HOUSE 3rd Reading Unamended April 29, 2016 HOUSE Amended 2nd Reading April 28, 2016 Second Regular Session Seventieth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 16-1256.01 Jason Gelender x4330 HOUSE BILL 16-1450 HOUSE SPONSORSHIP Hullinghorst, SENATE SPONSORSHIP Steadman and Guzman, House Committees Senate Committees Appropriations A BILL FOR AN ACT Concerning the allocation of additional state revenue made available for expenditure due to the enactment of legislation during the 2016 regular legislative session. 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.) Contingent upon the passage of legislation (the CHASE Act) that eliminates the hospital provider fee at the end of fiscal year 2015-16, the bill: Requires annual estimation for each of the fiscal years 2016-17 through 2020-21 of the total amount of general fund revenues that the state would have been required to make unavailable for expenditure in the fiscal year and refund in the next fiscal year but for the enactment of the CHASE Act; Requires the amount that is estimated for each fiscal year and relied upon by the general assembly in developing and enacting the state budget for the next fiscal year to be allocated in specified amounts and percentages to: Repayment of the state severance tax trust fund and the local government severance tax fund for money diverted from those funds since July 1, 2006; The state education fund; The college opportunity fund program and institutions of higher education to offset student tuition costs, improve student services and academic quality, address controlled maintenance needs, and provide additional need-based student financial assistance; The general fund; The capital construction fund; The highway users tax fund for allocation to the state highway fund for expenditure by the department of transportation (CDOT) for specified transportation projects. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Legislative declaration. (1) The general assembly hereby finds and declares that: (a) The economic forecast prepared by legislative council staff in March 2016 indicated that revenues included in state fiscal year spending, as defined in section 24-77-102 (17), Colorado Revised Statutes, would exceed the state fiscal year spending limit calculated pursuant to section 24-77-103.6, Colorado Revised Statutes, for fiscal year 2016-17 which, if accurate, would require the state to make unavailable for expenditure in fiscal year 2016-17 an amount of general fund revenues sufficient to enable the state to make refunds to taxpayers in fiscal year 2017-18 as required by section 20 of article X of the state constitution; (b) The March 2016 economic forecast assumed, under the law in effect at the time of its publication, that state revenues generated by the hospital provider fee, which was being collected from hospitals by the department of health care policy and financing until the enactment of House Bill 16-1420 ended the collection of the fee at the end of fiscal year 2015-16, would continue to be collected in fiscal year 2016-17 and would be included in state fiscal year spending and counted against the fiscal year spending limit for fiscal year 2016-17; (c) The general assembly assumed, under the law in effect at the time of its consideration and enactment of the legislation establishing the fiscal year 2016-17 state budget, that the state would continue to collect hospital provider fees in fiscal year 2016-17 and that the revenues generated by those fees would be included in state fiscal year spending and counted against the fiscal year spending limit for fiscal year 2016-17; (d) Because hospital provider fee revenues were not general fund revenues, but the state must refund revenues in excess of the state fiscal year spending limit from the general fund, hospital provider fee revenues that would have been collected in fiscal year 2016-17 but for the enactment of House Bill 16-1420 were expected to reduce the amount of general fund revenue available for expenditure by the state in fiscal year 2016-17, and the general assembly took this expected reduction into account by including less general fund money in the state budget for fiscal year 2016-17 than it otherwise would have. (2) The general assembly further finds and declares that: (a) House Bill 16-1420 eliminated the hospital provider fee at the end of fiscal year 2015-16; (b) House Bill 16-1420: (I) Will reduce the amount of state revenues counted against the state fiscal year spending limit for fiscal year 2016-17 and subsequent fiscal years; (II) Is expected to prevent the state from collecting revenues in excess of the state fiscal year spending limit for fiscal year 2016-17 and to either prevent the state from collecting such revenues or reduce the amount of such revenues collected in subsequent fiscal years; (III) Is expected to ensure that the state is not required to refund general fund revenues in fiscal year 2017-18 or make any general fund revenues unavailable for expenditure in fiscal year 2016-17 in anticipation of a required refund and to reduce the frequency and extent to which the state is required to make refunds and make general fund revenues unavailable for expenditure in subsequent fiscal years; and (IV) Is therefore expected to increase the amount of general fund revenues available for expenditure in the 2016-17 fiscal year; and (c) If, as expected, the enactment of House Bill 16-1420 increases the amount of general fund revenues available for expenditure in fiscal year 2016-17 and subsequent fiscal years, it is necessary, appropriate, and in the best interest of the state to use the additional revenues for the purposes prioritized in this act. SECTION 2. In Colorado Revised Statutes, add 24-75-224 as follows: 24-75-224. Additional general fund money available for expenditure in fiscal years 2016-17 through 2020-21 - estimation of amount - expenditure prioritization - repeal. (1) As part of its December 2016 economic and revenue forecast, the legislative council staff shall estimate based on current law at the time of the estimate the additional amount of general fund revenues that the state would have been required to make unavailable for expenditure in fiscal year 2016-17 and refund in fiscal year 2017-18 pursuant to section 20 of article X of the state constitution and sections 24-77-103.6 and 24-77-103.8, but for the enactment of House Bill 16-1420 in 2016. (2) An amount of general fund revenues, which shall not be allocated from the general fund exempt account created in section 24-77-103.6 (2), that is equal to the additional amount estimated pursuant to subsection (1) of this section is allocated for fiscal year 2016-17 as follows: (a) On December 31, 2016, the state treasurer shall transfer the lesser of the full amount of general fund revenues or fifty million dollars to the highway users tax fund for allocation in accordance with section 43-4-205 (6.5) (a), C.R.S.; (b) On December 31, 2016, the state treasurer shall transfer the lesser of the full amount of general fund revenues remaining after the transfer required by paragraph (a) of this subsection (2) has been made or a total amount of sixteen million two hundred thousand dollars in equal parts to the state severance tax trust fund created in section 39-29-109, C.R.S., and the local government severance tax fund created in section 39-29-110, C.R.S. Money transferred to the local government severance tax fund pursuant to this paragraph (b) must be distributed in accordance with section 39-29-110 (1) (b), C.R.S. (c) The lesser of the full amount of general fund revenues remaining after the transfers required by paragraphs (a) and (b) of this subsection (2) have been made or a total amount of forty million dollars is allocated to reduce the negative factor established in section 22-54-104 (5) (g), C.R.S.; and (d) The lesser of the full amount of general fund revenues remaining after the transfers required by paragraphs (a) and (b) of this subsection (2) and the allocation required by paragraph (c) of this subsection (2) have been made or forty-nine million five hundred thousand dollars is allocated to the college opportunity fund program and institutions of higher education in accordance with part 3 of article 18 of title 23, C.R.S., to offset student cost of tuition, improve student services and academic quality, address controlled maintenance needs, and, in accordance with section 23-3.3-103, C.R.S., provide additional need-based student financial assistance. (3) The governor, as part of the revenue estimate published in March of fiscal years 2016-17 through 2019-20 as required by section 24-75-201.3 (2), and the legislative council staff, as part of its economic and revenue forecast published in March of fiscal years 2016-17 through 2019-20, shall estimate based on current law at the time of the estimate the additional amount of general fund revenues that the state would have been required to make unavailable for expenditure in the following fiscal year and refund in the next following fiscal year pursuant to section 20 of article X of the state constitution and sections 24-77-103.6 and 24-77-103.8, but for the enactment of House Bill 16-1420 in 2016. (4) An amount of general fund revenues, which shall not be allocated from the general fund exempt account created in section 24-77-103.6 (2), that is equal to the additional amount estimated pursuant to subsection (3) of this section that is included in the revenue estimate or economic and revenue forecast published in March of a fiscal year that is relied upon by the general assembly in developing and enacting the state budget for the next fiscal year, less an amount equal to the sum of any increases in the amounts that are required to be transferred from the general fund to the highway users tax fund created in section 43-4-201 (1) (a), C.R.S., and the capital construction fund created in section 25-75-302 (1) (a), C.R.S., pursuant to section 24-75-219 (2) (c) and (4) due to the enactment of House Bill 16-1420 in 2016, and net of any amount transferred pursuant to paragraph (a) of this subsection (4), is allocated for each of the fiscal years from 2017-18 through 2020-21 as follows: (a) If the total amount of general fund revenues previously transferred to the state severance tax trust fund created in section 39-29-109, C.R.S., and the local government severance tax fund created in section 39-29-110, C.R.S., pursuant to this section is less than sixteen million two hundred thousand dollars, out of the amount of general fund revenues, the state treasurer, on July 1 of the fiscal year, shall transfer the difference between sixteen million two hundred thousand dollars and the total amount of general fund revenues previously transferred to the state severance tax trust fund and the local government severance tax fund to the trust fund and the tax fund in equal parts. Money transferred to the local government severance tax fund pursuant to this paragraph (a) must be distributed in accordance with section 39-29-110 (1) (b), C.R.S. (b) (I) On July 1 of 2017, 2018, and 2019, the state treasurer shall transfer thirty percent of the net amount of general fund revenues to the state education fund created in section 17 (4) of article IX of the state constitution; and (II) On July 1, 2020, the state treasurer shall transfer twenty percent of the net amount of general fund revenues to the state education fund created in section 17 (4) of article IX of the state constitution; (c) (I) For each of the fiscal years 2017-18, 2018-19, and 2019-20, twenty-five percent of the net amount of general fund revenues is allocated to the college opportunity fund program and institutions of higher education in accordance with part 3 of article 18 of title 23, C.R.S., to offset student cost of tuition, improve student services and academic quality, address controlled maintenance needs, and, in accordance with section 23-3.3-103, C.R.S., provide additional need-based student financial assistance; and (II) For the fiscal year 2020-21, twenty percent of the net amount of general fund revenues is allocated to the college opportunity fund program and institutions of higher education in accordance with part 3 of article 18 of title 23, C.R.S., to offset student cost of tuition, improve student services and academic quality, address controlled maintenance needs, and, in accordance with section 23-3.3-103, C.R.S., provide additional need-based student financial assistance; (d) Twenty percent of the net amount of general fund revenues remains in the general fund and is available for expenditure by the general assembly for any lawful purpose; (e) (I) Except as otherwise provided in paragraph (f) of this subsection (4), on July 1 of 2017, 2018, and 2019, the state treasurer shall transfer fifteen percent of the net amount of general fund revenues to the capital construction fund created in section 24-75-302 (1) (a); and (II) Except as otherwise provided in paragraph (f) of this subsection (4), on July 1, 2020, the state treasurer shall transfer ten percent of the net amount of general fund revenues to the capital construction fund created in section 24-75-302 (1) (a); (f) On July 1 of each of the fiscal years, the state treasurer shall transfer ten percent of the net amount of general fund revenues in equal parts to the state severance tax trust fund created in section 39-29-109, C.R.S., and the local government severance tax fund created in section 39-29-110, C.R.S.; except that the maximum total amount transferred to the state severance tax trust fund and the local government severance tax fund pursuant to this section is three hundred sixty-three million one hundred four thousand five hundred one dollars. Money transferred to the local government severance tax fund pursuant to this paragraph (f) must be distributed in accordance with section 39-29-110 (1) (b), C.R.S. The state treasurer shall add to the amount transferred to the capital construction fund created in section 24-75-302 (1) (a), pursuant to paragraph (e) of this subsection (4), any portion of the net amount of general fund revenues in excess of the maximum total amount that would otherwise be transferred pursuant to this paragraph (f). (g) On July 1, 2020, only, the state treasurer shall transfer twenty percent of the net amount of general fund revenues to the highway users tax fund for allocation in accordance with section 43-4-205 (6.5) (a), C.R.S., for the projects identified in subsection (5) of this section. (5) The department of transportation shall expend any money transferred to the highways users tax fund for allocation in accordance with section 43-4-205 (6.5) (a), C.R.S., pursuant to paragraph (a) of subsection (2) of this section, paragraph (g) of subsection (4) of this section, or, on and after July 1, 2017, section 24-75-219 exclusively for the following highway construction or improvement projects: (a) Improvements in the interstate highway 70 mountain corridor, including Floyd hill and interchanges located to the west of the Eisenhower-Johnson tunnels; (b) Widening of interstate highway 70 in Grand Junction and through Mesa county; (c) The intersection of U.S. highways 550 and 160 near Durango; (d) U.S. highway 160 from Alamosa to Durango; (e) U.S. highway 50 in Pueblo; (f) State highway 13 from Rifle to Meeker; (g) Interstate highway 25 in northern Colorado; (h) Interstate highway 25 from Monument to Castle Rock; (i) Interstate highway 25 interchange improvements in Colorado Springs and El Paso county; (j) Ports to Plains corridor improvements to U.S. highway 287 and state highway 71; (k) North metro rail and state highway 119 bus rapid transit projects; and (l) Mudslide and rockslide prevention and mitigation and repair and reconstruction of roadways damaged by mudslides and rockslides in Cottonwood Canyon. (6) The general assembly intends to increase the total amount annually appropriated or transferred from the general fund exempt account created in section 24-77-103.6 by an amount equal to the estimated additional amount of general fund revenues available for expenditure due to the enactment of House Bill 16-1420 in 2016 that is either estimated pursuant to subsection (1) of this section or estimated pursuant to subsection (3) of this section and is relied upon by the general assembly in developing and enacting the state budget. (7) This section is repealed, effective July 1, 2022. SECTION 3. In Colorado Revised Statutes, add 25.5-4-212 as follows: 25.5-4-212. State medical assistance spending study - spending growth reduction options - spending offset options - repeal. (1) During the 2016-17 state fiscal year, the legislative council staff and the joint budget committee staff shall collaborate to study the manner in which the state provides medical assistance under the provisions of the "Colorado Medical Assistance Act". In conducting the study, the staff shall specifically seek to identify and evaluate: (a) Opportunities and proposals to more efficiently allocate state revenue by reducing the rate of growth in state spending for medical assistance; and (b) Means of offsetting state spending for medical assistance, including but not limited to offsets based on federal waivers and the use of co-pays and other cost-sharing mechanisms that would be instituted on a sliding scale based on income. (2) The legislative council staff and the joint budget committee staff shall report on the progress of the study to the joint budget committee in conjunction with the departmental hearing for the state department held in the fall of 2016 and shall report the final results of the study in conjunction with the 2017 departmental presentation of the state department to legislative committees of reference made as required by section 2-7-203, C.R.S., and shall post a study report on their websites. (3) The general assembly has determined that the legislative council staff and the joint budget committee staff can complete the study required by this section within their respective existing appropriations. (4) This section is repealed, effective July 1, 2018. SECTION 4. In Colorado Revised Statutes, 43-4-205, amend (6.5) (a) as follows: 43-4-205. Allocation of fund. (6.5) (a) The revenues accrued to and transferred to the highway users tax fund pursuant to section 39-26-123 (4) (a) or 24-75-219, C.R.S., or appropriated to the highway users tax fund pursuant to House Bill 02-1389, enacted during the second regular session of the sixty-third general assembly, transferred to the highway users tax fund pursuant to section 24-75-224, C.R.S., shall be paid to the state highway fund for allocation to the department of transportation and shall be expended as provided in section 43-4-206 (2). SECTION 5. In Colorado Revised Statutes, 43-4-206, amend (2) (a) introductory portion as follows: 43-4-206. State allocation. (2) (a) Notwithstanding the provisions of subsection (1) of this section, the revenues accrued to and transferred to the highway users tax fund pursuant to section 39-26-123 (4) (a) or, before July 1, 2017, 24-75-219, C.R.S., or appropriated to the highway users tax fund pursuant to House Bill 02-1389, enacted at the second regular session of the sixty-third general assembly, and credited to the state highway fund pursuant to section 43-4-205 (6.5), transferred to the highway users tax fund pursuant to section 24-75-224, C.R.S., or, on and after July 1, 2017, section 24-75-219, for expenditure subject to the additional limitations set forth in section 24-75-224 (5), C.R.S., shall be expended by the department of transportation for the implementation of the strategic transportation project investment program transportation projects in the following manner: SECTION 6. Effective date. This act takes effect July 1, 2016; except that this act takes effect only if House Bill 16-1420 becomes law and takes effect either upon the effective date of this act or upon the effective date of House Bill 16-1420, whichever is later. SECTION 7. 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.