Two upcoming Colorado ballot initiatives could have enormous implications for the state’s natural resources.

Proposition 112

What It Does: Proposition 112, known during the petition process as Initiative 97, proposes a new statute to designate 2,500-feet buffer zones around “vulnerable areas” and “occupied structures.”ⁱ “Vulnerable areas” is broadly defined to include everything from playgrounds to perennial or intermittent streams.ⁱⁱ By comparison, Colorado’s current rules on energy production prohibit oil and gas operations within 500 feet of a home or 1,000 feet of a school or hospital.ⁱⁱⁱ

Proponents believe the passage of Proposition 112 would bolster the health and safety of residents in the booming Front Range, where industry and residential development are increasingly at loggerheads. Opponents predict a job-gutting attack on Colorado’s economy that would deprive the State of millions of dollars in tax revenues and billions of dollars in GDP. According to the Colorado Oil and Gas Conservation Commission, the statute would remove 54 percent of Colorado’s total land surface from new oil and gas development.^iv More acutely, in Colorado’s top 5 oil and gas producing counties combined, 94 percent of non-federal land would be unavailable.^v Unlike a similar initiative in 2016, this initiative does not allow private property owners to waive the buffer.

Legal Implications: The passage of Proposition 112 could satisfy the current takings test in Colorado under Animas Valley Sand & Gravel, Inc. v. Board of County Commissioners.^vi In Animas Valley, the Colorado Supreme Court held that even if a property retained some economically viable use, a taking could occur under a fact-specific inquiry if a regulation “goes too far.”^vii For example, a regulation may go too far if it causes a substantial diminution in the property value or adversely impacts the owner’s reasonable investment-backed expectations.^viii Given that mineral development is the only available use for much of the land affected by Proposition 112, the buffer zones would likely constitute compensable takings. As explained below, the buffer zones would certainly constitute compensable takings if Amendment 74 passes.

Amendment 74
 
What It Does: Amendment 74, known during the petition process as Initiative 108, proposes to modify Article II, section 15 of the Colorado Constitution’s takings clause by adding the underlined language as follows: “Private property shall not be taken, or damaged, or reduced in fair market value by government law or regulation for public or private use, without just compensation.”^ix Amendment 74 was crafted by the Colorado Farm Bureau and the energy industry in reaction to Proposition 112.

Legal Implications: Proponents believe the passage of Amendment 74 would merely strengthen the existing “property shall not be . . . damaged” language. Opponents fear the initiative could sweep away the nuances of Colorado’s takings case law, create strict liability, and incentivize a flood of lawsuits against the state and local governments over any changes to land use policies. For example, water providers could be required to compensate property owners for reducing or limiting water supply during times of drought.

Stay Tuned: Election Day is November 6th

Neither initiative would be subject to governor veto, and both are self-executing, meaning they would apply on the effective date without any regulations needed. Proposition 112 needs 50 percent vote to pass. Amendment 74 needs 55 percent.  Election day is November 6th.

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References:

ⁱ Colorado Secretary of State, 2017-2018 Proposed Initiative #97 – Statutory Setback Requirement for Oil and Gas Development, Text of Measure, available at https://www.sos.state.co.us/pubs/elections/Initiatives/titleBoard/filings/2017-2018/97Final.pdf.
ⁱⁱId.
ⁱⁱⁱ 2 CCR § 404-1.
^iv Colorado Oil & Gas Conservation Commission, GIS-Based Impact Assessment – Colorado Ballot Initiative #97 (July 2, 2018), available at https://cogcc.state.co.us/documents/library/Technical/Miscellaneous/COGCC_2018_Init_97_GIS_Assessment_20180702.pdf.
^vId. 
^vi 38 P.3d 59 (Colo. 2001).
^viiId. at 66.
^viiiId. at 66-67.
^ix Colorado Secretary of State, 2017-2018 Proposed Initiative #108 – Constitutional Just Compensation for Reduction in Fair Market Value by Government Law or Regulation, Text of Measure, available at https://www.sos.state.co.us/pubs/elections/Initiatives/titleBoard/filings/2017-2018/108Final.pdf.