Second Regular Session Seventieth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 16-1192.02 Jason Gelender x4330 HOUSE BILL 16-1421 HOUSE SPONSORSHIP Hullinghorst, SENATE SPONSORSHIP (None), House Committees Senate Committees Appropriations A BILL FOR AN ACT Concerning the allocation of additional general fund revenues made available for expenditure in fiscal year 2016-17 due to the enactment of legislation to end the state collection of hospital provider fee revenues that are counted against the state fiscal year spending limit, and, in connection therewith, prioritizing the allocation of such revenues, in order, for the highway users tax fund, repayment of the state severance tax trust fund and the local government severance tax fund of money diverted from those funds to the general fund in fiscal year 2014-15, reduction in the amount of fiscal year 2016-17 public school finance negative factor, and mitigation of tuition increases at state-supported institutions of higher education. 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 legislative council staff, as part of its 2016 economic and revenue forecast, to estimate the total 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 but for the enactment of the CHASE Act; and Requires the amount estimated by legislative council staff to be allocated as follows: On September 30, 2016, the state treasurer must transfer the lesser of the full amount or $50 million to the highway users tax fund (HUTF); On September 30, 2016, the state treasurer must transfer the lesser of the full amount remaining after the HUTF transfer has been made or a total amount of $16.2 million in equal parts to the state severance tax trust fund and the local government severance tax fund as repayment of money diverted from those funds to the general fund in fiscal year 2014-15; The lesser of the full amount remaining after the HUTF and severance tax fund transfers have been made or a total amount of $40 million must be used to reduce the 2016-17 public school finance negative factor; and The lesser of the full amount remaining after the HUTF and severance tax fund transfers and the negative factor allocation have been made or $49.5 million is allocated to governing boards of state-supported institutions of higher education to reduce fiscal year 2017-18 tuition increases and provide additional student financial assistance. 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-_____ 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-_____ 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-_____ eliminated the hospital provider fee at the end of fiscal year 2015-16; (b) House Bill 16-_____: (I) Will reduce the amount of state revenues counted against the state fiscal year spending limit for fiscal year 2016-17; (II) Is expected to prevent the state from collecting revenues in excess of the state fiscal year spending limit for fiscal year 2016-17; (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 (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-_____ increases the amount of general fund revenues available for expenditure in fiscal year 2016-17, 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 year 2016-17 - estimation of amount by legislative council staff - expenditure prioritization - repeal. (1) As part of its September 2016 economic and revenue forecast, the legislative council staff shall estimate the total 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-_____ in 2016. (2) The amount estimated pursuant to subsection (1) of this section is allocated as follows: (a) On September 30, 2016, the state treasurer shall transfer the lesser of the full amount 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 September 30, 2016, the state treasurer shall transfer the lesser of the full amount 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.; (c) The lesser of the full amount 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., for fiscal year 2016-17; and (d) The lesser of the full amount 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 governing boards of state-supported institutions of higher education in accordance with part 3 of article 18 of title 23, C.R.S., to reduce fiscal year 2017-18 tuition increases and, in accordance with section 23-3.3-103, C.R.S., provide additional student financial assistance. (3) This section is repealed, effective July 1, 2018. SECTION 3. 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., transferred to the highway users tax fund pursuant to section 24-75-224, 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, 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 4. Effective date. This act takes effect July 1, 2016; except that this act takes effect only if House Bill 16-_____ becomes law and takes effect either upon the effective date of this act or upon the effective date of House Bill 16-_____, whichever is later. SECTION 5. 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.