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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0388.01 SLE HOUSE BILL 98­1212

STATE OF COLORADO

BY REPRESENTATIVE George;

also SENATOR Bishop.

FINANCE

A BILL FOR AN ACT

CONCERNING STATE REVENUES IN EXCESS OF THE CONSTITUTIONAL LIMITATION ON STATE FISCAL YEAR SPENDING, AND, IN CONNECTION THEREWITH, SUBMITTING A BALLOT QUESTION TO VOTERS STATEWIDE TO AUTHORIZE THE STATE TO ANNUALLY RETAIN AN AMOUNT OF SUCH EXCESS REVENUES NOT TO EXCEED TWO HUNDRED FIFTY MILLION DOLLARS FOR A PERIOD OF FIVE FISCAL YEARS TO BE USED FOR CERTAIN GOVERNMENTAL PURPOSES AND PROVIDING FOR A TEMPORARY STATE INCOME TAX RATE REDUCTION FOR THE PURPOSE OF REFUNDING STATE EXCESS REVENUES THAT VOTERS HAVE NOT AUTHORIZED THE STATE TO RETAIN.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.)

Requires the secretary of state to submit a ballot question to voters statewide at the 1998 general election to approve the state's annual retention of the lesser of $250 million of or the total amount of state revenues in excess of the constitutional limitation on state fiscal year spending for fiscal years 1997­98 through 2001­02.

Creates the state excess revenue fund in the state treasury. If voters approve said ballot question, requires the state treasurer to annually transfer the appropriate amount of state excess revenues to the state excess revenue fund. Specifies that such transfers are not appropriations subject to the statutory limitation on general fund appropriations.

Specifies that moneys in the state excess revenue fund may be used for any of the following purposes:

$ Providing financial assistance to local governments impacted by growth and reimbursing state moneys already spent to provide such assistance;

$ Financing public school operations;

$ Financing school district capital construction projects that address health and safety concerns;

$ Financing state capital construction projects;

$ Providing health insurance to uninsured individuals and children;

$ Financing state and local government multi­modal transportation projects;

$ Financing the renovation of the state capitol;

$ Financing certain activities relating to the state's natural resources.

Limits the amount of moneys in the state excess revenue fund that can be appropriated for these purposes in any given fiscal year. Specifies that the state treasurer shall annually certify the amount of interest earned on the principal of the fund during the previous fiscal year and shall estimate the amount of principal in the fund as of a specified date and the interest expected to be earned on such principal during the current fiscal year.

Authorizes moneys in the state excess revenue fund to be appropriated to the general fund in any given fiscal year if there are not sufficient revenues in the general fund for the maximum amount of appropriations allowed under the statutory 6% limit on general fund appropriations. Specifies the amount of revenue that can be appropriated from the state excess revenue fund for this purpose.

Requires the refunding of state revenues that exceed the constitutional limitation on state fiscal year spending for any given fiscal year and that the voters have not authorized the state to retain through a temporary reduction of the state income tax rate. Provides for the executive director of the department of revenue to calculate the income tax rate necessary to refund the amount of state excess revenues required to be refunded. States that the executive director shall utilize the most recent general fund estimates prepared by the staff of the legislative council in calculating such adjusted income tax rate.

Specifies that the executive director shall notify the governor and the executive committee of the legislative council of the general assembly of the income tax rate or rates calculated and the basis for each calculation. Requires the state controller, based upon the financial statement prepared to ensure compliance with section 20 of article X of the state constitution, to certify the amount of state revenues in excess of the constitutional limit on state fiscal year spending for a given fiscal year by a specified date. Requires the state auditor to conduct an audit of the certified amount of excess state revenues by a specified date.


Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  Article 77 of title 24, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PART to read:

PART 2

REVENUES IN EXCESS OF STATE

FISCAL YEAR SPENDING LIMIT

24­77­201.  State excess revenue fund ­ created. (1)  THERE IS HEREBY ESTABLISHED IN THE STATE TREASURY THE STATE EXCESS REVENUE FUND, THE PRINCIPAL OF WHICH SHALL CONSIST OF GENERAL FUND REVENUES TRANSFERRED THERETO PURSUANT TO SECTION 24­77­202 (1). ALL INTEREST DERIVED FROM THE DEPOSIT AND INVESTMENT OF MONEYS IN THE FUND SHALL BE CREDITED TO THE FUND. ANY MONEYS NOT APPROPRIATED SHALL REMAIN IN THE FUND AND SHALL NOT BE TRANSFERRED OR REVERT TO THE GENERAL FUND OF THE STATE AT THE END OF ANY FISCAL YEAR.

(2)  THE STATE TREASURER, IN THE STATE TREASURER'S DISCRETION, MAY DEPOSIT, REDEPOSIT, INVEST, AND REINVEST MONEYS ACCRUED OR ACCRUING TO THE STATE EXCESS REVENUE FUND IN THE TYPES OF DEPOSITS AND INVESTMENTS AUTHORIZED IN SECTIONS 24­36­109, 24­36­112, AND 24­36­113. INVESTMENT EARNINGS OR OTHER MONEYS IN THE FUND SHALL NOT BE SUBJECT TO THE MANAGEMENT FEE IMPOSED PURSUANT TO SECTION 24­36­114.

(3)  IF VOTERS STATEWIDE APPROVE THE BALLOT QUESTION SUBMITTED AT THE 1998 GENERAL ELECTION PURSUANT TO SECTION 24­77­203:

(a)  ON FEBRUARY 1, 1999, THE STATE TREASURER SHALL PROVIDE TO THE GENERAL ASSEMBLY AN ESTIMATE OF THE AMOUNT OF THE PRINCIPAL OF THE STATE EXCESS REVENUE FUND AS OF JUNE 30, 1999, AND THE INTEREST EXPECTED TO BE EARNED ON SUCH PRINCIPAL DURING THE CURRENT FISCAL YEAR;

(b)  BEGINNING SEPTEMBER 1, 1999, AND ON SEPTEMBER 1 OF EACH YEAR THEREAFTER, THE STATE TREASURER SHALL CERTIFY TO THE GENERAL ASSEMBLY THE AMOUNT OF INTEREST ACTUALLY EARNED ON THE PRINCIPAL OF THE STATE EXCESS REVENUE FUND DURING THE PREVIOUS FISCAL YEAR AND SHALL ALSO PROVIDE AN ESTIMATE OF THE AMOUNT OF THE PRINCIPAL IN THE FUND AS OF JUNE 30 OF THE CURRENT FISCAL YEAR AND THE INTEREST EXPECTED TO BE EARNED ON SUCH PRINCIPAL DURING THE CURRENT FISCAL YEAR.

24­77­202.  Transfer of state excess revenues to state excess revenue fund ­ appropriation of moneys. (1)  IF VOTERS STATEWIDE APPROVE THE QUESTION SUBMITTED AT THE 1998 GENERAL ELECTION PURSUANT TO SECTION 24­77­203:

(a)  SUBSEQUENT TO THE DATE OF THE OFFICIAL DECLARATION OF THE VOTE APPROVING SAID QUESTION BY PROCLAMATION OF THE GOVERNOR OR THIRTY DAYS AFTER SUCH VOTE HAS BEEN CANVASSED, WHICHEVER OCCURS FIRST, BUT NO LATER THAN FEBRUARY 1, 1999, THE STATE TREASURER SHALL TRANSFER AN AMOUNT OF REVENUES FROM THE GENERAL FUND TO THE STATE EXCESS REVENUE FUND CREATED IN SECTION 24­77­201 (1) EQUAL TO THE LESSER OF:

(I)  TWO HUNDRED FIFTY MILLION DOLLARS; OR

(II)  THE AMOUNT OF STATE REVENUES FROM SOURCES NOT EXCLUDED FROM STATE FISCAL YEAR SPENDING THAT ARE IN EXCESS OF THE FISCAL YEAR SPENDING LIMITATION IMPOSED UPON THE STATE BY SECTION 20 (7) (a) OF ARTICLE X OF THE STATE CONSTITUTION FOR THE 1997­98 STATE FISCAL YEAR, AS CERTIFIED AND AUDITED PURSUANT TO SECTIONS 24­30­204.5 AND 2­3­103 (9), C.R.S.;

(b) (I)  UPON CERTIFICATION THAT STATE REVENUES FROM SOURCES NOT EXCLUDED FROM STATE FISCAL YEAR SPENDING EXCEED THE LIMITATION ON FISCAL YEAR SPENDING IMPOSED UPON THE STATE BY SECTION 20 (7) (a) OF ARTICLE X OF THE STATE CONSTITUTION FOR ANY FISCAL YEAR COMMENCING ON OR AFTER JULY 1, 1998, BUT PRIOR TO JULY 1, 2002, THE STATE TREASURER SHALL TRANSFER AN AMOUNT OF REVENUES FROM THE GENERAL FUND TO THE STATE EXCESS REVENUE FUND CREATED IN SECTION 24­77­201 (1) EQUAL TO THE LESSER OF:

(A)  TWO HUNDRED FIFTY MILLION DOLLARS; OR

(B)  THE AMOUNT OF STATE REVENUES FROM SOURCES NOT EXCLUDED FROM STATE FISCAL YEAR SPENDING THAT ARE IN EXCESS OF THE FISCAL YEAR SPENDING LIMITATION IMPOSED UPON THE STATE BY SECTION 20 (7) (a) OF ARTICLE X OF THE STATE CONSTITUTION FOR SUCH STATE FISCAL YEAR AS CERTIFIED AND AUDITED PURSUANT TO SECTIONS 24­30­204.5 AND 2­3­103 (9), C.R.S.;

(II)  THE STATE TREASURER SHALL TRANSFER SAID AMOUNT OF REVENUES TO THE STATE EXCESS REVENUE FUND NO LATER THAN NOVEMBER 1 OF THE CALENDAR YEAR IN WHICH THE STATE FISCAL YEAR FOR WHICH SUCH EXCESS STATE REVENUES ARE CERTIFIED ENDED.

(2) (a)  SUBJECT TO APPROPRIATION BY THE GENERAL ASSEMBLY AND SUBJECT TO THE LIMITATION SET FORTH IN PARAGRAPH (b) OF THIS SUBSECTION (2), MONEYS IN THE STATE EXCESS REVENUE FUND MAY BE APPROPRIATED IN ANY GIVEN FISCAL YEAR FOR ONE OR MORE OF THE FOLLOWING PURPOSES:

(I)  TO PROVIDE FINANCIAL ASSISTANCE TO LOCAL GOVERNMENTS IMPACTED BY GROWTH IN SUCH MANNER AS MAY BE AUTHORIZED BY LAW;

(II)  TO REIMBURSE THE GENERAL FUND OF THE STATE ANY MONEYS PREVIOUSLY APPROPRIATED FROM THE GENERAL FUND TO PROVIDE FINANCIAL ASSISTANCE TO LOCAL GOVERNMENTS IMPACTED BY GROWTH;

(III)  TO PROVIDE FINANCIAL ASSISTANCE TO PUBLIC SCHOOL DISTRICTS FOR CAPITAL CONSTRUCTION PROJECTS THAT WILL ADDRESS IMMEDIATE SAFETY HAZARDS OR HEALTH CONCERNS AT EXISTING SCHOOL FACILITIES IN SUCH MANNER AS MAY BE AUTHORIZED BY LAW;

(IV)  TO PROVIDE MONEYS FOR CAPITAL CONSTRUCTION, AS DEFINED IN SECTION 24­75­301 (1). ANY MONEYS APPROPRIATED FROM THE STATE EXCESS REVENUE FUND FOR THIS PURPOSE SHALL BE CREDITED TO THE CAPITAL CONSTRUCTION FUND CREATED IN SECTION 24­75­302 (1) (a) AND SHALL BE IN ADDITION TO AND NOT A SUBSTITUTE FOR MONEYS OTHERWISE APPROPRIATED BY THE GENERAL ASSEMBLY FOR CAPITAL CONSTRUCTION.

(V)  TO PROVIDE MONEYS FOR THE COLORADO UNINSURABLE HEALTH INSURANCE PLAN CREATED BY PART 5 OF ARTICLE 8 OF TITLE 10, C.R.S. ANY MONEYS APPROPRIATED FROM THE STATE EXCESS REVENUE FUND FOR THIS PURPOSE SHALL BE CREDITED TO THE COLORADO UNINSURABLE HEALTH INSURANCE PLAN CASH FUND CREATED IN SECTION 10­8­530 (2), C.R.S., AND SHALL BE IN ADDITION TO AND NOT A SUBSTITUTE FOR MONEYS OTHERWISE APPROPRIATED BY THE GENERAL ASSEMBLY FOR THE COLORADO UNINSURABLE HEALTH INSURANCE PLAN.

(VI)  TO PROVIDE MONEYS FOR THE CHILDREN'S BASIC HEALTH PLAN CREATED BY ARTICLE 19 OF TITLE 26, C.R.S. ANY MONEYS APPROPRIATED FROM THE STATE EXCESS REVENUE FUND FOR THIS PURPOSE SHALL BE:

(A)  USED TO MAXIMIZE MATCHING FUNDS FROM ALL AVAILABLE SOURCES, INCLUDING THE FEDERAL GOVERNMENT, LOCAL GOVERNMENTS, AND PRIVATE INDIVIDUALS AND ENTITIES, TO ENSURE THE MAXIMUM AMOUNT OF FUNDING AVAILABLE FOR THE CHILDREN'S BASIC HEALTH PLAN; AND

(B)  CREDITED TO THE CHILDREN'S BASIC HEALTH PLAN TRUST CREATED IN SECTION 26­19­105 (1), C.R.S., AND SHALL BE IN ADDITION TO AND NOT A SUBSTITUTE FOR MONEYS OTHERWISE APPROPRIATED BY THE GENERAL ASSEMBLY FOR THE CHILDREN'S BASIC HEALTH PLAN.

(VII)  TO FINANCE PUBLIC SCHOOLS IN THIS STATE PURSUANT TO THE "PUBLIC SCHOOL FINANCE ACT OF 1994", ARTICLE 54 OF TITLE 22, C.R.S. ANY MONEYS APPROPRIATED FROM THE STATE EXCESS REVENUE FUND FOR THIS PURPOSE SHALL BE IN ADDITION TO AND NOT A SUBSTITUTE FOR MONEYS OTHERWISE APPROPRIATED BY THE GENERAL ASSEMBLY FOR FINANCING PUBLIC SCHOOLS PURSUANT TO SAID ACT.

(VIII)  TO PROVIDE MONEYS FOR STATE, COUNTY, AND MUNICIPAL MULTI­MODAL TRANSPORTATION NEEDS, IN SUCH MANNER AS MAY BE AUTHORIZED BY LAW AND IN ACCORDANCE WITH THE PROVISIONS OF THIS SUBPARAGRAPH (VIII). ANY MONEYS APPROPRIATED FROM THE STATE EXCESS REVENUE FUND FOR THIS PURPOSE SHALL BE:

(A)  APPROPRIATED IN THE FOLLOWING PROPORTIONS: ONE­HALF OF ANY AMOUNT SO APPROPRIATED SHALL BE FOR STATE MULTI­MODAL TRANSPORTATION NEEDS; ONE­FOURTH OF ANY AMOUNT SO APPROPRIATED SHALL BE FOR COUNTY MULTI­MODAL TRANSPORTATIONS NEEDS; AND ONE­FOURTH OF ANY AMOUNT SO APPROPRIATED SHALL BE FOR MUNICIPAL MULTI­MODAL TRANSPORTATION NEEDS; AND

(B)  IN ADDITION TO AND NOT A SUBSTITUTE FOR MONEYS OTHERWISE APPROPRIATED BY THE GENERAL ASSEMBLY OR OTHERWISE DISTRIBUTED PURSUANT TO LAW FOR STATE, COUNTY, OR MUNICIPAL MULTI­MODAL TRANSPORTATION NEEDS.

(IX)  TO FINANCE THE RENOVATION OF THE STATE CAPITOL IN SUCH MANNER AS MAY BE AUTHORIZED BY LAW AND IN ACCORDANCE WITH THE PROVISIONS OF THIS SUBPARAGRAPH (IX). MONEYS APPROPRIATED FROM THE STATE EXCESS REVENUE FUND FOR THIS PURPOSE SHALL BE AVAILABLE FOR THE REPAIR, REMODELING, RESTORATION, AND PRESERVATION OF THE STATE CAPITOL AND ANY FIXTURES OR IMPROVEMENTS ASSOCIATED THEREWITH, AND FOR PROVISIONAL OFFICE SPACE DURING THE RENOVATION OF THE STATE CAPITOL FOR ANY OR ALL STATE DEPARTMENTS, OFFICES, OR ENTITIES LOCATED IN THE STATE CAPITOL.

(X)  TO FINANCE ANY OF THE FOLLOWING:

(A)  INTERSTATE WATER LAWSUITS;

(B)  THE RECOVERY AND PROTECTION OF NATIVE SPECIES;

(C)  THE ENVIRONMENTAL CLEAN­UP OF ABANDONED MINES;

(D)  WATER STORAGE PROJECTS.

(b)  THE AGGREGATE AMOUNT OF MONEYS APPROPRIATED FROM THE STATE EXCESS REVENUE FUND IN ANY GIVEN FISCAL YEAR FOR THE PURPOSES SPECIFIED IN PARAGRAPH (a) OF THIS SUBSECTION (2) SHALL NOT EXCEED THE SUM OF:

(I)  AN AMOUNT EQUAL TO SIXTY PERCENT OF THE AMOUNT OF PRINCIPAL IN THE FUND AS OF JUNE 30 IMMEDIATELY PRIOR TO THE FISCAL YEAR FOR WHICH MONEYS IN THE FUND ARE BEING APPROPRIATED; AND

(II)  THE AMOUNT OF INTEREST IN THE FUND AS OF JUNE 30 IMMEDIATELY PRIOR TO THE FISCAL YEAR FOR WHICH MONEYS IN THE FUND ARE BEING APPROPRIATED.

(3)  IF, IN ANY GIVEN FISCAL YEAR, THERE ARE NOT SUFFICIENT REVENUES IN THE GENERAL FUND OF THE STATE FOR THE MAXIMUM AMOUNT OF STATE GENERAL FUND APPROPRIATIONS ALLOWED FOR SAID FISCAL YEAR PURSUANT TO SECTION 24­75­201.1 (1) (a) (II), THE GENERAL ASSEMBLY MAY APPROPRIATE MONEYS IN THE STATE EXCESS REVENUE FUND TO THE GENERAL FUND CREATED IN SECTION 24­75­201 IN AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN THE AMOUNT OF REVENUES IN THE GENERAL FUND AVAILABLE FOR APPROPRIATION FOR SAID FISCAL YEAR AND THE MAXIMUM AMOUNT OF STATE GENERAL FUND APPROPRIATIONS ALLOWED FOR SAID FISCAL YEAR PURSUANT TO SECTION 24­75­201.1 (1) (a) (II). ANY APPROPRIATIONS MADE PURSUANT TO THIS SUBSECTION (3) SHALL NOT BE SUBJECT TO THE LIMITATION SET FORTH IN PARAGRAPH (b) OF SUBSECTION (2) OF THIS SECTION.

(4)  ANY TRANSFER OF REVENUES FROM THE GENERAL FUND TO THE STATE EXCESS REVENUE FUND PURSUANT TO THE PROVISIONS OF THIS SECTION SHALL NOT BE DEEMED TO BE AN APPROPRIATION SUBJECT TO THE LIMITATION OF SECTION 24­75­201.1.

24­77­203.  Submission of ballot question regarding retention of excess revenues. (1)  THE SECRETARY OF STATE SHALL SUBMIT A BALLOT QUESTION TO A VOTE OF THE REGISTERED ELECTORS OF THE STATE OF COLORADO AT THE GENERAL ELECTION TO BE HELD IN NOVEMBER, 1998, FOR THEIR APPROVAL OR REJECTION. EACH ELECTOR VOTING AT SAID GENERAL ELECTION AND DESIROUS OF VOTING FOR OR AGAINST SAID BALLOT QUESTION SHALL CAST A VOTE AS PROVIDED BY LAW EITHER "YES" OR "NO" ON THE PROPOSITION: "SHALL THE STATE OF COLORADO BE PERMITTED TO ANNUALLY RETAIN THE LESSER OF TWO HUNDRED FIFTY MILLION DOLLARS OF OR THE TOTAL AMOUNT OF STATE REVENUES IN EXCESS OF THE CONSTITUTIONAL LIMITATION ON STATE FISCAL YEAR SPENDING FOR THE 1997­98 STATE FISCAL YEAR AND FOR EACH OF THE SUCCEEDING FOUR STATE FISCAL YEARS, NOTWITHSTANDING ANY STATE RESTRICTION OR LIMITATION ON SPENDING OR APPROPRIATIONS, INCLUDING WITHOUT LIMITATION THE RESTRICTIONS OF SECTION 20 OF ARTICLE X OF THE STATE CONSTITUTION AND THE STATUTORY LIMITATION ON STATE GENERAL FUND APPROPRIATIONS, TO BE EXPENDED FOR ANY OF THE FOLLOWING GOVERNMENTAL PURPOSES: PROVIDING FINANCIAL ASSISTANCE TO LOCAL GOVERNMENTS IMPACTED BY GROWTH AND REIMBURSING STATE MONEYS ALREADY SPENT TO PROVIDE SUCH ASSISTANCE; FINANCING PUBLIC SCHOOL OPERATIONS; FINANCING SCHOOL DISTRICT CAPITAL CONSTRUCTION PROJECTS THAT ADDRESS HEALTH AND SAFETY CONCERNS; FINANCING STATE CAPITAL CONSTRUCTION PROJECTS; PROVIDING HEALTH INSURANCE TO UNINSURED ADULTS AND CHILDREN; PROVIDING FINANCIAL ASSISTANCE FOR STATE AND LOCAL MULTI­MODAL TRANSPORTATION NEEDS; FINANCING THE RENOVATION OF THE STATE CAPITOL; FINANCING CERTAIN ACTIVITIES RELATING TO THE NATURAL RESOURCES OF THE STATE; AND FINANCING OTHER STATE SERVICES AND PROGRAMS WHEN STATE GENERAL FUND REVENUES ARE INSUFFICIENT TO FUND THE MAXIMUM AMOUNT OF APPROPRIATIONS ALLOWED UNDER THE STATUTORY LIMITATION ON GENERAL FUND APPROPRIATIONS?"

(2)  THE VOTES CAST FOR THE ADOPTION OR REJECTION OF THE QUESTION SUBMITTED PURSUANT TO SUBSECTION (1) OF THIS SECTION SHALL BE CANVASSED AND THE RESULT DETERMINED IN THE MANNER PROVIDED BY LAW FOR THE CANVASSING OF VOTES FOR REPRESENTATIVES IN CONGRESS.

24­77­204.  Refund of excess state revenues.  UPON CERTIFICATION THAT STATE REVENUES FROM SOURCES NOT EXCLUDED FROM STATE FISCAL YEAR SPENDING EXCEED THE LIMITATION ON FISCAL YEAR SPENDING IMPOSED UPON THE STATE BY SECTION 20 (7) (a) OF ARTICLE X OF THE STATE CONSTITUTION FOR ANY GIVEN FISCAL YEAR, THE AMOUNT OF SAID EXCESS STATE REVENUES WHICH VOTERS STATEWIDE HAVE NOT AUTHORIZED THE STATE OF COLORADO TO RETAIN AND EXPEND SHALL BE REFUNDED IN ACCORDANCE WITH SECTION 39­22­627, C.R.S.

SECTION 2.  39­22­104 (1), Colorado Revised Statutes, is amended to read:

39­22­104.  Income tax imposed on individuals, estates, and trusts ­ single rate. (1)  EXCEPT AS OTHERWISE PROVIDED IN SECTION 39­22­627, subject to subsection (2) of this section, with respect to taxable years commencing on or after January 1, 1987, a tax of five percent is imposed on the federal taxable income, as determined pursuant to section 63 of the internal revenue code, of every individual, estate, and trust.

SECTION 3.  39­22­301 (1) (d) (I) (G), Colorado Revised Statutes, is amended to read:

39­22­301.  Corporate tax imposed. (1) (d) (I)  A tax is imposed upon each domestic C corporation and foreign C corporation doing business in Colorado annually in an amount of the net income of such C

corporation during the year derived from sources within Colorado as set forth in the following schedule of rates:

(G)  EXCEPT AS OTHERWISE PROVIDED IN SECTION 39­22­627, for income tax years commencing on or after July 1, 1993, five percent of the Colorado net income.

SECTION 4.  Part 6 of article 22 of title 39, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read:

39­22­627.  Legislative declaration ­ temporary adjustment of rate of income tax ­ authority of executive director. (1)  THE GENERAL ASSEMBLY HEREBY FINDS AND DECLARES THAT:

(a)  SECTION 20 OF ARTICLE X OF THE STATE CONSTITUTION, WHICH WAS APPROVED BY THE REGISTERED ELECTORS OF THIS STATE IN 1992, LIMITS THE ANNUAL GROWTH OF STATE FISCAL YEAR SPENDING;

(b)  IT IS ANTICIPATED THAT DURING THE 1997­98 FISCAL YEAR AS WELL AS FUTURE FISCAL YEARS, STATE REVENUES FROM SOURCES NOT EXCLUDED FROM STATE FISCAL YEAR SPENDING WILL EXCEED THE LIMITATION ON STATE FISCAL YEAR SPENDING;

(c)  WHEN REVENUES EXCEED THE STATE FISCAL YEAR SPENDING LIMITATION FOR ANY GIVEN FISCAL YEAR, SECTION 20 (7) (d) OF ARTICLE X OF THE STATE CONSTITUTION REQUIRES THAT THE EXCESS REVENUES BE REFUNDED IN THE NEXT FISCAL YEAR UNLESS VOTERS APPROVE A REVENUE CHANGE ALLOWING THE STATE TO RETAIN THE REVENUES;

(d)  IN ADDITION, SECTION 20 (1) OF ARTICLE X OF THE STATE CONSTITUTION STATES THAT REFUNDS NEED NOT BE PROPORTIONAL WHEN PRIOR PAYMENTS ARE IMPRACTICAL TO IDENTIFY OR RETURN AND AUTHORIZES THE USE OF ANY REASONABLE METHOD FOR REFUNDING EXCESS REVENUES;

(e)  IF VOTERS DO NOT APPROVE A REVENUE CHANGE, THE STATE IS REQUIRED TO REFUND THE REVENUES IN EXCESS OF THE STATE FISCAL YEAR SPENDING LIMITATION FOR ANY GIVEN FISCAL YEAR DURING THE FOLLOWING FISCAL YEAR;

(f)  IT IS WITHIN THE LEGISLATIVE PREROGATIVE OF THE GENERAL ASSEMBLY TO ENACT LEGISLATION TO IMPLEMENT A PERMANENT MECHANISM TO REFUND STATE EXCESS REVENUES FOR ANY GIVEN FISCAL YEAR IN COMPLIANCE WITH SECTION 20 OF ARTICLE X OF THE STATE CONSTITUTION;

(g)  IT IS A REASONABLE AND NECESSARY EXERCISE OF THE LEGISLATIVE PREROGATIVE TO DETERMINE THAT, DUE TO THE IMPOSSIBILITY OF IDENTIFYING OR RETURNING PRIOR PAYMENTS, IT IS NOT FEASIBLE TO MAKE PROPORTIONAL REFUNDS OF STATE EXCESS REVENUES;

(h)  IT IS ALSO A REASONABLE AND NECESSARY EXERCISE OF THE LEGISLATIVE PREROGATIVE TO DETERMINE WHAT CONSTITUTES A REASONABLE METHOD OF REFUNDING STATE EXCESS REVENUES AFTER CONSIDERATION OF THE BEST INFORMATION AVAILABLE AT THE TIME REGARDING: THE AMOUNT AND SOURCE OF EXCESS REVENUES TO BE REFUNDED; THE QUALIFICATIONS FOR AND NUMBER OF ELIGIBLE RECIPIENTS; AND THE RELATED ADMINISTRATIVE EXPENSES;

(i)  IT IS THE CONSIDERED JUDGMENT OF THE GENERAL ASSEMBLY THAT:

(I)  THE STATE EXCESS REVENUES FOR ANY GIVEN FISCAL YEAR ARE DERIVED FROM A WIDE VARIETY OF STATE TAXES AND FEES RANGING FROM STATE INCOME TAX TO SEVERANCE AND TRANSPORTATION TAXES TO HEALTH SERVICE FEES TO COURT FINES TO PERMIT AND LICENSE FEES TO HIGHER EDUCATION FEES;

(II)  IT IS NOT FEASIBLE TO MAKE PROPORTIONAL REFUNDS OF STATE EXCESS REVENUES FOR ANY GIVEN FISCAL YEAR DUE TO THE IMPOSSIBILITY OF IDENTIFYING OR RETURNING PRIOR PAYMENTS;

(III)  IT IS REASONABLE AND FAIR TO REFUND STATE EXCESS REVENUES FOR ANY GIVEN FISCAL YEAR THROUGH A TEMPORARY REDUCTION OF THE STATE INCOME TAX RATE; AND

(IV)  REFUNDING STATE EXCESS REVENUES FOR ANY GIVEN FISCAL YEAR THROUGH THE STATE INCOME TAX SYSTEM IN THE MANNER SET FORTH IN THIS SECTION IS A REASONABLE METHOD FOR REFUNDING SUCH EXCESS REVENUES.

(2)  IF, FOR ANY STATE FISCAL YEAR COMMENCING ON OR AFTER JULY 1, 1997, THE AMOUNT OF STATE REVENUES EXCEEDS THE LIMITATION ON STATE FISCAL YEAR SPENDING IMPOSED BY SECTION 20 (7) (a) OF ARTICLE X OF THE STATE CONSTITUTION AND VOTERS STATEWIDE HAVE NOT AUTHORIZED THE STATE TO RETAIN AND SPEND ALL OR ANY PORTION OF THE EXCESS STATE REVENUES FOR THAT FISCAL YEAR, THE EXECUTIVE DIRECTOR SHALL TEMPORARILY REDUCE THE RATE OF STATE INCOME TAX, AS SPECIFIED IN SECTIONS 39­22­104 AND 39­22­301 (1) (d) (I) (G), IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION TO REFUND THE AMOUNT OF EXCESS STATE REVENUES THAT IS REQUIRED PURSUANT TO SECTION 20 (7) (d) OF ARTICLE X OF THE STATE CONSTITUTION.

(3)  NO LATER THAN OCTOBER 1 OF ANY GIVEN CALENDAR YEAR DURING WHICH IT IS CERTIFIED AND AUDITED IN ACCORDANCE WITH SECTION 24­77­106.5, C.R.S. THAT STATE REVENUES EXCEED THE LIMITATION ON STATE FISCAL YEAR SPENDING IMPOSED BY SECTION 20 (7) (a) OF THE STATE CONSTITUTION FOR THE FISCAL YEAR ENDING IN THAT CALENDAR YEAR, THE EXECUTIVE DIRECTOR SHALL CALCULATE THE INCOME TAX RATE FOR THE TAXABLE YEAR COMMENCING ON OR AFTER JANUARY 1 OF SAID CALENDAR YEAR THAT WOULD REDUCE THE ESTIMATED AMOUNT OF STATE INCOME TAX REVENUES FOR SUCH TAXABLE YEAR BY AN AMOUNT EQUAL TO THE AMOUNT OF EXCESS STATE REVENUES REQUIRED TO BE REFUNDED.

(4)  UPON CALCULATING THE INCOME TAX RATE OR RATES FOR ANY TAXABLE YEAR IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION, THE EXECUTIVE DIRECTOR SHALL NOTIFY IN WRITING THE GOVERNOR AND THE EXECUTIVE COMMITTEE OF THE LEGISLATIVE COUNCIL CREATED PURSUANT TO SECTION 2­3­301 (1), C.R.S.

(5)  IF ONE OR MORE BALLOT QUESTIONS ARE SUBMITTED TO THE VOTERS AT A STATEWIDE ELECTION TO BE HELD IN NOVEMBER OF ANY GIVEN CALENDAR YEAR THAT SEEK AUTHORIZATION FOR THE STATE TO RETAIN AND SPEND ALL OR ANY PORTION OF THE AMOUNT OF EXCESS STATE REVENUES FOR THE FISCAL YEAR ENDING DURING SAID CALENDAR YEAR, NO LATER THAN OCTOBER 1 OF THAT CALENDAR YEAR, THE EXECUTIVE DIRECTOR SHALL CALCULATE THE INCOME TAX RATE FOR THE TAXABLE YEAR COMMENCING ON OR AFTER JANUARY 1 OF SAID CALENDAR YEAR THAT WOULD REDUCE THE ESTIMATED AMOUNT OF STATE INCOME TAX REVENUES FOR SUCH TAXABLE YEAR BY AN AMOUNT EQUAL TO THE AMOUNT OF EXCESS STATE REVENUES, IF ANY, REQUIRED TO BE REFUNDED IF ONE OR MORE OF BALLOT QUESTIONS ARE APPROVED BY VOTERS STATEWIDE.

(6)  IN CALCULATING THE INCOME TAX RATE IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION, THE EXECUTIVE DIRECTOR SHALL UTILIZE THE MOST RECENT ESTIMATE OF STATE INCOME TAX REVENUES FOR THE APPLICABLE TAX YEAR PREPARED BY THE STAFF OF THE LEGISLATIVE COUNCIL OF THE GENERAL ASSEMBLY IN ACCORDANCE WITH SECTION 24­75­201.3, C.R.S.

(7) (a)  ANY INCOME TAX RATE ADJUSTMENT MADE PURSUANT TO THE PROVISIONS OF THIS SECTION SHALL BE MADE BY RULE PROMULGATED BY THE EXECUTIVE DIRECTOR IN ACCORDANCE WITH ARTICLE 4 OF TITLE 24, C.R.S. SUCH RULE SHALL BE PROMULGATED NO LATER THAN OCTOBER 30 OF ANY GIVEN CALENDAR YEAR IN WHICH THE EXECUTIVE DIRECTOR IS REQUIRED TO ADJUST THE INCOME TAX RATE PURSUANT TO THE PROVISIONS OF THIS SECTION.

(b)  IF ONE OR MORE BALLOT QUESTIONS ARE SUBMITTED TO THE VOTERS AT A STATEWIDE ELECTION TO BE HELD IN NOVEMBER OF ANY GIVEN CALENDAR YEAR THAT SEEK AUTHORIZATION FOR THE STATE TO RETAIN AND SPEND ALL OR ANY PORTION OF THE AMOUNT OF EXCESS STATE REVENUES FOR THE FISCAL YEAR ENDING DURING SAID CALENDAR YEAR, THE EXECUTIVE DIRECTOR SHALL NOT ADJUST THE INCOME TAX RATE UNTIL THE RESULTS OF SAID ELECTION ARE KNOWN SO THAT THE ADJUSTED INCOME TAX RATE CORRECTLY REFLECTS THE IMPACT OF THE RESULTS OF SAID ELECTION, IF ANY, ON THE AMOUNT OF EXCESS STATE REVENUES REQUIRED TO BE REFUNDED.

SECTION 5. 24­77­106.5, Colorado Revised Statutes, is amended to read:

24­77­106.5. Annual financial report ­ certification of state excess revenues. (1) (a) For each fiscal year, the controller shall prepare a financial report for the state for purposes of ascertaining compliance with the provisions of this article. Any financial report prepared pursuant to this section shall include, but shall not be limited to, state fiscal year spending, reserves, revenues, and debt.

(b) BASED UPON THE FINANCIAL STATEMENT PREPARED IN ACCORDANCE WITH PARAGRAPH (a) OF THIS SUBSECTION (1) FOR ANY FISCAL YEAR COMMENCING ON OR AFTER JULY 1, 1997, THE CONTROLLER SHALL CERTIFY TO THE GOVERNOR, THE GENERAL ASSEMBLY, AND THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF REVENUE NO LATER THAN SEPTEMBER 1 FOLLOWING THE END OF A FISCAL YEAR THE AMOUNT OF STATE REVENUES IN EXCESS OF THE LIMITATION ON STATE FISCAL YEAR SPENDING IMPOSED BY SECTION 20 (7) (a) OF ARTICLE X OF THE STATE CONSTITUTION, IF ANY, FOR SUCH FISCAL YEAR.

(2) Such ANY financial report PREPARED AND CERTIFICATION OF STATE EXCESS REVENUES MADE PURSUANT TO SUBSECTION (1) OF THIS SECTION shall be audited by the state auditor. NO LATER THAN SEPTEMBER 15 FOLLOWING THE CERTIFICATION MADE BY THE STATE CONTROLLER FOR ANY GIVEN FISCAL YEAR, THE STATE AUDITOR SHALL REPORT AND TRANSMIT TO THE GOVERNOR, THE GENERAL ASSEMBLY, AND THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF REVENUE THE RESULTS OF ANY AUDIT CONDUCTED IN ACCORDANCE WITH THIS SUBSECTION (2).

SECTION 6.  10­8­530 (1), Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PARAGRAPH to read:

10­8­530.  Funding of plan. (1)  The plan shall be funded by the following:

(d)  MONEYS APPROPRIATED PURSUANT TO SECTION 24­77­202 (1) (a) (V), C.R.S.

SECTION 7.  Effective date.  This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety­day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution; except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.