DENVER – A bill purported to protect children from online predators seems stalled in the Colorado House of Representative after Republican Rep. Matt Soper raised the alarm of multiple issues in the legislation, not the least of which is that it creates a new, and seemingly unrelated stream of revenue requiring voter approval.
House Bill 26-1148 “Protections for Youth on Social Media” is hung up in the House Judiciary Committee awaiting a vote because Soper says its title is not at all what the bill aims to do.
“It really came down to the fiscal side and the fact that we had a statutory change at the ballot box in Prop 117,” Soper told Complete Colorado. “And the fiscal note did not reflect that this bill was likely to run afoul of that ballot measure.”
Proposition 117 was a 2020 ballot measure approved by Colorado voters requiring approval at the ballot box for all new fee-based state enterprise funds expected to collect revenue of more than $100 million over five years.
Enterprise funds earmark money for a specific expenditure and have been used for years as a workaround to asking voter permission for new taxes, or to keep and spend over collected revenue, as is required under the Taxpayer’s Bill of Rights (TABOR).
Avoiding voters
HB 1148’s fiscal note predicts collecting $20 million in the first year and $22.8 million in the years following, adding up to over $100 million over five years. But nothing in the note even mentions Proposition 117. Rather, bill sponsors opted not to create an enterprise fund for the money, and legislative council staff drafted the note to read “up to” $20 million and “up to” $22.8 million, which Soper describes as an attempt to evade asking voters.
“The fact the fiscal analysts didn’t even include a note about Prop 117 to me was troubling,” Soper said.
The revenue-stream the bill creates is also troubling for Soper, which is a 5 percent “fee” added to all online “in-game” purchases. For example, someone who plays Minecraft and purchases $20 in adventure worlds, furniture, etc. needed for the game would pay $21 for those items, and the game manufacturer would be responsible for sending the $1 fee to the state.
“One of my colleagues said it best,” Soper said. “This is a tax on kids.”
While the bill claims the money would go back to kids via after school program financing, there is no guarantee. The fact there is no enterprise fund attached funnels all money collected into the state’s General Fund, which can be used for anything deemed necessary by the legislature.
Soper said the bill is the biggest violation of TABOR he’s witnessed.
“It’s an illegal enterprise because it’s not an enterprise fund,” Soper said. “It’s being dumped into the General Fund, which you can’t do, and that fulfills the legal definition of a tax. That is a full violation of the Taxpayer’s Bill of Rights.”
Soper also said even if it was an enterprise fund, the requirements around that would mean the money would go back to video game-related purposes.
“I don’t know what you would have an enterprise fund tied to video games for,” he said. “It clearly will not withstand judicial scrutiny. It’s just flagrant abuse.”
Jon Caldara, president of Independence Institute, a free market think tank (and publisher of of Complete Colorado) agrees with Soper. Caldara testified on the bill before the Judiciary Committee on March 18.
“Quite simply, the main problem here is this is a direct violation of Prop 117 and this change requires a vote of the people,” Caldara told the committee. “I don’t see anything in this bill that makes that clear, nor do I see anything in the fiscal note that makes that clear. That type of lack of transparency is causing some serious issues with trust with our government.”
Single-subject issues
Soper said the bill has more wrong with it than just the fiscal piece. The bill claims to be about child protection, putting in place requirements and penalties for social media platforms to play watchdog for online predators.
A similar bill that passed the legislature last year dealing with the predator portion was vetoed by Gov. Jared Polis.
“It’s not a clean bill,” Soper said. “There are a lot of issues when it comes to their definitions of protections. It’s definitely giving more tools to trial lawyers and the attorney general to be able to sue gaming companies.”
Yet, this year the sponsors added the charge for in-game purchases, which is not connected to those regulations, and it walks a fine line with violating Colorado’s single subject rule for bills, Soper said.
“Considering the title says ‘concerning protection for minors on social media,’ whether or not you can consider video games as online social media, I don’t know,” he said. “But the fee piece would not fit under the title. It seems like an add on.”
Although the bill was heard once in the judiciary committee, there was not a vote taken, and the bill was instead laid over, which signals trouble for the measure.
There is not timeline currently for when the bill might be voted on
