SENATE 3rd Reading Unamended April 26, 2016 SENATE Amended 2nd Reading April 25, 2016Second Regular Session Seventieth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 16-0730.01 Ed DeCecco x4216 SENATE BILL 16-097 SENATE SPONSORSHIP Scott, Baumgardner, Cooke HOUSE SPONSORSHIP Coram, Senate Committees House Committees Agriculture, Natural Resources, & Energy Appropriations A BILL FOR AN ACT Concerning measures to ensure that revenue related to the severance of minerals in the state is used in areas most impacted by the severance. 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 prohibits transfers to the general fund from the following funds (mineral severance fund): Higher education federal mineral lease revenues fund (section 2); Higher education maintenance and reserve fund (section 2); Local government permanent fund (section 4); Local government mineral impact fund (section 4); or Local government severance tax fund (section 5). In addition, the governor is prohibited from restricting the money in each of these funds from being used as required by law for the purpose of saving the restricted money for a future transfer to the general fund. For purposes of preparing the annual general appropriation act, section 1 of the bill limits the joint budget committee's ability to use money in the mineral severance fund for any purpose that is not authorized by law or that does not benefit the political subdivisions impacted by the severance of minerals, and section 3 imposes the same limitation on the governor when he or she proposes an annual executive budget. Section 1 also restricts the joint budget committee from introducing legislation to waive this limitation. Section 5 changes the allocation of the money in the local government severance tax fund. The proportion of the fund used for direct distributions is increased from 30% to 60%, and the proportion of the fund used for direct distributions is decreased for grants from 70% to 40%. In addition, the executive director is restricted to only giving a grant to a political subdivision that received more than $200,000 from its direct distribution in the prior state fiscal year. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, add 2-3-209 as follows: 2-3-209. Limitation - annual general appropriation act - legislative declaration - definitions. (1) The general assembly hereby finds and declares that, even when economic conditions are poor, the general assembly should not take money away from the communities most impacted from the severance of minerals in this state and use that money to pay for the general expenses of state government. Therefore, the limitations in this section are designed to ensure that the committee prepares the annual general appropriation act consistent with this intention. (2) As used in this section, "mineral severance fund" means the: (a) Higher education federal mineral lease revenues fund and the higher education maintenance and reserve fund, both created in section 23-19.9-102, C.R.S.; (b) Local government permanent fund and the local government mineral impact fund, both created in section 34-63-102, C.R.S.; or (c) Local government severance tax fund created in section 39-29-110, C.R.S. (3) The committee shall not approve for introduction an annual general appropriation act that: (a) Includes appropriations from a mineral severance fund if the appropriations are for any purpose that is not currently authorized by law or that does not benefit political subdivisions socially or economically impacted by the development, processing, or energy conversion of minerals and mineral fuels subject to the state severance tax; (b) Appropriates money from a mineral severance fund to the general fund or any other cash fund; or (c) Appropriates money from the general fund or any cash fund that was transferred from a mineral severance fund. (4) The committee shall not propose legislation to amend any provision in this section or to transfer money from a mineral severance fund to any other fund. SECTION 2. In Colorado Revised Statutes, 23-19.9-102, add (3) as follows: 23-19.9-102. Higher education federal mineral lease revenues fund - higher education maintenance and reserve fund - creation - sources of revenues - use. (3) Beginning January 1, 2016: (a) Transfers from the revenues fund or the maintenance and reserve fund to the general fund are prohibited; and (b) The governor shall not restrict the use of money in the revenues fund or the maintenance and reserve fund for the purpose of saving the restricted moneys for a future transfer to the general fund. SECTION 3. In Colorado Revised Statutes, amend 24-37-301 as follows: 24-37-301. Executive budget responsibility - definitions. (1) The governor, as chief executive, shall annually evaluate the plans, policies, and programs of all departments of the state government. He or she shall direct the formulation of his or her decisions into a financial plan encompassing all sources of revenue and expenditure. He or she shall propose this plan for the consideration of the general assembly in the form of an annual executive budget consisting of operating expenditures, capital construction expenditures, estimated revenues, and special surveys. Proposed expenditures in the budget shall not exceed estimated moneys available. After legislative review and modification, if any, of the budget and appropriation of the moneys therefor, the governor shall administer the budget. (2) The governor shall not propose in his or her annual executive budget that money from a mineral severance fund be used for any purpose that is not currently authorized by law or that does not benefit political subdivisions socially or economically impacted by the development, processing, or energy conversion of minerals and mineral fuels subject to the state severance tax. As used in this subsection (2), "mineral severance fund" means the: (a) Higher education federal mineral lease revenues fund and the higher education maintenance and reserve fund, both created in section 23-19.9-102, C.R.S.; (b) Local government permanent fund and the local government mineral impact fund, both created in section 34-63-102, C.R.S.; or (c) Local government severance tax fund created in section 39-29-110, C.R.S. SECTION 4. In Colorado Revised Statutes, 34-63-102, add (8) as follows: 34-63-102. Creation of mineral leasing fund - distribution - advisory committee - local government permanent fund created - definitions - transfer of moneys - repeal. (8) Beginning January 1, 2016: (a) Transfers from the local government permanent fund or the local government mineral impact fund to the general fund are prohibited; and (b) The governor shall not restrict the use of money in the local government permanent fund or the local government mineral impact fund for the purpose of saving the restricted money for a future transfer to the general fund. SECTION 5. In Colorado Revised Statutes, 39-29-110, add (8) as follows: 39-29-110. Local government severance tax fund - creation - administration - definitions. (8) Beginning January 1, 2016, transfers from the local government severance tax fund to the general fund are prohibited and the governor shall not restrict the use of money in the fund for the purpose of saving the restricted money for a future transfer to the general fund. SECTION 6. 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.