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Second Regular Session
Sixty-first General Assembly
LLS NO. 980844.01D SLE
HOUSE BILL 981414
STATE OF COLORADO
BY REPRESENTATIVES Grampsas, Owen, and Romero;
also SENATORS Lacy, Blickensderfer, and Rizzuto.
A BILL FOR AN ACT
CONCERNING THE PREPARATION OF FINANCIAL STATEMENTS
OF STATE GOVERNMENT AS THEY RELATE TO THE CONSTITUTIONAL LIMITATION
ON STATE FISCAL YEAR SPENDING.
(Note: This summary applies to this bill as introduced
and does not necessarily reflect any amendments that may be subsequently
Implements the constitutional limitation on state fiscal year spending contained in article X, section 20 of the state constitution (TABOR). Specifies that state revenues in excess of the limit are to be refunded in the following fiscal year and shall not be available for any other governmental purpose unless voters have authorized the state to retain such excess revenues.
Clarifies that the annual financial report prepared to ensure compliance with section 20 of article X of the state constitution (TABOR) shall be prepared in accordance with generally accepted accounting principles unless otherwise provided by law or unless there exists an irreconcilable conflict with said constitutional provision.
Specifies that, notwithstanding any generally accepted accounting principle to the contrary, the annual financial report prepared to ensure compliance with section 20 of article X of the state constitution shall not include any unrealized gains or losses on investments held by the state.
Requires that the general fund surplus be determined
based on the accrual system of accounting; except that any excess
general fund revenues shall be included in the unrestricted general
fund surplus for the year in which the excess accrued. Restricts
excess revenues to preserve their availability for refund in the
following fiscal year. Removes such restriction if voters authorize
the state to retain such revenues.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. 2477101 (2), Colorado Revised Statutes, is amended, and the said 2477101 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read:
2477101. Legislative declaration. (2) The general assembly further finds and declares that:
(a) The adoption of section 20 of article X imposes a limit on state fiscal year spending and the provisions of this article were enacted to facilitate compliance with the state fiscal year spending limit;
(b) This article reflects the judgment of the general assembly regarding the meaning and implementation of section 20 of article X of the state constitution as it relates to state government;
(c) The provisions of this article should not be construed to substitute for generally accepted accounting principles which are applicable to financial documents and reports of state government;
(d) The purpose of preparing figures in accordance with this article, to ensure compliance with the state fiscal year spending limit, may differ from the purpose of preparing financial statements of the state, to determine the financial condition of the state;
(e) The financial statements of the state prepared by the state controller shall be prepared, insofar as possible, in conformity with generally accepted accounting principles; and
(f) The financial report required by this article shall be prepared in conformity with generally accepted accounting principles UNLESS OTHERWISE PROVIDED BY LAW OR unless an irreconcilable conflict exists between generally accepted accounting principles and the provisions of section 20 of article X in which case the provisions of said constitutional provision shall control.
(3) THE GENERAL ASSEMBLY FURTHER FINDS AND DECLARES THAT:
(a) 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;
(b) IT IS THE DUTY AND INTENT OF THE GENERAL ASSEMBLY TO COMPLY WITH THE CONSTITUTIONAL REQUIREMENT TO REFUND STATE EXCESS REVENUES;
(c) IT IS WITHIN THE LEGISLATIVE PREROGATIVE TO FACILITATE COMPLIANCE WITH THE CONSTITUTIONAL REQUIREMENT TO REFUND STATE EXCESS REVENUES AND LEGISLATION RELATING TO THE REFUNDING OF SUCH EXCESS REVENUES IS A REASONABLE AND NECESSARY EXERCISE OF THE LEGISLATIVE PREROGATIVE; AND
(d) STATE EXCESS REVENUES THAT ARE CARRIED FORWARD FROM THE FISCAL YEAR IN WHICH THEY ACCRUED SHALL BE REFUNDED IN THE NEXT FISCAL YEAR AND SHALL NOT BE AVAILABLE FOR ANY OTHER GOVERNMENTAL PURPOSE UNLESS VOTERS HAVE AUTHORIZED THE STATE TO RETAIN SUCH REVENUES.
SECTION 2. 2477106.5, Colorado Revised Statutes, is amended to read:
2477106.5. Annual financial report. (1) 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. Such financial report shall be audited by the state auditor.
(2) NOTWITHSTANDING ANY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES TO THE CONTRARY, FINANCIAL REPORTS PREPARED PURSUANT TO SUBSECTION (1) OF THIS SECTION SHALL NOT INCLUDE ANY UNREALIZED GAINS OR LOSSES ON INVESTMENTS HELD BY THE STATE.
SECTION 3. 2475201, Colorado Revised Statutes, is amended to read:
2475201. General fund general fund surplus. (1) There is hereby created and established the general fund, to which shall be credited and paid all revenues and moneys not required by the state constitution or the provisions of any law to be credited and paid into a special fund. The surplus fund created before June 30, 1971, is hereby merged into the general fund. Any unrestricted balance remaining in the general fund at the end of any fiscal year shall be designated as the general fund surplus.
(2) THE GENERAL FUND SURPLUS SHALL BE DETERMINED BASED UPON THE ACCRUAL SYSTEM OF ACCOUNTING, AS ENUNCIATED BY THE GOVERNMENTAL ACCOUNTING STANDARDS BOARD; EXCEPT THAT ANY GENERAL FUND REVENUES THAT ARE DESIGNATED AS STATE REVENUES IN EXCESS OF THE CONSTITUTIONAL LIMITATION ON STATE FISCAL YEAR SPENDING SHALL BE INCLUDED AS UNRESTRICTED REVENUES IN THE GENERAL FUND SURPLUS FOR THE FISCAL YEAR IN WHICH SUCH EXCESS REVENUES WERE ACCRUED. SUCH EXCESS REVENUES SHALL BE RESTRICTED IN THE NEXT FISCAL YEAR TO PRESERVE THEIR AVAILABILITY FOR REFUND UNLESS VOTERS HAVE AUTHORIZED THE STATE TO RETAIN SUCH EXCESS REVENUES.
SECTION 4. The introductory portion to 2430202 (12), Colorado Revised Statutes, is amended to read:
2430202. Procedures vouchers and warrants rules penalties. (12) The controller shall prescribe and cause to be installed a unified and integrated system of accounts for the state. EXCEPT AS OTHERWISE PROVIDED IN SECTION 2475201 (2), such system shall be based upon the accrual system of accounting, as enunciated by the governmental accounting standards board, which shall include:
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.