HOUSE 3rd Reading Unamended May 4, 2011 HOUSE 2nd Reading Unamended May 3, 2011First Regular Session Sixty-eighth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 11-0305.01 Ed DeCecco HOUSE BILL 11-1280 HOUSE SPONSORSHIP Beezley and DelGrosso, Acree, Balmer, Barker, Baumgardner, Becker, Bradford, Brown, Conti, Coram, Gardner B., Gerou, Holbert, Joshi, Kerr J., Liston, Looper, Massey, McNulty, Murray, Nikkel, Priola, Ramirez, Scott, Sonnenberg, Stephens, Summers, Swalm, Swerdfeger, Szabo, Vaad, Waller SENATE SPONSORSHIP Brophy, Harvey, Grantham, Cadman, King K., King S., Kopp, Lambert, Lundberg, Mitchell, Renfroe, Roberts, Scheffel, Spence, White House Committees Senate Committees Finance A BILL FOR AN ACT Concerning the use of moneys in the state general fund above a newly established limit on total state general fund appropriations. 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.) Currently, the maximum allowable amount of total state general fund appropriations for a given fiscal year is equal to 5% of Colorado personal income. Beginning with the 2011-12 state fiscal year, the bill establishes a new limit for total state general fund appropriations that is equal to 6% over the total general fund appropriations for the previous fiscal year. End-year surplus in the general fund, less the required annual reserve and any amount that is necessary to make constitutionally required refunds, is transferred to the state rainy day fund until the balance in the state rainy day fund is equal to the target amount of 8% of total general fund appropriations. During economic downturns, the general assembly may appropriate or transfer moneys from the state rainy day fund for any purpose by the enactment of a bill approved by a 2/3 majority vote of all of the members elected to each house. Once the balance in the state rainy day fund is greater than or equal to the target amount, any remaining surplus is transferred as follows: 2/3 to the highway users tax fund; and 1/3 to the capital construction fund. The moneys transferred to the highway users tax fund shall be allocated as follows: 60% to the state highway fund; 22% to counties; and 18% to municipalities. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. 24-75-201.1 (1) (a) (II.5), the introductory portion to 24-75-201.1 (1) (a) (III), 24-75-201.1 (1) (a) (IV), and the introductory portion to 24-75-201.1 (1) (a) (V), Colorado Revised Statutes, are amended, and the said 24-75-201.1 (1) (a) is further amended BY THE ADDITION OF A NEW SUBPARAGRAPH, to read: 24-75-201.1. Restriction on state appropriations - legislative declaration - definitions. (1) (a) (II.5) Except as otherwise provided in subparagraphs (III) and (IV) of this paragraph (a), for the fiscal year 2009-10 and each fiscal year thereafter years 2009-10 and 2010-11, the total state general fund appropriations shall be limited to such moneys as are necessary for reappraisals of any class or classes of taxable property for property tax purposes as required by section 39-1-105.5, C.R.S., plus an amount equal to five percent of Colorado personal income. (II.7) Except as otherwise provided in subparagraphs (III) and (IV) of this paragraph (a), for the fiscal year 2011-12 and each fiscal year thereafter, the total state general fund appropriations shall be limited to such moneys as are necessary for reappraisals of any class or classes of taxable property for property tax purposes as required by section 39-1-105.5, C.R.S., plus six percent over the total state general fund appropriations for the previous fiscal year. (III) The limitation on the level of state general fund appropriations set forth in subparagraphs (II), and (II.5), and (II.7) of this paragraph (a) shall not apply to: (IV) (A) The limitation on the level of state general fund appropriations as set forth in subparagraphs (II), and (II.5), and (II.7) of this paragraph (a) may be exceeded for a given fiscal year upon the declaration of a state fiscal emergency by the general assembly. A state fiscal emergency may be declared by the passage of a joint resolution which is approved by a two-thirds majority vote of the members of both houses of the general assembly and which is approved by the governor in accordance with section 39 of article V of the state constitution. (B) Any funds appropriated in a given fiscal year which exceed the limitation on state general fund appropriations established by subparagraphs (II), and (II.5), and (II.7) of this paragraph (a) because of the declaration of a state fiscal emergency by the general assembly pursuant to sub-subparagraph (A) of this subparagraph (IV) shall not be included in the calculation of the maximum level of state general fund appropriations pursuant to sub-subparagraph (B) of subparagraph (II) of this paragraph (a) for subsequent fiscal years. (V) No state cash fund appropriation which either supplants any state general fund appropriation or, if not made, would necessitate a state general fund appropriation shall be made in order to circumvent the limitation on the level of state general fund appropriations set forth in subparagraphs (II), and (II.5), and (II.7) of this paragraph (a). The provisions of this subparagraph (V) shall not apply to any state cash fund appropriation: SECTION 2. 24-75-218, Colorado Revised Statutes, is RECREATED AND REENACTED, WITH AMENDMENTS, to read: 24-75-218. Transfers of general fund surplus - definitions. (1) As used in this section, unless the context otherwise requires: (a) "Capital construction fund" means the capital construction fund created in section 24-75-302. (b) "Designated funds" means the capital construction fund, highway users tax fund, and the state rainy day fund. (c) "Highway users tax fund" means the highway users tax fund created in section 43-4-201, C.R.S. (d) "State rainy day fund" means the state rainy day fund created in section 24-75-1401. (e) "Target amount" means an amount equal to eight percent of the amount appropriated for expenditure from the general fund for the state fiscal year for which the general fund surplus is transferred pursuant to subsection (2) of this section. (2) The general fund surplus designated in accordance with section 24-75-201 (1), less the applicable amount of reserve required by section 24-75-201.1 (1) for the state fiscal year, and less any general fund revenues that are designated as state revenues in excess of the constitutional limitation on state fiscal year spending for the state fiscal year, shall be deducted from the general fund and such sum shall be transferred to the state rainy day fund until the balance in the state rainy day fund is equal to the target amount. Once the balance in the state rainy day fund is greater than or equal to the target amount, any additional general fund surplus shall be transferred as follows: (a) Two-thirds of the surplus to the highway users tax fund; and (b) One-third of the surplus to the capital construction fund. (3) The state treasurer shall deduct the general fund surplus and transfer such sum to the designated funds as required pursuant to subsection (2) of this section as follows: (a) On September 20, 2011, and each September 20 thereafter, the state treasurer shall deduct from the general fund and transfer to the designated funds amounts estimated by the treasurer to equal ninety percent of the amounts required to be deducted and transferred. (b) On the date during the state fiscal year on which the state controller distributes the comprehensive annual financial report of the state, the state treasurer shall deduct from the general fund and transfer to the designated funds amounts equal to the differences between the actual amounts required to be transferred and the estimated amounts previously transferred pursuant to paragraph (a) of this subsection (3). SECTION 3. 24-75-302 (1) (a), Colorado Revised Statutes, is amended to read: 24-75-302. Capital construction fund - capital assessment fees - calculation. (1) (a) There is hereby created the capital construction fund to which shall be allocated moneys pursuant to section 24-75-218 and such other revenues as the general assembly may from time to time determine. Moneys in the capital construction fund may be appropriated for capital construction, as defined in section 24-75-301 (1), including the remodeling or renovation of existing buildings or other physical facilities designated as controlled maintenance projects in the general appropriation act; except that any moneys transferred to the capital construction fund for state highway reconstruction, repair, and maintenance projects may only be appropriated for such projects. The appropriation for such projects shall be set forth in a single line item as a total sum. All unappropriated balances in said fund at the close of any fiscal year shall remain therein and not revert to the general fund. All moneys unexpended or not encumbered from the capital construction fund appropriation to each department for any fiscal year shall revert to the capital construction fund at the end of the period for which such moneys are appropriated. Except as provided in sections 2-3-1304 (1) (a.5) and 24-30-1303.7 (1), C.R.S., no portion of the unexpended balance of a department's capital construction fund appropriation may be used by such department for any additional projects which are beyond the scope or design of the original project without further approval by the general assembly of such additional project. Anticipation warrants may be issued against the revenues of the fund as provided by law. Except as provided in subsection (7) of this section, all interest earned from the investment of moneys in said fund shall remain in said fund and become a part thereof. SECTION 4. Article 75 of title 24, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PART to read: PART 14 STATE RAINY DAY FUND 24-75-1401. State rainy day fund - use. (1) The state rainy day fund is hereby created in the state treasury. The fund shall consist of moneys transferred to the fund pursuant to section 24-75-218 (2) and any other moneys required by law to be credited thereto. Interest and income earned on the deposit and investment of moneys in the fund shall be credited to the fund. All moneys, including any interest and income, shall remain in the fund unless appropriated or transferred from the fund pursuant to subsection (2) of this section. (2) During economic downturns, the general assembly may appropriate or transfer moneys from the state rainy day fund for any purpose by the enactment of a bill approved by a two-thirds majority vote of all of the members elected to each house of the general assembly. SECTION 5. The introductory portion to 43-4-205 (6) (b), Colorado Revised Statutes, is amended to read: 43-4-205. Allocation of fund. (6) Revenues raised by the excise tax imposed on gasoline and special fuel pursuant to sections 39-27-102 and 39-27-102.5, C.R.S., in excess of seven cents per gallon of tax, shall be placed in the highway users tax fund to be allocated as follows; except that revenues raised by the excise tax imposed on gasoline in excess of eighteen cents per gallon of tax shall be allocated according to the provisions of paragraph (b) of this subsection (6): (b) The remaining balance of such revenue from the excise tax imposed on gasoline and special fuel and revenues that are credited to the fund pursuant to section 24-75-218, C.R.S., shall be expended only for improvements to highways within the state, including new construction, safety improvements, maintenance, and capacity improvements. No moneys shall be expended for administrative purposes. Such revenue shall be allocated as follows: SECTION 6. Act subject to petition - effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 10, 2011, if adjournment sine die is on May 11, 2011); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part shall not take effect unless approved by the people at the general election to be held in November 2012 and shall take effect on the date of the official declaration of the vote thereon by the governor.