Second Regular Session Sixty-eighth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 12-0367.01 Esther van Mourik x4215SENATE BILL 12-063 SENATE SPONSORSHIP Brophy, HOUSE SPONSORSHIP (None), Senate Committees House Committees Finance A BILL FOR AN ACT Concerning the allocation of certain severance tax revenues to institutions of higher education located in rural regions impacted by the development of minerals subject to taxation. 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.) The bill establishes a $100 million cap, as adjusted annually for inflation, on the current allocation of severance tax revenue. Any revenue received above the $100 million cap, as adjusted annually for inflation, is first made available to any political subdivisions socially or economically impacted by the development, processing, or energy conversion of minerals and mineral fuels subject to taxation, but only for a serious need. Such political subdivision must make a grant request at a joint committee hearing of the house local government committee and the senate local government and energy committee, or any successor committees. Whatever moneys remain after the joint committee awards grants to those particular political subdivisions is to be transferred to the rural higher education cash fund and annually appropriated to rural institutions of higher education on a proportionate basis. The bill requires that each rural institution of higher education set aside at least 50% of each annual appropriation in a separate trust account in order to build an endowment fund to be used by the rural institution of higher education. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, amend 39-29-108 (2) as follows: 39-29-108. Allocation of severance tax revenues - definitions. (2) (a) For the fiscal years ending on or before June 30, 2012, of the total gross receipts realized from the severance taxes imposed on minerals and mineral fuels under the provisions of this article after June 30, 1981, fifty percent shall be credited to the state severance tax trust fund created by section 39-29-109, and fifty percent shall be credited to the local government severance tax fund created by section 39-29-110. (b) (I) For the fiscal year commencing July 1, 2012, of the revenues from the severance taxes imposed on minerals and mineral fuels under the provisions of this article after June 30, 1981, up to one hundred million dollars shall be credited fifty percent to the state severance tax trust fund created in section 39-29-109, and fifty percent to the local government severance tax fund created in section 39-29-110. Any revenues in excess of one hundred million dollars shall be made available to impacted local governments as described in paragraph (c) of this subsection (2), and the remainder shall be credited to the rural higher education cash fund created in section 23-1.3-101, C.R.S. (II) For the fiscal years commencing on and after July 1, 2013, of the revenues from the severance taxes imposed on minerals and mineral fuels under the provisions of this article after June 30, 1981, up to one hundred million dollars, as adjusted annually for inflation, shall be credited fifty percent to the state severance tax trust fund created by section 39-29-109, and fifty percent to the local government severance tax fund created by section 39-29-110. Any revenues in excess of one hundred million dollars, as adjusted annually for inflation, shall be made available to impacted local governments as described in paragraph (c) of this subsection (2) and the remainder shall be credited to the rural higher education cash fund created in section 23-1.3-101, C.R.S. For purposes of this subparagraph (II), "inflation" means the annual percentage change of inflation indicated in the United States department of labor, bureau of labor statistics, consumer price index for Denver-Boulder-Greeley, all items, all urban consumers, or its successor index. (c) The amount of revenues described in paragraph (b) of this subsection (2) that are to be made available to any political subdivisions socially or economically impacted by the development, processing, or energy conversion of minerals and mineral fuels subject to taxation under this article are only for a serious need. Such political subdivisions shall make a grant request at a joint committee hearing of the house local government committee and the senate local government and energy committee, or any successor committees. No later than February 15, 2013, and each February 15 thereafter, the joint committee shall determine what funding requests to approve for the subsequent state fiscal year and, if more than one request is approved, the priority to be accorded to the approved funding requests. The joint committee shall forward its determinations to the joint budget committee in writing. SECTION 2. In Colorado Revised Statutes, add article 1.3 to title 23 as follows: ARTICLE 1.3 Rural Higher Education Cash Fund 23-1.3-101. Rural higher education cash fund - creation - legislative declaration - definition. (1) There is hereby created in the state treasury the rural higher education cash fund which shall consist of all moneys credited from severance tax revenues as specified in section 39-29-108 (2) (b), C.R.S., and any general fund revenues appropriated or transferred thereto by law. (2) In addition to any other appropriations made to rural institutions of higher education, the general assembly shall annually appropriate moneys in the fund to such institutions, on a proportionate basis, based on appropriations made to the institutions in the 2011-12 state fiscal year. At least fifty percent of each annual appropriation shall be deposited by each institution into a trust fund created by the institution. The moneys in the trust funds created by the institutions shall not be used until the total in each fund equals at least one hundred percent of the annual operating costs of the institution. The general assembly hereby finds, determines, and declares that the moneys set aside in the trust funds shall grow into an endowment fund for the institution that the institution may use or leverage in order to pay for needs central to the role and mission of each institution as set forth in this title. (3) For purposes of this section, "rural institution of higher education" or "institution" means Aims community college, Colorado mountain college, Colorado Northwestern community college, Front Range community college, Lamar community college, Morgan community college, Northeastern junior college, Otero junior college, Trinidad state junior college, Colorado Mesa university, Adams state college, Fort Lewis college, Western state college of Colorado, and the Colorado school of mines. SECTION 3. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.