SENATE 3rd Reading Unamended April 26, 2016 SENATE 2nd Reading Unamended April 25, 2016Second Regular Session Seventieth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 16-0244.01 Christy Chase x2008 SENATE BILL 16-002 SENATE SPONSORSHIP Lundberg, HOUSE SPONSORSHIP Sias, Senate Committees House Committees Health & Human Services Appropriations A BILL FOR AN ACT Concerning the submission to the voters of a ballot question regarding whether the Colorado health benefit exchange can impose a tax to support its operations. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill directs the secretary of state to submit to the voters, at the November 2016 statewide election, the question of whether the Colorado health benefit exchange can impose a tax to support its ongoing operations. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Legislative declaration. The general assembly hereby finds and declares that: (1) Starting in 2015, the Colorado health benefit exchange began assessing what it refers to as an "administrative fee" against all carriers offering health benefit plans through the exchange. (2) The "fee" is authorized under the federal "Patient Protection and Affordable Care Act", which refers to the charge as a "user fee". (3) The "fee" is assessed against the premiums of all health benefit plans offered by those carriers, regardless of whether the plans are sold through the exchange. (4) Given that the "fee" is assessed against the premiums for plans not sold through the exchange, Colorado taxpayers who are not "users" of the exchange are being charged to fund the operations of the exchange. (5) This so-called "fee" appears to be a tax, and in order to impose a new tax on Coloradans, section 20 of article X of the state constitution requires voter approval of the tax. (6) Therefore, the question of whether to approve a tax to support the operations of the Colorado health benefit exchange must be submitted to the voters at the November 2016 election, and, if not approved, the Colorado health benefit exchange can no longer impose this tax. SECTION 2. In Colorado Revised Statutes, add 10-22-112 and 10-22-113 as follows: 10-22-112. Submission of ballot question regarding imposition of exchange administrative tax - repeal. (1) The secretary of state shall submit a ballot question to a vote of the registered electors of the state of Colorado at the statewide election to be held on November 8, 2016, for their approval or rejection. For purposes of title 1, C.R.S., the ballot question is a proposition. Each elector voting at said November election shall cast a vote as provided by law either "Yes/For" or "No/Against" on the proposition: "Shall Colorado health benefit exchange taxes be increased by $30,321,000 annually in the first full fiscal year and by such amounts as are raised annually thereafter by imposing an exchange administrative tax of 3.5% on all health benefit plans sold by carriers through the Colorado health benefit exchange, which tax is to be assessed as part of the premium on all health benefit plans sold by those carriers, regardless of whether the health benefit plans are sold through the Colorado health benefit exchange, with the tax revenues being used to support the ongoing operations of the Colorado health benefit exchange?" (2) The votes cast for the adoption or rejection of the question submitted pursuant to subsection (1) of this section shall be canvassed and the result determined in the manner provided by law for the canvassing of votes for representatives in congress. (3) (a) This section is repealed, effective February 1, 2017, if the voters at the November 2016 statewide election do not approve the question described in subsection (1) and the governor issues an official declaration of the vote on the question. (b) This subsection (3) is repealed, effective February 1, 2017, if the voters at the November 2016 statewide election approve the question described in subsection (1) and the governor issues an official declaration of the vote on the question. 10-22-113. Exchange prohibited from imposing administrative tax. (1) If the voters at the November 2016 statewide election do not approve the question described in section 10-22-112 (1) and the governor issues an official declaration of the vote on the question, the Colorado health benefit exchange shall not impose an administrative or user fee or tax, as described in section 1311 (d) (5) (A) of the federal act and 45 CFR sec. 155.160, on carriers offering health benefit plans through the exchange. (2) (a) This section is repealed, effective February 1, 2017, if the voters at the November 2016 statewide election approve the question described in subsection (1) and the governor issues an official declaration of the vote on the question. (b) This subsection (2) is repealed, effective February 1, 2017, if the voters at the November 2016 statewide election do not approve the question described in subsection (1) and the governor issues an official declaration of the vote on the question. SECTION 3. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.