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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0326.01 JAP HOUSE BILL 98­1275

STATE OF COLORADO

BY REPRESENTATIVE Adkins

FINANCE

A BILL FOR AN ACT

CONCERNING THE REFUND OF STATE REVENUES IN EXCESS OF THE CONSTITUTIONAL LIMITATION ON STATE FISCAL YEAR SPENDING FOR ANY GIVEN FISCAL YEAR THROUGH THE TEMPORARY REDUCTION OF SCHOOL DISTRICTS' PROPERTY TAX RATE LEVIED FOR THE OPERATION OF PUBLIC SCHOOLS.

Bill Summary

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

For any fiscal year in which the state controller certifies that state revenues exceed the limitation on state fiscal year spending imposed by section 20 (7) (a) of article X of the state constitution, allows school districts to temporarily reduce their mill levies for the operation of public schools by the number of mills that would generate the amount of the school district's share of state excess revenues. Instructs the department of education to calculate each school district's share of the state excess revenues by dividing the total amount of state excess revenues required to be refunded by the total pupil enrollment for the state and then multiplying that amount by the pupil enrollment in each of the respective school districts. Requires the general assembly to appropriate the entire amount of state excess revenues required to be refunded to fund the "Public School Finance Act of 1994". Specifies that said appropriation is in addition to the amount of general funds that would otherwise be appropriated to fund the act. States that general fund appropriations to effectuate the refund of state excess revenues are not subject to the statutory 6% limitation on general fund appropriations. Specifies that these provisions for refunding state excess revenues shall not apply in any year in which the voters statewide vote to allow the state to retain and expend the entire amount of state excess revenues.

Directs the state controller to certify the amount of state excess revenues on or before September 1 of any given year. Requires the state auditor to complete an audit of the certified amount of excess state revenues by September 15 of that year.


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

SECTION 1.  Article 54 of title 22, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read:

22­54­106.5.  State share of district total program ­ use of state excess revenues. (1)  THE GENERAL ASSEMBLY HEREBY FINDS 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)  WHEN REVENUES NOT EXCLUDED FROM STATE FISCAL YEAR SPENDING 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 KEEP THE REVENUES;

(c)  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;

(d)  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;

(e)  IT IS ALSO A REASONABLE AND NECESSARY EXERCISE OF THE LEGISLATIVE PREROGATIVE TO DETERMINE WHAT CONSTITUTES A REASONABLE METHOD OF REFUNDING STATE EXCESS REVENUES;

(f)  REDUCING SCHOOL DISTRICTS' PROPERTY TAX RATES BY ALLOWING SCHOOL DISTRICTS TO TEMPORARILY REDUCE THEIR MILL LEVIES AND APPROPRIATING THE AMOUNT OF THE STATE EXCESS REVENUES TO INCREASE THE STATE'S SHARE OF DISTRICT TOTAL PROGRAM FUNDS TO MAKE UP FOR THE DECREASE IN SCHOOL DISTRICTS' PROPERTY TAX REVENUES IS A REASONABLE METHOD OF REFUNDING THE STATE EXCESS REVENUES.

(2)  FOR ANY EXCESS REVENUE BUDGET YEAR, EACH DISTRICT SHALL REDUCE THE NUMBER OF MILLS IT WOULD OTHERWISE LEVY PURSUANT TO SECTION 22­54­106 (2) BY THE NUMBER OF MILLS NECESSARY TO GENERATE AN AMOUNT EQUAL TO THE DISTRICT'S SHARE OF THE EXCESS REVENUE, AS REPORTED BY THE DEPARTMENT OF EDUCATION PURSUANT TO SUBSECTION (3) OF THIS SECTION. ANY MILL LEVY REDUCTION CALCULATED PURSUANT TO THIS SECTION SHALL CONSTITUTE A TEMPORARY REDUCTION FOR THE PURPOSE OF REFUNDING SAID EXCESS REVENUES, SHALL BE EFFECTIVE ONLY FOR THE BUDGET YEAR IN WHICH IT IS CALCULATED, AND SHALL NOT REQUIRE VOTER APPROVAL TO LEVY THE NUMBER OF MILLS IN ACCORDANCE WITH SECTION 22­54­106 (2) FOR THE BUDGET YEAR SUBSEQUENT TO AN EXCESS REVENUE BUDGET YEAR.

(3) (a) (I)  EXCEPT AS OTHERWISE PROVIDED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH (a) ON OR BEFORE NOVEMBER 1 OF ANY EXCESS REVENUE BUDGET YEAR, THE DEPARTMENT OF EDUCATION SHALL NOTIFY EACH DISTRICT OF THE AMOUNT OF THE DISTRICT'S SHARE OF STATE EXCESS REVENUES, CALCULATED PURSUANT TO PARAGRAPH (b) OF THIS SUBSECTION (3).

(II)  IF ONE OR MORE BALLOT QUESTIONS ARE SUBMITTED TO THE VOTERS AT A STATEWIDE ELECTION TO BE HELD IN NOVEMBER OF ANY EXCESS REVENUE BUDGET YEAR THAT SEEK AUTHORIZATION FOR THE STATE TO RETAIN AND SPEND ALL OR ANY PORTION OF THE AMOUNT OF EXCESS STATE REVENUES FOR THE STATE FISCAL YEAR ENDING IMMEDIATELY PRIOR TO THAT EXCESS REVENUE BUDGET YEAR, ON OR BEFORE NOVEMBER 31 OF THAT EXCESS REVENUE BUDGET YEAR, THE DEPARTMENT OF EDUCATION SHALL NOTIFY EACH DISTRICT OF THE AMOUNT OF THE DISTRICT'S SHARE OF STATE EXCESS REVENUES, CALCULATED PURSUANT TO PARAGRAPH (c) OF THIS SUBSECTION (3).

(b)  THE DEPARTMENT SHALL CALCULATE EACH DISTRICT'S SHARE OF STATE EXCESS REVENUES BY DIVIDING THE AMOUNT OF THE STATE EXCESS REVENUES, AS CERTIFIED BY THE CONTROLLER, BY THE TOTAL PUPIL ENROLLMENT FOR ALL DISTRICTS AND THEN MULTIPLYING SAID AMOUNT BY THE PUPIL ENROLLMENT FOR EACH RESPECTIVE DISTRICT.

(c)  THE DEPARTMENT SHALL CALCULATE EACH DISTRICT'S SHARE OF STATE EXCESS REVENUES BY DIVIDING THE AMOUNT OF THE STATE EXCESS REVENUES, AS CERTIFIED BY THE CONTROLLER, AND AS ADJUSTED TO REFLECT THE IMPACT THE RESULTS OF THE STATEWIDE ELECTION HELD IN NOVEMBER OF THAT EXCESS REVENUE BUDGET YEAR AT WHICH ONE OR MORE BALLOT QUESTIONS THAT SEEK AUTHORIZATION FOR THE STATE TO RETAIN AND SPEND ALL OR ANY PORTION OF THE AMOUNT OF STATE EXCESS REVENUES FOR THE STATE FISCAL YEAR ENDING IMMEDIATELY PRIOR TO THAT EXCESS REVENUE BUDGET YEAR, BY THE TOTAL PUPIL ENROLLMENT FOR ALL DISTRICTS AND THEN MULTIPLYING SAID AMOUNT BY THE PUPIL ENROLLMENT FOR EACH RESPECTIVE DISTRICT.

(4)  FOR ANY EXCESS REVENUE BUDGET YEAR, THE GENERAL ASSEMBLY SHALL APPROPRIATE THE ENTIRE AMOUNT OF THE EXCESS REVENUES CERTIFIED BY THE CONTROLLER PURSUANT TO SECTION 24­77­106.5, C.R.S., THAT IS REQUIRED TO BE REFUNDED TO FUND THE STATE'S SHARE THE TOTAL PROGRAM FOR ALL DISTRICTS. THE MONEYS APPROPRIATED PURSUANT TO THIS SUBSECTION (4) SHALL BE IN ADDITION TO AND NOT A SUBSTITUTE FOR MONEYS OTHERWISE APPROPRIATED BY THE GENERAL ASSEMBLY PURSUANT TO SECTION 22­54­106 (4) TO FUND THE STATE'S SHARE OF THE TOTAL PROGRAM FOR ALL DISTRICTS. THE AMOUNT APPROPRIATED PURSUANT TO THIS SUBSECTION (4) SHALL CONSTITUTE A REFUND OF STATE EXCESS REVENUES AND THEREFORE SHALL BE EXCLUDED FROM STATE FISCAL YEAR SPENDING, AS DEFINED IN SECTION 24­77­102 (17), C.R.S., FOR THE FISCAL YEAR FOR WHICH IT IS APPROPRIATED. ANY APPROPRIATION FROM THE GENERAL FUND PURSUANT TO THE PROVISIONS OF THIS SUBSECTION (4) SHALL NOT BE SUBJECT TO THE LIMITATION OF SECTION 24­75­201.1, C.R.S., SINCE SUCH APPROPRIATION CONSTITUTES A REFUND OF EXCESS STATE REVENUES REQUIRED UNDER SECTION 20 (7) (d) OF ARTICLE X OF THE STATE CONSTITUTION.

SECTION 2.  22­54­103, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read:

22­54­103.  Definitions.  As used in this article, unless the context otherwise requires:

(6.5)  "EXCESS REVENUE BUDGET YEAR" MEANS THE BUDGET YEAR IMMEDIATELY FOLLOWING ANY STATE FISCAL YEAR FOR WHICH THE CONTROLLER, PURSUANT TO SECTION 24­77­106.5, C.R.S., CERTIFIES THE EXISTENCE OF AN AMOUNT OF STATE REVENUES FROM SOURCES NOT EXCLUDED FROM STATE FISCAL YEAR SPENDING THAT ARE IN EXCESS OF THE LIMITATION ON STATE FISCAL YEAR SPENDING IMPOSED BY SECTION 20 (7) (a) OF ARTICLE X OF THE STATE CONSTITUTION; EXCEPT THAT AN EXCESS REVENUE BUDGET YEAR SHALL NOT OCCUR IF THE VOTERS STATEWIDE AUTHORIZE THE STATE OF COLORADO TO RETAIN AND EXPEND ALL OF THE AMOUNT OF STATE EXCESS REVENUES SO CERTIFIED.

SECTION 3.  The introductory portion to 22­54­106 (2) (a), Colorado Revised Statutes, is amended to read:

22­54­106.  Local and state shares of district total program. (2) (a)  Except as provided in paragraph (c) of this subsection (2) AND SECTION 22­54­106.5, for reorganized districts, for the 1994 property tax year and property tax years thereafter, each district shall levy the lesser of:

SECTION 4.  24­77­103, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read:

24­77­103.  Limitation on state fiscal year spending. (8)  FOR ANY FISCAL YEAR FOR WHICH THE CONTROLLER, PURSUANT TO SECTION 24­77­106.5, CERTIFIES THE EXISTENCE OF AN AMOUNT OF STATE REVENUES FROM SOURCES NOT EXCLUDED FROM STATE FISCAL YEAR SPENDING THAT ARE IN EXCESS OF THE LIMITATION ON STATE FISCAL YEAR SPENDING IMPOSED BY SECTION 20 (7) (a) OF ARTICLE X OF THE STATE CONSTITUTION AND THAT THE VOTERS STATEWIDE HAVE NOT AUTHORIZED THE STATE OF COLORADO TO RETAIN AND EXPEND, THE GENERAL ASSEMBLY SHALL REFUND SUCH STATE EXCESS REVENUES BY ALLOWING SCHOOL DISTRICTS TO REDUCE THE NUMBER OF MILLS LEVIED AND OFFSETTING THE RESULTING REDUCTION IN THE SCHOOL DISTRICTS' PROPERTY TAX REVENUES BY INCREASING APPROPRIATIONS TO FUND THE "PUBLIC SCHOOL FINANCE ACT OF 1994", ARTICLE 54 OF TITLE 22, C.R.S.; EXCEPT THAT THE PROVISIONS OF THIS SUBSECTION (8) SHALL NOT APPLY IF THE VOTERS STATEWIDE AUTHORIZE THE STATE OF COLORADO TO RETAIN AND EXPEND ALL OF THE AMOUNT OF STATE EXCESS REVENUES. ANY AMOUNT SO APPROPRIATED 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.

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.  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.