Colorado Legislative Council Staff



General Fund or Cash Fund Expenditure Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-322

Rep. Tool

Sen. Wells


Bill Status:

Fiscal Analyst:

January 2, 1998

House Education

Harry Zeid (866-4753)



Summary of Legislation

            This bill would authorize each state institution of higher education to employ up to six persons under employment contracts or contract extensions for a period of not more than five years. The employment contracts would be authorized if the governing board of the institution determines that the contract is necessary for the hiring or retaining of the employee in light of prevailing market conditions and competitive employment practices in other states. The employment contract would contain a clause that allows the institution to terminate the contract without penalty if sufficient funds are not appropriated. The bill is assessed as having a conditional state fiscal impact since it allows institutions of higher education to create a future financial obligation that is not authorized under current law. The bill would become effective upon signature of the Governor.


FY 1998/99

FY 1999/2000

State Revenues

General Fund

Other Fund



State Expenditures

General Fund

Other Fund

Potential future expenditure obligation

FTE Position Change



Local Government Impact — None

State Expenditures

            Section 20 of Article X of the State Constitution Under (the TABOR Amendment), specifically excludes the “creation of any multiple-fiscal year direct or indirect district debt or other financial obligation whatsoever without adequate present cash reserves pledged irrevocably and held for payments in all future fiscal years.” This bill would allow each institution of higher education to enter into a limited number of multi-year contracts, with the contract amounts to be appropriated annually. Although the bill states that the contract must contain a clause that the institution remains free to terminate the contract or extension without penalty if sufficient funds are not appropriated, the bill may be interpreted as obligating a university for the duration of the multi-year contract in the event that the employee is terminated prior to the fulfillment of the contract period. This would create a conditional fiscal impact on the university, and therefore, the state. It is assumed that any funds required to fulfill the remaining term of a multi-year contract would be obtained from within the annual budget and financial resources of the higher education institution (which consists of General Fund and Cash Fund revenue sources), and not from an additional appropriation of state money.

Spending Authority

            The fiscal note would imply that no new state appropriations or spending authority are required to implement the provisions of the bill in FY 1998-99.

Departments Contacted

            Colorado Commission on Higher Education