Second Regular Session Sixty-fifth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 06-0471.01 Jason Gelender HOUSE BILL 06-1050 HOUSE SPONSORSHIP Buescher, SENATE SPONSORSHIP (None), House Committees Senate Committees Finance A BILL FOR AN ACT Concerning the creation of a budget stabilization fund, and, in connection therewith, requiring the appropriation of general fund moneys and the crediting of portions of general fund surplus and state severance tax revenues to the budget stabilization fund under specified circumstances and allowing appropriations from the budget stabilization fund under other specified circumstances. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Creates a budget stabilization fund, and requires interest and income earned on the deposit and investment of moneys in the fund to be credited to and remain in the fund. For any fiscal year commencing on or after a specified date:  Requires the general assembly to appropriate from the general fund to the budget stabilization fund a specified amount of the maximum annual general fund appropriations growth permitted by existing law for the fiscal year unless the joint budget committee of the general assembly determines, based on revenue estimates, that the balance of the budget stabilization fund at the beginning of the fiscal year will exceed a specified percentage of total general fund appropriations for the preceding fiscal year or that the amount of total general fund revenues for the fiscal year will be less than a specified amount.  Requires a specified percentage of any state general fund surplus, less the 4% statutory reserve required by law and less any general fund revenues that are designated as excess state revenues for the immediately preceding fiscal year, to be credited to the budget stabilization fund prior to any other required crediting or allocation of such general fund surplus.  Requires a specified percentage of state severance tax revenues above a specified amount to be credited to the budget stabilization fund unless the joint budget committee determines, based on revenue estimates, that the balance of the budget stabilization fund at the beginning of the fiscal year will exceed a specified percentage of total general fund appropriations for the preceding fiscal year and total general fund revenues for the fiscal year are expected to be sufficient to allow total general fund appropriations to increase by at least a specified amount.  Allows the general assembly to make appropriations up to specified amounts from the budget stabilization fund to the general fund if the joint budget committee of the general assembly determines, based on revenue estimates, that the amount of total general fund revenues for the fiscal year will be less than a specified amount. Defines terms. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Part 1 of article 75 of title 24, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 24-75-112. Budget stabilization fund - creation - appropriations to and from fund - definitions. (1) As used in this section, unless the context otherwise requires: (a) "Limit" means the maximum total general fund appropriations permitted for a fiscal year as calculated pursuant to section 24-75-201.1 (1) (a). (b) "Maximum annual general fund appropriations growth", with respect to any fiscal year, means the difference between the limit for the fiscal year and the total general fund appropriations for the prior fiscal year. (2) The budget stabilization fund is hereby created in the state treasury. Interest and income earned on the deposit and investment of moneys in the budget stabilization fund shall be credited to the budget stabilization fund and shall not revert to the general fund or any other fund at the end of any fiscal year. (3) Except as otherwise provided in subsection (4) of this section, for any fiscal year that commences on or after July 1, 2006: (a) The general assembly shall appropriate from the general fund to the budget stabilization fund an amount equal to one twenty-fourth of maximum annual general fund appropriations growth for the fiscal year. An appropriation made pursuant to this paragraph (a) shall be included in maximum annual general fund appropriations growth and subject to the limit, but shall not be deemed to impose a limit on state spending for purposes of section 20 (1) of article X of the state constitution. (b) Of the general fund surplus designated in accordance with section 24-75-201 (1), less the four percent reserve required by section 24-75-201.1 (1) (d) (III) 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 immediately preceding fiscal year, ten percent shall be credited and allocated to the budget stabilization fund prior to any other crediting or allocation of such general fund surplus required by law. (c) A portion of the total gross receipts realized from the severance taxes imposed on minerals and mineral fuels under the provisions of article 29 of title 39, C.R.S., shall be credited to the budget stabilization fund as required by section 39-29-108 (5), C.R.S. (4) For any fiscal year that commences on or after July 1, 2006: (a) If, taking into account any appropriations made or expected to be made from the budget stabilization fund to the general fund during the preceding fiscal year pursuant to paragraph (b) of this subsection (4), the joint budget committee of the general assembly determines, based on either the revenue estimate prepared by the office of state planning and budgeting in March of the preceding fiscal year pursuant to section 24-75-201.3 (2) or the revenue estimate prepared by the staff of the legislative council in March of the preceding fiscal year, that the beginning balance of the budget stabilization fund for the fiscal year will equal or exceed five percent of the amount of total general fund appropriations for the preceding fiscal year or that the amount of total general fund revenues for the fiscal year will be less than an amount equal to one hundred four percent of total general fund appropriations for the prior fiscal year, the general assembly may decline to make the appropriation required by paragraph (a) of subsection (3) of this section. (b) If, based on either the revenue estimate prepared by the office of state planning and budgeting in March of the fiscal year pursuant to section 24-75-201.3 (2) or the revenue estimate prepared by the staff of the legislative council in March of the fiscal year, the joint budget committee of the general assembly determines that the amount of total general fund revenues for the fiscal year will be less than an amount equal to one hundred four percent of total general fund appropriations for the prior fiscal year, the general assembly may make appropriations from the budget stabilization fund to the general fund. The general assembly may appropriate any amount that is less than or equal to one-half of the difference between an amount equal to one hundred four percent of the total general fund appropriations for the prior fiscal year and the estimated amount of total general fund revenues for the fiscal year. SECTION 2. 39-29-108, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read: 39-29-108. Allocation of severance tax revenues. (5) (a) Notwithstanding any provisions of subsections (1) to (4) of this section to the contrary and except as otherwise provided in paragraph (b) of this subsection (5), for any fiscal year that commences on or after July 1, 2006, five percent of the total gross receipts in excess of one hundred fifty million dollars realized from the severance taxes imposed on minerals and mineral fuels under the provisions of this article shall be credited to the budget stabilization fund created in section 24-75-112 (2), C.R.S. The amounts of total gross receipts credited pursuant to subsection (2) of this section to the severance tax trust fund created in section 39-29-109 and the local government severance tax fund created in section 39-29-110 shall each be reduced by amounts equal to fifty percent of the amounts credited to the budget stabilization fund. (b) For any fiscal year that commences on or after July 1, 2006, if, taking into account any appropriations made or expected to be made from the budget stabilization fund created in section 24-75-112 (2), C.R.S., to the general fund pursuant to section 24-75-112 (4) (b), C.R.S., during the preceding fiscal year, the joint budget committee of the general assembly determines, based on either the revenue estimate prepared by the office of state planning and budgeting in March of the preceding fiscal year pursuant to section 24-75-201.3 (2), C.R.S., or the revenue estimate prepared by the staff of the legislative council in March of the preceding fiscal year, that the beginning balance of the budget stabilization fund for the fiscal year will equal or exceed five percent of the amount of total general fund appropriations for the preceding fiscal year and that total general fund revenues for the fiscal year will be sufficient to allow total general fund appropriations to increase by at least four percent, gross receipts realized from the severance taxes imposed on minerals and mineral fuels under the provisions of this article shall not be credited to the budget stabilization fund. 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.