATION SECTION SUPPORT: The request includes $353,274 reappropriated funds and 3.0 FTE in FY 2020-21 to address an increased administrative workload resulting from an expansion of responsibilities and increases in staffing across the Department. R3 DATA SECURITY AND PRIVACY: The request includes $300,552 total funds, including $148,116 General Fund, and 1.9 FTE in FY 2020-21 to enhance the Consumer Protection Section’s investigation and enforcement efforts in the area of data security and privacy. ANNUALIZE PRIOR YEAR BUDGET ACTIONS: The request includes adjustments related to prior year budget actions.

ANNUALIZE PRIOR YEAR BUDGET ACTIONS TOTAL

FUNDS GENERAL

FUND CASH


FUNDS FEDERAL

FUNDS FTE

FY 19-20 Salary survey $1,971,900 $501,539 $193,710 $1,233,678 $42,973 0.0


ANNUALIZE PRIOR YEAR BUDGET ACTIONS TOTAL

FUNDS GENERAL

FUND CASH


FUNDS FEDERAL

FUNDS FTE

FY 19-20 Merit pay 689,740 157,843 31,184 492,399 8,314 0.0

FY 19-20 BA2 Appellate backlog 24,139 24,139 0 0 0 0.4

FY 19-20 BA6 Additional opioid staff 13,400 13,400 0 0 0 0.2

FY 19-20 BA4 Asst Deputy AG for Water 9,900 9,900 0 0 0 0.1

FY 19-20 BA1 IT asset maintenance (16,433) (17,096) (1,393) (1,157) 3,213 0.0

TOTAL $2,692,646 $689,725 $223,501 $1,724,920 $54,500 0.7

ANNUALIZE PRIOR YEAR LEGISLATION: The request includes adjustments related to prior year legislation.

ANNUALIZE PRIOR YEAR LEGISLATION TOTAL

FUNDS GENERAL

FUND CASH


FUNDS FEDERAL

FUNDS FTE

SB 19-218 Sunset medical marijuana $382,499 $0 $0 $382,499 $0 1.8

SB18-200 PERA 258,758 46,207 33,770 173,065 5,716 0.0

SB 19-002 Regulation of student loan servicers 232,055 (115,273) 347,328 0 0 1.6

HB 19-1309 Mobile home park oversight 199,572 0 199,572 0 0 1.1

HB 19-1090 Publicly licensed marijuana companies 64,251 0 0 64,251 0 0.3

HB 19-1242 Board of Pharmacy regulate technicians 62,179 0 0 62,179 0 0.4

SB 19-005 Import prescription drugs from Canada 10,363 0 0 10,363 0 0.1

SB 19-030 Remedying improper guilty pleas 225 225 0 0 0 0.0

SB 19-223 Actions related to competency to proceed (117,360) (50,000) 0 (67,360) 0 (0.4)

SB 19-236 Sunset PUC (93,267) 0 0 (93,267) 0 (0.5)

SB 19-224 Sunset regulated marijuana (77,722) 0 0 (77,722) 0 (0.5)

HB 19-1230 Marijuana hospitality establishments (18,135) 0 0 (18,135) 0 0.0

SB 19-166 POST board revoke certification (4,703) 0 (4,703) 0 0 0.0

TOTAL $898,715 ($118,841) $575,967 $435,873 $5,716 3.9

INDIRECT COST ASSESSMENT: The request includes adjustments based on the Department’s indirect cost assessment plan. NON-PRIORITIZED REQUEST ITEMS: The request includes four decision items originating in other departments. The following table summarizes the non-prioritized requests, which will be addressed in separate staff briefings.

NON-PRIORITIZED REQUEST ITEMS TOTAL

FUNDS GENERAL

FUND CASH


FUNDS FEDERAL

FUNDS FTE

NP1 Natural Resources legal budget request $191,881 $0 $0 $191,881 $0 1.0

NP2 Governor's Energy Office legal budget request 110,864 0 0 110,864 0 0.6

OIT Budget request package 8,560 2,386 1,218 4,707 249 0.0

DPA Annual fleet vehicle request (5,445) (3,829) (4,722) 3,106 0 0.0

TOTAL $305,860 ($1,443) ($3,504) $310,558 $249 1.6

TECHNICAL CHANGES: The request includes five technical changes, as detailed in the table below.

TECHNICAL ADJUSTMENTS TOTAL

FUNDS GENERAL

FUND CASH


FUNDS FEDERAL

FUNDS FTE

Attorney Registration and CLE $9,168 $1,995 $0 $7,173 $0 0.0

Annualize POTS to indirect recoveries 0 (176,166) 0 176,166 0 0.0


TECHNICAL ADJUSTMENTS TOTAL

FUNDS GENERAL

FUND CASH


FUNDS FEDERAL

FUNDS FTE

Technical adjustment to HB 19-1309 0 0 (221,645) 221,645 0 0.0

Technical adjustment for Medicaid match 0 19 0 0 (19) 0.0

FTE true-up for custodial 0 0 0 0 0 1.0

TOTAL $9,168 ($174,152) ($221,645) $404,984 ($19) 1.0

CENTRALLY APPROPRIATED LINE ITEMS: The request includes adjustments to centrally appropriated line item, as detailed in the following table.

CENTRALLY APPROPRIATED LINE ITEMS TOTAL

FUNDS GENERAL

FUND CASH


FUNDS FEDERAL

FUNDS FTE

Health, life, and dental $465,559 $109,825 $21,978 $331,864 $1,892 0.0

AED 154,129 51,715 17,223 87,900 (2,709) 0.0

SAED 154,129 51,715 17,223 87,900 (2,709) 0.0

Ralph L. Carr Judicial Center leased space 61,136 (3,695) 9,035 45,320 10,476 0.0

Payments to OIT adjustment 42,112 6,248 6,083 26,252 3,529 0.0

CORE adjustment 12,619 3,226 1,799 7,105 489 0.0

Short-term disability 5,240 1,758 586 2,988 (92) 0.0

Salary survey (657,164) (160,352) (43,645) (435,130) (18,037) 0.0

Merit pay (257,809) (62,223) 1,167 (190,686) (6,067) 0.0

Payment to risk management / property funds adjustment (82,819) (24,514) (11,762) (44,731) (1,812) 0.0

PERA Direct Distribution (52,674) (9,617) (10,096) (28,352) (4,609) 0.0

Legal services adjustment (25,884) (13,355) (12,529) 0 0 0.0

Workers’ compensation adjustment (4,322) (2,501) (594) (1,644) 417 0.0

ALJ adjustment (532) 0 (532) 0 0 0.0

TOTAL ($186,280) ($51,770) ($4,064) ($111,214) ($19,232) 0.0

The Department’s request includes the statewide salary survey increase of 2.0 percent for classified employees, as well as an additional salary survey and merit pay increase for attorneys, as outlined in the table below. The request is based on findings from the 2019 market survey conducted by the Department.

ATTORNEY SALARY SURVEY AND MERIT PAY REQUEST ATTORNEY CLASS TOTAL ADJUSTMENT SALARY SURVEY MERIT PAY

Deputies 5.1% 4.0% 1.1%

Firsts 3.6% 2.5% 1.1%

Seniors 3.6% 2.5% 1.1%

Asst. Attorneys General 3.6% 2.5% 1.1%


ISSUE: MAJOR LITIGATION PENDING AGAINST THE STATE

The Department of Law submits an annual report to the State Controller discussing pending litigation against the State that could have a significant financial impact. The 2019 report includes cases involving the Department of Corrections related to hepatitis C medications for inmates and claim for excessive force; the Department of Health Care Policy and Financing related to the Children’s Basic Health Plan, hepatitis C drugs for Medicaid beneficiaries, operations at the Pueblo Regional Center, and the hospital provider fee; the Department of Natural Resources related to water litigation; the Department of Public Health and Environment related to the Heartland Biogas Facility; the Department of Revenue related to tax collections; and the Department of State related to the financing of elections. SUMMARY The following ongoing legal cases involving the State could have a significant financial impact: Department of Corrections

Hepatitis C Drugs for Inmates

Claim of Excessive Force By Corrections Officer

Health Care Policy and Financing

CHIPRA Bonus Recovery

Pueblo Regional Center CMS Report

Hepatitis C Drugs for Medicaid Beneficiaries

Hospital Provider Fee Natural Resources

Rio Grande River Compact Public Health and Environment

Heartland Biogas Facility State Court Litigation Revenue

Online Travel Company Tax Litigation State

Election Funding RECOMMENDATION Staff recommends that the Committee ask the Department to discuss the status of the various cases listed in the report, as well as any other cases the Attorney General believes warrant the Committee’s attention, at the Department’s upcoming hearing.


DISCUSSION The Department of Law submits an annual report to the State Controller concerning pending or threatened litigation, claims, and assessments involving significant dollar amounts, brought against the State and to which the Department has devoted substantial attention on behalf of the State. The Department's annual report describes the nature and status of each case, the claims asserted by the plaintiff and the objectives and/or damages sought, how management is responding to the litigation, the Attorney General’s evaluation of the likelihood of an unfavorable outcome, and an estimate as to the amount or range of potential loss. This annual report does not, however, include information about two types of cases or claims: As the Department does not represent the General Assembly (except in cases under the Risk Management Fund) or the University of Colorado Board of Regents, this report excludes information about cases brought against these two entities. Although notices of claims in the nature of tort must be filed with the Attorney General pursuant to the Colorado Governmental Immunity Act (CGIA) 3 , the Department of Personnel's State Risk Management Office and the State Claims Board have the responsibility to investigate, adjust, and settle such claims before they become lawsuits4. All tort and federal claims alleging damages against state agencies and employees, if settled, are to be paid out of the Risk Management Fund to the limits of the CGIA. Thus, the report excludes information about claims that have not resulted in lawsuits. The Department submitted the 2019 annual report to the State Controller on September 5, 2019. Based on the report, as well as additional information from the Department of Law, staff has provided a brief summary of unresolved cases in which the potential financial impact, either through damages, attorneys’ fees and costs, or the cost of state compliance with court orders, exceeds $5 million. In cases where the Plaintiff has alleged more than $5 million in damages, but the law limits the plaintiff’s potential recovery to an amount less than $5 million (such as damage caps provided by the Colorado Governmental Immunity Act), the litigation is not included in this report. The cases are organized by department, in the same order as they are listed on the previous page. Corrections Hepatitis C Drugs for Inmates Case. On July 19, 2017, the plaintiffs filed a class action asserting that the denial and/or delay in the provision of “breakthrough” direct acting anti-viral medications recently approved by the Food and Drug Administration (FDA) for Hepatitis C patients violated inmates’ constitutional rights. The plaintiffs argue that the community standard of care now, as endorsed by major medical associations, requires treating all chronic Hepatitis C patients with the direct acting anti-viral medications and that the Department of Corrections (DOC) is delaying/denying this treatment based upon unconstitutional eligibility criteria. The plaintiffs are not seeking damages but are seeking declaratory and injunctive relief requiring the State to pay for these drugs for all Hepatitis C patients, as well as attorney fees. Status. DOC requested, and the General Assembly approved, funding for Hepatitis C treatment for FYs 2018-19 and FY 2019-20. Following these appropriations, the parties have reached a settlement

3 See Section 24-10-109, C.R.S. 4 See Section 24-30-1501, et seq., C.R.S.


agreement. Assuming the full appropriation is provided, and the DOC performs under the conditions of the settlement agreement, it is anticipated that the case will be dismissed at the end of FY 2019-20. Financial Impact: Parties have agreed to resolve the plaintiffs request for attorney fees and costs in the amount of $175,000. Claim of Excessive Force by Corrections Officer Case. On March 7, 2013, a prison inmate with a seizure disorder had a seizure, was treated by prison staff, then was returned to his cell. His cell mate later observed him showing signs of another seizure and called for assistance. The inmate was assisted by the defendant. However, the cell mate then reported that the defendant slammed the plaintiff against the wall, causing injuries. The plaintiff has no memory of the incident but brought suit for excessive force based on the cell mate’s accounting of events. The case was tried to a jury in March 2018, and that jury returned a verdict in favor of the plaintiff in the amount of $5.0 million in compensatory damages and $1.0 million in punitive damages. The verdict was subsequently set aside on the ground that is was so unsupported by the evidence that is raised an irresistible inference that passion, prejudice, corruption, or other improper cause invaded the trial. A new trial was granted and the verdict was in favor of the defendant. The plaintiff appealed and is seeking a reinstatement of the $6.0 million, plus costs, attorneys’ fees, and interest. Status. The parties were contacted by a mediator but it was determined that the parties were so far apart that monetary offers were not relayed. The mediator and the parties agreed to proceed to file appellate briefs to better evaluate the strengths and weaknesses of the case, with the option to reopen settlement discussions. The Opening Brief has been filed and the Defendant is currently drafting the Answer Brief. Financial Impact: Restitution of the verdict would be $6.0 million, plus attorneys’ fees, costs, and interest. The Department estimates attorneys fees in this case are likely to excess $250,000. The Department indicates there is meaningful potential for an unfavorable outcome. Health Care Policy and Financing CHIPRA Bonus Recovery Case. On April 30, 2019, the Center for Medicare and Medicaid Services (CMS) issued a demand that Colorado return $38.4 million in performance bonus payments paid under the Children’s Health Insurance Program Reauthorization Act of 2009. The Department disagrees with the CMS finding that the Department improperly included individuals in the enrollment counts provided to CMS for FYs 2009-10 through 2012-13. Status. The Department filed an appeal at the federal Departmental Appeals Board on May 30, 2019 and provided a brief and written argument in September 2019. Financial Impact. CMS seeks to recover $38.4 million. Pueblo Regional Center CMS Report Case. In April 2015, the Department of Health Care Policy and Financing (HCPF) reported a number of serious incidents at the Pueblo Regional Center (PRC) to the Center for Medicare and Medicaid Services (CMS). In response, CMS conducted a detailed review of PRC documentation of the incidents and an on-site visit of the Pueblo Regional Center in 2016. In August 2016, the CMS sent the


Department of Health Care Policy and Financing (HCPF) a report of its findings and requested development of a corrective action plan. The CMS asserts that HCPF violated federal administrative requirements regarding administration of the Medicaid Home and Community Based Services waiver program for the developmentally disabled. At this point, the CMS claims involve care provided pursuant to the waiver to approximately 60 individuals between November 2014 and November 2015. The CMS seeks disallowances of payments to HCPF for services provided at the Pueblo Regional Center between at least November 1, 2014, and November 2015, and possibly beyond. The CMS also sought the development and implementation of a corrective action plan within twelve months, which is underway and a moratorium on admissions to the Pueblo Regional Center, which occurred until the Center met certain benchmarks and the parties jointly agreed to lift the moratorium on August 15, 2018. Status. On September 26, 2016, HCPF submitted its proposed Corrective Action Plan to CMS, which initiated an ongoing process of negotiation between HCPF and CMS. HCPF and CMS continue to exchange information in an effort to resolve concerns raised by CMS. Following the CMS response to the initial HCPF submission, HCPF filed a federal administrative appeal with the Department of Health and Human Services in October 2016 to dispute the scope of the corrective action plan and any proposed remedial sanctions. However, that appeal has been stayed to allow the parties to attempt to negotiate a resolution. Financial Impact: The CMS has not provided an amount for the disallowances. However, information from HCPF and CMS suggests the disallowances may exceed $5 million. Hepatitis C Drugs for Medicaid Beneficiaries Case. On April 13, 2017, three plaintiffs filed a case seeking a permanent injunction enjoining the Department of Health Care Policy and Financing (HCPF) from enforcing its prior authorization criteria for the direct acting anti-viral drugs to treat Hepatitis C in Medicaid beneficiaries. Under previous authorization criteria, HCPF limited the use of these medications to Hepatitis C patients meeting specific criteria. The plaintiffs assert that the medications are medically necessary for all individuals diagnosed with Hepatitis C and that any Medicaid recipient for whom a doctor has prescribed the medications should have access to the medications. Status. The original three plaintiffs filed the class action on April 13, 2017. An amended complaint was filed on May 9, 2017, adding a fourth plaintiff. The plaintiffs filed a motion to certify a class and, over the Department’s objections, the court certified the class. While the lawsuit was pending, HCPF underwent its yearly review of all criteria required for approval of treatment with certain classes of medications, including the anti-viral drugs. During this process, the criteria at issue was eliminated (effective January 1, 2018). Because the criteria was eliminated through the ordinary course of evaluating authorization requirements, the parties to the lawsuit have agreed to settle Plaintiffs’ claims. The parties are in the process of having a written settlement agreement approved by the Court. Financial Impact: Risk Management has approved a settlement award of $64,500 for attorneys’ fees and cost for a modest incentive award ($500 for each of the four named plaintiffs). The case was dismissed on May 9, 2019. The Department’s obligations under the settlement agreement will end on January 1, 2020.


Hospital Provider Fee Case. In June 2015, the TABOR Foundation sued the Department of Health Care Policy and Financing claiming that the hospital provider fee is a tax rather than a fee and thus requires a vote of the Colorado electorate before it may be levied or increased. The original complaint challenged the fee imposed in FY 2010-11, FY 2011-12, and FY 2012-13 and sought a refund of all revenue collected, kept, or spent unconstitutionally, plus interest. On June 30, 2017, the plaintiff filed an amended complaint adding additional claims to: (1) include the additional fiscal years for the hospital provider fee since the suit was filed; (2) challenge the Colorado Healthcare Affordability and Sustainability Enterprise (CHASE, established in S.B. 17-267) as not meeting the definition of an enterprise; (3) challenge the CHASE fee as being a tax; (4) challenge the failure to fully adjust the TABOR spending limit in S.B. 17-267; and (5) challenge S.B. 17-267 as violating the constitutional single subject requirements. Status. The plaintiffs filed the complaint in Denver District Court on June 26, 2015. The Department filed a motion to dismiss on September 2, 2015, the plaintiffs responded, and the Department filed a reply on October 16, 2015. The motion was fully briefed and pending before the district court for 20 months when plaintiffs filed an amended complaint. Per the court’s order, on September 8, 2017, the Department filed a supplement to the motion to dismiss adding grounds to dismiss the new claims made in the amended complaint. On September 25, 2017, the Colorado Hospital Association filed a motion to intervene in the case, and which was granted on December 11, 2017. The parties filed cross-motions for summary judgment, which were fully briefed on August 20, 2018, and later argued before the District Court. After finding that the issues can be resolved on summary judgment, the Court vacated the five-day bench trial that was set to commence on October 29, 2018. On March 5, 2019, the District Court found that the plaintiffs had standing to bring the case, but found in favor of the state for all claims (listed above). An appeal has been filed and the plaintiffs and the State have submitted Opening briefs. Financial Impact. The estimated range of potential losses exceeds $5.59 billion (through FY 2018-19), plus 10 percent annual simple interest and additional fees collected on an ongoing basis. Natural Resources Rio Grande Compact Litigation Case. Texas filed suit against New Mexico for alleged violation of the Rio Grande Compact, asserting that New Mexico is consuming more water than allowed under the Compact. No claims have been made against Colorado at this time – and New Mexico and Texas have indicated they do not want to involve Colorado any more than necessary – but the State is listed as a defendant because it is a signatory to the Compact. Status. The case was filed in January 2013 and was accepted by the U.S. Supreme Court. New Mexico filed a motion to dismiss, and oral arguments were heard in August 2015. Oral arguments for exceptions to the Special Master’s First Interim Report occurred on January 8, 2018. In March ,the Court issued its ruling, allowing the U.S. to pursue claims under the Compact under very narrow conditions, and denying New Mexico’s motion to dismiss. As of July 2018, the case is at issue, and the parties have commenced discovery, with a tentative trial date anticipated for 2020. Due to the protracted timeline and extended timeframe associated with litigation, the case is expected to last years.


Financial Impact. No specific dollar amount has been identified against Colorado. Depending on the court’s interpretation of the Compact, either Texas or New Mexico (or both) may seek damages in the future. Public Health and Environment Heartland Biogas Facility State Court Litigation Case. Heartland Biogas filed a state suit against the Colorado Department of Public Health and Environment. The claims, arising from the voluntary closure of the company’s biogas facility, allege that the State agencies are liable under a theory of promissory estoppel and that the State’s actions constituted a regulatory taking. Heartland alleges the Department promised that all zoning approvals needed to operate a solid waste facility were obtained and that the facility could distribute wastewater to third parties. Heartland alleges that the Department later took the position that Heartland did not have the proper zoning permits and prohibited the company from distributing wastewater. Status. The Department moved to dismiss the case. The court granted the motion to dismiss as to the promissory estoppel claims but denied the motion as to the regulatory takings claim. Heartland has now filed an amended complaint reviving the promissory estoppel claims, which the State objected to. A status conference was scheduled for December 3, 2018, and the court allowed the plaintiff to amend the complaint to add Weld County to the lawsuit. The state has filed an interlocutory appeal. Financial Impact: The plaintiff is seeking more than $110 million in compensatory damages. The Department indicates that the likelihood of an unfavorable outcome in this case is uncertain. Revenue Online Travel Company Tax Litigation Case. The taxpayers (nine online travel companies) seek to reverse the Department of Revenue’s assessment regarding the payment of state sales tax and certain state-collected local taxes, along with associated penalties and interest. The taxpayers wish to obtain a ruling that they do not need to charge, collect, and remit the types of taxes at issue. The types of taxes at issue include Colorado’s state sales tax, as well as various state-collected local taxes, including city sales taxes, county sales taxes, county lodging taxes, and special district sales taxes (RTD, SCFD, multi-jurisdictional housing authorities, public safety improvement districts, local improvement districts, regional transportation authorities, local marketing districts, and the football stadium district). The taxpayers filed their appeal in Denver District Court on January 11, 2019. Status. Three of the taxpayers have agreed to settle and a written agreement is being drafted. The remaining taxpayers are continuing to litigate the matter. Financial Impact. That amount at issue through June 2019 is $30.7 million. Between the three settling taxpayers, they have agreed to pay approximately $5.0 million. State Election Funding Case. In December 2014, the National Federation of Independent Business (NFIB) sued the Secretary of State alleging that the use of business filing fees to support elections violates the Taxpayers Bill of Rights (TABOR).


Status. The parties filed cross-motions for summary judgement in Denver District Court in June 2015 and argued those motions in September 2015. On November 3, 2015, the Denver District Court issued an order granting summary judgement for the State. The Court did not decide whether the business and licensing fees are taxes but found that the statutory provisions authorizing the funding structure for the Secretary of State’s office predate TABOR’s enactment and are therefore not subject to challenge under TABOR. The Plaintiff filed a timely appeal to the Colorado Court of Appeals, and the matter was fully briefed. In an unpublished decision, the Court of Appeals reversed the trial court’s grant of summary judgment in favor of the Secretary and remanded the case for further factual development on the question of whether and to what extent the Secretary’s fees have increased post-TABOR’s enactment. The parties filed a joint petition for rehearing that was summarily denied, and then each party cross-petitioned for a writ of certiorari. The Supreme Court granted certiorari on three questions. Financial Impact. The plaintiffs seek a refund of allegedly unconstitutionally collected registration fees and the imposition of penalties, interest, fees, and costs. The complaint does not seek a precise monetary award but the Department estimates potential exposure of approximately $20 million. The Department notes a possibility that a decision with precedential value may implicate similar funding mechanisms in other state departments, which could implicate a significantly larger amount.


ISSUE: OPIOID LITIGATION AND POTENTIAL SETTLEMENT

The Department of Law’s Opioid Unit is actively investigating and engaging in litigation against opioid manufacturers, distributors, and retailers that use deceptive marketing and other irresponsible practices that have furthered the opioid epidemic. Department of Law efforts seek to curb those practices, as well as seek monetary damages.

SUMMARY

As recently reported by the media, Colorado is a part of a pending $48.0 billion opioid settlement.

While no settlements have been finalized to date, and a solid answer is difficult to provide until the settlement is complete and available for review, it is likely that any settlement dollars received as the result of opioid litigation would be custodial.

These custodial funds would be administered by the Department of Law, coordinated by the Department’s new Director of Opioid Strategy, in collaboration with the Opioid Crisis Recovery Funds Advisory Committee, which was created in H.B. 19-1009 (Substance Use Disorders Recovery).

RECOMMENDATION Staff recommends discussing opioid litigation with the Attorney General at the Department’s hearing, including the following:

Updates on litigation efforts, including any likely settlements

Expected revenue from potential settlements, including expectations as to how those funds will be distributed

The Attorney General’s role in determining how funds may be distributed

DISCUSSION

BACKGROUND In September 2018, the Department created an Opioid Litigation team, made up of an Assistant Attorney General and six temporary contract attorneys, as well as portions of the time of several other Department staff, including the Deputy of Consumer Protection. For FY 2019-20, the Department requested and the General Assembly authorized, $287,156 General Fund and 1.8 FTE to support the state’s opioid litigation efforts. According to the Department, the Unit is actively investigating and engaging in litigation against opioid manufacturers, distributors, and retailers that use deceptive marketing and other irresponsible practices that have furthered the opioid epidemic. Department of Law efforts seek to curb these practices, as well as seek monetary damages. The litigation has required significant staff hours to date, and the Department expects this to grow substantially as litigation continues, and as the Department engages in additional litigation against additional defendants. Much like tobacco litigation, this is expected to be a years-long process, with the potential for a significant financial settlement. Moreover, should the state be successful, there is a strong likelihood for ongoing


needs, much like the ongoing tobacco arbitration and regulatory compliance requirements. While there is no way to assess the outcome or future needs, the Department believes that Colorado’s investment in opioid litigation efforts early in the process will help to ensure Colorado is well-positioned to benefit in negotiations.

POTENTIAL SETTLEMENT As recently reported by the media, Colorado is a part of a pending $48.0 billion settlement with Cardinal Health, McKesson, Amerisource Bergen, Teva, and Johnson & Johnson. While the terms of this settlement have not yet been finalized or released, Colorado would receive some portion of those dollars.

WHERE WOULD SETTLEMENT DOLLARS GO? While no settlements have been finalized to date, and a solid answer is difficult to provide until the settlement is complete and available for review, it is likely that any settlement dollars received as the result of opioid litigation would be custodial. Section 24-31-108 (4)(a), C.R.S. defines custodial funds as money received by the Attorney General that:

Originated from a source other than the State of Colorado,

Are awarded or otherwise provided to the state for a particularly purpose, or

For which the state is acting as a custodian or trustee to carry out the particular purpose for which the money has been provided.

Further, statute states that any money received by the Attorney General and deemed custodial shall not be subject to annual appropriation by the General Assembly. While the General Assembly could consider a change to statute, the ability to redirect funding is limited. Court order or the terms of a settlement will most likely specify, at least in part, where and how the funds are to be used. For example, a settlement may direct that money be placed in custodial funds administered by the Attorney General, to be used for the prevention and treatment of opioid use.

DOL DIRECTOR OF OPIOID STRATEGY The DOL is in the process of hiring a Director of Opioid Strategy. This 1.0 FTE will coordinate the expenditure of opioid settlement dollars. Duties will include:

Providing fiscal oversight and coordination of settlement dollars,

Ensuring expenditures are made in accordance with settlement agreements and applicable court orders, and

Collaborating with stakeholders (including the legislature) to ensure dollars are prioritized for opioid addiction education, prevention, and treatment.

This position will be funded with Consumer Protection custodial dollars, and will report to the Attorney General. The Committee may recall that the Department’s FY 2019-20 budget request included funding for an additional FTE for the Office of Community Engagement, which was denied by the Committee. Staff recommended the Committee deny that request for two reasons. First, staff did not believe the Department has statutory authority for such a program. Additionally, staff believes operating opioid prevention programs out of the Department of Law is both duplicative to the efforts


of other state departments such as the Colorado Department of Public Health and Environment and the Department of Human Services, and not a core function of the Department of Law.

OPIOID CRISIS RECOVERY FUNDS ADVISORY COMMITTEE The Director of Opioid Strategy will also be responsible for convening and coordinating with the Opioid Crisis Recovery Funds Advisory Committee, which was created in H.B. 19-1009 (Substance Use Disorders Recovery). The Advisory Committee was created to advise and collaborate with the Department of Law on uses of any custodial funds received as the result of opioid-addiction-related litigation, and for which the use of the funds is not predetermined or committed by court order or other action by a state or federal court of law. The Committee consists of 26 members representing a variety of stakeholders, including medical professionals, community members impacted by the opioid crisis, and law enforcement. Statute does not require (nor prohibit) that any of these Committee members be members of the General Assembly.


Appendix A: Numbers Pages

FY 2017-18Actual

FY 2018-19Actual

FY 2019-20Appropriation

FY 2020-21Request

Request vs.Appropriation

DEPARTMENT OF LAWPhil Weiser, Attorney General

(1) ADMINISTRATIONThis section includes funding for the Attorney General, the Solicitor General, and other management staff, as well as the Department's human resources, accounting/budgeting, information technology, and legal support services units. These units are supported by General Fund and indirect cost recoveries. This section also includescentral appropriations for the entire Department, including funding for employee benefits, facilities, vehicles, and information technology. Cash funds appropriationsinclude moneys received by the Attorney General as an award of attorney fees or costs, and various other sources. Reappropriated funds derive from indirect cost recoveriesand moneys transferred from a variety of other appropriations. For FY 2014-15 and subsequent years, federal funds are from the Medicaid Fraud Control Program. Prioryears included federal funding from the Colorado Justice Review Project.

Personal Services 3,842,758 4,016,004 4,298,562 4,826,348 *FTE 39.3 40.4 48.2 51.2

General Fund 0 87,365 0 0Cash Funds 0 0 0 0Reappropriated Funds 3,842,758 3,928,639 4,298,562 4,826,348Federal Funds 0 0 0 0

Office of Community Engagement 802,157 855,299 926,944 1,071,869 *FTE 6.6 6.5 9.0 9.0

General Fund 790,593 790,563 734,556 879,160Cash Funds 0 0 192,388 192,709Reappropriated Funds 11,564 64,736 0 0Federal Funds 0 0 0 0

*This line item includes a decision item.



FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


Health, Life, and Dental 4,100,333 4,446,369 5,069,951 5,535,510General Fund 1,138,267 1,214,540 1,332,613 1,442,438Cash Funds 514,081 630,564 609,537 631,515Reappropriated Funds 2,343,126 2,457,733 2,982,564 3,314,428Federal Funds 104,859 143,532 145,237 147,129

Short-term Disability 78,820 80,820 78,605 83,845General Fund 20,652 22,619 20,740 22,498Cash Funds 9,237 9,336 9,634 10,220Reappropriated Funds 47,214 46,767 46,287 49,275Federal Funds 1,717 2,098 1,944 1,852

S.B. 04-257 Amortization Equalization Disbursement 2,074,232 2,126,857 2,311,928 2,466,057General Fund 543,479 595,245 609,996 661,711Cash Funds 243,079 245,682 283,366 300,589Reappropriated Funds 1,242,481 1,230,722 1,361,377 1,449,277Federal Funds 45,193 55,208 57,189 54,480

S.B. 06-235 Supplemental Amortization EqualizationDisbursement 2,074,232 2,126,857 2,311,928 2,466,057

General Fund 543,479 595,245 609,996 661,711Cash Funds 243,079 245,682 283,366 300,589Reappropriated Funds 1,242,481 1,230,722 1,361,377 1,449,277Federal Funds 45,193 55,208 57,189 54,480



FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


PERA Direct Distribution 0 0 1,173,886 1,121,212General Fund 0 0 310,469 300,852Cash Funds 0 0 146,761 136,665Reappropriated Funds 0 0 687,277 658,925Federal Funds 0 0 29,379 24,770

Salary Survey for Classified Employees 219,348 403,959 383,066 305,746General Fund 72,892 136,002 100,341 103,774Cash Funds 57,135 112,053 118,149 87,213Reappropriated Funds 76,997 131,697 139,664 94,804Federal Funds 12,324 24,207 24,912 19,955

Salary Survey for Exempt Employees 589,217 1,071,536 1,588,834 1,008,990General Fund 136,893 274,637 414,511 250,726Cash Funds 35,824 52,558 62,248 49,539Reappropriated Funds 411,605 731,902 1,094,014 703,744Federal Funds 4,895 12,439 18,061 4,981

Merit Pay for Exempt Employees 226,847 0 689,740 431,931General Fund 58,514 0 165,099 102,876Cash Funds 15,474 0 23,928 25,095Reappropriated Funds 150,724 0 492,399 301,713Federal Funds 2,135 0 8,314 2,247

Workers' Compensation 128,404 189,682 211,095 206,773General Fund 35,929 54,227 60,148 57,647Cash Funds 17,224 27,465 30,019 29,425Reappropriated Funds 71,908 102,871 115,332 113,688Federal Funds 3,343 5,119 5,596 6,013



FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


Attorney Registration and Continuing Legal Education 117,700 114,348 131,908 141,076General Fund 25,857 26,763 33,868 35,863Cash Funds 3,525 2,818 4,275 4,275Reappropriated Funds 87,324 84,523 92,340 99,513Federal Funds 994 244 1,425 1,425

Operating Expenses 204,676 199,121 202,917 225,567 *General Fund 0 0 0 0Cash Funds 0 0 0 0Reappropriated Funds 204,676 199,121 202,917 225,567Federal Funds 0 0 0 0

Legal Services 21,845 25,766 35,800 9,916General Fund 10,630 12,538 17,421 4,066Cash Funds 11,215 13,228 18,379 5,850Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0

Administrative Law Judge Services 7,819 5,736 1,307 775General Fund 0 0 0 0Cash Funds 7,819 5,736 1,307 775Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0

Payment to Risk Management and Property Funds 255,052 203,937 231,888 149,069General Fund 71,366 58,414 66,073 41,559Cash Funds 34,212 29,153 32,975 21,213Reappropriated Funds 142,835 110,855 126,693 81,962Federal Funds 6,639 5,515 6,147 4,335




FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


Vehicle Lease Payments 35,950 42,930 66,876 61,431 *General Fund 21,105 26,604 28,615 24,786Cash Funds 6,340 10,202 20,259 15,537Reappropriated Funds 8,235 5,975 17,462 20,568Federal Funds 270 149 540 540

Information Technology Asset Maintenance 829,612 669,808 1,375,402 1,358,969General Fund 237,994 200,209 395,965 378,869Cash Funds 97,694 95,563 194,779 193,386Reappropriated Funds 474,148 361,374 748,351 747,194Federal Funds 19,776 12,662 36,307 39,520

Ralph L. Carr Colorado Judicial Center Leased Space 3,261,575 3,320,567 3,379,635 3,440,771General Fund 924,384 951,100 962,949 959,254Cash Funds 383,833 474,661 480,597 489,632Reappropriated Funds 1,867,046 1,805,013 1,846,504 1,891,824Federal Funds 86,312 89,793 89,585 100,061

Payments to OIT 653,023 639,106 895,196 945,868 *General Fund 182,720 182,708 255,065 263,699Cash Funds 87,594 92,539 127,300 134,601Reappropriated Funds 365,710 346,610 489,102 520,061Federal Funds 16,999 17,249 23,729 27,507

CORE Operations 59,305 81,395 47,529 60,148General Fund 16,420 23,268 13,542 16,768Cash Funds 7,987 11,785 6,760 8,559Reappropriated Funds 33,348 44,145 25,967 33,072Federal Funds 1,550 2,197 1,260 1,749




FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


Attorney General Discretionary Fund 5,000 200 5,000 5,000General Fund 5,000 200 5,000 5,000Cash Funds 0 0 0 0Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0

Merit Pay for Classified Employees 95,651 0 0 0General Fund 31,786 0 0 0Cash Funds 24,915 0 0 0Reappropriated Funds 33,576 0 0 0Federal Funds 5,374 0 0 0

TOTAL - (1) Administration 19,683,556 20,620,297 25,417,997 25,922,928 2.0%FTE 45.9 46.9 57.2 60.2 5.2%

General Fund 4,867,960 5,252,247 6,136,967 6,213,257 1.2%Cash Funds 1,800,267 2,059,025 2,646,027 2,637,387 (0.3%)Reappropriated Funds 12,657,756 12,883,405 16,128,189 16,581,240 2.8%Federal Funds 357,573 425,620 506,814 491,044 (3.1%)



FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


(2) LEGAL SERVICES TO STATE AGENCIESThe Department provides legal services on a fee-for-service basis to state agencies and enterprises. This section includes appropriations for the attorneys, legal assistants,and support personnel who provide these services. In most cases, the appropriations in this section are reflected as reappropriated funds because a duplicate appropriationfor the purchase of legal services appears in the client agency’s budget. Cash funds reflect payments the Department receives from state agencies that are not duplicatedin appropriations elsewhere in the budget.

Personal Services 26,614,607 29,224,075 31,380,735 33,892,034 *FTE 251.7 258.4 269.9 273.8

General Fund 0 0 0 0Cash Funds 0 0 19,866 0Reappropriated Funds 26,614,607 29,224,075 31,360,869 33,892,034Federal Funds 0 0 0 0

Operating and Litigation 1,140,933 927,202 1,682,203 1,758,718 *General Fund 0 0 0 0Cash Funds 0 0 202,207 200,000Reappropriated Funds 1,140,933 927,202 1,479,996 1,558,718Federal Funds 0 0 0 0

Indirect Cost Assessment 3,140,956 3,266,800 3,552,478 4,048,375General Fund 0 0 0 0Cash Funds 1,245,355 1,080,050 1,287,309 1,910,245Reappropriated Funds 1,895,601 2,186,750 2,265,169 2,138,130Federal Funds 0 0 0 0

TOTAL - (2) Legal Services to State Agencies 30,896,496 33,418,077 36,615,416 39,699,127 8.4%FTE 251.7 258.4 269.9 273.8 1.4%

General Fund 0 0 0 0 0.0%Cash Funds 1,245,355 1,080,050 1,509,382 2,110,245 39.8%Reappropriated Funds 29,651,141 32,338,027 35,106,034 37,588,882 7.1%Federal Funds 0 0 0 0 0.0%

*This line item includes a decision item.18-Nov-2019 27 LAW-brf


FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


(3) CRIMINAL JUSTICE AND APPELLATEThis division investigates and prosecutes fraud involving insurance, securities, Medicaid, and workers' compensation. It also handles foreign prosecutions, certifies peaceofficers, provides support to district attorneys in certain cases, and represents the state in criminal appeals. When the Department is involved in criminal appeals or in trialcourt criminal prosecution, this division is responsible for keeping crime victims informed about the case. Cash fund sources include moneys paid by insurance companiesfor the investigation and prosecution of insurance fraud, fees paid by peace officers for P.O.S.T. Board certification, the Marijuana Tax Cash Fund, and a statewide vehicleregistration fee to support training for peace officers. Reappropriated funds are transferred from the Department of Regulatory Agencies and the Department of PublicSafety. Federal funds are from the U.S. Department of Health and Human Services' Medicaid Fraud Control Program.

Special Prosecutions Unit 4,492,295 4,613,835 4,460,237 4,656,738FTE 36.4 35.7 38.8 38.8

General Fund 2,023,919 2,025,232 2,180,540 2,272,075Cash Funds 1,618,242 1,795,179 1,491,217 1,558,704Reappropriated Funds 850,134 793,424 788,480 825,959Federal Funds 0 0 0 0

Auto Theft Prevention Grant 258,852 269,073 295,544 295,544FTE 1.7 2.0 2.0 2.0

General Fund 0 0 0 0Cash Funds 0 0 0 0Reappropriated Funds 258,852 269,073 295,544 295,544Federal Funds 0 0 0 0

Appellate Unit 3,664,404 4,006,102 4,319,481 4,626,092FTE 36.5 37.6 42.2 42.6

General Fund 3,367,705 3,581,023 3,874,455 4,122,275Cash Funds 0 0 0 0Reappropriated Funds 0 425,079 445,026 503,817Federal Funds 296,699 0 0 0



FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


Medicaid Fraud Control Unit 1,662,678 1,517,672 2,223,658 2,299,642FTE 15.5 14.4 20.0 20.0

General Fund 413,880 385,269 555,910 574,910Cash Funds 0 0 0 0Reappropriated Funds 0 0 0 0Federal Funds 1,248,798 1,132,403 1,667,748 1,724,732

Peace Officers Standards and Training Board Support 5,699,664 5,794,089 5,971,985 5,992,300FTE 10.0 11.1 14.6 14.6

General Fund 0 0 0 0Cash Funds 5,699,664 5,794,089 5,971,985 5,992,300Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0

Indirect Cost Assessment 572,690 601,149 672,893 708,206General Fund 0 0 0 0Cash Funds 342,933 379,147 401,474 422,543Reappropriated Funds 87,032 86,776 91,887 96,709Federal Funds 142,725 135,226 179,532 188,954

TOTAL - (3) Criminal Justice and Appellate 16,350,583 16,801,920 17,943,798 18,578,522 3.5%FTE 100.1 100.8 117.6 118.0 0.3%

General Fund 5,805,504 5,991,524 6,610,905 6,969,260 5.4%Cash Funds 7,660,839 7,968,415 7,864,676 7,973,547 1.4%Reappropriated Funds 1,196,018 1,574,352 1,620,937 1,722,029 6.2%Federal Funds 1,688,222 1,267,629 1,847,280 1,913,686 3.6%



FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


(4) WATER AND NATURAL RESOURCESThis section provides funding for department staff who protect and defend the interests of the State and its citizens in all areas of natural resources law and environmentallaw, including the use of surface and ground water, oil and gas development, mining and minerals, wildlife, the clean-up of contaminated sites, the proper storage ordisposal of hazardous waste, and protection of the state's air and water. Cash fund sources include the Colorado Water Conservation Board's Litigation Fund and moneysreceived by the Attorney General as an award of attorney fees or costs. Reappropriated funds are transferred from the Department of Public Health and Environmentfrom the Hazardous Substance Response Fund.

Federal and Interstate Water Unit 538,282 534,391 800,845 834,195FTE 4.7 4.5 6.4 6.5

General Fund 538,282 534,391 800,845 834,195Cash Funds 0 0 0 0Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0

Defense of the Colorado River Basin Compact 433,597 427,018 442,877 465,675FTE 3.5 3.5 3.5 3.5

General Fund 433,597 (818) 0 0Cash Funds 0 427,836 442,877 465,675Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0

Defense of the Republican River Compact 39,887 48,651 110,000 110,000General Fund 0 0 0 0Cash Funds 39,887 48,651 110,000 110,000Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0



FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


Consultant Expenses 66,592 90,706 275,000 275,000General Fund 0 0 0 0Cash Funds 66,592 90,706 275,000 275,000Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0

Comprehensive Environmental Response, Compensationand Liability Act 202,647 332,706 531,548 544,562

FTE 2.4 2.6 3.5 3.5General Fund 0 0 0 0Cash Funds 0 0 0 0Reappropriated Funds 202,647 332,706 531,548 544,562Federal Funds 0 0 0 0

Indirect Cost Assessment 45,465 46,726 49,477 52,074General Fund 0 0 0 0Cash Funds 0 0 0 0Reappropriated Funds 45,465 46,726 49,477 52,074Federal Funds 0 0 0 0

TOTAL - (4) Water and Natural Resources 1,326,470 1,480,198 2,209,747 2,281,506 3.2%FTE 10.6 10.6 13.4 13.5 0.7%

General Fund 971,879 533,573 800,845 834,195 4.2%Cash Funds 106,479 567,193 827,877 850,675 2.8%Reappropriated Funds 248,112 379,432 581,025 596,636 2.7%Federal Funds 0 0 0 0 0.0%



FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


(5) CONSUMER PROTECTIONThis section provides funding for department staff who protect Colorado consumers against fraud and enforce state and federal consumer protection, antitrust, charitablesolicitation, consumer lending, and fair debt collection laws. This section also provides funding to support one attorney who is responsible for enforcing the tobaccomaster settlement agreements and protecting the State's interests under the settlement payment calculation provision. Cash fund sources include fees paid by regulatedentities, custodial moneys awarded to the Attorney General in consumer protection lawsuits, and tobacco settlement moneys. Reappropriated funds are transferred fromthe Department of Regulatory Agencies for consumer protection activities related to mortgage brokers.

Consumer Protection and Antitrust 3,310,189 3,012,258 3,466,185 3,957,873 *FTE 30.8 31.4 33.0 36.1

General Fund 1,308,344 1,445,826 1,802,915 2,057,236Cash Funds (275,275) 1,585,225 1,514,506 1,746,909Reappropriated Funds 2,117,182 (18,793) 148,764 153,728Federal Funds 159,938 0 0 0

Consumer Credit Unit 1,557,374 1,750,229 1,925,826 2,220,954FTE 17.7 18.6 21.4 23.0

General Fund 0 0 115,273 0Cash Funds 1,557,374 1,750,229 1,810,553 2,220,954Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0

Indirect Cost Assessment 500,111 554,034 586,661 662,082General Fund 0 0 0 0Cash Funds 0 534,009 565,456 639,765Reappropriated Funds 480,626 20,025 21,205 22,317Federal Funds 19,485 0 0 0




FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


TOTAL - (5) Consumer Protection 5,367,674 5,316,521 5,978,672 6,840,909 14.4%FTE 48.5 50.0 54.4 59.1 8.6%

General Fund 1,308,344 1,445,826 1,918,188 2,057,236 7.2%Cash Funds 1,282,099 3,869,463 3,890,515 4,607,628 18.4%Reappropriated Funds 2,597,808 1,232 169,969 176,045 3.6%Federal Funds 179,423 0 0 0 0.0%



FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


(6) SPECIAL PURPOSEThe section includes funding to cover 80 percent of the statutory minimum salary for Colorado's twenty-two district attorneys, for unanticipated legal and technologyexpenses, and for litigation expenses associated with significant lawsuits. Cash fund sources include tobacco settlement moneys, moneys received from State Board ofLand Commissioners from its Investment and Development Fund, and moneys received by the Attorney General as an award of attorney fees or costs.

District Attorneys' Salaries 2,749,138 2,749,138 2,754,858 2,754,858General Fund 2,749,138 2,749,138 2,754,858 2,754,858Cash Funds 0 0 0 0Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0

Deputy District Attorney Training 405,000 350,000 400,000 350,000General Fund 405,000 350,000 400,000 350,000Cash Funds 0 0 0 0Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0

Litigation Management 175,981 200,000 200,000 200,000General Fund 0 0 0 0Cash Funds 175,981 200,000 200,000 200,000Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0

Tobacco Litigation 759,110 15,576 750,000 750,000General Fund 0 0 0 0Cash Funds 759,110 15,576 750,000 750,000Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0



FY 2017-18Actual

FY 2018-19Actual


FY 2020-21Request


CORA OML Attorney 75,790 74,516 96,010 101,717FTE 0.7 0.7 1.0 1.0

General Fund 75,790 74,516 96,010 101,717Cash Funds 0 0 0 0Reappropriated Funds 0 0 0 0Federal Funds 0 0 0 0

TOTAL - (6) Special Purpose 4,165,019 3,389,230 4,200,868 4,156,575 (1.1%)FTE 0.7 0.7 1.0 1.0 0.0%

General Fund 3,229,928 3,173,654 3,250,868 3,206,575 (1.4%)Cash Funds 935,091 215,576 950,000 950,000 0.0%Reappropriated Funds 0 0 0 0 0.0%Federal Funds 0 0 0 0 0.0%

TOTAL - Department of Law 77,789,798 81,026,243 92,366,498 97,479,567 5.5%FTE 457.5 467.4 513.5 525.6 2.4%

General Fund 16,183,615 16,396,824 18,717,773 19,280,523 3.0%Cash Funds 13,030,130 15,759,722 17,688,477 19,129,482 8.1%Reappropriated Funds 46,350,835 47,176,448 53,606,154 56,664,832 5.7%Federal Funds 2,225,218 1,693,249 2,354,094 2,404,730 2.2%


APPENDIX B RECENT LEGISLATION AFFECTING

DEPARTMENT BUDGET

2018 SESSION BILLS S.B. 18-027 (ENHANCED NURSE LICENSURE COMPACT): Adopts the Enhanced Nurse Licensure Compact (enhanced compact) and repeals the existing Nurse Licensure Compact. Requires all registered and licensed practical nurses licensed after July 20, 2017, to complete a fingerprint-based criminal history check in order to participate in the compact. Grandfathers nurses holding a multi-state license prior to July 20, 2017, into the enhanced compact. For FY 2018-19, appropriates $93,773 reappropriated funds and 0.5 FTE to the Department of Law for the provision of legal services to the Department of Regulatory Agencies (DORA). S.B. 18-145 (IMPLEMENT EMPLOYMENT FIRST RECOMMENDATIONS): Implements recommendations from the 2017 Employment First Advisory Partnership. Contingent upon appropriations to the Department of Health Care Policy and Financing (HCPF), requires the Colorado Department of Labor and Employment (CDLE), in conjunction with the Medical Services Board in HCPF, to promulgate rules by July 1, 2019, requiring training or certification for certain supported employment services providers. For FY 2018-19, appropriates $2,131 reappropriated funds to the Department of Law for the provision of legal services to the CDLE. S.B. 18-167 (ENFORCE REQUIREMENTS 811 LOCATE UNDERGROUND): Creates the Underground Damage Prevention Safety Commission (commission) in the Colorado Department of Labor and Employment (CDLE) to support increased enforcement related to the excavation of underground facilities. Requires Colorado 811 to enter into a memorandum of understanding with the newly created commission and to provide administrative support to the commission. For FY 2018-19, appropriates $12,787 reappropriated funds and 0.1 FTE to the Department of Law for the provision of legal services to the CDLE. S.B. 18-234 (HUMAN REMAINS DISPOSITION SALE BUSINESSES): Makes it unlawful for a person owning an indirect or direct interest in a funeral establishment or a crematory to own an indirect or direct interest in a nontransplant tissue bank. Requires each nontransplant tissue bank to register with the Department of Regulatory Agencies (DORA) by July 1, 2019, and requires nontransplant tissue banks to pay registration and renewal fees set by DORA, comply with standards of practice as specified in the bill, have body part delivery records, and disclose donor information. Authorizes DORA to initiate disciplinary actions against nontransplant tissue banks. For FY 2018-19, appropriates $5,328 reappropriated funds to the Department of Law for the provision of legal services to the DORA. S.B. 18-243 (RETAIL SALES OF ALCOHOL BEVERAGES): Changes state law related to retail sales of alcohol. For FY 2018-19, appropriates $10,656 reappropriated funds and 0.1 FTE to the Department of Law for the provision of legal services to the Department of Revenue. S.B. 18-271 (IMPROVE FUNDING FOR MARIJUANA RESEARCH): Allows a marijuana research and development licensee or a marijuana research and development cultivation licensee to share premises


with a commonly owned medical marijuana infused products manufacturer or a retail marijuana product manufacturers under a co-location permit. House Bill 18-1322 (Long Bill) transferred $3.0 million from the Marijuana Tax Cash Fund to the health research subaccount of the Medical Marijuana Program Cash Fund. This bill continues the subaccount from its current repeal date of July 1, 2019, to July 1, 2023, and authorizes the Department of Public Health and Environment (CDPHE) to use up to $100,000 from the subaccount for administration of the medical marijuana research grant program. For FY 2018-19, appropriates $10,656 reappropriated funds to the Department of Law for the provision of legal services to the Department of Revenue. H.B. 18-1017 (PSYCHOLOGY INTERJURISDICTIONAL COMPACT): Enters Colorado into the Psychology Interjurisdictional Compact (compact) to allow psychologists licensed by the Department of Regulatory Agencies (DORA) to practice in other compact states (member states) via telepsychology or short-term, in person practice. Specifies requirements for psychologists to participate in the compact. For FY 2018-19, appropriates $15,984 reappropriated funds and 0.1 to the Department of Law for the provision of legal services to DORA. H.B. 18-1224 (LICENSEE DISCIPLINE MEDIATION STATE AGENCY): Adds a mediation component to the process related to professional disciplinary actions initiated by state agencies. For FY 2018-19, appropriates $64,575 reappropriated funds and 0.3 FTE to the Department of Law for the provision of legal services to DORA. H.B. 18-1280 (COURT APPOINTEES FOR MARIJUANA BUSINESSES): Addresses requirements for court-appointed receiverships or similar situations related to a person taking possession of, operating, managing, or controlling a licensed marijuana business. Requires the Marijuana Enforcement Division (MED) in the Department of Revenue to issue temporary registration to any appointee that has certified to the appointing court that he or she is not prohibited from holding a marijuana license and has notified the MED of the court appointment. For FY 2018-19, appropriates $14,918 reappropriated funds and 0.1 FTE to the Department of Law for the provision of legal services to the Department of Revenue. H.B. 18-1322 (LONG BILL): General appropriations act for FY 2018-19. H.B. 18-1353 (DEFENSE COUNSEL IN MUNICIPAL COURT GRANT): Creates the Defense Counsel on First Appearance Grant Program in the Division of Local Government in the Department of Local Affairs (DOLA) to reimburse local governments, in full or in part, for costs associated with providing counsel to defendants at their first appearance in municipal court. For FY 2018-19, appropriates $1,598 reappropriated funds to the Department of Law for the provision of legal services to DOLA. H.B. 18-1434 (SAFE2TELL PROGRAM NEW DUTIES AND ANNUAL REPORT): Expands the Safe2Tell Program’s duties to include additional training responsibilities and reporting requirements. For FY 2018-19, appropriates $164,920 cash funds from the Marijuana Tax Cash Fund and 1.6 FTE to the Department of Law.

2019 SESSION BILLS S.B. 19-002 (REGULATE STUDENT LOAN EDUCATION LOAN SERVICERS): Requires entities that service student loans to be licensed by the Department of Law and creates the Student Loan


Ombudsperson to assist student loan borrowers. For FY 2019-20, appropriates $115,273 General Fund and 1.4 FTE to the Department. S.B. 19-005 (IMPORT PRESCRIPTION DRUGS FROM CANADA): Requires the Department of Health Care Policy and Financing (HCPF) to submit a request for federal approval for a program to import prescription drugs from Canada. Establishes parameters for the importation program. For FY 2019-20, appropriates $134,719 reappropriated funds and 0.7 FTE to the Department of Law for the provision of legal services to HCPF. S.B. 19-030 (REMEDYING IMPROPER GUILTY PLEAS): Allows a defendant who is an immigrant and who has successfully completed a deferred judgment and sentence to petition the court for an order vacating the defendant’s guilty plea on the grounds that they were not properly advised of the adverse immigration consequences of their plea. The court must grant the motion unless the prosecution can prove by a preponderance of the evidence that the defendant will not suffer an immigration consequence or that the plea was constitutionally entered. For FY 2019-20, appropriates $55,139 General Fund and 0.6 FTE to the Department of Law in anticipation of an increase in criminal appeals. S.B. 19-166 (POST BOARD REVOKE CERTIFICATION FOR UNTRUTHFUL STATEMENTS): Requires the revocation of a peace officer standards and training (POST) certification when the POST Board receives notice from a law enforcement agency that a peace officer made untruthful statements or omitted material facts. For FY 2019-20, appropriates $40,056 cash funds and 0.6 FTE from the P.O.S.T. Board Cash Fund to the Department of Law. S.B. 19-181 (PROTECT PUBLIC WELFARE OIL & GAS OPERATIONS): Expands the regulatory charge of the Department of Natural Resources (DNR) related to oil and gas production and allows local governments to also regulate oil and gas operations within their jurisdictions. For FY 2019-20, appropriates $186,534 reappropriated funds and 1.0 FTE to the Department of Law for the provision of legal services to DNR.

S.B. 19-207 (LONG BILL): General appropriations act for FY 2019-20. S.B. 19-218 (SUNSET MEDICAL MARIJUANA PROGRAM): Continues the Medical Marijuana Program in the Department of Public Health and Environment through September 1, 2028. Appropriates $560,143 cash funds and 0.4 FTE to the Department of Regulatory Agencies (DORA) for FY 2019-20 to investigate and take enforcement action against providers violating the statutory requirements for recommending medical marijuana to a patient. Of this amount, $535,456 and 2.9 FTE is reappropriated to the Department of Law for the provision of legal services to DORA. S.B. 18-200 (ELIMINATE UNFUNDED LIABILITY IN PERA): Makes changes to the defined benefit plan administered by the Colorado Public Employees' Retirement Association (PERA) with the goal of eliminating PERA's unfunded actuarial accrued liability within 30 years. Among other changes, on July 1, 2020, increases the monthly employer contribution to PERA on behalf of members by 0.25 percent of salary.


S.B. 19-223 (ACTIONS RELATED TO COMPETENCY TO PROCEED): Makes various changes to the process when a defendant's competency to proceed is raised in a criminal proceeding, including the following:

Shortens the times frames for several actions related to competency evaluations, competency restoration services, and related court hearings. Reduces the maximum time period that a defendant determined incompetent to proceed may be detained.

Expands the information that must be included in competency evaluation reports. Requires the Department of Human Services (DHS) to create a committee of clinical experts to create a guideline to be used by all competency evaluators when determining the correct clinical location for competency restoration services. Limits the circumstances under which the court may order an inpatient competency evaluation.

Modifies the court’s options when a defendant is determined to be incompetent to proceed to trial, including options to initiate civil commitment proceedings, order outpatient restoration services unless inpatient restoration is recommended, require outpatient pretrial management services and care management services, and dismiss the charges.

If a defendant is determined to be incompetent to proceed and outpatient restoration services are available and clinically appropriate, requires DHS to notify the court and court liaison and develop a discharge plan. For defendants ordered to undergo inpatient restoration services, requires DHS to offer services based on their level of need. Allows DHS to move a defendant receiving inpatient restoration services to a less restrictive facility.

When a defendant is restored to competency and returned to county jail or the community, requires DHS to coordinate with other agencies to ensure the defendant receives ongoing services and medication. Directs DHS, subject to available appropriations, to require county jails to assist in the provision of interim mental health services for individuals who have been ordered to undergo inpatient competency restoration and are awaiting admission to an inpatient bed.

Requires DHS, with assistance from the Judicial Department, to develop an electronic system to track the status of defendants ordered to undergo competency evaluation or restoration and the cost of inpatient and outpatient services.

Requires DHS to create a partnership with an accredited higher education institution to develop and provide rigorous evaluation training. Requires the Judicial Department, the Office of the State Public Defender, the Alternate Defense Counsel, and district attorneys to train attorneys and other employees on juvenile and adult competency evaluation reports, restoration services, and certification proceedings and to report annually to the General Assembly on this training.

The following table summarizes the appropriations and appropriation changes that are included in the act.

S.B. 19-223 APPROPRIATIONS

GENERAL

FUND

REAPPROPRIATED

FUNDS FTE

Department of Human Services

Fines, liquidated damages, costs, or attorney fees for non-compliance with the consent decree $10,483,000

Compensation for the Special Master pursuant to the consent decree 500,000

Community transition services (anticipated reversion) (2,150,000)

Rural co-occurring disorder services (anticipated reversion) (1,375,000)

Jail-based behavioral health services (anticipated reversion) (1,000,000)

TOTAL: FY 2018-19 $6,458,000


S.B. 19-223 APPROPRIATIONS

GENERAL

FUND

REAPPROPRIATED

FUNDS FTE

Department of Human Services $8,141,194 19.0

Judicial Department 750,570 5.4

Department of Law 50,000 139,901 0.8

Governor’s Office of Information Technology Services 454,539 0.9

TOTAL: FY 2019-20 $8,941,764 $594,440 26.1

S.B. 19-224 (SUNSET REGULATED MARIJUANA): Continues the regulation of medical and retail marijuana in the Department of Revenue (DOR), which is scheduled to repeal on September 1, 2019. For FY 2019-20, appropriates $103,630 reappropriated funds and 0.6 FTE to the Department of Law for the provision of legal services to DOR. S.B. 19-236 (SUNSET PUBLIC UTILITIES COMMISSION): Continues the Public Utilities Commission in the Department of Regulatory Agencies (DORA) through September 1, 2026, adds various requirements on the Commission and electric utilities related to clean energy planning and creates a process for electric utilities to issue energy impact bonds. For FY 2019-20, appropriates $186,534 reappropriated funds and 1.0 FTE to the Department of Law for the provision of legal services to DORA. H.B. 19-1009 (SUBSTANCE USE DISORDER RECOVERY): Expands a state housing voucher program in the Department of Local Affairs (DOLA) to include individuals with substance use disorders who are transitioning back into the community from a correctional or behavioral health institution, county jail, or residential treatment program. Creates a 26-member Opioid Crisis Recovery Funds Advisory Committee to advise and collaborate with the Department of Law on uses of any custodial funds received by the state as a result of opioid-addiction-related litigation for which the use of the funds is not predetermined by the court. H.B. 19-1045 (OFFICE OF PUBLIC GUARDIANSHIP OPERATION): Requires the Office of Public Guardianship to begin operating a pilot program in the Second Judicial District (Denver) as soon as it receives sufficient appropriations to do so. For FY 2019-20, appropriates $50,000 General Fund and 0.3 FTE to the Department of Law for the provision of legal services to the Office. H.B. 19-1090 (PUBLICLY LICENSED MARIJUANA COMPANIES): Modifies ownership and investment definitions and allows publicly traded corporations to own or invest in a marijuana business. For FY 2018-19, appropriates $31,089 reappropriated funds and 0.2 FTE to the Department of Law for the provision of legal services to the Department of Revenue (DOR). For FY 2019-20, appropriates $242,494 reappropriated funds and 1.3 FTE to the Department of Law for the provision of legal services to the DOR. H.B. 19-1230 (MARIJUANA HOSPITALITY ESTABLISHMENTS): Allows for the operation of marijuana hospitality establishments and retail marijuana hospitality and sales establishments, with local government approval. For FY 2019-20, appropriates $72,023 reappropriated funds and 0.3 FTE to the Department of Law for the provision of legal services to the Department of Revenue (DOR).


H.B. 19-1234 (REGULATED MARIJUANA DELIVERY): Creates a phased-in marijuana delivery permit for licensed medical and retail marijuana businesses and transporters to deliver marijuana products to consumers. For FY 2019-20, appropriates $35,752 reappropriated funds and 0.2 FTE to the Department of Law for the provision of legal services to the Department of Revenue (DOR). H.B. 19-1242 (BOARD OF PHARMACY REGULATE PHARMACY TECHNICIANS): Requires pharmacy technicians to become certified by the Colorado Board of Pharmacy. For FY 2019-20, appropriates $15,545 reappropriated funds to the Department of Law for the provision of legal services to the Department of Regulatory Agencies (DORA). H.B. 19-1261 (CLIMATE ACTION PLAN TO REDUCE POLLUTION): Sets statewide greenhouse gas pollution reduction goals relative to 2005 statewide greenhouse gas pollution levels and requires the Air Quality Control Commission to adopt rules and regulations for statewide greenhouse gas pollution reduction. For FY 2019-20, appropriates $93,267 reappropriated funds and 0.5 FTE to the Department of Law for the provision of legal services to the Department of Public Health and Environment (CDPHE). H.B. 19-1309 (MOBILE HOME PARK ACT OVERSIGHT): Increases the authority of counties and municipalities to enact certain ordinances for mobile home parks. Allows mobile home owners additional time between the notice of nonpayment of rent and eviction, and additional time to vacate a mobile home park after a court ordered eviction. Creates the Mobile Home Park Act Dispute Resolution and Enforcement Program to be administered by the Department of Local Affairs (DOLA). Creates the Mobile Home Park Act Dispute Resolution and Enforcement Program Fund, which consists of mobile home park registration fee revenue, and continuously appropriates money in the Fund to DOLA for administering the program. For FY 2019-20, appropriates $22,073 cash funds to the Department of Law and $130,065 cash funds to the Governor’s Office of Information Technology, and states that the Department of Law will require 0.1 FTE to implement the act. The source of cash funds is registration fee revenue collected by DOLA and transferred to these agencies. H.B. 19-1327 (AUTHORIZE & TAX SPORTS BETTING REFER UNDER TABOR): Decriminalizes sports betting and, conditional upon voter approval, levies a tax on net sports betting revenue. For FY 2019-20, appropriates $142,388 reappropriated funds and 0.8 FTE to the Department of Law for the provision of legal services to the Department of Revenue (DOR).


APPENDIX C FOOTNOTES AND INFORMATION REQUESTS

UPDATE ON LONG BILL FOOTNOTES 65 Department of Law, Legal Services to State Agencies -- In making this appropriation, it is the

General Assembly's intent that hourly billing rates charged by the Department for legal services to state agencies not exceed $111.93 per hour for attorneys and not exceed $84.37 per hour for legal assistants, which equates to a blended legal rate of $106.60 per hour.

COMMENT: The Department is billing client agencies at the stated rates.

66 Department of Law, Special Purpose, Litigation Management -- It is the General Assembly's

intent to grant the Department of Law additional flexibility by allowing the Department to use money appropriated to this line item to address unanticipated state legal needs that arise during FY 2019-20. It is also the General Assembly's intent that money spent from this line item does not require the appropriation of additional FTE and will not be used for any type of salary increase, promotion, reclassification, or bonus related to any present or future FTE employed by the Department of Law. It is furthermore the General Assembly's intent that money spent from this line item will not be used to offset present or future personal services deficits in any division in the Department.

COMMENT: The Department is complying with this footnote.


UPDATE ON REQUESTS FOR INFORMATION 1 Department of Law, Legal Services to State Agencies, Personal Services – The Department is

requested to provide by November 1, 2020 a report concerning the implementation of changes to the appropriation and billing methodologies for legal services provided to state agencies. As part of the report, the Department is requested to solicit feedback from all client agencies regarding the benefits and challenges associated with the change in methodologies. COMMENT: In 2019, the Committee approved an updated RFI to request this report every two years, rather than annually. This report is not due until November 2020.

2 Department of Law, Criminal Justice and Appellate, Appellate Unit – The Department is

requested to provide by November 1, 2020 a report concerning the Appellate Unit’s progress in reducing its case backlog, including the following data for FY 2019-20: the number of opening briefs received; the number of answer briefs filed; and the case backlog as of June 30, 2019. COMMENT: The Department provided the report (summarized below) on November 1, 2019.

APPELLATE UNIT WORKLOAD AND CASE BACKLOG (ACTUALS)

FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

Incoming Cases 1,018 911 952 1,056 968 971 1,002

Briefs Filed 885 1,149 1,017 911 931 943 1,034

Attorney FTE 26.3 32.0 32.0 31.2 31.2 30.9 31.9

Briefs per Attorney 33.7 35.9 31.8 29.2 29.8 30.5 32.4

Case Backlog 398 320 264 428 466 494 463

Change in Backlog n/a (78) (56) 164 38 28 (31)

The Criminal Appeals Section increased its productivity in FY 2018-19, closing 1034 cases, compared to 943 in FY 2017-18. However, the number of new cases continues to increase. The backlog remains large enough to cause the briefing of appeals to be delayed. The Department is working to control how long it takes to file briefs by prioritizing answer briefs based on when the defendant’s opening brief was filed. Additionally, the Section uses a case management system to track case aging, monitor attorney workload, and redistribute cases to avoid excessive extensions of time. The Department will continue to track the case backlog, as well as the time it takes to file appellate briefs.

3 Department of Law, Criminal Justice and Appellate, Medicaid Fraud Control Unit – Pursuant

to Section 25.5-4-310, C.R.S., the Department of Law’s Medicaid Fraud Control Unit is required to submit an annual report by January 15 concerning: actions filed under the “Colorado Medicaid False Claims Act”, the amount recovered as a result of such actions, and the amount of related expenditures. The General Assembly requests that the Department also


include in this annual report information about expenditures and recoveries related to the Unit’s criminal investigations. COMMENT: The Department plans to include as part of its statutorily required January 2020 report the requested information about expenditures and recoveries related to the Unit’s criminal investigations.

4 Department of Law, Special Purpose, District Attorney Training – Pursuant to Section 20-1-

111 (4) (b), C.R.S., the Colorado District Attorneys’ Council (CDAC) allocated these dollars to provide prosecution training, seminar, continuing education programs, and other prosecution related services on behalf of District Attorneys who are members of the CDAC. The CDAC is requested to submit an annual report by November 1 detailing how the District Attorney Training appropriation is spent, including the number and type of training activities provided, the number of district attorney offices served by each type of training activity, the number of deputy district attorneys trained, and detail of the costs categorized by personnel, operating, and travel, for each training effort. COMMENT: The CDAC has not yet provided the requested report. Staff expects to receive it prior to the January 2, 2020 budget submittal.


APPENDIX D DEPARTMENT ANNUAL PERFORMANCE REPORT

Pursuant to Section 2-7-205 (1)(b), C.R.S., the Department of Law is required to publish an Annual Performance Report for the previous fiscal year by November 1 of each year. This report is to include a summary of the Department’s performance plan and most recent performance evaluation for the designated fiscal year. In addition, pursuant to Section 2-7-204 (3)(a)(I), C.R.S., the Department is required to develop a Performance Plan and submit the plan for the current fiscal year to the Joint Budget Committee and appropriate Joint Committee of Reference by July 1 of each year.

For consideration by the Joint Budget Committee in prioritizing the Department's FY 2020-21 budget request, the FY 2018-19 Annual Performance Report and the FY 2019-20 Performance Plan can be found at the following link: https://www.colorado.gov/performancemanagement/department-performance-plans


https://www.colorado.gov/performancemanagement/department-performance-plans

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