Second Regular Session DRAFT

Sixty-seventh General Assembly 11.2.09

STATE OF COLORADO
Bill 1 - B

LLS NO. 10-0331.02 Jason Gelender INTERIM COMMITTEE BILL

Long-term Fiscal Stability Commission

@House1 Committees @House2 Committees

SHORT TITLE: "Create Budget Stabilization Reserve Fund"

A BILL FOR AN ACT

101 C ONCERNING THE CREATION OF A STATE BUDGET STABILIZATION
102 RESERVE FUND, AND, IN CONNECTION THEREWITH, REQUIRING
103 SPECIFIED AMOUNTS OF GENERAL FUND MONEYS TO BE
104 CREDITED TO THE RESERVE FUND FOR FISCAL YEAR 2009-10 AND
105 EACH SUCCEEDING FISCAL YEAR, REQUIRING RESERVE FUND
106 INTEREST AND INCOME TO BE CREDITED TO THE RESERVE FUND,
107 AND SPECIFYING THE CONDITIONS UNDER WHICH THE GENERAL
108 ASSEMBLY MAY APPROPRIATE MONEYS FROM THE RESERVE
109 FUND.

Bill Summary

(Note: This summary applies to this bill as introduced and does

not necessarily reflect any amendments that may be subsequently

Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.

Capital letters indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute.
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adopted.)

Long-term Fiscal Stability Commission. Section 1 of the bill:

! Creates the state budget stabilization reserve fund (fund);
! Requires fund investment earnings to be credited to the
fund;
! Beginning in FY 2009-10, requires an amount of general
fund moneys equal to at least the lesser of the amount
required to be retained as the general fund reserve for the
fiscal year or the amount needed to bring the balance of the
fund to an amount equal to 15% of general fund
appropriations for the fiscal year to be credited to the fund
at the end of each fiscal year;
! Specifies that appropriations from the fund may be made
for a fiscal year only if the general assembly enacts a bill
authorizing the appropriations that alone or in conjunction
with one or more previously enacted bills authorizes the
appropriation or transfer of the entire general fund reserve
otherwise required for the fiscal year and further specifies
that such a bill may include appropriations for only a single
fiscal year; and
! States that moneys credited to the fund shall supplement
and not supplant the general fund reserve.
Sections 2 through 8 of the bill make conforming amendments
necessitated by the creation of the fund.

1 Be it enacted by the General Assembly of the State of Colorado:

2 SECTION 1. 24-75-201.2 (1) (a) and (2), Colorado Revised

3 Statutes, are amended, and the said 24-75-201.2 is further amended BY

4 THE ADDITION OF THE FOLLOWING NEW SUBSECTIONS, to

5 read:

6 24-75-201.2. Restriction on state spending - state budget

7 stabilization reserve fund - creation - funding requirements.

8 (1) (a) For purposes of determining unrestricted general fund year-end

9 balances as required in section 24-75-201.1 AND THE AMOUNT OF

10 GENERAL FUND MONEYS REQUIRED TO BE CREDITED TO THE STATE BUDGET

11 STABILIZATION RESERVE FUND CREATED IN SUBSECTION (3) OF THIS

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1 SECTION at the end of any fiscal year, moneys budgeted or allocated for

2 possible state liability, pending the determination of a legal action, shall

3 not be included.

4 (2) For purposes of determining the unrestricted general fund

5 year-end balances as required in section 24-75-201.1 AND THE AMOUNT

6 OF GENERAL FUND MONEYS REQUIRED TO BE CREDITED TO THE STATE

7 BUDGET STABILIZATION RESERVE FUND CREATED IN SUBSECTION (3) OF

8 THIS SECTION AT THE END OF ANY FISCAL YEAR, the year-end balance of

9 the federal revenue sharing trust fund and all moneys received from the

10 general and special revenue programs of the federal government shall be

11 included in said balances.

12 (3) (a) T HE STATE BUDGET STABILIZATION RESERVE FUND IS

13 HEREBY CREATED IN THE STATE TREASURY. A LL INTEREST AND INCOME

14 DERIVED FROM THE DEPOSIT AND INVESTMENT OF MONEYS IN THE FUND

15 SHALL BE CREDITED TO AND REMAIN IN THE FUND. A LL MONEYS IN THE

16 FUND SHALL BE SUBJECT TO ANNUAL APPROPRIATION BY THE GENERAL

17 ASSEMBLY FOR THE PURPOSE OF BUDGET STABILIZATION DURING

18 ECONOMIC DOWNTURNS, BUT APPROPRIATIONS FROM THE FUND MAY BE

19 MADE FOR A FISCAL YEAR ONLY IF THE GENERAL ASSEMBLY ENACTS A BILL

20 AUTHORIZING THE APPROPRIATIONS THAT ALONE OR IN CONJUNCTION

21 WITH ONE OR MORE PREVIOUSLY ENACTED BILLS AUTHORIZES THE

22 APPROPRIATION OR TRANSFER OF THE ENTIRE RESERVE OTHERWISE

23 REQUIRED FOR THE FISCAL YEAR BY SECTION 24-75-201.1 (1) (d). A BILL

24 AUTHORIZING APPROPRIATIONS FROM THE STATE BUDGET STABILIZATION

25 RESERVE FUND MAY INCLUDE APPROPRIATIONS FOR ONLY A SINGLE FISCAL

26 YEAR.

27 (b) F OR EACH FISCAL YEAR BEGINNING WITH THE FISCAL YEAR

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1 2009-10, GENERAL FUND MONEYS SHALL BE CREDITED TO THE STATE

2 BUDGET STABILIZATION RESERVE FUND IN AT LEAST AN AMOUNT EQUAL

3 TO THE LESSER OF:

4 (I) T HE AMOUNT REQUIRED TO BE RETAINED AS A RESERVE FOR

5 THE FISCAL YEAR PURSUANT TO SECTION 24-75-201.1 (1) (d); OR

6 (II) T HE AMOUNT NEEDED TO BRING THE BALANCE OF THE FUND TO

7 AN AMOUNT EQUAL TO FIFTEEN PERCENT OF THE AMOUNT APPROPRIATED

8 FOR EXPENDITURE FROM THE GENERAL FUND FOR THE FISCAL YEAR.

9 (4) T HE BASIS FOR THE CALCULATION OF ANY AMOUNT REQUIRED

10 TO BE CREDITED TO THE STATE BUDGET STABILIZATION RESERVE FUND

11 PURSUANT TO SUBPARAGRAPH (II) OF PARAGRAPH (b) OF SUBSECTION (3)

12 OF THIS SECTION SHALL INCLUDE ALL APPROPRIATIONS FOR EXPENDITURE

13 FROM THE GENERAL FUND FOR THE FISCAL YEAR, EXCEPT FOR ANY

14 APPROPRIATIONS FOR EXPENDITURE FROM THE GENERAL FUND DUE TO A

15 STATE FISCAL EMERGENCY AS PROVIDED FOR IN SECTION 24-75-201.1 (1)

16 (a) (IV).

17 (5) M ONEYS CREDITED TO THE STATE BUDGET STABILIZATION

18 FUND SHALL SUPPLEMENT AND NOT SUPPLANT THE RESERVE REQUIRED BY

19 SECTION 24-75-201.1 (1) (d).

20 SECTION 2. 12-47.1-701 (4.5) (b), Colorado Revised Statutes,

21 is amended to read:

22 12-47.1-701. Limited gaming fund. (4.5) (b) If, based on the

23 revenue forecast prepared by the staff of the legislative council in June of

24 any fiscal year, the state treasurer determines that the amount of general

25 fund revenues for the fiscal year will be insufficient to allow the

26 maximum amount of general fund appropriations permitted by section

27 24-75-201.1 (1) (a), C.R.S., to be made AND THE FULL AMOUNT OF

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1 GENERAL FUND MONEYS REQUIRED TO BE CREDITED TO THE STATE BUDGET

2 STABILIZATION RESERVE FUND CREATED IN SECTION 24-75-201.2 (3),

3 C.R.S., PURSUANT TO SAID SECTION TO BE SO CREDITED for the fiscal year,

4 the state treasurer, at the end of the fiscal year, shall transfer to the

5 general fund from the moneys that would otherwise be transferred to the

6 innovative higher education research fund pursuant to paragraph (a) of

7 this subsection (4.5) an amount equal to the lesser of the full amount that

8 would otherwise be transferred to the innovative higher education

9 research fund or the amount necessary to allow the maximum amount of

10 general fund appropriations to be made for the fiscal year.

11 SECTION 3. 23-19.9-102 (2) (b) (II), Colorado Revised Statutes,

12 is amended to read:

13 23-19.9-102. Higher education federal mineral lease revenues

14 fund - higher education maintenance and reserve fund - creation -

15 sources of revenues - use. (2) (b) (II) If, at any time during a fiscal year,

16 the most recent available quarterly revenue estimate prepared by the staff

17 of the legislative council indicates that the amount of total general fund

18 revenues for the fiscal year will not be sufficient to allow the state to

19 maintain the four percent or higher reserve required by section

20 24-75-201.1 (1), C.R.S., AND CREDIT TO THE STATE BUDGET

21 STABILIZATION RESERVE FUND CREATED IN SECTION 24-75-201.2 (3),

22 C.R.S., THE FULL AMOUNT OF GENERAL FUND MONEYS REQUIRED TO BE

23 CREDITED TO THE FUND PURSUANT TO SAID SECTION, the general assembly

24 may make supplemental appropriations of principal of the maintenance

25 and reserve fund or the state controller may allow overexpenditures to be

26 made from principal of the maintenance and reserve fund pursuant to and

27 in accordance with the requirements of section 24-75-111, C.R.S., in

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1 order to offset any reduction in the amount of one or more general fund

2 appropriations for the fiscal year for operating expenses of

3 state-supported institutions of higher education that resulted from the

4 insufficiency in the amount of total general fund revenues.

5 SECTION 4. 24-75-109 (5), Colorado Revised Statutes, is

6 amended to read:

7 24-75-109. Controller may allow expenditures in excess of

8 appropriations - limitations - appropriations for subsequent fiscal

9 year restricted - repeal. (5) The limitation on general fund

10 appropriations and the requirement REQUIREMENTS for a general fund

11 reserve contained in section 24-75-201.1 AND THE FUNDING OF THE STATE

12 BUDGET STABILIZATION RESERVE FUND CREATED IN SECTION 24-75-201.2

13 (3) shall not apply to overexpenditures from the general fund for

14 medicaid programs allowed pursuant to paragraph (a) of subsection (1)

15 of this section or to supplemental general fund appropriations for

16 medicaid programs enacted pursuant to subsection (4) of this section.

17 Overexpenditures for all other purposes allowed pursuant to subsection

18 (1) of this section and supplemental general fund appropriations for all

19 other purposes enacted pursuant to subsection (4) of this section shall be

20 considered appropriations for the fiscal year in which the overexpenditure

21 was allowed and shall accordingly be subject to the limitations and

22 requirements of section 24-75-201.1 SECTIONS 24-75-201.1 AND

23 24-75-201.2.

24 SECTION 5. 24-75-111 (6), Colorado Revised Statutes, is

25 amended to read:

26 24-75-111. Additional authority for controller to allow

27 expenditures in excess of appropriations - limitations -

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1 appropriations for subsequent fiscal year

2 restricted. (6) Overexpenditures allowed pursuant to the provisions of

3 subsection (1) of this section and supplemental general fund

4 appropriations enacted pursuant to subsection (5) of this section shall be

5 considered appropriations for the fiscal year in which the overexpenditure

6 was allowed and shall accordingly be subject to the limitations and

7 requirements of section 24-75-201.1 SECTIONS 24-75-201.1 AND

8 24-75-201.2.

9 SECTION 6. The introductory portion to 24-75-302 (2), Colorado

10 Revised Statutes, is amended to read:

11 24-75-302. Capital construction fund - capital assessment fees

12 - calculation. (2) As of July 1, 1988, and July 1 of each year thereafter

13 through July 1, 2012, a sum as specified in this subsection (2) shall accrue

14 to the capital construction fund. The state treasurer and the controller

15 shall transfer such THE sum out of the general fund and into the capital

16 construction fund as moneys become available in the general fund during

17 the fiscal year beginning on said July 1. Transfers between funds

18 pursuant to this subsection (2) shall not be deemed to be appropriations

19 subject to the limitations AND REQUIREMENTS of section 24-75-201.1

20 SECTIONS 24-75-201.1 AND 24-75-201.2. The amount that shall accrue

21 pursuant to this subsection (2) shall be as follows:

22 SECTION 7. The introductory portions to 39-26-123 (4) (a) (IV)

23 and (4) (a) (V) and 39-26-123 (4) (a) (VI) (B), Colorado Revised Statutes,

24 are amended to read:

25 39-26-123. Receipts - disposition - transfers of general fund

26 surplus - sales and use tax holding fund - creation - definitions -

27 repeal. (4) (a) Except as otherwise provided in sub-subparagraph (B) of

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1 subparagraph (VI) of this paragraph (a) and subsection (4.5) of this

2 section, all moneys in the sales and use tax holding fund shall be

3 transferred to the highway users tax fund, as follows:

4 (IV) If the revenue estimate prepared by the staff of the legislative

5 council in December of state fiscal year 2017-18 or in December of any

6 succeeding state fiscal year indicates that the amount of total general fund

7 revenues for the state fiscal year will be sufficient to maintain the four

8 percent or higher reserve required by section 24-75-201.1 (1), C.R.S.,

9 AND ALLOW THE FULL AMOUNT OF GENERAL FUND MONEYS REQUIRED TO

10 BE CREDITED TO THE STATE BUDGET STABILIZATION RESERVE FUND

11 CREATED IN SECTION 24-75-201.2 (3), C.R.S., FOR THE FISCAL YEAR

12 PURSUANT TO SAID SECTION TO BE SO CREDITED, on February 1 of the

13 fiscal year the state treasurer shall transfer from the sales and use tax

14 holding fund to the highway users tax fund an amount equal to the lesser

15 of:

16 (V) If the revenue estimate prepared by the staff of the legislative

17 council in March of state fiscal year 2017-18 or in March of any

18 succeeding state fiscal year indicates that the amount of total general fund

19 revenues for the state fiscal year will be sufficient to maintain the four

20 percent or higher reserve required by section 24-75-201.1 (1), C.R.S.,

21 AND ALLOW THE FULL AMOUNT OF GENERAL FUND MONEYS REQUIRED TO

22 BE CREDITED TO THE STATE BUDGET STABILIZATION RESERVE FUND

23 CREATED IN SECTION 24-75-201.2 (3), C.R.S., FOR THE FISCAL YEAR

24 PURSUANT TO SAID SECTION TO BE SO CREDITED, on April 15 of the fiscal

25 year the state treasurer shall transfer from the sales and use tax holding

26 fund to the highway users tax fund the lesser of:

27 (VI) (B) Notwithstanding the provisions of sub-subparagraph (A)

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1 of this subparagraph (VI), the state controller shall reduce the amount

2 accrued to the highway users tax fund pursuant to said sub-subparagraph

3 and accrue moneys in the sales and use tax holding fund to the general

4 fund to the extent necessary to ensure that the amount of general fund

5 revenues for the state fiscal year is sufficient to maintain the four percent

6 reserve required by section 24-75-201.1 (1), C.R.S., AND ALLOW THE FULL

7 AMOUNT OF GENERAL FUND MONEYS REQUIRED TO BE CREDITED TO THE

8 STATE BUDGET STABILIZATION RESERVE FUND CREATED IN SECTION

9 24-75-201.2 (3), C.R.S., FOR THE FISCAL YEAR PURSUANT TO SAID SECTION

10 TO BE SO CREDITED.

11 SECTION 8. 40-9.7-108 (3) (b) (I), Colorado Revised Statutes,

12 is amended to read:

13 40-9.7-108. Colorado clean energy development authority

14 fund - creation - authorization of projects. (3) (b) (I) Notwithstanding

15 the provisions of subsection (4) of this section, and subject to the

16 limitations set forth in paragraphs (e) and (f) of this subsection (3), the

17 authority, with prior approval by enacted legislation of the general

18 assembly in accordance with paragraph (c) of this subsection (3), may

19 agree in any resolution or trust indenture authorizing the issuance of

20 bonds that, if the balance in the fund pledged as a reserve for the payment

21 of all or any portion of bonds or obligations of the authority under any

22 bond, financing agreement, contract, agreement, or other obligation of the

23 authority authorized by this article falls below the debt service reserve

24 fund requirement established in such resolution or trust indenture, the

25 board shall, on or before January 1 of each year, make and deliver to the

26 governor a certificate stating the sum, if any, required to restore the debt

27 service reserve fund to the reserve fund requirement and, if the project is

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1 located partly or wholly outside the state, the percentage of the total value

2 of the project that is located within the state. If the governor determines

3 that the sum of the amount of anticipated general fund revenues for the

4 fiscal year in which the board delivers a certificate to the governor and

5 the amount of available moneys in or to be credited to state funds other

6 than the general fund for the fiscal year are sufficient to allow the general

7 assembly to make general fund appropriations, maintain the four percent

8 or higher reserve required by section 24-75-201.1 (1) (d), C.R.S., ALLOW

9 THE FULL AMOUNT OF GENERAL FUND MONEYS REQUIRED TO BE CREDITED

10 TO THE STATE BUDGET STABILIZATION RESERVE FUND CREATED IN

11 SECTION 24-75-201.2 (3), C.R.S., FOR THE FISCAL YEAR PURSUANT TO SAID

12 SECTION TO BE SO CREDITED, and restore the debt service reserve fund to

13 the reserve fund requirement, the governor shall transmit to the general

14 assembly a request for the amount, if any, required to restore the debt

15 service reserve fund to the debt service reserve fund requirement; except

16 that, if the project is located partly or wholly outside the state, the

17 governor shall transmit to the general assembly only a request for an

18 amount equal to the product of the amount, if any, required to restore the

19 debt service reserve fund to the debt service reserve fund requirement and

20 the percentage of the total value of the project located within the state.

21 The general assembly may, but shall not be required to, make any

22 appropriations so requested. All sums appropriated and paid by the

23 general assembly for the restoration shall be deposited by the authority in

24 the debt service reserve fund. Nothing in this section shall create or

25 constitute a debt or liability of the state.

26 SECTION 9. Effective date. This act shall take effect June 30,

27 2010.

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1 SECTION 10. Safety clause. The general assembly hereby finds,

2 determines, and declares that this act is necessary for the immediate

3 preservation of the public peace, health, and safety.

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