Date: 03/08/2006

Final
BILL SUMMARY for HB06-1050

HOUSE COMMITTEE ON FINANCE

Votes: View--> Action Taken:
Moved amendment L.003. (The amendment changes thePass Without Objection

02:04 PM -- House Bill 06-1050 - Concerning A Budget Stabilization Fund

Representative Buescher and Representative Hall, explained the provisions in House Bill 06-1050 that create a rainy day fund from several funding sources. Representative Buescher distributed amendment L.003 and discussed it (Attachment C). Representative Buescher said the amendment changes the funding sources for the rainy day fund and also allows money in the fund to be used for any purpose with a two-thirds vote of the legislature. Funding sources include: an annual General Fund appropriation of $5 Million (appropriation is optional if the fund balance is at least 5% of total General Fund appropriations under the 6% limit of the preceding fiscal year or if General Fund revenue is estimated to limit General Fund appropriations to growth of less than 4%.); $10 million of the tobacco settlement money that is credited to the General Fund annually; and 10% of excess General Fund reserves.) Staff distributed a March 2006 memorandum on a comparison of 2006 rainy day fund legislation (Attachment D).

Representative Hall commented on the need and importance of a state emergency fund and said that once General Fund revenues sink below 4 percent, the budget stabilization fund would kick in. Representative Buescher commented on the 5 percent threshold that was selected as the level for the budgetary reserve.

The committee discussed the tobacco settlement funding component in the bill. Representative Buescher commented on his concern about placing fiscal policy changes in the Colorado Constitution.

The following person testified:

02:23 PM -- Mr. Herb Homan, Colorado Senior Lobby, testified in support of the original bill. Mr. Homan commented that the state needs a rainy day fund and with the amendment, he would more strongly support the bill. Mr. Homan commented on the appropriations process and said that it resembles a "mine field". Mr. Homan closed by saying that earlier versions of a rainy day fund was not as comprehensive as the 2006 legislation.

The committee engaged in a brief discussion about the funding mechanisms in the bill. Representative Vigil, Chairman, placed the bill on the table for action and the committee adopted amendment L.003. Representative Vigil, took the bill off the table for action to allow the sponsors time to combine provisions of the rainy day fund bills and allow the committee time to hear testimony on the other rainy day fund legislation.
BILL:HB06-1050
TIME: 02:27:09 PM
MOVED:Harvey
MOTION:Moved amendment L.003. (The amendment changes the funding sources for the rainy day fund and also allows money in the fund to be used for any purpose with a two-thirds vote of the legislature. Funding sources include: an annual General Fund appropriation of $5 Million (appropriation is optional if the fund balance is at least 5% of total General Fund appropriations under the 6% limit of the preceding fiscal year or if General Fund revenue is estimated to limit General Fund appropriations to growth of less than 4%.); $10 million of the tobacco settlement money that is credited to the General Fund annually; and 10% of excess General Fund reserves.) The motion passed without objection by those members present. Representative Vigil, Chairman, took the bill off the table to allow the committee to hear testimony on the remaining rainy day fund bills. All rainy day fund bills will be heard "for action only" on a future date determined by the Chairman of the House Finance Committee.
SECONDED:McCluskey
VOTE
Benefield
Cloer
Crane
Frangas
Garcia
Harvey
Jahn
Kerr
Marshall
Massey
McCluskey
Judd
Vigil
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection