DISTRICT COURT, CITY AND COUNTY OF DENVER, COLORADO 1437 Bannock Street Denver, CO 80202 DOUGLAS BRUCE, Plaintiff,

v. STATE OF COLORADO and GOVERNOR JOHN HICKENLOOPER, in his official capacity, Defendants. JOHN W. SUTHERS, Attorney General MAURICE G. KNAIZER, Deputy Attorney General* Registration No.: 5264 Email: maurie.knaizer@state.co.us MATTHEW D. GROVE, Assistant Attorney General* Registration No.: 34269 Email: matthew.grove@state.co.us 1525 Sherman Street, 7th Floor Denver, CO 80203 Telephone: 303-866-5264 *Counsel of Record COURT USE ONLY Case No. 10CV2425

DEFENDANTS REPLY IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

Defendants John Hickenlooper, in his official capacity as Governor of the State of Colorado, and the State of Colorado, submit the following Reply in support of their motion for summary judgment. REPLY REGARDING ASSERTIONS OF UNDISPUTED FACT Rather than offering evidence to counter the Defendants assertions of material fact, Bruce simply asserts that Plaintiff disputes them, and then proceeds to attack their relevance and materiality. Resp. Br. at 1. Bruce cannot demonstrate that a dispute exists,

however, by merely stating that he disagrees with the facts presented. See Briggs v. American Nat. Prop. and Casualty Co., 209 P.3d 1181, 1185 (Colo. App. 2009) (once the moving party makes a convincing showing that there are no genuine issues of material fact, the opposing party must demonstrate with relevant and specific facts that a real controversy exists) (emphasis added); see also Wardell v. Duncan, 470 F.3d 954, 960 (10th Cir. 2006) ([t]o defeat summary judgment, it is not enough for plaintiff to disagree with the views expressed in the affidavit; he must point to evidence creating genuine factual disputes that undermine those views). Those facts must therefore be deemed true, and to the extent that they are relevant and material, they may serve as the basis for summary judgment in the Defendants favor. Bruces response, on the other hand, is replete with assertions of fact that, because they are unsupported by evidence, are not entitled to consideration by this Court. Most important is Bruces ongoing attempt to inject his own personal views about the meaning of TABOR. For instance, Bruce claims that the emergency reserve was inserted to address the opposition argument that requiring voter approval in November of a tax increase would risk the state not having MONEY to spend on intervening emergencies. Resp. Br. at 3. Even if this bald assertion were supported by competent evidence when in fact, it is not supported by any evidence at all it would be irrelevant. See Submission of Interrogatories on Senate Bill 93-74, 852 P.2d 1, 8 n.7 (Colo. 1993) (declining to consider Bruces post hoc interpretation of TABOR). Put simply, Bruces after-the-fact

commentary on what TABOR means or what it was intended to accomplish should simply be ignored. Cf. Mesa County of Bd. of County Commrs v. State, 203 P.3d 519, 534 (Colo. 2009). Bruces continued misunderstanding of the historical composition of the TABOR emergency reserve also bears noting. Bruce claims that [t]he interpretation [of 20(5)] for the first 10 years was to use cash only, Resp. Br. at 7, but the evidence appended to the Defendants motion for summary judgment demonstrates that this is untrue. The TABOR emergency reserve has always included both cash and non-cash assets. The decision to include state properties did expand the categories of assets designated, but it did not mark a fundamental shift in the reserves basic composition. Because Bruce offers neither facts rebutting the Defendants assertions, nor any evidence supporting his own arguments, the Defendants are entitled to summary judgment if the facts presented in support of the summary judgment motion, along with their points of law, are sufficient to support it. The relevance and materiality of the Defendants assertions of fact are addressed in detail below. ARGUMENT I. The General Assemblys inclusion of non-cash assets in the TABOR emergency reserve is consistent with its historical interpretation of 20(5). Bruces Complaint focused on the states inclusion of capital assets in the TABOR emergency reserve. However, the response to the Defendants motion for summary

judgment reveals that his challenge is actually far broader. The response clarifies that Bruce objects not only to the designation of capital assets as part of the TABOR emergency reserve, but also to the General Assemblys designation of anything that is either: 1) not cash; or 2) part of a pre-existing cash fund. In other words, Bruce argues that there is one, and only one, way that the General Assembly can comply with 20(5): by establishing a separate and independent all-cash account that includes the whole of the TABOR-mandated emergency reserve. Whether TABOR actually establishes such a requirement is more a question of law than it is one of fact. But it is not a question that can or should be resolved in a vacuum. To the contrary, for more than a century our appellate courts have acknowledged the General Assemblys role in interpreting vague and uncertain provisions of the constitution. See Frost v. Pfeiffer, 58 P. 147, 151 (Colo. 1899) (acknowledging the importance of legislative interpretation in resolving case[s] of doubt or ambiguity in the constitution). While not binding on the judiciary, [t]he General Assemblys construction of TABOR made shortly after its adoption is to be given great weight. Zaner v. City of Brighton, 899 P.2d 263, 267 (Colo. App. 1994). This is particularly true in light of the legislative declaration that is incorporated into TABORs implementing legislation: Where the meaning of section 20 of article X is uncertain, the general assembly has attempted to ascertain the attempt of those who adopted the

measure, and where appropriate, the intent of the proponents, as well as to apply other generally accepted rules of construction. 24-77-102(1)(e), C.R.S. (2010). It is for these reasons that the evidence appended to the summary judgment is not only relevant and material, but is also highly persuasive. The Defendants evidence demonstrates that the General Assembly when it interpreted the obvious ambiguities presented by 20(5) for the first time construed the provision precisely the same way that it does today. Hence, in 1993, just as in 2010, the TABOR emergency reserve contained a mix of cash and non-cash derived from state-owned assets of varying values and types. While the legislatures contemporaneous interpretation of TABOR 20(5) certainly does not bind this Court, it is certainly an important factor to consider, most importantly because it establishes that the inclusion of state properties beginning in 2003 did not represent a sea change in the composition of the TABOR emergency reserve. II. Accounting principles are relevant because they fill the void left by TABORs vague and ambiguous drafting. Bruce is right about one thing: accountants including the State Controller do not have a secret power to amend the constitution. Resp. Br. at 2. The State Controllers affidavit, however, makes no such suggestion. To the contrary, it was included to explain: 1) the history of the TABOR emergency reserve; and 2) how TABOR 20(5) interacts with accounting principles that are incorporated into state law. Importantly, it demonstrates that from an accounting perspective, there is no difference

between cash and non-cash assets, and that consistent with applicable accounting principles, either or both can be included as part of a reserve. If TABOR 20(5) was intended to alter the accounting principles that have guided the state budgetary process for decades, it would have barred the state from relying on them following its passage. It did not, however, and as a result the General Assembly expressly incorporated GAAP into TABORs implementing legislation. See 24-77-102(2)(c), C.R.S. (2010) ([t]he provisions of this article should not be construed to substitute for generally accepted accounting principles which are applicable to financial documents and reports of state government). The Controllers affidavit is relevant and material because it establishes that the composition of the TABOR emergency reserve is consistent with the very accounting principles that TABORs implementing legislation requires. As the motion for summary judgment demonstrates, Bruce is unable to show that 20(5), by its plain language, requires the TABOR emergency reserve to be composed solely of cash. In the absence of such a constitutional requirement, all that the Defendants must do is show that the composition of the TABOR emergency reserve is consistent with state law. The State Controllers affidavit does precisely that. III. Summary judgment should be granted in the Defendants favor.

The authority conferred upon the Colorado General Assembly is broad; it permits the legislature to enact any law that is not expressly or inferentially prohibited by the

constitution of the state or of the nation. People v.Y.D.M., 593 P.2d 1356, 1359 (Colo. 1979). The Defendants motion for summary judgment establishes that 20(5) does not, by its plain terms, place any express restrictions on the composition of the TABOR emergency reserve. A review of TABOR as a whole including, among other things, its unrelated reference to cash reserves in 20(4)(b) indicates that TABOR contains no inferential restrictions on the reserves composition either. Accordingly, Bruce is unable to prove that the current composition of the TABOR emergency reserve is unconstitutional beyond a reasonable doubt. See City of Littleton v. Bd. of County Commrs of Arapahoe County, 787 P.2d 158, 163 (Colo. 1990). Given the crippling effect associated with requiring the state to divert some $270,000,000 of revenue into an unused and virtually unusable account, the correct outcome of this case is clear. CONCLUSION Based on the foregoing reasoning, authorities and evidence, along with the reasoning, authorities and evidence contained in the motion for summary judgment, the Defendants respectfully request that summary judgment be granted in their favor.

JOHN W. SUTHERS Attorney General /s/ Matthew D. Grove MATTHEW D. GROVE, * Assistant Attorney General Public Officials/PUC Unit State Services Section Attorneys for Defendants *Counsel of Record

CERTIFICATE OF SERVICE

I hereby certify that on the 4th day of March, 2011, a true and accurate copy of the foregoing REPLY IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT was served upon the following by first-class mail, postage prepaid: Douglas Bruce Box 26018 Colorado Springs, CO 80936 Plaintiff, pro se
/s Thomas R. Bovee